Indebted Health Minister invested in plot to set up primary care centre at the height of the boom
HEALTH Minister James Reilly has been forced to sell off an estimated €5m site he bought at the height of the property boom for the knockdown price of €750,000, the Sunday Independent can reveal.
The indebted minister put the 1.3-acre site beside the Airside Retail Park in Swords, Co Dublin, on sale -- just a month before he was named in Stubbs Gazette -- after his plans to develop a HSE Primary Care Centre on the land fell through.
He bought the land in Nevinstown with two other doctors in 2007 and will only be entitled to one-third of the sale income, or €250,000, if the site sells at 85 per cent less than its Celtic Tiger value.
The revelation will provide some small comfort to the eight investors who were forced to lodge a judgement against Dr Reilly and his business partners over a €1.9m debt owed from a Tipperary nursing home project.
Dr Reilly hit the headlines in July when he became the first minister to be named in the pages of the debt defaulter magazine following a courtroom battle over the Greenhills Nursing Home in Carrick on Suir.
Along with four other investors, who include former Fine Gael councillor Anne Devitt, Dr Reilly was ordered by the High Court in 2010 to fulfil a contractual agreement to buy out the remaining eight investors once the nursing home had been in operation for a decade.
In a personal statement he made to the Dail on the matter, Dr Reilly ensured the chamber that he acted with "complete propriety" at all times and had been trying to divest himself of any interest in the nursing home since he took office.
During the address, he also made reference to the primary care centre project he planned to develop in north county Dublin.
Mr Reilly said: "For completeness, I can advise the house that in advance of being appointed to Government I had intended to develop a primary care centre with partners in Nevinstown in Swords. This project is not being proceeded with and the property is for sale."
In June 2007, a month after Dr Reilly was first elected to office, the TD, along with doctors Stan Natin and David Reilly, registered the 1.3-acre site they bought with an Ulster Bank loan with the Land Registry.
Auctioneers familiar with the Airside Retail Park development said land was selling for €4m an acre at the height of the Celtic Tiger. A source said: "Sites sold in Airside for probably €4m an acre at one stage -- even earlier than 2007."
In the same month as the site was registered, Dr Natin received a letter from HSE North Dublin Local Health Officer accepting the group's application to a public tender for primary care centres.
Dr Reilly and his business partners then submitted a comprehensive planning application, which cost more than €34,000, to the local authority in January 2008 for an ambitious medical centre designed to house six separate GP practices with 19 consultancy rooms and nine treatment rooms available to the doctors.
Amendments were made to the design in early 2010 and the development was given the final go-ahead by the local authority that July.
If construction had gone ahead, Dr Reilly and his business partners would have faced a €942,612 bill for development levies and €412,577 contribution costs towards the now stalled Metro North scheme.
The HSE said they selected Dr Reilly's proposal as their 'preferred provider' for the Airside centre in March 2009 but the agreement was not completed because one of the parties withdrew from the deal. Four months ago, on May 25, the Airside Clinic consortium wrote to the HSE saying they were withdrawing from the project.
A source close to the project said GPs lined up for the primary centre pulled out when the recession hit and because the rates Dr Reilly and his partners were charging were too high.
A source said: "Suites alone were being offered for €900,000 and that would not have entitled GPs to any ownership or profits the building would have generated.
"They thought it a poor deal. The ethos was presented to them as 'doctors for doctors' but it felt no more a deal than if they had been approached by a builder to develop."
On June 14, less than a month before Dr Reilly would have his name published in Stubbs Gazette, the multi-million-euro site was put up for sale by GVA Donal O Buachalla.
A spokesman for Dr Reilly would not comment on why the project was stalled, saying it was "a private business matter, which commenced before James Reilly became a minister".
He added: "The site is for sale on the open market and the project is not proceeding. The minister will not be making any further comment."