Sales at former Vancouver Olympic Village far exceed original estimates

VANCOUVER -- The financial health of the former Olympic Village project is improving, according to a second receiver's report released today.

The report by Ernst & Young says there is occupancy of more than 60 per cent of the residential units at the Village on False Creek.

The receiver has estimated an occupancy of 70 per cent by July 31 "given the strong sales and rental activity now underway."

As of Monday, 124 strata units have been sold at a value of more than $84 million, with most of the sales expected to close by the end of this month, the report said.

Sales have far exceeded the receiver's expectation, resulting in 33 additional units at the Compass building being released for sale 10 days ago, the receiver said.

It also says the 119 units in the three market rental buildings are now completely leased and 22 of the units in the Bridge building were leased within three weeks of being offered.

Occupancy now is at 98 per cent of the original estimate to be achieved by July 31, the report said.

Another 263 condo units were sold before the receiver was appointed last November.

As far as the commercial space, Terra Breads is planning to open a new cafe July 1 and a medical/dental clinic has made an offer on a lease. Earlier TD Canada Trust opened a branch and Legacy Liquor opened a store.

The two anchor tenants, London Drugs and Overwaitea Foods, have no definite opening dates. Overwaitea plans to open an Urban Fare store when the site achieves a "critical mass of population," the report said.

The receiver earlier said that its first priority was to boost the population of the Village in order to put to rest the project being called a "ghost town" because so few people were living in the multi-building site.

The massive $1-billion project, which was used for the athletes' village for the 2010 Vancouver Olympics, has been plagued by controversy and financial problems.

The city took over financing after the original lender froze funding. Ernst & Young took over last year after the developer, Millennium, went into receivership.

The city earlier said it expects lose $40-50 million on the project, which will be partly offset by the city's $3.5 billion real estate holdings, the Property Endowment Fund.

In March, when sales of condos were relaunched, Rennie Marketing Systems, the receiver's sales agent, sold 118 of 737 remaining units, nearly double its original sales estimate.

The units were offered at price reductions of about 30 per cent under the first phase of a receivership plan to recoup as much as possible of the $740 million owed to Vancouver taxpayers on the Southeast False Creek development.

There were complaints of deficient workmanship in suites, but more than 90 per cent of 1,797 reported deficiencies were resolved by May 5, the report said.

The report says the cost of deficiencies range from less than $500 to more than $5,000 for some suites, and the receiver has seven "deficiency crews" with a total of 20 workers to address deficiency complaints.

The receiver said earlier that it had already fixed two of three major infrastructure problems, including a faulty hot water system and a heating-cooling system, and repairs were made to the rainwater collection system.

Ernst & Young said it expects much of the repair work will be covered under warranty coverage by the builders or the New Home Warranty Program.

The receiver has agreed to post an additional $5 million letter of credit to ensure warranty obligations for the first five years are completed.

The report said the receiver's fees from Nov. 17, 2010 until April 8 were $1.67 million for more than 5,000 hours, which includes $500,000 to address on-site issues but excludes out-of-pocket and administrative expenses, plus HST, which are estimated at $160,000.

The city is being sued by about 60 condo owners who bought in the pre-Olympic sales period and now want their money back. They claim they were buying luxury suites but received much less. The city filed its defence to the legal action, denying the claims.

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