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Backgrounder: The Expert Panel Report on the MaRS Phase 2 Building

Backgrounder

Backgrounder: The Expert Panel Report on the MaRS Phase 2 Building

Ministry of Economic Development and Growth

The MaRS Phase 2 Expert Panel began work in mid-September 2014 and formally submitted their findings to the government on Dec. 8, 2014. The panel recommended that:

  • MaRS should acquire the leasehold interest from Alexandria Real Estate Equities, Inc. (ARE) to unlock the fiscal sustainability of MaRS Phase 2, which will reduce the time and cost to achieve substantial lease-up, and ensure MaRS Phase 2 reaches its potential value on the order of $400 million.
  • MaRS Phase 2 should be used to house tenants critical to the execution of the MaRS innovation mission in life sciences.
  • Resources to acquire ARE's leasehold interest and achieve substantial lease-up should be made available to MaRS by the province through a line of credit that is fully repayable with interest and is protected by appropriate covenants and security against MaRS Phases 1 and 2.

The following outlines financial commitment of the panel's recommended option:

 

Announced to Date

New

Total

Original IO Loan

224

224

ARE Buyout

65

65

Coverage of Original IO Loan

4

21

25

Operating Funding During Lease-up

15

15

Completion of Floors

55

55

MaRS Reserves

(5)

(5)

Grant for land purchase

16

16

Total

$309M

$86M*

$395M

$86 million of the line of credit will be drawn down on an as-needed basis. The $55 million for completion of floors includes a $15 million contingency, and all additional funding secured by MaRS through private donations, grants, and a potential equity deal would reduce their need for funds under the line of credit.

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 conducted its work pro bono.

Media Contacts

  • Andreas Kyprianou

    Communications Branch

    andreas.kyprianou@ontario.ca

    416-325-2479

  • Jessica Hume

    Minister's Office

    jessica.hume@ontario.ca

    416-325-7569

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