The Canadian government emphatically and categorically denied today that it is currently negotiating a $90-million payment to the Wall Street hedge fund Fortress Investment Group to bail out Intrawest in time for the Olympics. Fortress is the parent company of Intrawest which operates Whistler Blackcomb.
The NY Post has been floating stories about a possible Canadian government bailout since December, most recently reporting on Saturday that Fortress is ready to sue if it is not paid off prior to the start of the Games :
"Fortress says it is negotiating with the Canadian government, which it says promised to make it whole for the time Whistler/Blackcomb Mountain is used for the Olympics. Intrawest is trying to get roughly $90 million, and wants to be paid before the Games start on Feb. 12, a source said.
If it does not get paid, Fortress plans to start legal proceedings, the source added. It is unclear if that could disrupt the Winter Olympics. "
In a 2002 agreement between VANOC and Intrawest, VANOC agreed to compensate Whistler-Blackcomb for revenue lost due to the Games, estimated at between $5 million to $30 million.
After Fortress failed in December to make the final payment on a $1.7-billion loan used to buy Intrawest in 2006, Fortress' lenders announced in ads in US papers in January that they will auction off equity in Intrawest on Feb. 19th, one week into the Games.
In a secret meeting on Oct. 8th 2008, the City of Vancouver took over the $1 billion price tag for financing the Athletes' Village after Fortress ceased payments on its construction. Not counting the new $885-million convention centre, the multi-billion Sea-to-Sky Highway improvements, or the new rapid transit line, Ottawa has invested at least $1.23-billion in the Games while BC has spent $765-million. Security is currently hovering around $1-billion.
Touchingly, Owelympic supporters continue to insist that all this is really about jumping and sliding really fast.