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Archive for November 16th, 2012

“It is considered that the site of Liberty Hall is of  national historic and social significance and is located at a prominent and sensitive location fronting onto the River Liffey, within the historic city core  of Dublin  and adjacent to the Custom House,  a protected structure of primary importance  in the state. Having regard to policy SC18 of the planning authority, as set out in the Dublin City Development Plan 2011  –  17,  which seeks to protect and enhance the skyline of the inner city  inter alia,  and  notwithstanding the quality of the  architectural  design,  it is considered that the scale and in particular, the height of the development as proposed, would be  unacceptably dominant in  the city, would be visually intrusive in the streetscape  and  riverscape  and would  seriously injure the visual amenities of the city and  its  skyline. Furthermore, the proposed development would seriously detract from the setting and character of the Custom House,  would intrude on  the O’Connell Street  and Grafton Street  Architectural Conservation Areas, Board Direction and other  important  vistas  in the city.  The proposed development would,  therefore  be contrary to the proper planning and sustainable development of the area.” An Bord Pleanala’s decision on 13th November 2012 rejecting the proposed redevelopment of SIPTU’s Liberty Hall in central Dublin

“As Environment Minister I not only want to protect the environment, but also do everything I can to create jobs and develop the economy. This scheme will help with construction jobs and I hope create opportunities in the retail sector” Northern Ireland’s environment minister, Alex Atwood, announcing a major development in Newtownards, county Down in October 2012

Developers have a love/hate relationship with An Bord Pleanala, the quango established in 1977 to act as a politically independent final body of appeal when considering changes to our built environment.  Mostly developers have a dim view of the board and veteran developer , Paddy Kelly, in a reflective speech at the MacGill Summer School in 2010 described their decisions as capricious and not making sense. In the past year, An Bord Pleanala has put an end to a proposed development of a children’s hospital at the site of the Mater Hospital in central Dublin and today it has stopped the redevelopment of Dublin’s once-tallest building, Liberty Hall. What will be infuriating to some, in the context of our economic crisis, is the preciousness of the reasons given by Bord Pleanala for their decisions, and it may be time to amend the legislation governing how we deal with development to place broader economic considerations to the forefront.

For visitors to Dublin who might have a fresh perspective, the “injury to the visual amenities of the city and its skyline” sounds like complete tosh. Take our premier upmarket shopping street, Grafton Street. At street level, you have a mish-mash of McDonalds, Burger King (two of), mobile phone shops, newsagents, gift shops with the odd smattering of the upmarket retail offerings that you would expect from this street and of the two main anchors on the street – M&S and Brown Thomas – only the last has anything like cachet. Above street level, you have anything from tattoo parlours to internet cafes. And as for the architecture itself, you’ll count about 10 architectural styles though the dominant one is “borderline dilapidated” O’Connell Street is just as bad and at the north end of that street, you have Joe O’Reilly’s derelict site which has been in limbo for years, amid financial issues and planning for Metro North. And although there has been development in the area, much of it resembles the Dublin of “Strumpet City”.  And between O’Connell Street and Grafton Street, many might think Dublin’s “streetscape and cityscape” were ruined in the 1890s when the ugly Loopline rail bridge was constructed just down river from O’Connell Bridge which interrupts what is an attractive array of quayside architecture, particularly the Custom House. So the preciousness of “injuring the visual amenities” of the city seems more than a little la-di-da when you take a fresh look at the city.

We might benefit on this side of the Border from studying the recent developments in Northern Ireland where at their Department of the Environment, the minister, the SDLP’s Alex Atwood, acts as a final body of appeal – though his decisions are technically open to judicial review – and has recently ramped up the rate at which major scheme approvals are granted, including the development of an extension at the Ards shopping centre and a major development at Castlebawn on the edge of Newtownards.

As for An Bord Pleanala, it may be politically independent though the appointees are selected by the Minister for the Environment Community and Local Government, Phil Hogan, but their mandate seems disproportionately skewed towards subjective aesthetics and in the midst of an economic depression, our legislators might consider if the mandate of the body be modified or prorogued for a few years. As for the two rejections this year, the Mater development was indeed colossal and the Liberty Hall development would have taken the crown for Dublin’s tallest building back from Montevetro on Barrow Street but with 15% unemployment, an IMF funding programme, a 10% decline in national income and a still-awful deficit, economic considerations should trump overnice concerns for “injury to the skyline and cityscape”

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The Irish Independent this morning reported that asking prices at the Devlin Bank development in Naul village, north county Dublin have just been reduced by around 30%. This is a development on which NAMA made available its deferred mortgage product in its pilot launch in May 2012. The deferred mortgage, or as NAMA calls it, the 80:20 Deferred Payment Initiative gives buyers protection against future price falls of up to 20% of the original purchase price after five years. Today we learn that after six months, the asking prices have dropped at Devlin Bank by between 27-31%. “Wawawiwa!” as Borat might say.

Luckily for buyers, no properties at the development have been sold in the past six months, this despite NAMA originally offering 29 of the units but the Property Price Register revealed in October 2012 that none had been sold.

So if you go along today, you will have a 30% reduction on the May 2012 asking prices and be able to benefit from NAMA’s 80:20 product. Whew! But if you had bought in May, you might already be nursing a 30% loss on your purchase and given the properties had asking prices of €175-390,000 and the reductions now offered range from €50-105,000, that would have been a pretty hefty loss in just six months. And it might call into question whether NAMA is building a premium into the prices of property subject to its deferred mortgage scheme which was last month expanded from the original 115 properties to a further 180 properties.

Maybe time for NAMA to offer a 60:40 deferred payment scheme!

On a more general note, the feeling on here is that the Property Price Register will have a major short-term negative impact on property prices as buyers and sellers can see actual transaction prices and in a buyers’ market, transaction prices should rationally come down to the lowest transacted level or even lower. So the price reduction at Devlin Bank is not surprising.

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NAMA Top 10 developer Gerry Barrett’s Edward Holdings has announced a €20m expansion of its Scotch Hall development in Drogheda, county Louth – NAMA is providing the readies and work will commence in just over one month’s time. The expansion will see the creation of 150 construction jobs and when the development is completed, there should be an extra 150 retail and cinema jobs. The expansion will see a new 8-screen cinema, a food court that can accommodate 450 people, shopping units and additional parking.  Everyone seems delighted with the announcement, including politicians, the local Chamber of Commerce and Edward Holdings. It was announced last month that NAMA was selling 15 apartments in the wider Scotch Hall complex for social housing and the development is likely to improve the amenities available to all local residents.

You might contrast this announcement with the announcement by Paypal earlier this year for the creation of 1,000 jobs at its base in Dundalk. It seems the Paypal jobs will be created over a period of years and there are concerns that we don’t have people with the required skills for the roles which might mean the roles are either not filled or that Paypal is forced to bring in manpower from overseas.  By contrast, the investment at Scotch Hall is “shovel-ready” and will have an immediate boost to employment, particularly local employment and construction provides one of the most immediate boosts to the local economy. That’s not to take away from the Paypal announcement and the need to examine skills shortages, but it just highlights what a relatively small construction investment can achieve.

Earlier this year, NAMA announced plans to invest €2bn in its developments and at the time indicated the investment might create 25,000 construction jobs and 10,000 additional permanent jobs, and presumably this €20m forms part of that €2bn announcement.  Imagine what the remaining investment might do, if it is delivered expeditiously.

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