THE CLARION Hotel in Dublin Airport, which was valued at €43 million in January 2008, is now worth just €12 million, according to accounts just filed.
The hotel, which is owned by the McCormack and Kelly families, has submitted a business plan to the National Asset Management Agency (Nama).
Nama has taken on a loan of more than €31 million associated with the hotel that was issued in 2005 by Anglo Irish Bank.
International Airport Hotel Ltd, which operates the hotel, lost €2.45 million in 2008, according to accounts it has just filed. The directors state that the financial statements for 2009 and 2010 “indicate further significant losses”.
The accounts, which were signed on February 4th, 2011, say the hotel fell in value by €17.9 million during 2008 and was worth €24 million at year’s end. The property fell further in value since then and the directors believed it was worth just €12 million at the time they signed the accounts.
The commercial viability of the hotel is being assessed by Nama and while the outcome of the process is unclear, the directors say they expect the company to continue as a going concern for the foreseeable future.
International Airport Hotel is in turn owned by Adelphi Way Developments & Investments Ltd, which had borrowings of €31 million at the end of 2007, the latest year for which it has filed accounts. It is its borrowings which have been transferred to Nama.
The 2007 accounts for Adelphi show that during that year, the shareholders’ loans to the company increased to €7.3 million from €5.1 million.
Anglo has a mortgage on the hotel and several guarantees for percentages of stated amounts from Paddy Kelly, brothers Niall, Alan and Brian McCormack, financier Niall McFadden and business associates of Mr Kelly, Frankie Whelehan and Paul Pardy, according to the Adelphi accounts.
International Airport Hotel made an operating profit of €2.3 million in 2008 before interest, property costs and depreciation were accounted for. The directors said they had been concentrating on cost reductions.
The McCormack brothers and their father, John McCormack, are the operators of the Alanis group, which was involved in a range of very substantial property developments during the boom. As reported recently, the four men transferred shareholdings in a number of their companies to their wives during 2008.
The chief executive of Nama, Brendan McDonagh, told the Oireachtas committee Public Accounts Committee in January that the agency would not approve business plans where borrowers had transferred associated assets to spouses, unless the transfers were reversed.
Mr Kelly, whose Redquartz group is now in liquidation, told the courts some time ago he is broke. He and his sons Simon and Christopher have been the subject of a number of judgment orders granted to banks by the courts.
Mr McFadden is due to be cross-examined by the courts in March as part of proceedings where NIB, which is seeking a €15 million judgment order, has expressed concern that he may not have made a full disclosure in his statement of affairs. NIB secured a judgment order against Mr Pardy on 2009.
Mr Whelehan, chief executive of the Choice Hotels Ireland group, is working on building a chain of hotels in Germany. Last year, he said business for his hotels in Dublin city centre was improving with the opening of the National Conference Centre.