Liberals quietly changed rules to loan MaRS $224 million
The Liberal government changed the rules so it could lend $224 million to MaRS to build an ill-fated 20-storey downtown office tower now costing taxpayers $450,000 a month in interest payments alone.
Infrastructure Minister Brad Duguid confirmed Wednesday that a regulation change at the behest of MaRS was necessary to allow Infrastructure Ontario to lend the money in August 2011 to the not-for-profit Medical and Related Sciences.
The change allowed Infrastructure Ontario to extend its loans to charities beyond municipalities. Duguid was the minister when the regulation change was approved Feb. 24, 2010.
That was a conscious decision we made because the alternative would have been to see phase two collapse, Duguid told reporters after explaining that commercial lenders would be loath to touch a project of this sort unless it was 70 per cent occupied.
The office tower kitty-corner to Queens Park is just under 70 per cent unoccupied and MaRS earlier this year reneged on the loan, leaving taxpayers holding the bag for the $224 million and another $65 million to buy out the U.S. developer.
Even so, Duguid said it was a wise decision to give MaRS the money. The government hasnt decided what it plans to do with the building.
The fact regulation changes were necessary one for other unnamed not-for-profits and one specifically for MaRS was first raised during debate at the legislature estimate committee. MaRS Discovery District, a not-for-profit corporation, was founded in Toronto in 2000.
It allowed MaRS to become an eligible corporation, Duguids deputy minister, Giles Gherson, told the committee.
There is no question this was a unique circumstance, Duguid told the committee. He later accused reporters of conducting a witch hunt for asking questions about the loan deal.
NDP MPP Percy Hatfield (Windsor-Tecumseh), who prompted the information on the regulation changes, said, They want to keep it all private and they dont want to release any information. And even simple questions they want to stonewall.
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Liberals quietly changed rules to loan MaRS $224 million