Galway's €10.5 million Traveller hardstand site

It sounds like a Galway-version of a Carry On movie, except the story of Keeraun is no joke.

Developer buys land during boom, and plans to build houses. Just before the bottom falls out of the property market, local authority buys land from the developer.

Local authority pays roughly €4 million more than what the developer had paid, and pledges to build social housing.

Some months later, property market collapses. Ireland becomes bankrupt. Local authority’s income evaporates, and at behest of Government policy, abandons all plans to build new social housing.

The site, along with others across the city, is not accepted in the Government’s NAMA for local authorities, the Land Aggregation Scheme.

This means the Council was obliged to continue to pay the loan it used to acquire the site. The interest-only loan payment on this and other sites will cost the Council around €600,000 in 2017, according to the Council budget meeting; or €4.8 million if extrapolated out over the eight years.

Other than paying interest, local authority does nothing with the site for over eight years. Not one cent has been paid off the actual loan of €10.5 million.

During that time the social housing waiting list soared to 5,000 households, or around 15,000 people, and homelessness became the norm, with 20 rough sleepers on the city’s streets every night.

Meanwhile, the potential of the site, which the local authority paid €10.5 million for, is stunted because now there are plans to build a road through it. The ‘newest’ version of the Galway City Outer Bypass – or Ring Road as it’s now known – will cut through the site, landlocking part of it, and ‘freezing’ part of the site that comes within the road corridor.

And just to add another twist to the tale, the local authority appears to have now abandoned its commitment for social housing for this site, and instead wants to use it for Traveller-specific accommodation, and possibly a halting site.

You couldn’t make it up!

The history of Keeraun can be traced through extensive documentation released under the Freedom of Information (FOI) and seen by the Galway City Tribune.

Ballybane-based Sawgrass Properties Ltd bought the Keeraun site, off the Ballymoneen Road, in two lots.

In November, 2005, it paid €5.6 million to a local family for 6.89 acres of land. It purchased a further 0.76 acres in November 2006, for €750,050 bringing the total parcel of land to 7.65 acres, at a cost of €6.4 million.

Five months after that sale, Galway City Council on April 30, 2007, received a valuation, carried out by Rooney Auctioneers, which gave approximate values for the land depending on how many units were built, and assuming the site was fully serviced, with full planning permission.

It gave three different approximate values: €7.5 million for 10 units per acre amounting to 76 homes; €9 million for 12 units per acre, which would be 92 units; and €11.3 million for 12 units per acre, which would amount to 114 houses.

A handwritten note on correspondence that was released under FOI, between Joe McGrath, the then City Manager, which was copied to Joe O’Neill, the Director of Services for Housing, suggests the City Council did not pay for the Rooney valuation, which was done on behalf of Sawgrass.

The note added: “We had our own property manager do an independent valuation, which agreed with Rooney’s”.

This admission arose after City Councillor Pádraig Conneely (FG), in a fax to officials at City Hall, queried if the Council was using the valuation, which was drawn up for Sawgrass.

Helen Connaughton, the Council’s then property manager, inspected the site on June 25, 2007, and valued it “in the region of €11.14 million”, which was slightly higher than Rooney’s highest value.

Weeks prior to receiving this in-house valuation, the Council had already embarked on purchasing the 3.108 hectares’ site.

On June 5, 2007 Joe O’Neill wrote to Anne Holmes in the Department of Environment and said the Council “is to purchase” the site, “for the purpose of providing social and affordable housing”. Mr O’Neill requested permission “for the raising of a loan of €11.307 million from the Housing Finance Agency”.

There was much toing and froing before a cheque was handed over.

City Councillors discussed the site and borrowing, on June 11, 2007 in the Council chamber. Seven days later Frances Mullarkey of the Council’s housing department received contracts from solicitors Blake & Kenny for the purchase of the land for €11.136 million, which represented a 74% increase on what the developer had paid.

The contracts contained special conditions attached to the sale, which were agreed between Sawgrass and the original owner.

But on June 27, 2007, Sawgrass dropped a bombshell – it said it was withdrawing from the sale, although the documents released under FOI do not indicate why.

Two months later, on September 7, Joe O’Neill emailed Frances Mullarkey to confirm Sawgrass, had changed its mind, and “was now in a position to proceed with the sale”.

On October 24, a handwritten Council memo, written by Joe O’Neill, indicates that he told Colm O’Donnellan, of O’Donnellan and Joyce Auctioneers, in a telephone conversation, that the Council was seeking to buy the land but at a reduced price of €10.5 million.

The memo stated this was to “reflect the change in market conditions” but there was no evidence to suggest new valuations on the site were carried out.

The cheque from the Council to Sawgrass, dated January 23, 2008, amounted to €10.5 million, which was €4.1 million more than what Sawgrass had paid for it in two lots some months previous.

Prior to City Councillors signing off on the sale at a Council meeting on November 12, 2007, Joe O’Neill wrote to them seeking approval to borrow.

“The Council wishes to purchase the land as it will enable us to erect approximately 100 social and affordable units, and will help in meeting the needs of those on the housing list who are seeking accommodation on the West of the City.”

In his letter, Mr O’Neill said the lands have been valued by the Council’s property manager and “the purchase price does not exceed the valuation and is considered good value for money”.

So, after eight years, expenditure of €10.5 million, plus hundreds of thousands of Euro in interest payments on the loan (almost €5 million when other sites are included), Galway City Council hasn’t applied for planning permission or built one house on the site, which is now going to be split by the proposed new ring road, and there’s a potential of a halting site being built there, prompting local residents and elected representatives on the Ballymoneen Road to wonder – where’s the value for money?