There were multiple warnings about shrinking prospects for the mostly empty MaRS tower before Premier Kathleen Wynne’s government bailed it out for $309 million, new documents show.

Appraisals from two companies within the last year point to a “softening” real estate market and likely troubles in getting renters or selling the controversial building across from Queen’s Park.

The details are in 700 pages of documents released Thursday in response to a demand from opposition parties for the government to reveal its “business case” for the controversial deal, which first came to light during last spring’s provincial election campaign.

“We still haven’t got the business case,” said Progressive Conservative MPP Randy Hillier, noting a debt service guarantee revealed Thursday shows taxpayers are also on the hook for $106 million in interest payments over 15 years.

“There was no evaluation to see if this was feasible.”

The not-for-profit Medical and Related Sciences (MaRS) Discovery District was founded in 2000 to commercialize publicly funded medical research and other technologies, but critics say the tower at College and University is too big and expensive for the country’s relatively small life sciences sector.

In September, Wynne’s government announced it was putting $309 million into the tower, including $224 million to cover the original loan to MaRS from Infrastructure Ontario and $65 million to buy out a U.S. developer, Alexandria Real Estate.

MaRS announced earlier this year it could no longer pay the interest on that loan, which is $450,000 monthly or $7.1 annually — a tally that could reach $106 million over 15 years.

While the government points to the two appraisals putting the value of the building close to the $309 million invested by taxpayers, those same documents raise red flags about the 20-storey MaRS tower.

Altus Group and CBRE noted special difficulties in fully leasing a medical and laboratory tower that has signed deals with two tenants for just 31 per cent of its space.

It appears the MaRS building may have been beaten to the punch by two new research and lab buildings downtown, which in combined square footage are about 25 per cent bigger than the MaRS tower.

“Recent new construction of facilities at the Hospital for Sick Children and St. Michael’s Hospital have added significant new supply to the market,” said an Altus appraisal that put the value of the MaRS tower at $330.9 million.

“The additional space together with the vacancy created in existing buildings is expected to put downward pressure on rental rates in the district over the next four years.”

New Democrat MPP Gilles Bisson said the government did not do proper due diligence before plunging ahead, comparing the situation to getting a bank loan by proving how you can pay it back.

“It would appear basic questions were not asked in this particular case,” he told the Star. “The end result is we’re on the hook for $300 million. This is one big white elephant.”

Infrastructure Minister Brad Duguid shot back at the opposition.

“A business case for a loan comprises . . . a value assessment and a secure creditor, which are included in this package of documents,” Duguid said in a statement. “The loan is repayable, including all interest accrued.”

His officials said more tenants are interested but deals cannot be signed until February when the deal with Alexandria Real Estate is finalized.

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In its appraisal putting the building’s value at $303.7 million, CBRE pointed out the MaRS tower income profile is “compromised due to the significant leasing risk associated with the vacant space.”

The Altus appraisal added “leasing demand is expected to be weak” and “demand for life science and lab space is more difficult to estimate given the specialized nature and tenant reliance on government funding” at a time when the government is cutting back to eliminate its $12.5-billion deficit.

The two tenants signed for the tower are Public Health Ontario and the Ontario Institute for Cancer Research.

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