THE STORY of the Dublin Docklands Development Authority and the property boom involves unhappy dealings with the now nationalised Anglo Irish Bank.
The former chairman of the authority, Lar Bradshaw, was a non-executive director of the bank, while the bank’s chairman, Seán FitzPatrick, was a non-executive director of the authority.
The bank lent money to property developer Liam Carroll to build a new headquarters for the bank in the docklands area. The intended lease, for an unknown period of time, involved a cost of €101 million.
The building was fast-tracked but then came a cropper as a result of a High Court ruling. It was to have been eight storeys high, but had an underground car park suitable for a building twice that size. The authority’s executive entered into an agreement with the Carroll company involved that a larger building could be built once a new planning scheme was introduced for the North Lotts area of the docks. It didn’t tell the board of the authority about this.
The half-built, eight-storey building is now a shell. The bank has cancelled the deal for a lease. Carroll’s loans have been moved to the National Asset Management Agency, and his property group is in receivership. A recent filing in the Companies Registration Office gave “not known” for the value of the North Lotts site.
GLASS BOTTLE SITE - MASSIVE EXPOSURE
THE DUBLIN Docklands Development Authority is facing an enormous cost from one of the largest property deals of the boom.
According to the planning report, the executive board made decisions in October 2006 that led to the authority entering a joint venture agreement to buy the Irish Glass Bottle site in Ringsend, Dublin.
The initial investment by the authority was €32.8 million. The joint venture vehicle, Becbay Ltd, paid €411 million for the site, and €14.8 million in related costs. The partners put up €126.18 million and borrowed almost €300 million from Anglo Irish Bank. The other Becbay shareholders were Bernard McNamara and Derek Quinlan.
The partners signed an agreement that would limit the authority’s exposure to €35 million. However, Anglo was not a party to the agreement. The amount lent by the authority to Becbay by the end of 2008 was €47 million.
Early guarantees given to Anglo limited the authority’s exposure, but these were extended in March 2009 so that its exposure increased. The report found there was no limit on its exposure on cost overruns and interest.
McNamara is suing the authority seeking damages of €100 million. Interest on the Anglo loan to Becbay costs the authority €5 million per annum.