The €1.2 billion redevelopment of the Northside shopping centre is now likely to get underway following the resolution of an ownership dispute, writes Gretchen Friemann
BRIAN O'FARRELL, the businessman behind the €1.2 billion proposal to develop a "Northside Town Centre", has shelled out €100 million to Treasury Holdings and AIB Investment Managers to resolve a legal dispute over the ownership of the Northside shopping centre in Coolock.
Last year the bank took a High Court action against Treasury Holdings accusing the property firm of "spoiling" a proposed €64 million sale of its majority stake in the centre.
It was alleged that Treasury Holdings was offering AIB's co-owner of the shopping centre, Peter Conlon, a greater amount for his 10 per cent share than the bank had agreed to accept from O'Farrell's company, N1 Property Holdings.
In total N1 had agreed to pay AIB €81.75 million, of which Conlon would receive €17.5 million, while the bank would net €64.25 million. However Treasury Holdings' higher offer to the minority shareholder stalled the transaction, triggering AIB's legal dispute.
It is understood that of the €100 million out-of-court settlement, AIB received €64.25 million while the remainder was split between Treasury Holdings and Conlon.
The recently completed deal means O'Farrell has full control of the shopping centre: a strategic necessity if his plans for the reconstruction of a 65-acre area, widely known as Cromcastle, into a new town centre are to prove successful.
Last Friday, one hurdle was removed after Dublin City Council granted planning permission for the scheme, which will see the 37-year-old Northside shopping centre demolished and replaced by a massive 63,728sq m (685,962sq ft) shopping mall, making it one of the largest retail centres north of the Liffey.
The local authority has given N1, a wholly owned subsidiary of O'Farrell's holding company Headland Holdings, 10 years to complete the "Northside Town Centre".
Designed by architects Murray O'Laoire, the project will reshape an entire community, replacing tracts of bleak housing estates with residential developments constructed around riverside parkland. In addition to the new shopping mall, the town centre itself will feature a new streetscape, two civic plazas, a 16-storey office block and a leisure centre and swimming pool in the one building.
Dublin City Council has also committed €23 million to the development and it is expected that money will be used to relocate retailers and residents.
Under phase one of the scheme, 128 homes will be demolished, as will the Coolock Health Centre and its adjacent industrial and retail warehouse units.
A spokesman for N1 said if no objections are lodged to An Bord Pleanála, the shopping mall, civic plazas, 940 residential units, two-storey leisure centre, crèche, library, community centre and pigeon club should all be completed by the start of 2012.
In phase two, the old Northside shopping centre site will be replaced by the new office block, a pedestrianised high street, cinemas, restaurants, another crèche and 400 additional residential units. Major infrastructural changes are also planned with the realignment of key road routes.
Three years ago, when The Irish Times first reported O'Farrell's ambitious scheme, the budget was set at €200 million. Since then that figure has mushroomed to €1.2 billion.
Anglo Irish Bank has agreed to finance the project, however it is understood the debt may be syndicated amongst other financial institutions.
According to one well-placed source, Anglo Irish Bank is "fully committed" to the project despite the economic downturn and the ongoing turmoil across global money markets.
Such confidence may be partly attributable to Dublin City Council's unwavering support. The local authority first identified Cromcastle as an area in need of regeneration in its 2005-2011 development plan, where it stipulated the need to create a higher density, mixed-use urban centre, with a vibrant and animated town centre, and good quality civic and urban spaces.
Dublin City Council owns around 19 acres of the site and has worked alongside N1 in the formation of the area's master plan.
Yet despite the commitment of the local authority, O'Farrell's plans to construct a retail centre that will provide a counterbalance to Blanchardstown come at a time when industry experts are warning of an oversupply in the market, particularly in the greater Dublin region.
But Larry Brennan of Savills HOK, the agency responsible for the retail element of the "Northside Town Centre", points out that the existing shopping centre already has a loyal customer base and he predicts the 80,000 people who visit it every week will double in number once the new mall is constructed.
He says the retail mix won't rival the city centre, because "that is really a destination shop for people, who plan it in advance. We want 'Northside Town Centre' to be a place people visit four times a week, not four times a month. And the layout of this development, with the new pedestrian access, the new roads and the ample car-parking will make that possible."
Dunnes and Superquinn are the two anchor retailers at the existing Northside shopping centre.
However, it is expected that both supermarkets will relocate to the new mall, with one source speculating that Dunnes would open a flagship store, offering its food, clothes and homeware ranges, as a rival to Tesco's nearby Clare Hall outlet.
New Look, the UK fashion chain, opened its first Irish outlet at Northside, and the shop remains one of the brand's most profitable in Ireland, making it highly likely the retailer will also relocate to the new development across the road.
But while Brennan claims the "cost-efficient" 279sq m (3,000sq ft) to 465sq m (5,000sq ft) units will attract modern fashion retailers, it may prove difficult to bag the big names, like HM and Zara, as both those chains will be represented in developer Joe O'Reilly's Pavilions centre in Swords as well as in Henry Street.
O'Farrell, who also owns the estate agency O'Farrell Cleere, bought his initial 50 per cent stake in Northside shopping centre in 2004 for around €40 million. He also owns the Northside Retail Park, bringing his personal landholding in the "Northside Town Centre" plan to 23 acres.
In addition to a number of developments underway in Poland, O'Farrell is also a shareholder in the 437-acre Milverton Demesne site in Skerries with Richard Barrett and John Ronan of Treasury Holdings.
Irish Times
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