Monday 16 March 2009

Plans to knock down landmark Galway hotel

Businessman Gerry Barrett plans to demolish the Corrib Great Southern Hotel in Galway, just weeks after local controversy about the zoning of the hotel site.

A company called MD Merlin Developments, which is controlled by Barrett’s Edward Holdings, has sought permission to demolish the 175-bedroom, five-storey hotel. The hotel is on a site of 6.5 acres on the Dublin Road close to Galway city.

Barrett could not be contacted for comment last week, and it is not clear what he plans to do with the site if his application is successful. At a meeting of Galway city council last month, an independent councillor, Declan McDonnell, proposed that the hotel site be rezoned for commercial use, which could significantly increase its value.

The motion was supported by Labour Party councillor Tom Costello, but was opposed by the city manager, Joe McGrath. While McDonnell withdrew the proposal, the matter is likely to arise again next month when the Galway city development plan comes under review.

Barrett bought the Corrib hotel in 2006 when he paid a total of €140 million for it with the Great Southern hotels on Eyre Square in Galway and in Killarney in Kerry. He sold the Killarney hotel and rebranded the Eyre Square hotel as the Meyrick.

The value of the Corrib hotel was not disclosed at the time, but accounts for MD Merlin Developments show the firm has fixed assets valued at €36.9 million. The firm made an after-tax loss of €2.5 million in 2007, but said another group company, Talebury Properties, had agreed to provide it with financial support.

During 2007, MD Merlin Developments received €41.5 million from its parent company, KH Kitty Hall Holdings. It also had a bank loan of €9 million, which was secured on the assets of the firm and other group companies.

Sunday Business Post

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