Council’s lease deal for Dublin apartments collapses over ‘excessive rents’

Talks with O’Callaghan hotel group over using 28 apartments for social housing fail

The council had hoped to enter into a 25-year lease to use the block of 28 apartments, under construction on the corner of Sandwith Street and Boyne Street, for social housing. Photograph: Google Streetview

The council had hoped to enter into a 25-year lease to use the block of 28 apartments, under construction on the corner of Sandwith Street and Boyne Street, for social housing. Photograph: Google Streetview

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A deal between Dublin City Council and the owners of the Davenport and Alex hotels for the long-term lease of a city centre apartment block has been scrapped “due to excessive rents sought”, the council said.

The collapse of the lease plan follows the decision of councillors to block a previous deal which would have seen the council own the new apartments outright, in exchange for a block of 14 dilapidated council flats.

The council had in recent months been in talks with the O’Callaghan hotel group in relation to the lease of the apartment block currently under construction by the hoteliers in the south inner city.

The council had hoped to enter into a 25-year lease to use the block of 28 apartments, under construction on the corner of Sandwith Street and Boyne Street, for social housing, but it was unable to secure agreement on rents, with its valuers describing the rents sought by the hotel group as “excessive”.

However, the council had initially hoped to own, rather than lease, the new apartments. It had last year negotiated a deal with the hoteliers to swap a nearby block of 14 run-down senior citizens’ flats at St Andrew’s Court for the new apartment block.

Opposed

While the council would not have had to pay any money for the new complex, councillors opposed the exchange because it involved the transfer of public lands to a private company.

The hotel group had wanted to acquire the council’s senior citizens’ flat complex at the Fenian Street and Sandwith Street, close to two of its city centre hotels, the Alex and the Davenport.

In exchange, it would have transferred the ownership of the 28 new apartments and a ground-floor retail premises to the council. The group last year secured planning permission for the new block, less than 50m from St Andrew’s Court. It expects the development to be completed in about 14 months’ time.

The council’s head of housing, Brendan Kenny, last December told local councillors the completed scheme would be worth “more than double the market value of the St Andrew’s Court site, ie €12 million as against €5 million”.

The exchange agreement would have delivered a completed social housing development before the end of 2022 “which would be far in advance of any new development by [the council ] on the St Andrew’s Court site at no cost to the State”, he had said.

However, the proposal did not secure sufficient support of local councillors, although some were in favour of the deal, and it was never put to the full council.

The council subsequently began talks to lease the block from the hotel group. However, Mr Kenny said an acceptable rent deal couldn’t be secured.

“They were looking for too much, a couple of hundred more a month than we were prepared to pay, it was too much of a stretch.” Mr Kenny said he was not in a position to say how much rent had been sought.

The hotel group declined to comment on the matter.