OTTAWA—Facing an ugly balance sheet and a drop in supporter donations, the New Democratic Party has mortgaged its national headquarters near Parliament Hill for $12 million.
Property records show the party inked the mortgage for the Jack Layton Building with the Bank of Montreal on Aug. 30. The mortgage included an “assignment of rents” agreement, a form of collateral that says revenue from tenants in the building at 279 Laurier Ave. W. in downtown Ottawa can go to the bank if the party can’t repay the loan.
This is the first time the NDP has mortgaged the building since it bought the property for $3.5 million in 2004, the party says.
“The Jack Layton Building was purchased in whole as an asset for the NDP. Using an asset is common practice,” NDP national director Melissa Bruno told the Star in an emailed statement Monday.
“The NDP is focused on working hard to make life better for Canadians because we believe this is not as good as it gets and that we can do so much more, together.”
On the plus side, if the NDP bought the building in 2004 for $3.5M and now it can carry a mortgage for $12M it looks like the Party made a pretty shrewd real estate move. Assuming a maximum commercial mortgage ratio of 75% the building must be worth at least $16M today, which means the party almost quintupled its investment over 15 years.
On the downside the Party is going to have to do a lot of fundraising to pay that nut off and if fundraising was really going well maybe it wouldn't have needed such a big mortgage. Is the reporter really correct that this is the first time the Party has mortgaged the building? I am surprised it did not see fit to do so in previous elections, if "using assets" to finance election campaigns really is "a common practice" as Ms. Bruno says.