How the MaRS story took off
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Oct 15, 2014  |  Vote 0    0

How the MaRS story took off

The story behind the Liberal government’s bailout of the MaRS office deal


The public first learned of problems with the MaRS office deal in May during the spring provincial election campaign when the Tories revealed the then-minority Liberal government was close to a deal — even before the election — with MaRS and a U.S. developer to buy the virtually empty office tower.

MaRS Discovery District, a not-for-profit corporation, was founded in Toronto in 2000 to commercialize publicly funded medical research and other technologies.

In 2011, the province announced a $345-million expansion of the MaRS innovation and science complex in downtown Toronto and part of that deal involved a $224-million loan from Infrastructure Ontario to MaRS to help finance the new tower.

Also the end of May, the Toronto Star revealed the 20-storey building was at risk of becoming a white elephant from the very beginning because it was simply too big and too expensive for Canada’s relatively small life sciences sector.

Secret government documents showed that a plan to buy the troubled MaRS office tower projected the building would operate at a loss of $36 million over the next decade — in part because of the lack of tenants.

After the secret purchase was revealed during the election campaign, then Liberal Leader Kathleen Wynne argued that it was “the responsible thing to do.”

Then in September the majority Liberal government finally announced its was putting $309 million into the office tower — $224 million to cover the loan and $65 million to buy out a U.S. developer — in light of the fact MaRS had announced earlier in the year that it could no longer make payments on the loan

Earlier this month it was revealed Ontario taxpayers since February have been paying about $450,000 a month in interest payments on the office tower.

Infrastructure Minister Brad Duguid defended the bailout but acknowledged the projects had an element of risk.

The Liberals this week used their majority on the legislature’s estimates committee to block opposition efforts to get further details on the MaRS deal.

That was followed soon after by the revelation that the Liberal government quietly changed the rules in 2010 to allow Infrastructure Ontario to loan the money to MaRS.

Toronto Star

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