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Rainbow in race with Olympic village

Housing project must stick to development schedule or wait until athletes’ village units sold



By Alison Taylor

Whistler’s mayor is cautioning Rainbow’s developers to stick to their 2009 timeframe in order to protect the municipality’s own housing project at the athletes’ village.

“We’re not prepared to just keep extending (Rainbow),” he said this week. “It can’t go past 2009.”

The municipality’s guarantee that the developers will stick to their tight timelines is through a business deal, which has yet to be approved.

As per the original agreement, the business deal sees the Whistler Housing Authority backstop the project, meaning it will buy the single-family lots for $110,000 each if the developer cannot sell them to people on the WHA waitlist.

“The position we’ve taken is that if they’re not ready by a fixed date, we won’t purchase those lots,” said the mayor.

And, if the homes aren’t ready according to the schedule, they won’t go on the marketplace until after the athletes’ village is sold, sometime following the 2010 Olympics.

“The potential result would be that the developer is going to have to finance and carry his project for three or four years longer than they expected. That may make it uneconomical for the developer. We don’t know. That’s going to be their choice.”

The mayor’s comments Tuesday morning came on the heels of an update to council on the progress of the Rainbow housing development, which is supposed to deliver roughly 220 units of employee housing including single family homes, duplexes and apartments, phased over the next three years.

The project, said Bob MacPherson, the municipality’s general manager of planning and development, is under tough, aggressive timelines.

Developers have promised to deliver 50 units — a mixture of single family and duplexes — by Christmas 2007. The remaining units will be up for sale in 2008 and 2009.

Developer Rod Nadeau reiterated his commitment to that schedule again this week.

“I’m working really hard to make that happen and so are a lot of people,” he said. “All the pieces are starting to fall in place in time with our schedule, which is great.”

Their intention, he said, is to build the houses and sell them on schedule and never have the WHA buy anything. But council was told Monday night that there isn’t much “wiggle room” if things go wrong.

There was a pregnant pause in the mayor’s office Tuesday morning when asked about the potential fallout of not sticking to the schedule of this much-anticipated project.

Councillor Nancy Wilhelm-Morden filled the silence saying if Rainbow doesn’t deliver according to the schedule, the project will be delayed past the sale of the athletes’ village units — which could stretch until 2013.

“There aren’t enough people out there to put all of this product on the market at the same time,” she said. “We know we have to deliver the athletes’ village and we know that once the Olympics are done all of that product (will) come on the market. We can’t have the market non-existent because Rainbow’s come on late and filled the marketplace and supplied all the demand.”

There will be 250 housing units for sale in the athletes’ village after the 2010 Games.

The municipality established an independent organization called the Whistler 2020 Development Corporation to develop the $130 million athletes’ village/legacy neighbourhood in the Lower Cheakamus. The municipality is the sole shareholder of the corporation.

The mayor said there is a “very aggressive” business model for the absorption of the homes post-2010.

The development corporation expects to recover more than $80 million — and essentially break even — through the sale of the housing units. Ensuring there are buyers for those units is a critical piece of the business plan.

It states: “One of the biggest financial risks of the project appears to be the sale of up to 251 residential units over a (two) year period, in a market that has historically incorporated 40 resident units per year. The annual uptake of 40 units has been based on a limited supply, and does not indicate that this is the maximum uptake capacity.”

In order to mitigate this risk, the plan suggests there could be presales of the units to potential project partners before the Olympics.

“There’s a window in there between 2009-2012, arguably 2013 more realistically, before all the units in the athletes’ village are absorbed,” said Melamed.

And that’s why it’s critical to have Rainbow stick to its schedule and deliver before the Olympics.

Rainbow does not have final zoning approval. That is expected to come in the spring if the developer delivers on all outstanding conditions in time.

The business deal is expected to come before the WHA board next week.

If both projects come to fruition, Rainbow and the athletes’ village will produce almost 500 units of employee housing from 2007 until 2012.