VANCOUVER, British Columbia — The mayor of Vancouver said today the athletes village for the 2010 Olympic Games will be built even if it means the city will be on the hook for more than $700 million.

Vancouver began covering the monthly costs of building the near $1 billion project in October after the project's original lender refused to pay out any more cash.

That arrangement ends at the end of this month and if a new deal isn't negotiated between Millennium Development and lender Fortress Investments, either construction on the project will grind to a halt or the city will need to find the money to keep it going.

The city has been legally obligated to finish the village, if the developer couldn't, since it finalized the loan with Millennium for the project in 2007.

Constructions costs have increased by an estimated $105 million and there is concern that Vancouver's once-hot housing market won't provide the returns hoped for from sale of the village condos after the Games. Of 1,100 units being built, 120 are to be used for rentals while 730 will be sold.

Only 30 percent of them have sold thus far.

The city provided $84.3 million in interim financing in September to keep construction going.

"We're going to deliver the Olympic Village," mayor Gregor Robertson said Friday. "The taxpayers are on the hook for the project."

Robertson said "delicate negotiations" are ongoing with Fortress to ensure the remaining money for the project is delivered. He blamed the previous council and major for the city being on the hook to financially complete the project.

"It's a difficult pill for taxpayers to swallow, some very questionable decisions have been made by previous mayor and council that have put us in a difficult position," Robertson said. "At this point, the important thing is that we move this forward, we get this project built, we act in the best interest of taxpayers to reduce those losses as significantly as we possibly can."

Fortress did not respond for a request for comment Friday, but city officials said the lender stopped paying out installments of the loan to Millennium in September, when it determined the estimated $105 million in cost overruns on the project meant the company wouldn't be able to pay back the $631 million it was borrowing to build the village.

Details of the deal ends months of speculation around the village's finances, which began when news leaked from a closed-door city council meeting that the city advanced the $84.3 million to the builders.

It became a scandal that partially influenced the city's November elections and put Robertson in office.

The organizing committee for the Olympics, known as VANOC, gave $25 million for the village but that money is being used specifically to cover the cost of 250 units of social housing that will be built within the 1,100 units of housing overall.

"The eyes of the world are upon all of us and, as a community, we need to come together in our collective support for the City in this unprecedented economic environment," VANOC's vice president of construction Dan Doyle said in a statement.

"We fully support Mayor Robertson, city council and the city administration in their efforts to responsibly manage the construction and long term legacy and viability of this key venue in an extremely challenging economic environment."

It's not the first time the 2010 Games have been at the mercy of Fortress, a U.S. hedge fund.

In late October, Fortress-owned Intrawest ULC, the company that will run the ski hills for the Games, completed a $1.7 billion refinancing deal, ending weeks of speculation about the company's financial well-being.

Fortress bought Intrawest two years ago in a multibillion-dollar deal financed by a group of lenders that included Lehman Brothers, which filed for bankruptcy protection.