November 18, 2010
Millennium Water by Millennium Development Corporation has been in trouble for some time now. And s*%& really hit the fan yesterday, when it was announced that the developer was going into receivership. Ernst and Young Inc. will manage their assets from here.
According to the Province:
“It’s a sad day for the taxpayers of Vancouver,” [Vancouver Coun. Suzanne] Anton said Wednesday following a hastily-called new conference. “The developer [Millennium] has gone into receivership and the entire risk has been transferred to the city.”
And it’s a lot of risk. Vancouver’s mayor said that the city will have to rely on future condominium sales. And they’ve been moving slowly.
The city’s on the hook because these units were previously known as the Olympic Village. They were built for the athletes, and thought they could be sold as condos later. Not the case, it seems.
There’s been a lot of debate about what made this development such a massive failure. But I think the most pressing cause was that the units didn’t meet the current demand of the market. Vancouver homes are overpriced, and instead of trying to meet the demand of lower-end buyers, they threw a thousand units on the market with the lower-end units starting in the $800,000. And that’s because the developer and the city decided that these units had to meet the highest environmental standards. I’m all for the environment, but come on. They could have built them to pretty high standards and lowered costs a lot to provide more reasonably priced units.
Personally, I think the failure of Millennium Water is a massive wake-up call for Vancouver developers. You can’t just throw any number of units at any price and expect the market to absorb them. I know it’s Vancouver where prices seem to have nowhere to go but up, but you have to be smart about it and ensure you’re providing units people actually want.
Their homepage boasts, almost ominously, that “Something is changing at Millennium Water”. They’re right– something is seriously changing.