Saturday 21 October 2017

Taxpayer faces a €86m bill for renting property from the rich

LARRY GOODMAN: Tycoon is paid millions in rent by the State
LARRY GOODMAN: Tycoon is paid millions in rent by the State

Paul O'Donoghue

BEEF baron Larry Goodman, the Dunne stores retail family, and Michael O'Leary's Ryanair are just some of the major names who were renting property to the State last year.

The Government spent over €86m in 2013 renting properties from tycoons, the carcasses of bailed-out banks and the Knights of Columbus.

Figures released by the Office of Public Works show that the State spent €86.3m last year on rental property. This figure is down compared to previous years, with €103m spent the year before and €129m in 2010, as the cost of several leases has been reduced.

Among those featured are beef baron Larry Goodman, who is pulling in seven figure sums from his properties. His company, Halfpipe, is leasing out one of the most expensive buildings in the OPW's portfolio, 4-5 Harcourt Road, to some major government tenants, including the Offices of the Comptroller and Auditor General, the National Consumer Agency, and the National Crime Council, for €1.26m. Another company owned by Goodman, Hazeldale, also took in over €1m in rent for a single property on Harcourt Street.

Goodman made headlines in the 1980s when the State agreed to underwrite a $134m beef contract that one of his companies, Goodman International, had secured with Iraq. The government was later forced to pass special legislation to prevent the business from collapsing after Iraq defaulted.

The Dunne family, who own one of the country's most successful retailers in Dunnes Stores, also got a piece of the action through one of their key firms, Silverwood Developments, which is involved in the family's extended property portfolio.

The directors of the company are Dunne's biggest shareholder, Frank Dunne; and Anne Heffernan and Sharon McMahon, the daughter and niece of Dunne matriarch Margaret Heffernan respectively. The Government paid almost €1.83m in 2013 for a George's Street property used to house Revenue, close to Dunnes headquarters.

Another long-time major landlord to the State is the estate of the late John Byrne. One of its companies, Alstead Securities, pulls in more than €3.3m a year for two Parnell Street offices. Dublin City Estates also netted €640,000 for D'Olier Street House, which is leased to the Department of Social Protection, Solas and the Revenue Commissioners.

Ex-AIB manager John Hughes and former Anglo director Thomas Browne saw their 'Ballybrit Partnership' investment vehicle, earn €1.2m in fees. It rented out a property in Galway used by several government departments.

Mr Browne left Anglo in 2008, while Mr Hughes was the former Head of Business Banking with AIB in Eyre Square.

Michael O'Leary's Ryanair rented out Phoenix House on Conyngham Road to state organisations for €365,000, over €150,000 more than what it charged in 2011, while the Catholic businessmen's society Knights of Columbus pocketed €730,000 for leasing out Ely Place in Dublin.

Cosgrave Property Group, which is run by brothers Peter, Michael and Joseph Cosgrave and was one of the largest housebuilders in the country, took in almost €640,000 in 2013. The company charged the State €638,678 for a number of offices in Blanchardstown.

Donegal developer Pat Doherty is a director of Airscape, which charged €212,585 a year for a Park West office block. Mr Doherty also netted €160,000 from Lindat Developments, of which he is also a director, which leases out the Donaghmede social welfare office. Doherty is behind the hugely successful Titanic Quarter in Belfast.

Banks that have received taxpayer-funded bailouts are also major landlords to the State. IBRC Assurance, which was part of the state-owned bank's wealth management business, rented out the most expensive property in the OPW's entire portfolio. IBRC was liquidated last year, with its wealth management arm put up for sale.

Just under €3m was paid out in 2013 for 29-31 Adelaide Road in Dublin 2, which is being used to house the Department of Communications, Energy and Natural Resources.

The second most expensive property, Block 2 on Harcourt Square, is currently being rented out by Alvergold for €1.83m a year.

The company is associated with hotelier Jeremiah O'Reilly, who until last year was one of the directors, and also of well-known developer David Courtney, who passed away earlier this year.

One of the biggest earners listed was Irish Life Assurance, which was part of Irish Life and Permanent before the group needed a €4bn bailout from the taxpayer.

It rented nine buildings to the Government at a cost of over €6.28m while Bank of Ireland and its trust services charged the Government just over €3m a year to rent seven properties.

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