From any of the eastern-facing conference rooms in the Toronto offices of the Seven Sisters law firms, you can see a patch of bare brown land tucked between two car dealerships and the trendy Distillery District near the Toronto Harbour: the future site of the Pam Am Games Athletes Village. The project is the linchpin of the long-delayed revitalization of Torontos waterfront; at $504 million, it ranks as one of Canadas largest public-private partnerships ever. After the Games, the Village will be converted mostly into condos, with one-third of the units set aside for low-income and government-subsidized homeowners. (A separate part of the Village will become a YMCA, while another section will be sold to George Brown University for student housing.)
The Village deal wasnt a typical design, build, finance, maintain P3 project. Given the uncertainty of the residential real estate market and the complexity of the deal, getting funding was a challenge, says Fasken Martineau DuMoulins Brian Kelsall, counsel to the lenders [see chart on last page of "If You Built It, They Will Come"]. P3 deals bring a certain type of discipline and predictability, and the Village deal was almost a large real estate deal overlaid with a P3 framework, says Kelsall. The problems Vancouver experienced in trying to recycle the Athletes Village from the 2010 Olympics weighed heavily on everyones mind. The city of Vancouver had to bail out the project after it went over its $750 million budget; the property eventually cost over $1 billion and went into receivership in 2011. There were a lot of bad outcomes in Vancouver that [Infrastructure Ontario] sought to avoid by adopting a P3 model from the beginning, adds IO counsel Gordon Willcocks of McCarthy Tétrault.
