NAMA pays €0.5m to save management firm
NAMA has come to the assistance of property owners in the Beacon South Quarter (BSQ) apartment and shopping centre development in Sandyford Industrial Estate in Dublin 18.
The state agency appointed Simon Coyle of Mazars as receiver to the development and it has agreed to stump up around €500,000 in a hard nosed deal to pay off creditors of the BSQ management company.
When Mr Coyle took over, the management company owed €1.2 million to 47 creditors. Half of these creditors were owed under €5,000 and NAMA paid these in full.
NAMA also paid the remaining creditors 23pc of what they were owed, so those creditors effectively took a combined €700,000 write-off.
This was achieved through a receiver's contractual voluntary scheme of arrangement with the creditors.
Mr Coyle explained that because it was insolvent, the management company would have incurred huge administrative and legal costs if the company was wound up so NAMA decided to fund the scheme of arrangement as it would prove the least costly solution.
"This is a once off decision and may not apply in other cases," Mr Coyle said.
NAMA has also agreed to pay the management service charges relating to a number of unoccupied units. Some of the owners have welcomed his measures as they expect it will help to further reduce their annual service charges.
A member of the resident's committee said: "On 1 October, the current management company have started with a clean slate and are no longer insolvent. The haircut is extremely favourable to BSQ residents."
There are more than 600 apartments in the development and owners of two-bedroom apartments with a parking space pay about €1,500 a year in service charges.
Mr Coyle has pointed out that 19 of BSQ's retail and leisure units are let and all but three of the office and live work units have been sold.
Anchored by Dunnes Stores, BSQ also includes a landmark restaurant, formerly known as South, and he has had expressions of interest in it from potential operators.
He says that he is working on a strategy for the development which will look at selling or renting remaining units but no prices have yet been decided.
"It was started as a seven star development and we hope to maintain the high standards. However we are reducing costs to a level commensurate with the current economic situation," Mr Coyle added.
The concierge service while continuing is curtailed to office hours Monday to Friday and he is also seeking to reduce electricity, waste, lifts and mechanical service costs. Mr Coyle is drafting a budget for next year's expenses and owners' management fees.
CBRE are to continue as managing agents until the end of 2011. BSQ was developed by Landmark Developments whose directors include Paddy Shovlin and Tony Fitzpatrick.