No proper business case was done for $224M MaRS loan, opposition says

TORONTO — Scores of documents released Thursday by the Ontario government failed to convince the opposition parties that the Liberals did a proper business evaluation before granting a $224-million loan to a troubled Toronto real estate project.

The Progressive Conservatives and the New Democrats have been calling on the government for weeks to release a business case for the loan that Infrastructure Ontario granted for the MaRS Phase 2 office tower in 2011.

The released documents included an appraisal for the tower, a debt service guarantee and the financing agreement, which the Liberals say essentially comprise a business case.

But Tory MPP Randy Hillier said those don’t add up to a business case.

“We had some suspicion that they had not done their due diligence and hadn’t evaluated this on any merits and it’s clear so far from the released documents that we were right.”

Construction of MaRS Phase 2 was halted in 2008, when the recession hit, and resumed in 2011 but the building has had trouble attracting tenants. MaRS didn’t originally qualify for a loan under Infrastructure Ontario’s rules, so the government has said that in 2010 the regulations were changed to ensure MaRS was eligible.

NDP house leader Gilles Bisson suggested the government wanted to give an appearance of transparency with release of the documents, but didn’t actually show how the loan was approved.

“There are municipalities across this province that tried to get approved under Infrastructure Ontario,” he said. “They couldn’t qualify and the government moved heaven and earth in order to qualify this loan without having the business case…I think it’s a question where the government really wanted to do this and they didn’t have the proper business case in the first place to go forward.”

Infrastructure Minister Brad Duguid insisted the paperwork released Thursday equals a business case.

“It’s unfortunate that Randy Hillier doesn’t seem to know that a business case for a loan comprises of a value assessment and a secure creditor, which are included in this package of documents,” he said in a statement. “Mr. Hillier also conveniently leaves out the fact that the loan is repayable, including all interest accrued.”

The 2010 appraisal of the MaRS medical research office tower valued the project at about $380 million, but only if they could rent out 80 per cent of the building.

That has not happened, and the tower still sits mostly empty. MaRS and the developer have been unable to repay the loan and the province now has to pay interest of up to $7.1 million a year — for up to 15 years — on it until an agreement on the future of the new tower is finalized.

The government has blamed high rents the American company was charging for why it had trouble attracting tenants. Infrastructure Minister Brad Duguid has said that buying out Alexandria Real Estate’s share of MaRS for $65 million gives the province the authority to manage and operate the facility and the flexibility to set rents at a more attractive rate.

But the appraisal done by Altus Group, while listing various strengths, also cited several weaknesses, including that the special-use nature of the office space could limit leasing demand.

“The (Greater Toronto Area) office leasing market has softened over the last 12 months as a result of the negative effects of the recession,” the appraisal said.

It also noted that the investment market weakened substantially over the past year due to the tightening of the credit markets, but pointed to recent benchmark transactions indicating a stabilizing trend.

Hillier said he would have thought there would have been more thorough evaluations done to see whether there is a market for the special-use medical office space.

“There doesn’t appear to be a market for that building,” he said. “Who else throws around hundreds of millions of dollars without actually doing an analysis, an evaluation of the expenditure?”

The Liberals have said taxpayers won’t lose in the long run because the MaRS office tower is worth more than the $309 million the province has laid out so far, but the opposition parties worry the final bill will be a lot higher.

Article source: http://www.therecord.com/news-story/5028759-no-proper-business-case-was-done-for-224m-mars-loan-opposition-says/

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Sam McDadi Real Estate Inc. Thanks Customers for 25 Years of Business – Virtual

Award-winning Mississauga real estate professional, Sam McDadi, is hosting a 25th Anniversary Client Appreciation Car Draw on Wednesday, November 26th.

Mississauga, Ontario (PRWEB) November 23, 2014

On Wednesday November 26th at 6 p.m. Sam McDadi Real Estate Inc. will be hosting a Client Appreciation Car Draw at the Mississauga Convention Centre, 75 Derry Rd W, Mississauga ON L5W 1G3, 905-564-1920.

This wonderful night of celebration will include special guests, valued clients, friends, and family. NHL Hall of Famers Johnny Bower and Marcel Dionne will be joined by Toronto Maple Leaf greats Wilf Paiement, Gary Leeman, and Bill Derlago. All will be on hand signing hockey pucks for our guests. Mississauga Mayor elect, Bonnie Crombie, will also attend as well as Miss America Latina Canada, Ninela Carolina Sanchez.

The evening’s entertainment will feature music and performances from some of this City’s great musicians including: Dr. Alvin Tung, classical guitarist and Team McDadi real estate professional; Team McDadi graphic artist, Carla Casanova and her band Latintrain; Grady Johnny, son of Team McDadi real estate professional Sean Johnny; and five-year-old superstar in the making, Roberta Battaglia.

“This event is a celebration of our 25 years of service,” states Sam McDadi. “It is a way to give back to everyone who has entrusted Team McDadi with their real estate needs over the years, and a way to extend our gratitude. It truly is our pleasure to serve our clients as best as we can.”

The highlight of the night is the car draw itself. Along with an assortment of other prizes, two brand-new Acura ILX’s, acquired through Acura of Oakville and Erin Mills Acura, will be won. One stunning vehicle will go to a 2014 Team McDadi client and one will go to a client who bought or sold with Team McDadi anytime before Dec. 31, 2013 with no requirement to have participated in any recent transactions.

ABOUT SAM MCDADI REAL ESTATE INC. BROKERAGE:

Before starting his own brokerage, Sam McDadi and his team won almost every conceivable award a Mississauga real estate professional can obtain. With an extensive business background and having earned an M.B.A, Sam has been the top full service Realtor® in the Greater Toronto Area for the past three years. He and his team have sold over 7,800 homes and achieved over $3 billion dollars in sales. (Current Career Sales – both Independent and with Team 1988-2014.) In 2013 Sam and his team set yet another Toronto Real Estate Board record (eclipsing his previous record set in 2012) by assisting over 600 families with their real estate needs and generating over $400 million dollars of real estate sales.* (*Based on ReDatum stats plus exclusive sales 2013, both independent and with team). Sam was also honoured as one of the top Realtors® in the world, receiving the prestigious ‘Pinnacle Award’ two years in a row. Sam is also the author of two books; “Making Sense of Real Estate” and “My Collected Thoughts on Real Estate.”

For the original version on PRWeb visit: http://www.prweb.com/releases/sammcdadi/realestate/prweb12346017.htm

Article source: http://www.virtual-strategy.com/2014/11/23/sam-mcdadi-real-estate-inc-thanks-customers-25-years-business

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No proper business case was done for $224M MaRS loan, opposition says

TORONTO – Scores of documents released Thursday by the Ontario government failed to convince the opposition parties that the Liberals did a proper business evaluation before granting a $224-million loan to a troubled Toronto real estate project.

The Progressive Conservatives and the New Democrats have been calling on the government for weeks to release a business case for the loan that Infrastructure Ontario granted for the MaRS Phase 2 office tower in 2011.

The released documents included an appraisal for the tower, a debt service guarantee and the financing agreement, which the Liberals say essentially comprise a business case.

But Tory MPP Randy Hillier said those don’t add up to a business case.

“We had some suspicion that they had not done their due diligence and hadn’t evaluated this on any merits and it’s clear so far from the released documents that we were right.”

Construction of MaRS Phase 2 was halted in 2008, when the recession hit, and resumed in 2011, but the building has had trouble attracting tenants. MaRS didn’t originally qualify for a loan under Infrastructure Ontario’s rules, so the government has said that in 2010 the regulations were changed to ensure MaRS was eligible.

NDP house leader Gilles Bisson suggested the government wanted to give an appearance of transparency with release of the documents, but didn’t actually show how the loan was approved.

“There are municipalities across this province that tried to get approved under Infrastructure Ontario,” he said. “They couldn’t qualify and the government moved heaven and earth in order to qualify this loan without having the business case…I think it’s a question where the government really wanted to do this and they didn’t have the proper business case in the first place to go forward.”

Infrastructure Minister Brad Duguid insisted the paperwork released Thursday equals a business case.

“It’s unfortunate that Randy Hillier doesn’t seem to know that a business case for a loan comprises of a value assessment and a secure creditor, which are included in this package of documents,” he said in a statement. “Mr. Hillier also conveniently leaves out the fact that the loan is repayable, including all interest accrued.”

The 2010 appraisal of the MaRS medical research office tower valued the project at about $380 million, but only if they could rent out 80 per cent of the building.

That has not happened, and the tower still sits mostly empty. MaRS and the developer have been unable to repay the loan and the province now has to pay interest of up to $7.1 million a year — for up to 15 years — on it until an agreement on the future of the new tower is finalized.

The government has blamed high rents the American company was charging for why it had trouble attracting tenants. Infrastructure Minister Brad Duguid has said that buying out Alexandria Real Estate’s share of MaRS for $65 million gives the province the authority to manage and operate the facility and the flexibility to set rents at a more attractive rate.

But the appraisal done by Altus Group, while listing various strengths, also cited several weaknesses, including that the special-use nature of the office space could limit leasing demand.

“The (Greater Toronto Area) office leasing market has softened over the last 12 months as a result of the negative effects of the recession,” the appraisal said.

It also noted that the investment market weakened substantially over the past year due to the tightening of the credit markets, but pointed to recent benchmark transactions indicating a stabilizing trend.

Hillier said he would have thought there would have been more thorough evaluations done to see whether there is a market for the special-use medical office space.

“There doesn’t appear to be a market for that building,” he said. “Who else throws around hundreds of millions of dollars without actually doing an analysis, an evaluation of the expenditure?”

The Liberals have said taxpayers won’t lose in the long run because the MaRS office tower is worth more than the $309 million the province has laid out so far, but the opposition parties worry the final bill will be a lot higher.

Article source: http://www.winnipegfreepress.com/business/no-proper-business-case-was-done-for-224m-mars-loan-progressive-conservatives-282613841.html

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Tories say proper business case wasn’t done for $224M MaRS loan

TORONTO – Ontario’s Progressive Conservatives say documents released today by the Liberal government show due diligence was not done before a $224-million loan to a troubled Toronto real estate project was approved.

The opposition parties have been calling on the government to release a business case for the loan that Infrastructure Ontario granted for the MaRS Phase 2 office tower in 2011.

Today the Liberals released documents including an appraisal for the tower, a debt service guarantee and the financing agreement, which they say essentially comprise a business case.

But Tory MPP Randy Hillier says those don’t add up to a business case, which he says confirms his suspicions that there was no proper evaluation done of whether or not it was a good investment.

In addition to the loan, the government paid $65 million to buy out an American real estate company involved in the project – which so far remains nearly empty.

The 2010 appraisal of the MaRS medical research office tower ultimately valued the project at about $380 million, but only if they could rent out 80 per cent of the building.

© The Canadian Press, 2014

Article source: http://globalnews.ca/news/1670312/tories-say-proper-business-case-wasnt-done-for-224m-mars-loan/

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