PLANS TO create a major new town at Belmayne in north Dublin are in disarray after the developer pulled out of the purchase of lands earmarked for the town centre.
In the latest high-profile land deal to collapse in the city, Stanley Holdings have told Dublin city council it is unable to raise the € 5 million down-payment on the land, let alone the full € 60 million price tag.
The 9.3 hectare parcel was to have been the site of a public square and social housing that would form the centrepiece of a new town for 30,000 people on the so-called "northern fringe" of the city. So far, the company has built 430 housing units and, in spite of a ritzy marketing campaign for Belmayne featuring glamorous models in provocative poses, many remain empty.
In 2006, Stanley Holdings agreed to buy the land on the Malahide Road from the council through a subsidiaryfor € 47.9 million.
The agreement contained an uplift clause allowing the council to renegotiate the price if property values in the area rose. This happened, and the price increased to €60 million.
Since then, prices have crashed as the extent of over-supply in the property market became clear. Earlier this year, the company revised its offer by dropping its price to the original sum of € 47.9 million. Alternatively, it suggested paying € 5 million now and the remaining € 55 million in three years time, but subject to planning permission being granted for the site.
Now, however, the company says it cant proceed because of the risk involved, according to the council's executive manager, Declan Wallace.
Mr Wallace described the deal as a victim of the credit crunch.
Labour councillor Sean Kenny described the collapse of the deal as a complete disaster for the area. The site in question was to be developed as a town centre. House owners who purchased property recently in Belmayne/Balgriffin were led to believe by the sales agents that they could look forward to town centre facilities in a short time.
The company, which has spent €1.5 million on the project already, now wants to proceed on a "no contract" basis by drawing up plans for the civic amenities and applying for planning permission.
A spokesman for the company confirmed that negotiations with the council had stalled as a result of "the changing financial landscape".
