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The MaRS Phase 2 Building

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The MaRS Phase 2 Building

Ministry of Economic Development and Growth

To assist with greater flexibility around lease rates, terms and types of tenants for MaRS Phase 2 Building, the Ontario government has entered into a conditional Agreement of Purchase and Sale to acquire an interest in the building. This would help increase occupancy and create more financial certainty for MaRS.

Cost breakdown

The following outlines costs by the Ontario government if conditions on the agreement were met.

Item

Amount (millions)

Infrastructure Ontario loan

$224

Alexandria Real Estate (ARE) stake

$65

Land purchase

$16.2

Debt service guarantee*

$3.61

Total

$308.81

To support the IO/MaRS loan, MRI provided a Debt Service Guarantee (DSG) whereby the Ministry would offset debt service costs of up to $7.1 million per year. To date, the Ministry has provided a total of $3.61 million in DSG payments, which is repayable to the government by MaRS.

Construction of the MaRS Phase 2 building, which was halted in 2008, resumed in 2011 and has since been completed. Financing was provided by Infrastructure Ontario. Under current arrangements between MaRS and the developer, Alexandria Real Estate, there are restrictions that have had an impact on occupancy of the building, placing MaRS in a difficult financial situation. This has implications for Infrastructure Ontario and the government.

The Expert Panel consists of two highly experienced individuals: Michael Nobrega, former CEO of OMERS and the Chair of the Ontario Centre of Excellence; and Carol Stephenson, retired Dean of the Ivey School of Business. The Panel is conducting its work pro bono.


1 Draw on DSG as of September 23, 2014

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