State lease on empty offices for 22 years

The State is paying €1.3 million a year for an almost empty office building in Dublin 4 on an unbreakable lease that runs for another 22 years, the Dáil has heard.

Minister for Enterprise Richard Bruton said the then State agency AnCO took out a 65-year lease in 1969 for Carrisbrook House with a rent review every seven years. Forfás, which took responsibility for the lease in 1994, has been “actively seeking to market the vacant space” since 2008.

His department had written to the OPW and the Department of Public Expenditure and Reform advising them of its availability, and the IDA had also been asked to bring it to the attention of prospective clients.

Independent TD Catherine Murphy, who raised the issue during Question Time, asked if there was an initiative to see if leases could be broken.

The Kildare North TD highlighted some “upward-only rent review” leases, including an “extraordinarily expensive” €800,000 for a social welfare office in Carrick-on-Shannon.

Mr Bruton said the OPW had been repeatedly notified about Carrisbrook but it had signalled a lack of demand now and in the foreseeable future given decentralisation and the downsizing of the public service.

The IDA took up the lease in 1976, and when it moved in 1985 the building was leased to other tenants and operated on a “cost-neutral basis to the exchequer” for the next 23 years. Since 2008, however, six floors of the building had been vacant and the Israeli embassy was currently the only occupant on a sub-lease expiring in 2025, with lease-break provisions in 2015 and 2020.

Mr Bruton said the building had been upgraded and work done to put it in a better position to market from this year. He did not know “how much property is vacant or whether or not we can get out of leases and vacate others that are coming up for review”.

Ms Murphy said the Government had promised a big cost-cutting agenda. “We need to be imaginative about using this space if we cannot get out of the lease, which we do not seem to be able to do.”