There's more bad news for the beleaguered athletes village under construction for the 2010 Winter Games.
A report prepared by city staff and sent Monday night to the mayor and council says the costs of the affordable, or social, housing component of the massive athletes village is over-budget by as much as $77 million.
"In order to achieve the full 100 per cent core-need subsidy, a further $77 million would be the additional required investment by the city," says the report that will be debated by council Tuesday during its regular meeting.
"This was never contemplated by the city at the inception of the project."
The latest problem means that council will have to find millions of dollars more to maintain the social housing component in the village, or reduce the number of units.
Council policy requires that 20 per cent of units in new neighbourhoods be developed as affordable housing.
In the initial agreement with the Vancouver Olympic Committee, the city received $30 million from VANOC and planned to have 252 units in the village after the Olympics devoted to social housing.
Council in 2006 projected spending $65 million for the affordable housing. A year later, council approved an interim increase to $95 million.
"Current estimates . . . project that anywhere from $56 million to $77 million in additional city equity would be required to sustain affordable housing in the Olympic Village project."
The reports recommends that city staff report back to council by April 15 with "financial and operational options" for the affordable housing component.
The latest reports comes on the heels of earlier problems facing the village.
City councillors approved last month a report from their director of finance suggesting Vancouver take over the remaining cost of getting the village built on time for the Games.
The project's original lender stopped payment on its loan to developers in the fall and the city had the choice of trying to renegotiate with them or take over the development.
The report to council said assuming control would save on sky-high interest costs and would ensure Vancouver meet its commitment to the 2010 Olympic organizing committee to complete the village on time.
The go-ahead on village financing came through a report by city finance director Kenneth Bayne that suggested the city borrow the remaining $450 million needed to finish the village as well as advance the next construction payment due to developers.
While the remaining cost to finish the village is $450 million, there was no restriction in the legislation on how much the city can actually borrow and it was also given the option to explore other types of financing, such as issuing bonds.
The costs of the $1 billion project, which will house 1,100 athletes during the Games before being converted to private housing, breaks down into $193 million for land, $750 million for construction and $125 million for cost overruns.
