WATERLOO - Premier Kathleen Wynne denies she's trying to make a silk purse out of a sow's ear with the $309 million bailout of the MaRS office tower across from the legislature.
In Kitchener-Waterloo for the official kickoff of Oktoberfest, Wynne insisted the controversial building — which is nearly vacant because of high rents — can still serve as a hub for scientific and technical innovation.
“What I'm describing is the silk purse that is our economic future . . . the future that is our innovation potential in this province,” she said after a speech.
“We need new ways of creating jobs, we need new companies and new ideas,” she added before heading off to the Oktoberfest opening ceremonies.
“It's very important we provide opportunities for businesses that are innovative, are on the cutting edge to have the right conditions,” added the premier, whose government has signalled it wants to unload real estate — such as the Queens Quay LCBO headquarters and warehouse — to free up cash.
Wynne did not detail what will be done to solve the conundrum of high rental rates and an unsustainable low vacancy rate.
She didn’t answer the question when asked if the government would start moving civil servants into the building, in addition to the incoming Public Health Ontario infectious disease lab — at a cost of at least $86 million — going on the top four floors after safety modifications are made to waste and air systems.
“What we want in the MaRS building are the innovative, creative people who are going to create those jobs but also create the ideas we know are going to provide breakthroughs,” said Wynne.
MaRS, which is short for medical and related sciences, told the province last January it could no longer make payments on a loan for the 20-storey tower with just under one-third of the offices leased, leaving taxpayers on the hook for $450,000 a month in interest payments alone.
In addition to the outstanding loan of $224 million to MaRS, the government bought out the U.S. developer of the tower, Alexandra Real Estate, last month for $65 million, bringing the tally to $309 million plus the interest costs that are piling up.
Earlier this week, Infrastructure Minister Brad Duguid acknowledged there was “always an element of risk” to the project but it was offset by the value of the building in a prime downtown location, on the southeast corner of College and University.