THE DUBLIN Docklands Development Authority has been released from a €29 million plus bank guarantee by the National Asset Management Agency. In return, it has transferred a number of properties to the agency.
The deal is the result of a mediated process between the two State bodies and brings to an end the authority’s huge exposure to the costs associated with its disastrous involvement with the former Irish Glass Bottle site in Ringsend, Dublin.
The properties transferred to Nama include the former U2 Tower and have a value on the authority’s books of €7.85 million.
Its books have benefited to the tune of €4.36 million as a result of the writeback of a provision made in respect of its involvement in the Ringsend site. The net book cost of the deal with Nama, therefore, is €3.48 million.
The authority has a 26 per cent stake in Becbay Ltd, the company used by it and its partners to buy the glass bottle site, and had given bank guarantees to cover its proportion of Becbay’s borrowings.
Becbay, which bought the glass bottle site for €411 million in 2006, is owned by Bernard McNamara, Derek Quinlan and the authority, with the two developers having their interests by way of representative companies.
The transfer of the loans associated with the glass bottle site to Nama is believed to have involved a discount of in excess of 80 per cent. The authority has written the value of its involvement in the site to zero.
In July 2010, the then Minister for the Environment John Gormley outlined the authority’s position in relation to the loan. He said a € 288 million loan to Becbay was provided jointly by Anglo Irish Bank and AIB.
“It is a non-recourse loan largely secured against the land, with the exception of € 111.9 million that is secured by guarantees of the three shareholders in proportion to their respective shareholdings.”
He said the authority’s liability arising from the deal at the end of 2009 involved a principal guarantee on its 26 per cent share of the loans, totalling €29.1 million, and €5 million interest that accrued on its share of the loans for 2009.
“This leaves a current liability of some € 34.1 million, although interest continues to accrue at a rate of € 5 million per annum until such time as the loan is terminated.”
Yesterday the chairman of the authority, Niamh Brennan, said the settlement with Nama meant the authority was rid of an issue that had hung over it both in financial terms and in terms of what it represented.
“It allows us to get back to our proper job, which is providing fast-track planning in the docklands area. There is no need for us to be a development agency.”
Nama, in a statement, said the deal with the authority related solely to the guarantee that the authority had issued and did not affect the day-to-day management of the loans associated with the glass bottle site.
“We have approached this matter with the DDDA in exactly the same manner and with the same objectives as we would apply to any other debtor, namely with the aim of maximising the position of the taxpayer in respect of debts owed to the agency.”
The agency said the acquired sites would complement its existing holdings in the area.
The docklands authority published its 2010 annual report and financial statements yesterday, showing an operating surplus of €6.5 million, compared to a deficit of €7.4 million in 2009.
It recorded a deficit of €1.98 million in its income and expenditure account, compared to an €18.15 million deficit the previous year. The authority, which at one stage had 55 employees, now has 18.
Its area and social regeneration costs were €341,000 in 2010, compared to €5.8 million in 2009.
Balancing the books: Properties transferred to Nama
* Former BJ Marine premises, 81A and 81B, Sir John Rogerson’s Quay
* A retail unit, unit 2, Longboat Quay, Dublin 2
* Former Artbrook/Dublin Waste site, Upper Sheriff Street, Dublin 1
* Former Jones Oil site, Sheriff Street Upper and Mayor Street Upper
* Plot 8, Sir John Rogerson’s Quay
* Retail unit, 15 Irishtown Road, Ringsend
* Former U2 Tower, Britain Quay, Dublin 2
* Former Readymix site, 5-23 East Wall Road, Dublin 3
* Lot 2, Riverside IV, Grand Canal Harbour, Dublin 2
