Brad Duguid says the mostly vacant MaRS tower is important to “growing” Ontario’s biotech sector, but the Infrastructure Minister won’t commit to renting it out only to life sciences companies
“We haven’t made those decisions yet,” Duguid told reporters Monday after the government came under fire for its $309-million bailout of the building and last week’s release of 700 pages of documents pertaining to it.
Those documents included real estate appraisals warning that the market for life sciences tenants was shrinking as similar lab space was coming on stream at two downtown hospitals — Sick Kids and St. Michael’s.
“We recognized there were challenges with the project. The alternative would have been to just to leave it rotting in the ground,” said Duguid, whose government’s support for the tower includes a $224-million loan and $65 million to buy out a U.S. developer’s stake.
“You take the risks into consideration.”
Duguid insisted that the not-for-profit MaRS organization — short for medical and related sciences — is on the hook for the bailout money and up to $106 million in monthly interest payments on its loan over the next 15 years. That interest is now costing taxpayers $450,000 monthly.
Progressive Conservative MPP Randy Hillier said prospects appear dim for the 20-storey tower on the southeast corner of College and University, which is leasing 31 per cent of its space to Public Health Ontario and the Ontario Institute for Cancer Research.
“They haven’t been able to find any bioscience tenants. They’ve been able to find a few bureaucrats but that’s all,” Hiller said, questioning whether there was ever a “business case” study done on the project.
“This is just another one of these Fields of Dreams nightmares the Ontario government gets in to. Somebody says we will build it and they will come and, clearly, they haven’t.”
Duguid’s office said more details can’t be struck until the deal with the U.S. developer, Alexandria Real Estate, closes in February. An expert panel on the tower’s future will report “very soon,” Duguid added.
“Selling the building right off the bat would be one of the options that we would have but, ultimately . . . we want to make a good business decision here on behalf of taxpayers and on behalf of the importance of this project for building a strong economy and growing our bioscience cluster.”