Docklands agency hands over key sites to bad bank
Published 26/11/2011 | 05:00
ONE of the Government's own development agencies has become the latest "developer" forced to hand over property assets to NAMA.
The Dublin Docklands Development Authority (DDDA) has handed over nine development properties to NAMA as part of a negotiated loan settlement deal.
In exchange for the properties the DDDA has been released from around €35m in loan guarantees given by the DDDA to banks that financed the Dublin Glass Bottle site property deal in 2006. These loans were transferred to NAMA last year by Anglo Irish Bank and AIB.
The nine Dublin properties include the site of the planned "U2 Tower" near the Grand Canal Quay, the historic BJ Marine redbrick sheds perched on the banks of the Liffey at Sir John Rogerson's Quay as well as the former Readymix premises on the East Wall in the city. For taxpayers the deal simply means assets are been shifted from one arm of the State to another, but the deal frees the DDDA from a potential liability, and executives hope it draws a line under its disastrous role in the Dublin Glass Bottle site.
The deal has been signed off on by the Public Expenditure Minister and the Enterprise Minister. Details of the transaction emerged when the DDDA's annual accounts were presented to the Dail yesterday.
Also yesterday the chairman of the DDDA, Professor Niamh Brennan, told the Irish Independent that the Glass Bottle site was a very bad deal for the DDDA, but that the transfer to NAMA meant the authority now had a clean slate. She said the authority could focus on its primary job as a "fast-track planning authority" for the rest of Dublin's docklands.
The property fiasco raised questions over the DDDA's role as both a developer and planning authority, and its close connection to developers and banks.
Prof Brennan rejected suggestions the authority should be wound up, saying there was still a role for fast-tracking planning in the docklands and that the area was expected to house 10,000 new jobs in the next five years.
The DDDA returned an operating profit of €6.5m last year, she said.
The Glass Bottle site was bought in 2006 by a company called Becbay that is owned by developers Bernard McNamara, Derek Quinlan and the DDDA, which is also the authority responsible for planning in the docklands area of the city.
Anglo Irish Bank and AIB provided a €288m loan to fund the 2006 deal.
The loans have been transferred to NAMA and the property has since been valued at just €50m. When the deal was agreed the DDDA guaranteed lenders that it would repay a share of the loans, even if Becbay could not.
NAMA benefits from the deal because it owns sites adjacent to some of the properties, and it is still owed the original Becbay loans which it bought at a big discount from the banks.
The DDDA remains a shareholder in Becbay, the company that bought the site, despite the deal announced yesterday, Becbay still owes NAMA the money it borrowed to buy the site.
Yesterday's deal, however, means that NAMA cannot seek repayment of any share of the loans from the DDDA, if Becbay fails to repay NAMA.