Gotta hand it to those British Columbians. With the 2010 Olympics, they approved their economic stimulus plan well in advance of this fall's credit crisis. No need to debate a massive public works project, as they've already to committed to one that includes a $1 billion athletes' village and a $600 million improvement project on the Sea-to-Sky Highway to Whistler-Blackcomb.
But they're not out of the storm yet. Far from it, in fact. A flurry of recent stories have covered the complications the recession brings to the Vancouver games. First, the New York Times reports on the hedge fund firm heavily involved in financing pre-games construction:
Looming over the debate are the fortunes of the Fortress Investment Group, the hedge fund and private equity firm that controls the main Olympic skiing site, Whistler Blackcomb, and is the primary source of financing for a $1 billion athletes' village now under construction downtown. On Thursday [Nov. 13], Fortress reported a third-quarter loss of $20 million, in contrast to earnings of $111 million in the period a year earlier.
Last month, the Vancouver City Council voted at a closed meeting to advance up to 100 million Canadian dollars to cover cost overruns on the village, according to reports based on leaked information. That was in addition to 193 million Canadian dollars in loan guarantees to Fortress previously provided by the city'ê¦
"They chose Fortress because of a sense that this was a solid partner," said Mr. Robertson, a former provincial politician. "It doesn't look so solid now."
The Vancouver Sun and Toronto Globe and Mail have covered the Vancouver Organizing Committee's attempt to revise budgets in light of the recession. The committee hasn't made this easy, refusing to disclose its scaled-back budget until next month.
There are some interesting implications for those of us south of the border, too. Last month Crosscut's Floyd McKay detailed the opportunities for Washington businesses that have, so far, failed to bear much fruit:
That initial phase, the major construction and infrastructure contracts, was held close to the Canadian chest; Northwest Washington businesses gained only a tiny fraction of the contracts on offer. Only half-a-dozen Seattle-area firms signed contracts, and nearly all the work was for consulting.
In the next phase, and in the Games itself, there is greater hope for a slice of the Olympic pie. Contracts will be smaller, largely for services, and Olympics sponsors are shopping south of the Peace Arch.
And KUOW reported on Seattle day laborers finding better opportunities in Vancouver.
Maintaining construction financing while hedge firms and banks crumble seems to be the biggest problem. If the Obama administration moves as fast as they say on a public works bonanza, maybe the Olympic Committee can sneak in a project or two before it's discovered they're a little north of the 49th parallel.