The federal government announced this morning that it's buying the entire Nortel campus on Moodie Drive in Ottawa. The price tag is $208 million.
The campus is considered a landmark in the city with its huge glass pyramid. It is built to house up to 9,000 workers and is currently at about 60 per cent empty.
Public Works has yet to respond to questions on who will move into the sprawling campus or the fact that the land is NCC Greenbelt property, which is tied up in a 99-year lease with the NCC.
An earlier published report said the national defence department would keep its headquarters downtown, but consolidate several dozen other locations at the Nortel campus.
As for the five companies and roughly 3,000 employees now working on the campus, Nortel can stay in the building until it wraps up its bankruptcy case.
Public Works will take over the leases for Avaya, Ericsson and GENBAND while Ciena will have its lease reduced from 10 years to five.
In order to do that a US$33.5-million penalty will kick in. Nortel must pay that as well as pay off a $75-million outstanding mortgage plus assorted fees.
That means Nortel will likely receive less than $100 million to put into the asset mix for creditors.
The government must approve the deal, along with a bankruptcy court judge. Creditors may decide to intervene if they feel the deal is not good enough.
Nortel says it hopes the deal will close by the end of this year.
The sale could also prompt some new construction in the capital in order to house the companies that will have to leave the Nortel location.
