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The saga of Dublin City Council’s attempt to develop the big plot of land that it owns at O’Devaney Gardens in Stoneybatter continues, as the developer Bartra looks to renegotiate the deal agreed in November 2019.
At that time, council managers told councillors that if they agreed to transfer the land to Barta, the price for the social and affordable homes would be set in stone.
The developer would start building within a year and carry the planning and financial risks too, says a council report issued at the time.
More than three years on, construction work has not yet started. Last Tuesday local councillors backed a motion, tabled by independent Councillor Cieran Perry, calling on the council to take back control of the land.
The lack of action by the developer “is a clear breach of the development agreement”, says Perry in the motion.
Bartra did not respond to a query about this in time for publication.
On Friday, the council’s housing manager, Coilín O’Reilly, issued an update to councillors confirming that Bartra and the council are renegotiating the terms of that agreement.
“Unprecedented construction cost inflation and challenging events such as Brexit, the Covid Pandemic and the Ukraine Conflict have understandably presented difficulties which have had to be resolved,” says O’Reilly.
The discussions are progressing well, he says, so Bartra should start work there early next year “subject to final agreement”.
The government has announced a framework for handling construction cost inflation in public contracts, saying it is willing to shoulder up to 70 percent of the extra costs.
Some councillors say they still want the council to cancel the deal with Bartra, citing the unacceptable delays to the project so far.
Bartra didn’t respond to questions about whether it was responsible for the delays, how much of an increase it wants on the prices agreed in 2019, or when it will start work on the site.
The Story So Far
In 2006, Dublin City Council proposed plans to develop the O’Devaney Gardens site through a public-private partnership with developer Bernard McNamara. That deal came apart in the economic downturn of 2008.
In 2013, councillors and city managers started to debate a new vision to develop a few of the biggest council sites, including O’Devaney Gardens, under a flagship programme called the Housing Land Initiative.
In 2018, the council launched the project by starting to build 56 new social homes on a small section of the site.
Those homes have now been completed and some households got their keys this week, says Fine Gael Councillor Ray McAdam.
In November 2019, after a fraught debate, a majority of councillors agreed that the council should go ahead with a deal with Bartra to build 768 new homes on the main O’Devaney Gardens site.
The breakdown of the homes – the number of which has since increased – is planned as 30 percent social housing (including the 56 the council was building itself), 20 percent affordable purchase and 50 percent private homes.
There was also a non-binding commitment from Bartra that it would sell some of the private homes to a housing charity for use in a cost-rental scheme.
Council managers said that the fine details of the agreement were commercially sensitive, so the public wasn’t allowed to see them. Councillors were allowed to view the contract but they were not allowed to take notes or photos.
The affordable purchase homes would benefit from a government subsidy of €50,000 and a waiving of the development levy worth €10,000, says a report issued councillors in 2019.
They would then cost the purchaser around €250,000 for a one-bedroom home and €260,000 to €320,000 for a two-bedroom, and €300,00 to €320,000 for a three-bedroom house.
Architect and housing commentator Mel Reynolds and Sinn Féin TD and housing spokesperson Eoin Ó Broin were among those who queried whether the arrangement was good value for money for the state and suggested the council was handing over the land too cheap.
In November 2019, the council housing manager at the time, Brendan Kenny, issued a report to councillors, saying that the price the council would pay for the social and affordable homes was fixed.
Fixing the price had a significant monetary value, the report says – “an equivalent cash value in the region of €19m”.
He added that the developer was taking on all of the risks associated with planning and the financing. “The Developer carries these risks,” said Kenny.
A month earlier, a council spokesperson had also said the prices were set. “There’s no scope to renegotiate prices tendered as part of the competitive-dialogue European procurement process,” they said.
In his update to councillors last week, O’Reilly indicated that those prices are now back on the negotiating table. “Dublin City Council wants to achieve value for money notwithstanding the context of elevated inflation.”
Fine Gael Councillor Ray McAdam says that while he is frustrated by the delays he is happy with the response from the council housing manager. Because it says that works will start in the first quarter of next year, he says.
(The response says that will happen “subject to agreement” of the two parties in the current negotiations on price.)
Says McAdam: “It is my reading that the inflation situation has impacted on the costs.”
The price of the homes was agreed in 2018, he says. In light of construction-sector inflation – which he says is estimated at around 25 percent – it isn’t surprising that the council will have to pay more for the homes, says McAdam.
A spokesperson for the Department of Housing – which is funding the project – wouldn’t comment on the issues with the O’Devaney Gardens site, saying that the agreement was between Bartra and Dublin City Council.
(Back in October 2019, the then Minister for Housing, Fine Gael TD Eoghan Murphy did get involved in the issue though, telling councillors they had to agree to the deal or he would pull the funding.)
The spokesperson for the Department of Housing said that the government has put in place an “inflation co-operation framework” for all public works contracts.
“Where inflation can be shown to have increased the cost of fuel, energy or materials (on certain projects), the cost burden will be shared, with the State taking on up to 70% of the increase,” says the spokesperson.
“The Framework is a pragmatic and proportionate response to the current challenges caused by inflation that are not within either the Government’s or the contractor’s control,” he says.
Dublin City Council did not respond in time for publication to queries as to whether Bartra is seeking to renegotiate the price beyond what is allowed for by the inflation co-operation framework.
O’Reilly’s update appears to indicate that if the costs issue can be resolved, Bartra will start work on the site soon.
In July 2022 Bartra tendered for a contractor to do enabling works, and has evaluated the tenders, says O’Reilly.
It could appoint a contractor to start that work early in 2023, he said, “subject to conclusion of the above discussions”.
The first 380 homes could be built within 30 months, said O’Reilly.
His update cites delays to the first phase of 56 homes, built by the council, which meant the other bit of the site couldn’t be handed over to Bartra “without encumbrance”. That handover is now expected by the end of December, it says.
But Social Democrats Councillor Catherine Stocker says that the delays in this case were caused by the developer – so it should meet the costs of inflation itself too.
Bartra changed the plans by increasing the number of homes on the site, she says. Then it got planning permission in September 2021 but brought a judicial review against the planning permission granted, because it stipulated that the private homes could only be sold to individual purchasers.
(The board has since clarified that that stipulation related only to the houses in the scheme and not to the apartments.)
“They are clearly now using the Holy Trinity of excuses – Covid, Ukraine, Brexit – to try and extract yet more money from [the council],” says Stocker. “We should not capitulate to this.”
Independent Councillor John Lyons says Bartra keeps wasting time to maximise its bottom line.
“Dumping the original plan for the site so they can squeeze more units into higher blocks, legally challenging An Bord Pleanála so they can sell-off units to cuckoo funds,” says Lyons.
While Bartra does all this, people on the social housing list are “stuck paying astronomical rents to private landlords, stuck living in overcrowded family homes, couch-surfing or indeed in completely unsuitable emergency accommodation like family hubs”, he says.
The council should take the site back and build the homes itself, says Lyons.
Perry says the same in his motion.
The development agreement allows Dublin City Council to resume possession of the site should the successful tenderer fail to commence building within four weeks of getting planning permission, he says. “Now is the time to revoke the agreement with Bartra.”
The motion was supported by four local councillors on the Central Area Committee. Five abstained, and no one voted against it. The motion is due to go before the next meeting of the full council – in January.