Cherrywood facing 'severe delays' over €62m funding gap
A shortfall in infrastructure funding is 'greatest risk' to flagship development
The development of Cherrywood, the country's most significant housing development, is at "high risk" of being severely delayed by a €62m funding shortfall, the Sunday Independent has learned.
As Cherrywood is a greenfield site, there is a requirement for the build-out of extensive infrastructure, such as roads, bridges and flood attenuation areas.
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The estimated cost of this so-called common infrastructure is €175m, according to Dún Laoghaire-Rathdown County Council. Much of this will be met through a range of State funding, as well as the transfer of the relevant land by Hines, the main developer.
However, in its spring capital projects programme, the council stated that the money currently available would "not address the full funding requirement", and that there was a funding gap in the region of €61.9m.
"The greatest risk associated with the delivery of Cherrywood is the current funding gap, which must be resolved to deliver the common infrastructure," the council said.
"There is a high risk that if funding and legal solutions are not found, the pace of delivery will be significantly adversely affected, despite the potential benefit of the development from a housing and economic perspective."
The council stated that there was "no single solution" available due to the magnitude of the gap.
Cherrywood will raise around €55.2m through various development contributions. In addition, around €39m of State funding has been provided for infrastructure through a mix of local property tax, the Local Infrastructure Housing Activation Fund, and the Urban Regeneration and Development Fund.
The council stated that it was "not our responsibility" to provide the funding to bridge the gap.
Local Green Party councillor Ossian Smyth said the gap was a "very serious challenge". "Right now, construction is happening as fast as possible. There are five cranes and 1,300 apartments being built for completion in 2021," he said.
"So the shortfall in funding has not yet become an issue. However, if a source of income is not found, the delivery of housing will be delayed. The most obvious source is an increase in future development levies."
Smyth said that building a large town from scratch was "unusual" for Ireland and said it would ultimately be the same size as Bray and larger than the likes of Mullingar.
"A decade ago, when the last recession hit, every building scheme in the country seemed to stop suddenly," Smyth said.
"We need to find a way to smooth out our housing supply so that we don't lurch again from a surplus of unwanted ghost housing to a crippling shortage, causing homelessness."
He said the "probable" sources of income were from grants and development levies, adding that due to the fact the council needed ministerial approval to lend, this was "unlikely" to work as a solution. Hines said in a statement that it expected ongoing collaboration between all parties and for the work to "continue as intended".
Cherrywood has permission to provide 8,700 new residential units, as well as 350,000 sq m of commercial floor space. It will also boast 29 hectares of recreational space, incorporating three significant parks, and a further 32 hectares of natural green space.
The council said it was "a project of national, regional, as well as local, importance".
The zone has 12 different landowners, including Hines, W Neville and Sons, the council, Nama, Starwood Capital, O'Flynn Capital Partners, and Johnny Ronan.
Sunday Indo Business