Nama puts building blocks in place at D4 glass bottle site
New era beckons for this prime plot of development land on the Poolbeg peninsula
An aerial view of the former Irish Glass Bottle site in Ringsend, and adjoining land controlled by Nama.
In the 17 years since manufacturing stopped at the site of the old Irish Glass Bottle factory in Ringsend, its demise enriched one owner, contributed to the bankruptcy of another and has been a key front in the battle for social housing in Dublin 4.
Now it looks like a new era beckons for the prime plot of land on the Poolbeg peninsula on the south side of Dublin Port. The National Asset Management Agency (Nama), which controls the 22-acre site and an adjoining plot half that size again, which once belonged to developer Liam Carroll, will soon seek commercial partners to build 3,500 apartments across both properties, along with offices, shops, schools and other amenities.
Legislation obliges Nama to earmark 350 of the apartments for social housing. The State agency’s chief executive, Brendan McDonagh, indicated in May that it would provide more than this number. At the same time, the organisation is negotiating the sale of some land in Poolbeg to Dublin City Council for 600 affordable homes.
Recently, two companies, Becbay and Fabrizia Developments, applied to Dublin City Council for permission to build roads, water networks, parks and other infrastructure needed for housing on the Poolbeg sites.
Becbay owns the glass bottle property while Fabrizia has the former Carroll site. Nama controls both companies through its receiver, Ken Fennell of Deloitte, whom it appointed to collect hundreds of millions of euro in debt due from them.
Their application was the second real step towards finally developing the land. The first was An Bord Pleanála agreeing to classify the sites as a “strategic development zone” in April. This means planners should give permission relatively quickly to anyone seeking a green light to build there, once their proposals meet the criteria set out in the zoning. In Poolbeg’s case these primarily include building lots of new homes.
Allied to that, the development’s size means it will qualify for the fast-track strategic housing initiative planning system. This allows those intending to build 100 or more new homes to apply directly to An Bord Pleanála rather than going to the local council.
The board must decide on these applications within 16 weeks. Its ruling cannot be appealed, but interested parties can ask a High Court judge to review it to ensure planners have followed procedures properly.
Developers seem unlikely to hit unexpected planning obstacles, while Nama – through the receiver-controlled companies – is preparing to lay the literal groundwork in the shape of roads and services. The agency will provide cash and keep a stake in the project, while whichever partner it chooses will build the homes, shops and offices.
Potential partners will have to submit competing bids, with Nama choosing whichever one it judges will give the State best value. A few companies have already indicated that they would be interested. Justin Bickle, chief executive of stock market-listed house builder Glenveagh, confirmed recently that it would consider bidding.
Steve Bowcott, chief executive of construction group Sisk, said his organisation would specifically be interested in building the public housing and would consider getting involved alongside a partner.
There are plenty other likely candidates. Ballymore, a big player in Irish and British construction, is known to be keen. Its founder and chairman, Seán Mulryan, made his ambition to be involved in Poolbeg clear to staff as much as a year ago. Even without that, the group would be seen as a natural contender – it has completed similar projects in London, particularly in the city’s docklands.
Ballymore was a Nama debtor, but had repaid the agency all of the €3.2 billion it owed by the end of 2015.
Ballymore and a financial backer, Singapore-based Oxley, which could well back the Irish company should it get Poolbeg, are building apartments and offices on North Wall Quay on the north bank of the river Liffey, a development dubbed Dublin Landings. Oxley recently agreed to sell 268 of the homes for €154.6 million.
The buyer, Greystar, is another business thought likely to be interested in Poolbeg. The US developer has $26 billion in assets around the world. Its European arm already does business in countries including Britain, France, Germany and Spain. One area Greystar specialises in is building apartments to rent. Up to half the dwellings in Poolbeg could be leased rather than sold.
Industry observers see another US player, Hines, as a realistic bidder. The group is the “master developer” in Cherrywood, a project in south Dublin that could ultimately house 30,000 people, around a town centre that will also hold offices, shops and other amenities. Hines put in the infrastructure, roads, services and parks and will build some of the apartments. Recently it sold two plots likely to hold 2,600 dwellings to yet another American business, Lone Star, for €120 million.
Hines, whose Irish arm is headed by senior managing director Brian Moran, recently bought the Player Wills site on South Circular Road in south Dublin and has begun consulting with locals and other interested parties ahead of seeking permission to build up to 1,500 homes there.
It is also redeveloping the old Central Bank building on Dame Street, close to the capital’s main shopping district.
Lone Star, too, could seek to get involved through its property development arm, Quintain, which built the €3.4 billion Wembley Park residential complex in west London. The business plans to construct 1,000 dwellings in Adamstown in Co Dublin, most of which it is likely to rent rather than sell.
Hines and Ballymore, along with London-based U+I, are competing with each other to win a contract from Guinness parent Diageo to redevelop 12 acres of its complex in St James’s Gate in Dublin.
Property sources point to that race as a good guide to the companies likely to seek to join forces with Nama in Poolbeg, although they tend to rule out U+I as it specialises in urban regeneration rather than new development. Quintain and local developer Pat Doherty’s Harcourt were among six on an earlier shortlist for the Diageo project.
Johnny Ronan, one of the property boom’s more colourful figures, is also known to be interested. Ronan is another former Nama debtor, both through his own interests and Treasury Holdings, the developer in which he was a partner with Richard Barrett. Ronan cleared his liabilities to the State agency several years ago and now runs Ronan Group Real Estate.
Sources acknowledge that Ronan’s relationship with Nama while he was a client was tense, to say the least. However, the agency will have to judge all bids for Poolbeg on their merits, so observers argue that previous history should not be a factor when it comes to choosing a partner.
The Poolbeg site at the centre of all this speculation has a colourful history of its own. In 2002, Ardagh, chaired by businessman Paul Coulson, closed the Irish Glass Bottle factory, with the loss of 375 jobs. Coulson delisted the manufacturing business from the Irish Stock Exchange and set up South Wharf to house the Poolbeg property.
South Wharf sold the site to Becbay in 2006 for €412 million, giving a third to Dublin Port. The cash helped Coulson turn Ardagh into a global packaging giant that makes beer bottles for the likes of Budweiser and food tins for companies such as John West.
Becbay planned to build 2,100 homes on the land. Its backers were boom-era property speculators Bernard McNamara and Derek Quinlan, along with the now defunct State-owned Dublin Docklands Development Authority (DDDA) and private investors recruited by stockbrokers Davy.
Those involved were a who’s who of the Irish property boom. McNamara’s interests included the Shelbourne Hotel in Dublin, Michael McNamara & Co, which was Ireland’s third-biggest builder before it eventually went to the wall, and numerous trophy properties around the capital.
Quinlan was a revenue inspector turned financial adviser who used his knowledge of property tax breaks to move into development and real estate. His best-remembered deal was the purchase in 2004 of five luxury London hotels headed by the Savoy for more than €1 billion. Anglo Irish Bank loaned these men and others like them billions of euro to fund their buying sprees.
Liam Carroll, another boom-era developer, owned the land next to the glass bottle site through Fabrizia. Known as the “shoe-box king” for his build-them-high, sell-them-fast approach to apartment construction, his business was one of Dublin’s biggest property players.
McNamara was seen as Becbay’s leading figure. At the time, observers hailed his ability to find deals and the “razor-sharp” mind with which he assessed them. Either or both talents failed him in Poolbeg. The property market peaked as the deal was done. A credit freeze followed within months and shortly afterwards the property bubble burst in spectacular fashion.
Carroll’s empire collapsed in 2010, leaving debts of €2 billion, which Nama eventually absorbed when it bought €74 billion in property loans from the domestic Irish banks for €31 billion as part the State’s effort to bail the lenders out after the crash.
Becbay never got its plans to first base. Its liability also ended up in Nama. McNamara declared bankruptcy in the UK in 2012 after the value of his properties tumbled. The glass bottle site was thought to have lost 90 per of its €412 million purchase price by then, assuming that anyone would have bought it. The State nationalised and ultimately liquidated Anglo Irish Bank, which by then had been absorbed into Irish Bank Resolution Corporation. The Government wound up DDDA in 2016.
The construction slump that followed the 2008 bust left the Republic with a housing crisis, particularly in its cities. As this grew, debate began raging over what it should do with vacant land such as Poolbeg that the State held through Nama. In 2015, the Government decided that the Dublin site should get strategic development zone status.
Before An Bord Pleanála approved that, pressure grew on the Government to use Poolbeg for public housing, something both the city and the area around the site badly need. Locals led this campaign and the 900-plus social and affordable homes included in the plans are part of a deal struck with them in return for their support for the project.
Patsy Doolan of the Irish Glass Bottle Social Housing Action Group points out that residents in nearby Ringsend have had to put up with a lot in recent years, including the development of a nearby waste incinerator and sewage treatment works. They will soon have to live with the disruption that building the new homes in Poolbeg will cause. They must get something from this, she argues. “We want affordable homes for people from the area who want to live in the area,” Doolan says.
Labour senator Kevin Humphreys, who is from the same area, argues that this payback stretches to all taxpayers. He estimates that they will have to put in around €75 million to ensure that the project works. This includes services and the cost of a bridge connecting the East Link Road and Sir John Rogerson’s Quay, needed to facilitate public transport to what will be an entirely new community.
He fears those involved could yet go back on the social and affordable homes commitment. Humphreys points out that 30 social homes earmarked for the nearby Capital Dock development have been moved out to the suburbs. “We have got this commitment,” he says. “But it will not be until they start to get the keys in their hands that the local community will believe that it is being delivered.”
Doolan though warns that there will be trouble if the promise is not kept. Along with everything else, she recalls that the job losses that resulted from the glass bottle factory closure hit virtually every family in her community. “That land owes us something,” she said.
It also owes taxpayers a fortune but that money will never be seen.