€3m price cut on Smithfield hotel

HOTEL MARKET:  THE SALE price of Chief O'Neill's hotel in Smithfield has been slashed to €18 million from €21 million last June as the credit crunch and loss of investor confidence takes its toll on the sector.

Tullow businessman Lar Byrne, who shot to fame when his horse Hardy Eustace won successive titles at the Cheltenham festival in 2003 and 2005, bought the hotel from developer Terry Devey for just under €20 million two years ago. Selling agent, Lisney, is now asking for bids in the region of €18 million and it is understood that five separate parties are in advanced discussions on the property.

The 77-room hotel, which fronts onto Smithfield square, has been on the market now for almost 12 months and is being sold as a going concern. However, according to a well-placed source, a consortium of investors had agreed to buy the property last September for in excess of €18 million but the deal fell through just as the problems in the money markets erupted into a full-scale financial crisis.

Chief O'Neill's now trades as a Park Inn after Rezidor SAS took over its operation in early 2006. But a new owner will have the right to terminate the existing management contract and could choose to run the establishment themselves under the original Chief O'Neill's brand or employ a different operator, which might see the hotel undergo yet another name change. It is all a dramatic departure from what was unveiled in early 1999 when Chief O'Neill's identity revolved around the former Irish Traditional Music Centre or the Ceol museum and both were regarded as the centrepiece of Devey's rejuvenation of Smithfield from an old Dublin market into a European-style piazza.

Back then, the developer, whose company settled a €3.48 million tax bill with the Revenue Commissioners last summer, described the 170-foot Jameson distillery tower as what the project was "all about". The observation tower is included in the sale and is being marketed as a major tourist attraction.

However, for the past few months the chimney has been closed to visitors due to a faulty lift and a source familiar with the problem predicted that its sweeping views over the city would not be available again until the tourist season gets under way at the end of next month.

While many in the industry believe Smithfield's redevelopment has not quite matched up to original expectations, the area's growing population, the arrival of the Luas and the proposed DIT campus at Grangegorman are all expected to continue to inject new life into what was once a deprived and rundown corner of the capital.

Potential investors will also have the opportunity to significantly expand the hotel and an architect's feasibility study, commissioned by Byrne, demonstrates how a further 44 rooms can be added to the property.

The sale is being handled by Lisney agents Ross Shorten and Maeve Furlong, however neither were available to comment on this article.