Almost exactly seven years after the Vancouver 2010 Olympic Winter Games, the City of Vancouver’s credit rating has returned to AAA after receiving a downgrade from taking on debt from the costs with building the Olympic Village at Southeast False Creek.
In a release earlier this week, the municipal government says its credit rating in a new rating service report by Standard and Poor is now AAA, a stable outlook, up from the positive outlook of AA+.
“The report references the City’s exceptional liquidity, very strong economy and budgetary performance as reasons for the ratings upgrade,” reads the release. It adds that the City has “strong financial management” which are “a sign of the City’s strong commitment to fiscal discipline and increases the City’s ability to follow financially sustainable policies.”
Standard and Poor expects a stable outlook for the City over the next two years due to the maintenance of exceptional liquidity, very strong budgetary performance, and low debt on the foundation of a strong economy.
Vancouver’s credit rating fell in early-2009 after the municipal government took on debt required to finish the Olympic Village in time for the Games. Fortress Investment Group, the Wall Street lender that supported Millennium Development, the local developer building the Olympic Village, stopped payouts in late-2008 when the recession hit global financial markets and eventually walked away from the project.
There were initially some issues with selling the 1,100 condo units, but sales reignited after the Olympics with a renewed marketing approach. In April 2014, the remaining 67 units were purchased by Vancouver Canucks owner Aquilini Group in a block purchase, allowing the municipal government to pay off its entire $630 million debt from the Olympic Village.
It also recovered an extra $70 million from Millennium Development after the developer was forced to surrender a number of its properties.
Millennium surrendered a portfolio of Vancouver, Burnaby, Whistler and Toronto properties that the city hoped would yield as much as $70 million. Millennium’s latest projects are the Alexandra tower in the West End and Boheme condo complex on East Hastings.
The City of Vancouver’s crediting was gradually upgraded during the post-Olympic years.