DAA's €24m property punt now worth just €8m
Dublin Airport Authority, the loss-making semi-state that paid its CEO Declan Collier €568,000 last year, has seen the value of a speculative joint venture property punt plummet by €16m, or 67 per cent, in just over two years.
The semi-state airport operator hooked up with developer Gerry Gannon to buy the 20-acre Parnell Park GAA ground in Dublin for €24m as property markets were collapsing in early 2008. The land was to be developed as a new long-term carpark.
Company documents for Gatland Property, the joint venture vehicle, obtained by the Sunday Independent, reveal that this land was revalued by Shane Redmond Commercial (Chartered Surveyors) in May this year and was worth just €8m. This represents a colossal loss of €16m for Gannon and the DAA.
Gatland has bank loans of €23.9m, according to its latest accounts. Builder Gerry Gannon has provided personal guarantees against €17m of the bank loans from AIB.
DAA has also provided a guarantee for its share of "any interest and default interest accruing pursuant to the company's loan agreement". The bank loans associated with the land deal were transferred to Nama in April of this year. The company notes that it needs its existing bank loans and facilities to be maintained but that Nama has yet to rule on its business plan.
DAA and Gannon face a double whammy on their disastrous land deal. "It is unlikely that a developer would buy or build speculatively on the lands," according to the valuation. It also notes that the plan to build a car park has been abandoned. Dublin Airport is already creaking under €1.25bn net debt, clocked up during a building spree as passenger numbers fell.