Miro Cernetig
Sun
Shahram Malek is not a man who seeks the spotlight. Nor does the intensely private Malek clan, whose members prefer all discussion about their lives and their global empire’s finances to stay inside the family.
But he’s heard the rumours, too — the family company isn’t up to the task of building the $1-billion Olympic village. It won’t meet the completion date, just eight months away. And the one that really wounds — the family company, Millennium Development, is on the verge of going under.
“How do you deal with rumours like that?” he asks, hands clasped together and drawn up to his chest. “Do you go and take out an ad in the newspaper?”
Perhaps not. But when you’re at the centre of a media maelstrom, either you define yourself or others do it for you. So here he is, a multimillionaire sitting down with a columnist.
He suggested meeting in the private lounge of one of his hotels. Tea and coffee are served. A gas fire burns silently beside our plush chairs. Classical music, a little Pachelbel, occasionally some Wagner, fills the room. You strain to hear the soft-spoken, impeccably well-mannered developer.
“It’s very hard for me, what we read in the papers,” says Malek, adding that some mornings he has felt he’s in a dream. “We don’t like to be in the papers.”
Questions about the family’s financial situation cause him to shake his head and clench his hands tighter. He is adamant about the health of Millennium. It is just one, stand-alone entity in a family empire with interests in Europe and the Middle East.
“Certainly, we’re not insolvent,” he says. As for the potential losses from the Olympic village — some inside the city’s administration fear losses of $100 million or more — he dismisses the thought.
“We will break even,” he declares. “We think we will go beyond breaking even.”
And how will Millennium do so, with cost overruns already pegged at $125 million and a deep downturn in real estate cutting deeply into the Olympic village’s profitability?
Patience, he says. If the Olympic condos are sold off in “an orderly fashion,” over three or four years, “we can make money off the project and a good return on investment for all concerned.”
But can we trust Millennium to finish the project? The City of Vancouver has recently appointed an overseer to ensure the project stays on track. Privately, the city’s new administration worries Millennium is too small for the job and its tight construction schedules.
A flicker of frustration crosses Malek’s face. He and his brother Peter have built projects just as big, he says. In Iran, while in their 20s, the brothers oversaw construction of an equally massive village for the Asian Games three decades ago. There was pressure there, too: a helicopter, with the Shah of Iran its passenger, often hovered over the project. The Shah’s functionaries occasionally made it known that missed deadlines might mean jail time.
“If we were too small,” says Malek, “how would you have built a project like this [the Olympic village]? We have built large projects.
“We are truly believers of this project. We will finish it.”
We all should hope so. The Malek family has been hit hard by the global credit crunch. But unlike many of their developer peers, who have stopped construction to preserve cash, they are grinding ahead with no guarantee of profit.
After the Olympic Games, the condos used by athletes will go to market. First in line to get back their money will be the banks. Then it will be the city, owed more than $200 million for land and other costs. Then Millennium will absorb what’s left — whether that be profits or losses.
Look at this another way. If Millennium is forced to exit, as persistent rumours suggest, guess who absorbs all the risk of Millennium’s high-stakes gamble when the Olympic village is left without a developer? You got it — taxpayers.
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