Councillor Caroline Lamont raised the issue of conflict of interest at Mondays council.
She worried that municipal staff would be reporting to two masters, namely council and the board of the new development company, which includes the Vancouver Organizing Committee of the 2010 Games.
"I think it could be problematic," she said.
The Athlete Village Development Corporation has been created to not only facilitate the building of the Village for the 2010 games but to also limit the liability of the development to the Resort Municipality of Whistler.
"It is a common way for municipalities to handle a development program, such as the village," said Mike Vance, general manager of community initiatives with the RMOW.
In response to Lamonts concerns over conflict of interest, he said there would be checks and balances in place.
"Were going to have guiding principles that will guide the master planning of the village," he said, after Mondays meeting.
"Well have design guidelines. Well have development permit guidelines, so I think theres going to be a very strong framework within which we will operate that will ensure were aligned. And we also have the common objective of delivering a showcase neighbourhood."
The Athletes Village will be located in the south end of Whistler, opposite Function Junction in the site of the Lower Cheakamus. It is set to become Whistlers newest neighbourhood after the 2010 Games and intended to be a showcase area for sustainability in the Games.
The new company, which will be formed solely to build the village, will be responsible for guiding the whole project.
"We dont do development we regulate," said Vance.
"We knew clearly that if we were going to go down this road we needed to have some advisors who really had an insight into it and that is why we have proceeded the way we have."
The draft guiding principles for the design, development and operation of the athletes village and the community neighbourhood were approved at Mondays meeting. Under these guiding principles the Athletes Village would:
Respect the character of the resort community of Whistler;
Provide a range of housing and price points;
Incorporate systems and infrastructure that demonstrate best practices in sustainable design and technologies;
Connect to adjacent neighbourhoods and recreation areas and reduces dependency on automobiles; and
Support the tourism economy.
"Im excited about going ahead under these parameters," said Councillor Ken Melamed.
"This is a really important commitment that weve made to the community."