Smyth and Irish Club fall out over property sale

 

Property developer Mr Noel Smyth and the council which runs the Irish Club in London have fallen out over whether the club should accept an offer for its premises. A deal the club signed with Mr Smyth earlier this year gave him certain rights over the sale of the property. The council is understood to be very unhappy that it cannot proceed with a sale.

"We have two worthwhile offers, one which we think is particularly good, and we are satisfied the offers we have are as good as we are going to get," said Mr Owen Murphy, club secretary. He said the council had taken advice from property experts.

But Mr Smyth believes it would be better not to rush into any deal as a better price could yet be secured. "I'm in favour of a sale but you don't want to rush it."

The council is concerned that it may be forced by Mr Smyth to spend money it cannot afford on a marketing campaign. Mr Smyth said he had not as yet decided a marketing campaign will be needed. The agreement between the two sides allows for each to insist on a marketing campaign.

The club's lease on a 17,000 sq ft premises on Eaton Square, Chelsea, still has 10 years to run and is considered to be worth more than £3.5 million sterling (€5.4 million). Grosvenor Estates, which owns the property is understood to be a bidder for the lease.

The second bid received to date is from a firm representing a UK individual who wishes to use the huge building as his main home, according to one source. Grosvenor Estates also wishes to convert the building into a private residence as part of its programme of returning the exclusive square to predominantly residential use.

Mr Smyth is selling a nearby mansion and is seeking €29 million. The eight-bedroom detached corner house was bought in 1997 along with an adjoining building, Eaton Gate, from Grosvenor Estates for €4.76 million. The adjoining building was converted into apartments which were then sold. The corner house has been developed as a private residence.

Mr Smyth said he had received one "very substantial offer" for the building and that there were also several expressions of interest. He has not yet accepted the offer. He said it was not his wish to buy the Irish Club premises.

The Irish Club has been operating at a loss for some years and is unable to maintain the large building it has occupied since the 1950s. In April, club members were asked to vote on four plans, two of which involved selling the premises and two which involved staying. Mr Smyth's proposal involved the club's upgrade but subsequent to his plan winning the vote, and being agreed with the club, KPMG advised that the plan was not viable.

Mr Smyth guaranteed a €1.2 million loan from Irish Nationwide with which the club paid off debts. His agreement with the club included an understanding that if the development plan did not work and should it be sold, the proceeds would be used to pay off the loan. The deal also stipulated that any amount exceeding €6 million received from the sale of the lease, would be split equally between Mr Smyth and the club.