WICKLOW COUNTY Council is to apply to the Department of the Environment for help in securing a €3 million loan after being informed it is legally obliged to pay the cash as part of a three-acre land deal completed during the property boom.
Councillors have authorised council management to contact the department over a 2004 compulsory purchase order it issued for just under 3½ acres of land at Three Trouts, Charlesland, Greystones.
The council had hoped to develop social housing on the site and finalised the purchase order with a “notice to treat” in July 2006. However William Irwin, the owner, and the occupier John Nolan, both local men, valued the land at significantly more than the local authority was willing to pay.
The deal then went to arbitration, but during this process, in late 2008, both men died.
Their legal representatives continued with the negotiations on behalf of the estates and, in March, an arbitration hearing resulted in agreement on a €3 million purchase price. This is despite the fact any building on site is unlikely to begin soon because social housing projects have virtually ceased due to the downturn.
Auctioneering sources in the county yesterday valued the land at “no more than €400,000”.
“Development land in the area has fallen in value by as much as 90 per cent in recent years,” one property expert said. “With that in mind, this land would be worth no more now than €400,000, even though the area would be considered a good area.”
To the horror of councillors who were only informed of the deal early this month, senior management say the legal advice indicates they must honour the deal.
Irene Winters, a Fine Gael councillor, criticised senior officers at the council over their failure to disclose the deal sooner.
“They knew about this in March and only told us at a meeting in early July,” she said. “We have to buy the land by the end of August, so that left us no time whatsoever to try to get this sorted.”
Ms Winters said councillors felt obliged to authorise the loan application because the only other option was to take funding from the council’s budget, which would “seriously impact” on services.
John Brady, a Sinn Féin councillor, slammed the local authority over its handling of the matter.
“I reluctantly supported the proposal to take the loan route because I didn’t want to impact on services,” he said.
“Effectively we are now going to be stuck with this land, which will be no good for anything apart from growing briars.”
He added: “If it was valued today it would be a fraction of what we will pay for it, but the red tape of the situation doesn’t allow us to price at today’s values. It’s a bitter pill to swallow but I’d prefer to protect front-line services rather than hand that issue over to the executives.”
Michael Nicholson, the council’s director of housing, confirmed the chain of events and said the €3 million was “considerably less” than the price the land would have been worth if the purchase order and arbitration had been completed in 2006. In effect, he said, the council has “benefited” from the delay.
Mr Nicholson said that should the council get a loan for the purchase through the department, the land would, in seven years, be transferred to the land aggregation scheme, a programme for local authorities which could not pay land loans. He also defended the delay in informing councillors of the matter.
A spokesman for the department said Minister of State for Housing Willie Penrose was aware of the matter but said no loan had been approved yet. “It is his understanding that the arrangement is binding on the council,” he said.