Sunday 22 September 2019

Developer to earn €67m profit from public land site

Brendan Kenny: Insisted O’Devaney Gardens site is not being ‘given away’. Picture: Damien Eagers
Brendan Kenny: Insisted O’Devaney Gardens site is not being ‘given away’. Picture: Damien Eagers
Luke Byrne

Luke Byrne

Developer Bartra Capital is set to make around €67m in profit after it takes over the publicly owned site at O'Devaney Gardens, develops it and sells the property.

Bartra, which is also behind the controversial co-living development in Dún Laoghaire, has been chosen as the preferred bidder to redevelop the site in north Dublin.

Dublin City Council, whose deputy chief executive Brendan Kenny has insisted the site is not being "given away" to the private developer, has refused to say how much it stands to make from the deal.

The company has also declined to specify how much it has estimated it will make.

A Bartra spokesman said: "The procurement process is not yet complete. There are many hurdles still to be completed. As the preferred bidder our plan was deemed to most economically advantageous by the city council."

However, it is understood the developer stands to make tens of millions on the back of the public asset.

According to a report by Mr Kenny, the total cost of developing the site will be €300m. The profit figure was based on an estimated total sale value of €367.5m.

This was calculated based on the council's estimates for the value of each of the type of property to be built - one- to three-bedroom apartments, and two- to three-bedroom houses.

Affordable values for the properties were contained in Mr Kenny's report. These were adjusted upwards for the 411 properties to be sold privately on the basis that a 40pc market-rate discount applied.

Also included was an approximate €50,000-per-unit payment to the developer from the Serviced Site Fund for the affordable houses.

Barta will benefit from a development levy of around €10,000 being waived for the properties - but this was not taken into account, and could boost its overall profits when the site is fully sold.

The council has refused to be transparent about the total value of the deal to Bartra, citing commercial sensitivity and an ongoing procurement process.

"As a result of procurement rules, none of the actual procurement prices and figures contained in the final tender from the preferred bidder can be released," a statement said.

It said the result of this was that "for the purposes of the preferred bidder announcement", the unit prices "have to be indicated by a range of prices and not the actual per unit price".

Local councillor Anthony Flynn said: "It is absolute madness for councillors to agree to give away prime public lands in the middle of the worst housing crisis this country has ever seen while we have over 10,000 people in emergency homeless accommodation."

The proposed development has already proved controversial after it emerged individuals or couples will have to earn at least €108,000 a year and have savings of €42,000 to buy a category of "affordable" home.

At the top end of the "affordable" scale in O'Devaney Gardens, a three-bedroom apartment will cost €420,000 and this includes a discount of up to 40pc on what is considered market value.

The cheapest affordable properties at the site, two-bedroom houses, will still cost at least €270,000, meaning a household will have to earn almost €70,000 a year to buy under Central Bank rules.

Irish Independent

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