Department paid Rehab €4m more than valuation for Dublin school site
C&AG report says offer of €20.5 million for Sandymount site was 24% above valuation
A Google Earth view of Roslyn Park on Strand Road, Sandymount, Dublin 4
The Department of Education paid € 4 million or nearly 25 per cent more to the Rehab Group for a site for schools in Sandymount, Dublin 4 than the amount set out in an independent valuation report, the State’s spending watchdog has found.
The Comptroller and Auditor General also maintains that the Department of Education had agreed to additional conditions of sale that provided “valuable medium- term accommodation to the vendor”.
It says the Department of Education “opted not to use external negotiation expertise when acquiring this site”.
The Comptroller’s report says the Department of Education completed the purchase of the five-acre Roslyn Park site in Sandymount from the Rehab Group in October 2016 for €20.5million or €4.1 million per acre.
The report says that in May 2016 an independent consultant engaged by the department valued the freehold interest in the property at €16.5million.
It says the valuation report considered the potential continued occupation of the site by the Rehab Group for a minimum period of two years “as a weakness and reflected the impact of this condition in the valuation”.
The Comptroller’s report says the Department’s offer of €20.5 million for the site in May 2016 was 24 per cent above the valuation received.
“While the valuation report noted the potential for the Rehab Group to continue to occupy the site for two years, the final agreement provided for the Rehab Group to continue to occupy approximately 40 percent of the site for a further three years”, the report says.
The Department of Education told the Comptroller’s office that the reason it increased its offer for the Sandymount site from an initial €12 to €20.5 million was that it had been informed by the Rehab Group that several bidders were seeking to acquire the property and that the top bid was in the order of €20million.
“Therefore an offer was required to be at the €20.5 million level in order to secure the property.”
The department said the arrangements agreed were on the basis of facilitating continued education provision to existing clients of the Rehab Group while at the same time guaranteeing the acquisition of the property.
It said the continuing occupation of the site by the Rehab group reduced security costs which would otherwise have had to be paid while that arrangement did not have any impact on its own plans given the timeline needed for design, planning and procurement.