Dublin City Council is to seek a new developer for the site of the old Carlton cinema in O'Connell Street, after An Bord Pleanála confirmed a compulsory purchase order for the property.
The order allows the council to acquire the two-acre site from its current owner, the Carlton Group, which had hoped to develop it as an up-market shopping and entertainment complex.
The group's project manager insisted last night that its plans were still viable. Mr Paul Clinton said he and his partners welcomed the CPO as clearing the way for the site's development and said the council could use the order to speed up the Carlton Group proposal.
But the assistant city manager, Mr Sean Carey, indicated that the city council would now move to take possession of the property, in parallel with the process of seeking new developers.
Under the terms of the CPO, the price must be arrived at through agreement between the parties or by arbitration. Estimates of its worth have ranged from €20 million upwards.
As well as the old Carlton cinema, the property includes an adjacent site which once housed a religious goods shop but has been derelict since it was destroyed by fire during the Pope's visit to Ireland in 1979.
Frustration at the long delay in redeveloping such a prime location provoked Dublin Corporation to make the CPO in late 2001, a move which Mr Carey admitted was "unprecedented".
The corporation was ordinarily reluctant to intervene in the market in this way, but its impatience arose both from the importance of the site and from what it saw as the lack of evidence that the owners could deliver the complex they had proposed.
During the late 1990s Carlton fought a protracted struggle with a rival developer, Treasury Holdings, over the property, until in 1999 it won planning permission for its "Millennium Mall".
The complex would have included an up-market shopping centre twice the size of the nearby ILAC along with restaurants, a 15-screen multiplex cinema and a multi-storey car-park.
But with the economic outlook worsening and the developers having failed to make progress, the corporation stepped in with the CPO in December 2001.
In a statement, it said then it was making the order "to stem the physical deterioration and neglect of the various parts of this site" and the negative impact it was having in "weakening the commercial viability of the upper end of O'Connell Street".
Mr Clinton said yesterday his group was awaiting clarification from the city council about its intentions but added that the local authority did not have enough money to buy the site.
The Carlton Group had the funds and the planning permission to develop it, he insisted, and had signed a construction contract worth €100 million. If the council was going to use the order to sell the property to other developers, "that would sound like an abuse of the process".
Delays in developing the site had been exacerbated by the threat of the CPO, which had "stigmatised the project and stymied attempts to secure support", Mr Clinton added.
With the help of the order to "mop up" problems over title, builders could be on site within two months and the project completed in two years.
But the council suggested this was unlikely to happen. Mr Carey said it would now seek to exercise the CPO in tandem with the process of finding a developer in the marketplace for a retail-led complex. Under European law, interest must be sought throughout the EU.
