Dublin City Council's ownership of 62 acres of Clontarf Golf Club - as well as potential tax liabilities - may stymie the hopes of some club members for a cash bonanza of up to €100,000 each.
Crumlin-based property developer Capel Developments, which is owned by well-known property figures Eddie Keegan, John O'Connor and Liam Kelly, has offered an €80 million cash and land deal for the 77-acre Clontarf Golf Club site.
The deal would see the club move to the developers' existing links course at the Portmarnock Hotel, where a new clubhouse would be provided. Some €20 million of the €80 million would go towards a club fund, with the remaining €60 million shared among the club's 600 members.
However, some local councillors said the deal seemed to be ignoring ownership of most of land. Under a lease dated February 12th, 1998, the council leased the 62 acres adjoining the Malahide Road to the trustees of the golf club for a period of 99 years, backdated to March 25th, 1991. The annual rent was set at €19,046.07, with rent reviews every five years.
One of the covenants in the lease is that the premises should be maintained as a golf course.
The entire area that the club occupies is currently zoned Z9 "open space", and the city council said yesterday it had not been informed of the offer from Capel Developments and wasn't aware of any proposals to change the zoning.
If the deal does go ahead, the proceeds will be subject to capital gains tax at 20 per cent. This tax would be levied even if there was no distribution to members.
However, any money reinvested in new club facilities would be exempt from such tax under "rollover relief" provisions.
To take advantage of rollover relief, the club would have to apply for a special Revenue designation. To the extent that such money would be reinvested in sporting facilities, accounting sources believe that Revenue would grant such a designation.
In addition, another three key difficulties would arise for the golf club in entering any deal, local councillors claimed yesterday.
These were the lease, which specifically restricts the use of the land for use as a golf course; any possible disposal of the land, which would require approval of the elected members of the city council; and the question of rezoning the land.
The Fine Gael leader on Dublin City Council, Gerry Breen, who is an area councillor, said he also thought the local GAA team had access rights across some of the land.
Mr Breen said the site was very desirable, with the Dart line on one side and a quality bus corridor on another, while the entire lands were within three miles of Dublin city centre. But while he could see the advantage for the developers, he saw little public gain.
The Green Party councillor for the area, Bronwyn Maher, said she had "no objection to the golf club moving if they want to - but we won't be selling it, it would make a fine public golf course".
