MEDIATION TALKS have failed to resolve 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, the Commercial Court was told yesterday.
Businessman Harry Crosbie has claimed Dunnes’s alleged failure is jeopardising the continued financing of the project. He is now proceeding with his application for an order requiring Dunnes to pay €23 million under the alleged agreement, Mr Justice Peter Kelly was told.
The judge listed that application for hearing on April 2nd. The proceedings were admitted to the Commercial Court early last month, but were adjourned to facilitate mediation.
Point Village Development Ltd claims Dunnes had 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 is to cost about €850 million and will include a shopping centre, a cineplex, offices, a hotel, apartments and a public square. More than 50 per cent of the work, including €23 million on the Point Village, has been completed.
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.
Under the agreement, 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.
At that meeting, 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**ked”. Mr Crosbie said he had later received a phone call from Mr Druker saying Dunnes wanted a 20-30 per cent discount on the project and 10 years to pay it.
Mr Crosbie said he had made a number of proposals to try to resolve the impasse, but no agreement was reached.
He said stage payments of some €23 million, plus interest of €79,783, were due.