JDS' 3000 Merivale Rd. campus

JDS Uniphase has officially put up the For Sale sign on its 3000 Merivale Rd. campus and said Thursday it still considers the Department of National Defence to be a prospective bidder despite Tuesday's federal budget.

JDS spokeswoman Pam Sufi said the huge 900,000-square-foot property officially went onto the market last Friday. Dozens of local commercial realtors have been armed with the sales material to pitch the property far and wide. She said from JDS's perspective, DND remains a prospective buyer and the company has recieved no official word to the contrary.

However, for DND to acquire the property, a formal offer would have to come from Public Works with the approval of the Treasury Board. This at a time when government spending has come under close scrutiny thanks to the sponsorship scandal and Prime Minister Paul Martin's vow to rein in spending.

Though DND has not said flat out that it is no longer interested in acquiring the property from JDS, any deal has been indefinitely delayed by the federal budget that came down on Tuesday.

A potential acquisition of the property was among 10 projects worth about $1.5 billion that were put on hold in the budget, but not cancelled outright. Those projects also include for Ottawa a $151-million federal court building and a $275-million parliamentary building at Bank and Wellington.

Public Works spokeswoman Lucie Cote confirmed that any deal for 3000 Merivale has been deferred, but not cancelled. She added that before Tuesday's budget, Public Works's discussions with JDS had not reached the point where Treasury Board was approached to approve a transaction.

"We did take a look at the property and there had been communication with JDS," she said, but no commitment was made.

The property is still home to JDS's local workforce. Sufi stressed that Ottawa remains an important centre for the company even if it no longer shares the head office with San Jose.

Over the past three years, JDS's massive restructuring whittled the local workforce down from about 10,000 people spread across a number of locations across the city, to a mere 550 concentrated at 3000 Merivale.

Sufi said the property is now simply too large for JDS's needs.

"The Ottawa group is really important to us and having them in such a big building isn't the most logical choice in the world," she said.

The Ottawa Business Journal first reported last September that JDS was looking to unload the property and that the Department of National Defence was nibbling. At the time there were few hard details on a prospective sale.

Sufi said Thursday that the company is open to any offer. At this point it is too early to say what kind of price JDS is after. "All the scenarios are on the table," she said when asked if JDS is willing to become a landlord and lease the space if a suitable buyer does not emerge.

A timeframe for unloading the property and moving staff to another location also remains up in the air. Sufi said that, even if the perfect offer were to come forward tomorrow, the due diligence to close the deal would still take at least three to six months.

In September, sources told the OBJ that JDS was looking for a price in the range of $120 million, while the government was only willing to pay $70 million to $80 million.

The facility was built for about $180 million.

The property is attractive to DND due to its location, size, adaptability, proximity to the airport and train station, cafeteria and gym, security system, significant subterranean space and a theatre for press conferences.

Moving to the south end of Merivale would also get DND employees out of the headquarters building downtown, where security is a problem due to two adjacent bridges, an underpass and access from the Rideau Centre mall.

For most other prospective tenants, however, the size and amenities of the property may make it difficult to find a buyer. The location is remote and accessed only by two-lane roads. About 200,000 square feet is also below-grade, or basement, space.