A CITY COUNCIL plans to take a €250,000 loss on a property in a prime part of Dublin’s city centre even though they bought it only four years ago.
Dublin City Council paid out €800,000 to purchase the premises of what was the Plough Pub on Abbey Street, across the road from the Abbey Theatre.
The purchase of the derelict building was only made in 2017 since when commercial property prices have generally risen.
However, the condition of the property has since deteriorated further with the local authority warning it now presents a “serious financial risk and burden” to the council.
In April, the local authority’s plans to dispose the property were blocked by councillors with the council at the time declining to confirm their purchase price.
A valuation report – obtained under Freedom of Information – reveals the council were told a total of up to €1.25 million could be needed for the purchase.
This included acquisition costs of around €835,000 with a possible 20% addition for compulsory purchase order and a further possible 20% for “disturbance”.
However, the council confirmed that the price ultimately paid was €800,000 for what was a described as a “four-storey building in derelict condition”.
The valuation report said the property was well-serviced by public transport, including the Luas which runs directly outside its door.
It said the property was likely to benefit from the redevelopment that was taking place on O’Connell Street including the refurbishment of Clery’s department store.
The report said NAMA had only recently agreed the sale of the nearby Gresham Hotel for €92 million.
“If the council acquired this property, they could invest in its full refurbishment,” said the report, “using the finance available under the Revolving Fund or dispose to an owner with sufficient funds to carry out its redevelopment.”
It said the upper floors could be leased for office use and that restoring it from its derelict condition would be of “major benefit” to the Abbey Theatre and other neighbouring properties.
The report said the building had been boarded up in 2014 at the request of the council and had been vacant for a number of years.
It added: “Dublin City Council have attempted to gain access to the property for several months. However, the owner has not facilitated an inspection to date.”
Only an external inspection had taken place and while the property appeared to be dry, the owner had referred to “the possibility of subsidence” due to Luas works around the property.
It said that In May 2015, a valuation of the property had been done with an estimate of €1 million put on it.
A year later, the new valuation suggested the property’s estimated market value was now €800,000, the price that was ultimately paid by the council.
Plans for the disposal of the property are back on the council agenda at a Central Area Committee meeting this Tuesday where councillors will be told the building is infested with rodents and pigeons.
The building is only currently accessible by workers wearing full PPE and there are also leaks in the roof through which daylight can be seen.
Inside, floors have rotted away and are in some cases missing while some enclosed rooms are locked without any keys available.
Briefing documents also say significant expenditure has been undertaken to secure the structural stability of the properties.
A report says: “Despite the emergency works completed, their structural condition has continuously deteriorated in recent years and the properties provide a serious financial risk and burden to the council.”
The council again plan to recommend its sale for €550,000, crystallising a 30% loss for the taxpayer.
A statement from Dublin City Council said: “The property was acquired for €800,000 in 2017. The property is to be discussed at the June meeting of the Central Area Committee. This meeting will take place on 8 June.”
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