Business Irish

Saturday 7 December 2019

Legal costs to leave State floundering as NAMA wades in

Ailish O'Hora

FOR every loser, there's a winner. In the case of the Dublin Docklands Development Authority (DDDA) investment in the €426m former Irish Glass Bottle site, the taxpayer is the clear loser.

The beneficiaries are the state-owned Dublin Port and private firm South Wharf.

Financier and former tax adviser Paul Coulson and his fellow shareholders in South Wharf bagged €273.6m from the sale of the site while Dublin Port earned €138.4m.

The deal was orchestrated by Mr Coulson and the 25-acre site was sold by the two companies in 2006. It is understood Mr Coulson earned more than €30m from the transaction.

It is believed the DDDA contacted the now broke developer Bernard McNamara about a joint bid for the site. Financier Derek Quinlan also came on board to form Becbay, created to buy the site, in which the DDDA was a 26pc stakeholder.

Like many of the deals done during the boom, the now nationalised Anglo Irish Bank wasn't far from the action. Anglo lent €293m to fund the purchase of the site.

The now disgraced former Anglo chief executive Sean FitzPatrick was on the board of the DDDA, along with fellow director Lar Bradshaw, when the decision was made to invest.

Mr Coulson also had a business relationship with Mr Bradshaw and the two are investors in a development in Sandyford with Mr FitzPatrick.

The DDDA paid €109m for its investment in the site, funded mainly by borrowings from Anglo. Interest payments on those loans are now €5m a year.

The authority has already written off the value of its 26pc stake in the consortium to "nil", while the site was recently valued at €50m. It emerged yesterday the DDDA believed that even after the site was developed, it was only worth €220m.

As the site heads into NAMA, the taxpayer is left trying to work out how many millions this particular mess will cost us. And as the site is also the subject of a number of litigations, legal costs could push the taxpayer's exposure higher.

Irish Independent

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