Taxpayers hit by catastrophic loss as value of site drops 85pc
TAXPAYERS have been left with a catastrophic €90m loss after it was revealed the value of an 'Irish Glass Bottle' site in Dublin has crashed by 85pc.
Environment Minister John Gormley yesterday admitted the State's Dublin Docklands Development Authority's €107m investment, made at the peak of the property boom, was now worth just €16m.
The DDDA became involved in the €413m purchase of the former Irish Glass Bottle site in Ringsend in 2006 with developers Bernard McNamara and Derek Quinlan.
But Mr Gormley told the Dail that the value of the DDDA's 26pc stake had dropped by 85pc since then -- meaning it was down from €107m to €16m.
The site is now worth just €60m overall -- and is likely to be taken over by the National Asset Management Agency (NAMA).
"We are in extraordinary times and this site was bought at the very height of the boom. We are now at the lowest end of the market," Mr Gormley said.
"I have heard from my officials and I will say that as I understand it, the value of this site has depreciated by up to 85pc. That is my information and it is accurate," he added.
It is understood that property valuers Lisney carried out the valuation earlier this year on behalf of the DDDA.
Officials from the Department of the Environment and the Department of Finance met with the DDDA earlier this year about how to value the site and the rest of its property portfolio.
Although the DDDA had the valuation report on the site from Lisney, it decided to wait until details of the NAMA legislation were published before agreeing on how to value it in its 2008 accounts.
Given that NAMA plans to pay a premium above the market price for toxic property assets, the price it pays for the site could be well above Lisney's €60m valuation.
Fine Gael Environment Spokesman Phil Hogan said the massive write-off on the Irish Glass Bottle site again raises concerns about the DDDA's financial stability and the judgement of past management.
He said that using the NAMA method to value property owned by state agencies would be a new departure.
"There is a strong concern that the DDDA might use NAMA valuations since it might make the accounts seem healthier than they actually are by creating a false view on current market value," he said.
Mr Gormley described newly-appointed DDDA chairwoman Professor Niamh Brennan (wife of former PD leader Michael McDowell) as a person of "calibre who understands the question of corporate governance".
The DDDA is due to hand over its 2008 accounts to Mr Gormley in the coming days.
The DDDA has still not appointed a new chief executive to replace Paul Maloney, who departed from the DDDA helm last summer one year before his contract was due to expire. Some docklands businesses have hinted at a preference for former Dublin City Manager John Fitzgerald to take the job.