The right moves: What happens next for Clerys?
"Greed is good" Gordon Gekko told us in the movie "Wall Street" and he would have approved of the callous filleting of the Clerys assets.
The disrespect shown to the staff, concessionaires, and indeed an iconic Dublin landmark, is galling. Furthermore the closure of Clerys by Natrium Ltd is a huge blow to Ireland's principal street, which is already a tacky embarrassment. But do we have to take this lying down or can we turn this disaster into a revitalisation of O'Connell Street that makes us proud?
The State's hands are already on this mess in that the Clerys loans were originally sold by a state owned bank and any write downs were funded by the taxpayer. Gordon Brothers made a monkey of our corporate and employment legislation and one arm of the purchaser recently emerged from NAMA. Finally, the future of the property, and its value, now turns on the actions of Dublin City Council (DCC), who are responsible for the planning and development of O'Connell Street.
In order to analyse the planning situation, I met with expert town planner Auveen Byrne, a founding member of the Irish Planning Institute. Clerys is a protected structure and it's a given that the exterior of the building, the clock and internal features of conservation value must be kept intact in a redevelopment. However it's likely that a developer would have flexibility to reconfigure the interior.
Not only is the building protected but Dublin City Council's "Area of Special Planning Control" (SPA) for O'Connell Street has an objective to protect the existing, or last use, of a protected structure, where that use is intrinsic to the social, cultural and economic character of the area. The very first example the Plan gives of such a use is "Clerys Department Store."
Ms Byrne pointed out that the development plan policy for O'Connell Street is to protect the primary retail function and to control non-retail uses at ground floor level. This would allow uses such as a hotel on the upper floors. Offices and apartments are other possible uses although O'Connell Street is not a prime location for either.
Auveen Byrne feels that DCC has laid good foundations for a rejuvenation of the street, to include the Spire, paving, landscaping and policies. "On the whole, all the right policies are there, it's now all about making it happen. Planning facilitates-it doesn't deliver" she said.
In my view the local authority must take a lot of the blame for the decline of O'Connell Street and how they ever concluded that a plethora of fast food outlets, amusement arcades, a sex shop and "low -end" shops and restaurants were appropriate uses, beggars belief. Once you create this downward spiral, it's difficult to reverse it, without radical intervention.
However, the Luas Cross City line is a glorious opportunity to use the Clerys property as a launching pad for a new O'Connell Street.
In 2017 the Luas northbound and southbound stations will be at the front and back doors of Clerys. Thus, the taxpayer funded Luas will create huge new footfall around Clerys and will dramatically increase the property's value.
But here's a plan for DCC to seize the initative: DCC should compulsorily acquire Clerys. There can be no dispute over the value as the owner has just paid €29m. DCC then re-sells the property but inserts a clause in the title restricting the use of the main building to a "department store." DCC can now control who the new owner is and just imagine the attraction that an operator like Avoca would make of the building.
The restrictive clause probably reduces the value to €25m, so for €4m plus costs, DCC regains control and the property could be open for Christmas. Many of the staff could be rehired. The current owner makes no profits but escapes a PR firestorm.
DCC should then implement a plan to compulsorily relocate the inappropriate uses on the street. A rates relief incentive will help to attract high quality occupiers, who will come once they see that DCC are serious about creating the right environment. The costs are recouped in the long term in increased rates income, tourism and self respect.
This column is pro-development, and we don't want to scare away foreign investors, but Ireland needs to send out a message that our people and our heritage will not be treated as vulture fodder. It's a "Win-Win" plan. Even Gordon Gekko would approve.