The Olympic Deficit

While the U.S. is celebrating all that is Obama, up here in Canada, they’ve got Olympics blues (or maybe ‘reds’ if you think of the debit side of the balance sheet). Back in 2003, when Vancouver was wooing the Olympic Committee for the right to host the 2010 Winter Olympics, there was a significant groundswell of public unhappiness. It got to be so pervasive that they actually had an election as to whether Vancouver should go ahead with what was endlessly advertised as less a sporting event than a cornucopia of benefits to the economy and a vastly improved quality of life! A rail line to the airport! A new highway to Whistler! Some really big sports arenas here and there that would be unlikely to be necessary as sports arenas after the fact! A rebuilt ferry terminal access! The public was sufficiently persuaded however: 64% of them voted in favor of the Olympics bid, which subsequently won the hearts of the Olympic Committee, and whose reality is now barely a year away.

In the interim, the snow levels have been a little dicey and one certainly wondered what they do with a Winter Olympics without snow. But…ah, well, we are all in a different space now. There may or may not be snow next year, but the bigger issue is whether there will be anywhere to put the athletes when they get here and who is going to pay for all the cost overruns.

The major crisis at the moment is that a big U.S. hedge fund--you know this sentence isn't going to end well--was financing the building of the Olympic Village and the hedge fund’s plan was to make a profit by selling the village as pricey condos afterwards. Alas, hedge funds have been having hard times and this particular fund recently pulled out of the financing, about half way through, citing cost overruns as well as hard times more generally. The city needs about a half a billion dollars (Canadian) to finish the project but the city charter requires a vote of the citizenry to take on that kind of debt. And then of course the city will need to pay back that loan along with associated interest costs.

In some way, the B.C. legislature just evaporated the charter requirement and now Vancouver is going out to borrow the money at what I doubt are going to be low interest rates. Subsequently, I guess, lucky Vancouver will be in the business of trying to sell those condos spring, summer, fall, winter, and perhaps spring again.. I suppose there could be worse market timing for that kind of real estate venture but probably not in my lifetime.

I was living in L.A. when the city had the summer Olympics. Although L.A. actually did manage to make money on it, there was precious little reason to believe that overall it improved our quality of life. And I doubt if it’s going to do anything good for Vancouver’s, either. One of my neighbors at the Point has been talking of making a killing on the Olympics by renting out his house (one bedroom, one bathroom). I doubt if that’s going to happen, but maybe we could offer all of the Point for an Olympic Village next year and, in exchange, Vancouver could underwrite a Point Roberts vacation for all of us somewhere sunny next January and February. Maybe December, too, so they'd have adequate time to get things ready for the athletes. Travel is such a nice way to get to know strangers, especially when they're your neighbors!