The ball has been set in motion for the municipality to borrow $100 million and help pay for construction of the athletes’ village, with council unanimously voting to begin the process at Monday night’s council meeting.
“I am really excited to pass this,” Councillor Ralph Forsyth said of the motion to borrow the money.
“It is a lot of money, but I don’t think it is a lot of risk. I am very confident with the people on the board of the project,” he said.
His sentiments were echoed by other councillors around the table.
Borrowing the $100 million sum was not an impulsive decision by council. The June 2006 business plan for the athletes’ village budgeted the money to bridge the gap between when the neighbourhood is constructed in 2008 and 2009 and when the housing units are all sold after the Olympics, by 2011.
The money will be borrowed from the Municipal Finance Authority (MFA) at a competitive rate for five years. By that time it’s expected the loan will be repaid completely.
Only $90 million is needed for actual construction costs, with the extra $10 million being borrowed in case the situation changes.
At Monday’s meeting, Councillor Bob Lorriman asked municipal staff what would happen if council rejected the loan application.
“I don’t think that was ever anticipated,” responded Diane Mombourquette, general manager of economic viability for the municipality.
Mayor Ken Melamed added that if the municipality did not take out the loan, the developer of the project — The Whistler 2020 Development Corporation — would have to borrow the money from a financial institution at a much higher interest rate, costing them roughly $8 million extra.
One concern raised by Councillor Tim Wake was what was the risk that the loan would not be paid off in five years through sale of housing units once the athletes’ village is converted into a residential neighbourhood.
About 92 per cent of the units for sale in the athletes’ village will be resident restricted and regulated by the Whistler Housing Authority. Approximately 8 per cent will be valued at the market rate.
“With the price restricted units I have no doubts that they will sell out and that they will sell out at the price that was planned, because it is a much lower price,” said Wake.
“But we don’t know what they (WDC) have assigned in terms of sale values of the market proportion,” he said.
Mombourquette assured him that the risk of this is insignificant in the overall project. She added that in decisions with the Ministry of Community Services for the loans, the municipality has laid all its plans clearly on the table.
“They are confident in our ability to repay this and all other loans given the small risk,” she said.
The next step in applying for the loan is to wait for the ministry’s statutory approval. Council will then be asked to adopt the loan authorization bylaw and a 30-day quashing period will follow.