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The global recession touched down in Toronto when construction of a highly anticipated downtown research centre came to a sudden halt this week.

"The world is plunging into what could be a very deep recession so we're taking prudent measures to suspend construction," said John Cunningham of California-based Alexandria Real Estate Equities, which until this week was building a 20-storey building on the southeast corner of College Street and University Avenue as part of the MaRS Discovery District, a non-profit "innovation centre" established to encourage high-tech startups.

A speculative venture that was going ahead without government funding, the MaRS expansion is not the only such victim of the credit crunch. Last week, Alexandria suspended construction of two similar buildings at San Francisco's Mission Bay biotech complex and another at New York's East River Science Park.

"There's no one market that is different from another," Mr. Cunningham said. "It's a global situation."

But the Toronto building will go ahead when conditions improve, Mr. Cunningham insisted. "It's as simple as a temporary suspension in construction," he said. "We're totally committed to MaRS, we have nothing but the strongest feelings for Toronto and think it's a fantastic market."

The suspension is disappointing but not surprising, according to Ilse Treurnicht, MaRS CEO. "MaRS is a magnifying glass of what is going on in the global economy," she said. "We are clearly dealing with an unprecedented and unpredictable set of global circumstances."

As a result, Ms. Treurnicht said, it is impossible to anticipate when construction of the new building might begin again. But in the meantime, she insisted, MaRS continues to thrive.

"Although we're very excited about watching a building go up it doesn't change anything we do," she said. "We're not even taking a breath. We're marching ahead."

MaRS, established originally to foster innovation in the health sciences, currently accommodates 70 tenants in a variety of industries, including 30 in its incubator program. It serves even more companies that are not located in the complex, according to Ms. Treurnicht.

"We have a full building and in fact we're seeing growth in our waiting list, particularly with the smaller companies," she said.

Even so, some established tenants are feeling the crunch. "It's a very cash-dependent sector," said Tony Cruz, CEO of MaRS tenant Transition Therapeutics Inc., a biotech firm that has seen its stock price plummet in recent weeks. "We're dependent on investors and when the cash disappears from the market it really puts a lot of pressure on companies."

Building a business culture that is capable of sustaining a local biotech industry will take much more than new buildings, according to Mr. Cruz. "That takes a lot more focus."

The current "pause" will give MaRS the opportunity to develop a new strategy for implementing its plans, according to Ms. Treurnicht. Without asking for a bailout, she held out hope for future government partnerships.

"If anything, the global situation has made the work of MaRS more important," she said. "Building the next generation of knowledge-based businesses is our opportunity to take control of our future economic destiny. The work of MaRS is absolutely critical in terms of reinventing not only Toronto but Ontario's economy."