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Vancouver's Winter Olympics looks to save money

Athletes arriving in Vancouver for the 2010 Winter Olympics in six months will see snow-covered peaks towering above a modern city hugging shimmering English Bay.
/ Source: The Associated Press

Athletes arriving in Vancouver for the 2010 Winter Olympics in six months will see snow-covered peaks towering above a modern city hugging shimmering English Bay.

It's a breathtaking backdrop for the games, which open six months from Wednesday, but the current global economic slowdown has created a less stunning financial backdrop for the Vancouver Organizing Committee.

Organizers have been struggling to find creative ways to deliver what Chief Executive John Furlong said once would be the "best games ever" while meeting its $1.5-billion budget.

He made the pledge when Vancouver was awarded the games in Prague, Czech Republic in July 2003. Last year, he conceded that title to Beijing for its extravagant 2008 Summer Games.

Then came last fall's economic meltdown, something Furlong said no one could have foreseen.

But, he said, the budget remains balanced in the face of rising costs.

"We managed the most complex project in the world against this backdrop and pulled it off," Furlong said.

"Almost everything that happens here is measured against the backdrop of the current economy."

Given the challenges VANOC has faced, VANOC communications chief Renee Smith-Valade said while the games may not be the best ever, they will be "great games."

Vancouver's budget is close to the $1.4 billion Turin, Italy spent on its Winter Games in 2006, but significantly down from the $2.74- billion Nagano, Japan spent in 1998.

A $96.3 million shortfall caused panic in the final preparation for the Turin Games.

Furlong isn't anticipating any major problems in his sprint to the finish line.

Venues are completed, and the previously financially troubled athletes' village is on track for completion.

But organizers are looking to borrow around 1,500 employees from the public and private sector for jobs beginning later in the month. Facing a budget crunch, organizers made an extraordinary appeal for the workers, saying by borrowing employees they could significantly buffer their bottom line.

The province of British Columbia is beefing up its program to loan employees in the wake of the call for help.

The games also has a $27.6 million shortfall in money from global sponsors. Smith-Valade said the IOC continues talks with sponsors to find that funding.

The organizing committee also has $11 million in unsold billboard space, and sales of $263,000 corporate VIP packages that include limousine service and admission to elite events have languished.

Both were victims of the economic downturn, said Smith-Valade, adding a turnaround in sales has begun.

A scaling back of the scope of medal presentations at Whistler, the ski resort more than 70 miles north, allowed organizers to avoid the cheaper option of presenting medals at venues.

Preparations also hit a stumbling block when the City of Vancouver had to take over financing for the 1,100-unit athletes village. The project's original lender, New-York-based hedge fund Fortress Investment Inc., stopped payment on its $633-million construction loan in the fall.

The city said Fortress backed out in February due to cost overruns, and a crashing real-estate market that meant contractor Millennium Development might not be able to pay them back.

Vancouver taxpayers are on the hook for $254.2 million to complete construction of the village. It meant the city became the lender to Millennium. The finance takeover caused an uproar among local taxpayers.

There was a further outcry when it was revealed games security costs would be almost $717 million, four times the initial 2002 estimate. Security plans will put 15,000 police officers, private security and military personnel in Vancouver and nearby Whistler, where alpine events are being staged.