Business Irish

Sunday 18 February 2018

Richard Curran: Dublin film studio plans are starting to look very rock & roll

Robert Redford and Bono, who has been busy pushing the idea of a new film studio for Dublin. Photo: Wireimage
Robert Redford and Bono, who has been busy pushing the idea of a new film studio for Dublin. Photo: Wireimage
Richard Curran

Richard Curran

Some investors are banking on Hollywood coming to Ireland quite regularly in the future. Well, if not Hollywood, then major TV series at the very least. Just as the new Star Wars film is wrapping up its Irish shoot, news emerged this week of a new film studio operation proposed for Ringsend.

Bono and some Hollywood money is backing James Morris's proposed film studio venture at the former Irish Glass site in Dublin. If it goes ahead, it opens up some fascinating possibilities.

Bono appears to be backing Ringsend. Meanwhile, former U2 manager Paul McGuinness owns 33pc of the long-established Ardmore Studios in Bray. Former U2 accountant Ossie Kilkenny will have an interest in two studios - Ardmore, where he is also 33pc shareholder, and a new film studio venture in Limerick, where he is an investor.

Ardmore chief executive Siun Ni Raghallaigh is also involved in the Limerick studio venture, called Troy Studios, which is expected to open for business this year.

Then in Ashford in Co Wicklow is Joe O'Connell's Ballyhenry Studios where the Vikings television series was made and he has his own plans for expansion.

Just four years ago Ardmore Studios was really struggling - but improved tax incentives, and a growing attractiveness of Ireland as a film location turned its fortunes around.

Ardmore has been out the door in recent years with series like The Tudors and Penny Dreadful and has argued that there wasn't enough quality studio space available in Ireland. Ardmore has run out of space itself and can't expand on site.

Limerick stepped up to the plate and the City and County Council bought the former Dell building at Castletroy. It has lent €7.7m towards the project and Troy Studios, backed by Ni Raghallaigh and Kilkenny, has taken a 20-year lease.

Troy has secured €2.7m in funding from a mixture of investors. Ion Equity has put in €604,000. A group of other smaller investors under the umbrella of Fifcon Nominees based at the offices of Matheson Ormsby Prentice Solicitors has invested €1.5m. Pinergy investors Jeff Ward and Paul Curran, who is a music publishing veteran, put in €300,000.

The children of Davy Stockbrokers chairman, Kyran McLaughlin, have invested €300,000 between them. These include Mark McLaughlin, who set up a text technology firm in 2006, and David McLaughlin, who is head of Royal Bank of Canada's Irish wealth management operation.

Troy should have at least a two- to three-year start on the Irish Glass project. The question is whether enough movie and TV series work will come to Ireland to keep them all busy.

The Troy site, in the former Dell building, has 340,000sqft of space, of which 70,000sqft has been carved out for stage space, making it the biggest in Ireland from day one.

Michael Noonan gave a boost to the industry by committing to the tax relief scheme until 2020. He also switched the relief to a tax-credit system aimed at costing less to the exchequer while ensuring more money goes to film-making.

The Irish Film Institute has argued that if the sector continues to grow at current rates it would create 5,000 new job equivalents in the next five years.

If it doesn't, we could end up with a lot of studio space. State entities are in deep as Enterprise Ireland owns 35pc of Ardmore Studios and Limerick City has acquired the Dell building to lease out to Troy.

The Ringsend venture would have to make a strong business case to arms of the state in order to secure financial backing. James Morris and Bono have been in touch with former environment minister Alan Kelly, along with the Irish Strategic Investment Fund and IDA Ireland.

'Build it and they will come' can be risky in what is a very fickle movie industry.

Tax loopholes for the rich make a comeback

It takes a Fianna Failer to spot something going wrong with a tax break. Micheal McGrath was spot-on when he suggested that some "rich parents" were using a loophole to avoid paying tax.

According to McGrath, some 740 families availed of the dwelling house exemption last year, which enables parents to gift a house to their children without incurring inheritance or gift tax of 33pc. This involves houses other than the family home.

Like all good tax loopholes, it is based on the idea of structuring a transaction to avoid the tax, rather than needing to do the transaction.

For example, I have heard of one very wealthy businessperson who has bought a substantial house for a couple of million euro. He plans to allow his children to live in it for three years, and then gift it to them. They will either sell it or rent it out and avoid paying full gift tax on the deal. He will in effect have passed on a large piece of his wealth through an expensive house purchase, while depriving the Revenue of money he could easily afford to pay.

In fact he could probably repeat the process for several different children.

Revenue officials told the Department of Finance before last year's budget that the dwelling house exemption was relatively easy to get, but was being abused.

If it serves a useful purpose then it could be kept - but it needs to be revised. One option is to put a relatively low ceiling on the amounts involved to avoid super-wealthy parents gaming the system.

Irish exporters have to bet on a Brexit every day

Predicting the way the British public will vote on the Brexit referendum is a pretty tricky business.

A generally lacklustre Remain campaign caused concerns in currency markets in recent months which dragged down the value of sterling. The more it fell, the less competitive Irish exports became in the UK.

Then more recently the 'stay' campaign seemed to get its act together, with a mix of dire apocalyptic warnings about the implications of leaving, and at times sheer desperation from British PM David Cameron.

Recent polls have put the Remain camp well ahead at somewhere between 13 and 18 points clear of the Leave camp. But British polls are notoriously unreliable. You also have to bear in mind the turnout. People are always more likely to turn out to vote for a change to something than to keep the status quo.

There are concerns that the polls might not detect the full extent of migration fears among a large swathe of British society.

All of these things matter to the Irish economy in the long run and to Irish exporters in the short run. Exporters have enjoyed a huge currency advantage on the back of a weak euro in the last few years. It has boosted indigenous Irish companies, especially in the food sector.

That advantage could evaporate if there is a vote to leave and the value of sterling plummets. Some investment houses have suggested sterling could hit parity with the euro if a Brexit vote is carried.

Nobody will know for sure until the votes are counted.

I met a man last week who works in an office job in Derry City and lives in Co Tyrone. He shares a lift to work with a guy from Lifford in Co Donegal. Every day he drives from Co Tyrone, across the border to Co Donegal and along several southern border towns until he returns to the North again near Derry City. Not something that could be easily done after a Brexit, if passport or customs checkpoints resume.

He told me he was thinking of voting to leave the EU. Go figure.

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