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Archive for July 7th, 2012

It will be another few weeks before NAMA finishes with its wrecking ball at a block of flats in the Gleann Riada estate in Longford but the Agency has said that it has no further plans at present to demolish more property. In a response to a question in the Dail on Thursday from Fianna Fail’s Timmy Dooley, the Minister for Finance Michael Noonan said that although NAMA controls loans underpinned by 179 so-called ghost estates, the Agency has no plans at present to demolish any more. Last October 2011, a report by the Department of Environment, Community and Local Government revealed that there were 2,066 ghost estates – housing estates built during the boom years which are still part-complete, empty or substantially empty.  29 such estates are controlled by NAMA and are in desperate need for completion works – foot-paths, sewerage, lighting. A further 150 estates are controlled by NAMA but are largely completed. NAMA now says that it hasn’t plans to demolish any, but its decision-making is dependent on economic viability and structural issues.

The full exchange is here

Deputy Timmy Dooley: To ask the Minister for Finance his views on whether the National Assets Management Agency will engage in demolition of part built housing schemes; and if he will make a statement on the matter.

Minister for Finance, Michael Noonan: NAMA have advised me that there are no plans to demolish further developments but it may be considered as a means to reaching resolution on properties where; a) the economic viability of the site is otherwise in question, or b) due to structural or other considerations, the development is not viable.
As the Deputy may know, there was recent media commentary on a development in Longford which is to be demolished. I am advised by NAMA that the salient facts in this case were: NAMA acquired loans secured on this property in December 2010; the property, comprising two-bedroom duplex units and three-bedroom apartments, was poorly constructed, had been subject to continuous vandalism and anti-social behavior, including the removal of all fixtures and fittings and had become a significant source of concern for neighbouring residents.   I am further advised by NAMA that the property is located on a flood plain and in the middle of an industrial estate.   As a result of its condition and location, NAMA advises that the investment required to bring the property to a habitable state and to the point that it could be sold, in the unlikely event that a willing buyer exists, would be such as to make the investment uneconomical and that it is questionable whether structurally such works could in fact be undertaken. In any event, NAMA advises that Longford County Council, in detailing the Category 4 remediation works to be taken as part of the agreed site resolution plan in respect of this development, set out a requirement that the apartment block be demolished.

NAMA advises that to undertake the necessary remediation on this development, including the proposed demolition of this block, it had first to take enforcement proceedings over the property, which was a protracted process.

Following publication of the Report of the Advisory Committee on Unfinished Housing Developments in June 2011, the Minister for State with responsibility for housing established a National Co-ordination Committee to oversee planning and implementation of remediation programmes in respect of unfinished estates.  NAMA is represented on this Committee and is proactively engaged in policy processes aimed at the resolution of the problem of unfinished housing estates.

I am advised by NAMA that of the 243 estates categorised by local authorities as the most problematic from a public safety perspective (Category 4 estates), only 29 (or 12%) of these estates are controlled by NAMA debtors or receivers.  150 (or 10%) of Category 3 estates are linked to NAMA debtors.  NAMA is funding out of its own resources, through its debtors and receivers, the cost of urgent remediation work (estimated at €3 million) and significant progress is being made in this regard.

I am also advised by NAMA that it plans to invest substantial funding over its lifetime in preserving and enhancing the assets that secure its loans, including significant investment in assets located in Ireland, and that a substantial portion of its cash reserves will be used for this purpose. The Chairman of NAMA recently announced plans to invest €2 billion in this area by 2016. To end-March 2012, the Agency had invested over €1 billion in the preservation, enhancement and completion of property assets underlying its loan portfolio. Over €500 million of this had been committed to assets in Ireland and this is helping to secure the direct employment of thousands of employees in small and medium trading businesses located throughout the country, in addition to substantial additional direct and indirect construction and property related employment in general building works including re-fit, refurbishment and up-grade of NAMA-controlled properties.

NAMA has indicated its intention to rollout other innovations to support the resumption of more normalised activity in our property markets.  It has committed, for instance, to sponsor the launch at least one Qualifying Investor Fund (QIF) by the end of 2012, a proven mechanism for leveraging institutional investment. NAMA advises that it has identified over 3,000 residential units as being available and potentially suitable for social housing and it is working with housing authorities to determine the suitability of these units for the provision of social housing within their functional areas.”

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