Crosbie claims Dunnes jeopardising Point Village plan

THE ALLEGED failure of Dunnes Stores to complete an agreement to become anchor tenant at the Point Village development in Dublin’s docklands is jeopardising the continued financing of the project, businessman Harry Crosbie has claimed.

However, when proceedings by Mr Crosbie’s company, Point Village Development Ltd, for an order requiring Dunnes to pay €23 million allegedly due under the agreement came before the Commercial Court yesterday, Mr Justice Peter Kelly was told the matter and other issues in dispute was going to mediation.

The judge said he had read Mr Crosbie’s affidavit and mediation was a “sensible” course. He admitted the case to the court and adjourned it for five weeks to facilitate the mediation.

In its proceedings, Point Village Development claims Dunnes had entered into an agreement with it in February last whereby the retail chain would pay €46 million to become the anchor tenant in the scheme, part of the already completed O2 venue. The development is to cost about €850 million. More than 50 per cent of the work, including €23 million on the Point Village, has been completed.

In an affidavit, Mr Crosbie said he reached an agreement with his bank to borrow €51 million to fund the works for the anchor tenancy, on the basis of the agreement with Dunnes, but the alleged failure of the retailer to complete the deal was jeopardising the financing of other elements of the scheme.

Under the agreement, Dunnes was to make payments at various stages of construction but it failed to make the first stage payment last August, Mr Crosbie said. It “became apparent” the company wanted to delay the development.

A number of meetings took place between the parties, including one at the Point on October 20th last attended by Mr Crosbie and one of Dunne’s main shareholders, Margaret Heffernan, who was accompanied by Noel Fox and Irwin Druker.

At that meeting, Mr Crosbie said Ms Heffernan had said she wanted to do the project but it was “two years too early”. He said Ms Heffernan said Dunnes could not honour its contract without changes “reflecting new market conditions”.Mr Crosbie said he had later received a phone call from Mr Druker saying Dunnes wanted a 20-30 per cent discount on the project and 10 years to pay it.No agreement was reached and Mr Crosbie said his company made a number a formal demands for the stage payments which now stood at €23 million, plus interest of €79,783.