Toronto’s MaRS hub finds pri­vate fi­nanc­ing to re­pay On­tario gov­ern­ment loan

The Hamilton Spectator - - BUSINESS - ALLISON JONES

TORONTO — The MaRS Dis­cov­ery District has ac­quired pri­vate fi­nanc­ing to re­pay most of a con­tro­ver­sial loan it re­ceived from the On­tario gov­ern­ment to fund one of its tow­ers in Toronto.

The Lib­eral gov­ern­ment gave the “in­no­va­tion hub” nearly $400 mil­lion in loans as it strug­gled to find ten­ants for a nearly empty tower.

Both op­po­si­tion par­ties had been crit­i­cal of the Lib­er­als for grant­ing the loan with­out a proper busi­ness case, but the gov­ern­ment claimed vin­di­ca­tion Thurs­day.

“We are thrilled that MaRS will be re­pay­ing the ma­jor­ity of our gov­ern­ment’s loan, with in­ter­est, al­most three years ahead of sched­ule,” Eco­nomic De­vel­op­ment Min­is­ter Brad Duguid and Re­search and In­no­va­tion Min­is­ter Reza Moridi said in a state­ment.

“Our de­ci­sion to sup­port MaRS is an ex­am­ple of our will­ing­ness to stand up in the face of op­po­si­tion to serve the best in­ter­est of the peo­ple of On­tario.”

MaRS is now fully leased, which will al­low it to gen­er­ate enough rev­enue to be self-sus­tain­ing in the fu­ture, the gov­ern­ment said. Ten­ants in­clude JLABS, Face­book, IBM, Au­todesk, Merck, PayPal, Etsy and Airbnb.

“We are grate­ful that the gov­ern­ment of On­tario stepped up to help us solve an un­fore­seen prob­lem,” Gord Nixon, chair of the board of di­rec­tors at MaRS, said in a state­ment.

“The suc­cess of MaRS has fa­cil­i­tated a new gen­er­a­tion of en­trepreneurs and star­tups that show­case On­tario’s in­no­va­tion, which is crit­i­cal to the prov­ince’s com­pet­i­tive fu­ture and pros­per­ity.”

MaRS says it will get $290 mil­lion from Man­ulife, Sun Life Fi­nan­cial and iA Fi­nan­cial Group through in­vest­ments in 19-year bonds.

The prov­ince loaned MaRS $225 mil­lion for its sec­ond of­fice tower, then later pro­vided an $86-mil­lion line of credit to help at­tract ten­ants, spent $65 mil­lion buy­ing out an Amer­i­can real es­tate com­pany’s in­ter­est in the project, and gave a $16-mil­lion grant for the pur­chase of the land.

MaRS had trou­ble leas­ing up the tower, which was only about 30 per cent full when the loans were made in 2014, as high rents were de­manded by the U.S. real es­tate com­pany.

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