Sunday 10 May 2009

High, dry and stranded in north inner-city Dublin

Grangegorman was meant to be a new quarter for the capital, but falling property prices have left the project in doubt, writes News Investigations Correspondent John Downes
Former taoiseach Bertie Ahern with project architect James Mary O'Connor

The plans are ambitious: the complete regeneration of a whole section of north inner-city Dublin, and the transfer of one of the country's largest third-level colleges to a 73-acre site.

If implemented in full, the project at Grangegorman will eventually lead to the relocation of 22,000 Dublin Institute of Technology (DIT) students and 2,000 staff from some 40 different locations around the city to a single campus. It will also include a €115m redevelopment of St Brendan's hospital, a mental-health facility owned by the HSE, as well as a major primary-healthcare facility. Overall, the aim is to create a major new city quarter, including schools, social housing for the elderly and parkland and sports facilities.

But the Sunday Tribune has learned that serious questions remain about the viability of a project that was conceived during vastly different economic times.

Back in 2002, when then-taoiseach Bertie Ahern announced his government had given the green light for phase one of the new DIT campus, it had been hoped construction would start the following year. Assuming phase two of the project would be approved, construction was due to finish by 2010.

Fast-forward seven years, and the Grangegorman Development Agency (GDA) has yet to receive budgetary approval from the minister for education and science, Batt O'Keeffe, to begin implementing its draft strategic plan. It says it now hopes it can start construction on the replacement health facilities in 2010, with a view to having most of DIT transferred there by 2014 and its "core facilities" completed by 2020. All of this is subject to the government deciding that it will allocate the necessary money for the project.

It is currently estimated that it will cost at least €750m to complete the first "core phase" of the DIT's move to Grangegorman, as well as a large proportion of the HSE's planned facilities. If the project as originally envisaged is ever completed, however, the final figure will likely be far higher as other major infrastructural aspects to the project come on stream.

Figures for what these are likely to cost are not yet available, although an early meeting of the GDA in November 2006 was told that the overall cost of the project could be as much as €2bn.

Therein lies one of the major problems facing the Grangegorman proposals.

More than 50% of the costs of the DIT project are expected to be financed primarily through the sale of buildings currently owned or occupied by DIT.

The sale of these properties is due to take place from 2011 onwards, meaning much depends on whether the property market improves by this time.

Yet according to a confidential valuation of DIT's buildings, obtained by the Sunday Tribune, these were worth just €223m in July of last year. While this excludes two properties, one on Slaney Row and the other at Camden Row, this figure equates to less than one third of the estimated €710m cost of building phase one of the DIT project, as calculated in early 2008.

It is also a far cry from the 50% or more which the sale of these buildings was expected to contribute – and fails to take account of the collapse in property prices in the intervening period.

Add to this the lack of funds available for lending in the current property market, and questions are likely to have been raised in government circles as to whether DIT's properties can be relied upon when calculating overall budgets for the project. This means that the government may be required to make up any shortfall – hardly an ideal scenario in the current economic climate.

Perhaps understandably, supporters of the project point to the fact that construction costs have also declined significantly during this time. For example, the core part of the DIT campus, comprising all of its 27 schools, will amount to 140,000sq m of development. The GDA says the cost of this phase has dropped from €710m to approximately €635m currently. All prices are inclusive of VAT.

The GDA's chief executive, Gerry Murphy, told the Sunday Tribune that this significant fall in the cost of the project was due to a reduction in construction pricing and "value engineering" which the GDA and its technical advisers have carried out.

"The majority of the... costs will be funded by DIT itself through sale of its property portfolio, its savings on lease costs and other savings arising from its consolidation on site. Other DIT developments on site, such as student accommodation, will be self-funding," he said.

But does the project have the full support of the minister for education? Asked if Batt O'Keeffe was committed to providing all necessary resources to facilitate DIT's move to the Grangegorman site, his spokesman would only say he was committed to "examining the proposals" put forward by the GDA in relation to its draft strategic plan. These were sent to government six months ago.

The project could be facing other challenges too. Frustrated local residents cannot necessarily be relied upon to 'buy in' to the project.

Pirooz Daneshmandi of the Grangegorman Residents Alliance is an elected member of the GDA board. He accuses the GDA, which has allocated significant sums to public-consultation exercises and information campaigns, of "continually undermining" residents' contributions and not listening to their suggestions.

Just one of these is that consideration be given to saving money by turning Bolton Street College and an empty hotel in Smithfield into relatively low-cost student accommodation –rather than building high-rise student accommodation at Grangegorman.

"Our community has only ever looked for a meaningful role in this major project in order to avoid the mistakes made in Smithfield, Ballymun and elsewhere," he says.

Sunday Tribune

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