A DISPUTE over the alleged failure of Dunnes Stores to complete an agreement to become anchor tenant at the Point Village development in Dublin’s Docklands has been settled, the Commercial Court was told yesterday.
Businessman Harry Crosbie had claimed Dunnes’ alleged failure was jeopardising the continued financing of the project and had brought the court action for orders requiring Dunnes to pay €23 million under the alleged agreement.
When the case came before Mr Justice Peter Kelly yesterday he was told by Paul Gardiner SC, for Point Village Development Ltd, (PVD) the action had been settled and could be struck out.
The proceedings were admitted to the Commercial Court in February but were adjourned while the sides attempted mediation.
On March 9th, the judge was told mediation had not resolved the matter and the matter was listed for hearing yesterday.
PVD had claimed Dunnes entered into an agreement with it in February last year whereby the retail chain would pay €46 million to become the anchor tenant in the scheme, part of the already completed O2 venue.
The entire development will cost some €850 million and will include a shopping centre, cineplex, offices, a hotel, apartments and a public square. More than 50 per cent of the work, including €23 million on the Point Village, is complete.
In an affidavit, Mr Crosbie said he reached agreement with his bank to borrow €51 million to fund the works for the anchor tenancy, on the basis of the agreement with Dunnes, but the alleged failure of the retailer to complete the deal was jeopardising the financing of other elements of the scheme.
Dunnes was to make payments at various stages of construction but failed to make the first stage payment last August, Mr Crosbie said. It “became apparent” the company wanted to delay the development and was seeking “a number of significant concessions” before it would proceed.
A number of meetings took place between the parties, including one at the Point on October 20th last attended by Mr Crosbie and one of Dunnes’s main shareholders, Margaret Heffernan, who was accompanied by Noel Fox and Irwin Druker. Mr Crosbie said Ms Heffernan said she wanted to do the Point Village project, but it was “two years too early” and Dunnes could not honour its contract without changes “reflecting new market conditions”.
Mr Crosbie said Irwin Druker had told him: “Dunnes can break any contract” and, with huge redundancies coming to the docklands, the homewares business “is f***ed.” Mr Crosbie said Mr Druker later said Dunnes wanted a 20-30 per cent discount on the project and 10 years to pay.
Mr Crosbie said he made a number of proposals to try to resolve the impasse but no agreement was reached. Payments of some €23 million, plus interest of €79,783, were due, he said.