Financier Mr Dermot Desmond has been told by the Minister for Finance, Mr McCreevy, the State will not back his proposal for an £170 million "ecosphere" for the International Financial Services Centre (IFSC).
Mr Desmond made the proposal, for a multi-storey glass pyramid containing an aquarium and a simulated tropical forest four years ago but it was not until last month that the proposal was turned down.
The decision, which was taken after the Taoiseach, Mr Ahern, wrote to Mr McCreevy urging him to take such a course of action, means the Custom House Docks Development Company Ltd (CHDDCL) and the Dublin Docklands Development Authority DDDA) can now proceed with the refurbishment of a listed warehouse which is at the heart of the IFSC and was to form part of Mr Desmond's proposal.
Development of the Stack A warehouse has been on hold since 1996, when the then Government asked that development be halted pending consideration of Mr Desmond's proposal. The delay has been a source of considerable frustration to the DDDA and CHDDCL, and has delayed the development of a more mixed use development in the 27-acre phase one section of the IFSC.
Mr Desmond's proposal, first made to the Minister for Finance with the Rainbow Coalition government, Mr Ruairi Quinn, had complicated funding plans which changed during the four years it was being considered.
In the initial proposal Mr Desmond said he was prepared to underwrite a capitalised rent roll over five years, of £50 million.
The rent would arise from shops, restaurants and other retail outlets in the warehouse. Visitors to the proposed ecosphere would enter through the warehouse and then go underground before coming up into a glass pyramid built over George's Dock. The dock is currently a central water amenity in the IFSC.
The later proposal from Mr Desmond was that the £130 million needed to build the ecosphere would be put up by private investors, who would be given tax allowances on their investment. Also investors would put up half of a £63 million deposit which would earn interest at 5.25 per cent over 14 years, tax free. The investors would get tax allowances on this also. A state company would run the ecosphere, having leased it from the investors for £1.3 million per annum. After 14 years the £63 million deposit would have grown to £130 million and the money would be used by the state to buy the building from the investors.
Finance officials thought the 1996 estimate of £130 million would have grown to £170 million by late last year, because of inflation in the construction sector.
Mr Desmond saw the project as one which would bring more life to the IFSC in the evenings and weekends, and be of benefit to the docklands area generally. He also believed it would be a valuable addition to the tourism sector and would act as an "icon" of the new and more prosperous Ireland.
Mr Desmond said the Government had failed to create a vibrant social, cultural and entertainment dimension to the IFSC, "despite the fact that the IFSC generates over one-fifth of corporation taxes paid to the State".
He began to back the Ecosphere idea after engaging US consultants and spending £1 million on research. Similar centres in the US have been very successful.
