Economic crisis halts MaRS Phase II

The expansion plans of Canada's largest life sciences commercialization facility have been thwarted –— at least temporarily — with the suspension of construction on Phase II of the MaRS Discovery District in Toronto. The $350-million project is being undertaken by Alexandria Real Estate Equities Inc, a Pasadena CA-based real estate investment trust, which has run into serious financing problems stemming from the current financial meltdown.

Alexandria — billed as the world's largest life sciences property specialist — is footing the cost of the 20-story expansion with plans to jointly select tenants with MaRS. In a recent presentation on MaRS, president and CEO Dr Ilsa Truernicht described Phase II as "our venture capital phase" as it shifted the organization away from a research push model towards a more synergistic approach to commercialization.

Construction was halted November 20th, with the concrete foundations above ground level. The termination is leading to fears that the unsightly footing could become an eyesore at a particularly high-profile downtown intersection if the halt in construction persists over the long term.

There is also growing concern that the investment chill could lower demand for new office and laboratory space, prompting Alexandria to permanently scuttle development plans, leaving MaRS scrambling for another development partner.

Alexandria has also suspended construction on projects in San Francisco's Mission Bay biotechnology complex and New York City's East River Science Park and halted pre-construction plans for a 14,000-sq-m multi-building project adjacent to the Univ of Edinburgh in Scotland.

While Phase II development is essentially as pure real estate play, MaRS had high hopes that Alexandria's involvement in projects in other life sciences centres could be effectively leveraged for the benefit of Canadian companies and inventions.

"Alexandria is building its network and MaRS benefits," said Truernicht in an October 30 presentation in Ottawa. "It expands the range of locales where MaRS-generated companies can land."

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