Friday 16 May 2008

Council to meet developer over stalled projects

DUBLIN CITY Council officials are to meet leading developer Bernard McNamara today over the fate of a number of stalled public-private partnership (PPP) projects between the two parties.

Amid growing concern by developers over the effect of the credit crunch on the council's PPP programme, council officials are to press Mr McNamara to go ahead with the longest-delayed project, the €265 million flagship regeneration of St Michael's Estate in Inchicore.

Dublin assistant city manager Ciarán McNamara said he would be seeking an "immediate conclusion" to protracted negotiations on the St Michael's site.

Progress had been "slower than anticipated" in the discussions since McNamara Construction and Castlethorn Construction were chosen last year to redevelop the site and a number of deadlines had been missed, he said.

Ciarán McNamara denied claims that the developer had pulled out of the project. "We're still in serious negotiation with them and it's not over. It's never over till it's over."

He said the property market had changed since the contract was agreed last year.

The council had introduced new guidelines on the size of apartments and new requirements for energy ratings for buildings, and both of these would lead to the developers incurring extra costs.

Bernard McNamara declined to comment in advance of today's meeting.

The credit crunch has made it more expensive for developers to raise finance from banks, further contributing to a slowdown of the property market.

One option under discussion is believed to be a phased development of the site, with the developer having the option of not proceeding with later phases if economic conditions are not favourable.

Concerns have also been raised about the cost of clearing the site, which is said to contain petrol and other toxins left over from the time it was occupied by Richmond Barracks, before the departure of the British army in 1922.

A meeting of the board overseeing the regeneration of St Michael's is scheduled for next Monday, at which council officials are expected to indicate whether the project will go ahead or not.

Board chairman Finbarr Flood, a former chairman of the Labour Court, said his group signed off on the plans for St Michael's last January and was awaiting the outcome of the discussions between the council and the developers.

"I haven't been told the project is finished but I wouldn't be surprised if they said this," he commented, adding that "economic circumstances are very different from what they were two years ago".

The St Michael's project, which has been in planning since 2001, is to include 720 new private and social housing units, a creche, a civic centre, retail spaces, restaurants, bars, a health centre and all-weather pitches.

Most of the tower blocks on the existing site have been demolished and planning permission has been obtained for a portion of the site.

Last week's announcement by Guinness that it intends to dispose of half of its lands at nearby St James's Gate could render the lands at St Michael's less attractive to developers.

The regeneration of St Michael's Estate is one of five PPPs involving Mr McNamara and the council.

The other four are regeneration projects at O'Devaney Gardens in Dublin 7, the convent grounds on Seán MacDermott Street, Dominick Street flats and Infirmary Road. None has yet started.

PPPs were promoted by the council as an economically efficient way of modernising the city's public housing stock, but many have been beset by difficulties.

The major exception has been the regeneration of Fatima Mansions in Rialto, which is nearing completion.

Irish Times

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