Saturday 28 June 2008

Developer pushes for lower price in council land deal

CONSTRUCTION FIRM Stanley Holdings says it is not in a position to complete a major land purchase from Dublin City Council at the moment for the agreed price of €60 million.

Blaming the downturn in construction, the company wants to pay a reduced price of €47.9 million for the land at Balgriffin, or else defer payment of most of the money for three years and make it subject to obtaining planning permission, local councillors have been told.

In June 2006, the company agreed to buy 9.3 hectares of land on the Malahide Road through a subsidiary, Belmayne Contracts Ltd, for €47.9 million.

The deal required the developer to build a public square and access road and provide 20 per cent social and affordable housing as part of plans to create a new town on the so-called "northern fringe" of the city.

The contract contained an "uplift clause" allowing the council to renegotiate the price if property values in the area rose. This happened, and the price increased to €60 million. However, two years on, no contract has been signed and no planning permission has been applied for. Now, according to a reply given by council officials to local Labour councillor Seán Kenny, the company says it cannot pay the €60 million.

Instead, it is offering to pay the original sum of €47.9 million, or else pay €5 million now and the remaining €55 million in three years' time, subject to planning permission being granted for the site.

A spokesman for Stanley Holdings confirmed that it was not prepared to pay the €60 million price in the current climate, and admitted the council was "not keen" on settling for less.

"We haven't walked away from this deal by any means. The only thing that has changed is the timing of the payment."

He blamed the difficulty on the "very challenging" state of the residential market at present, but predicted agreement with the council would be reached within weeks.

He said the company was pressing ahead with plans for an international architectural competition for the design of the civic plaza, and a master plan was being finalised. A planning application could be submitted early next year once agreement is reached with the council.

The council declined to comment, saying contractual talks were continuing and the information was commercially sensitive.

The original deal with Stanley Holdings caused controversy when it emerged that it was not put out to tender. Council officials argued that the approach taken represented the quickest route to progress, given that the firm already owned the adjoining land.

Stanley Holdings has a 10-year planning permission to build 2,600 units at Belmayne, across the Malahide Road. In spite of an eye-catching advertising campaign featuring glamorous models, the company struggled to sell the 850 units built so far and was forced to drop prices. "The last six months have been very quiet, but before that we did well," the spokesman said. About 600 units have been sold and building will continue until January, after which the situation would be reviewed, he said.

Irish Times

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