Dublin City Council officials expect to pay at least €100,000 a year in rent for each of the homeless families that they plan to accommodate in Avalon House on Aungier Street.
That figure – which shakes out at more than €8,000 a month for each family – is before any costs of refurbishment, repairs, or staffing.
The council set out on this path after it took over the lease for the building from the Peter McVerry Trust, one that its law agent has said has no get-out clause and locked it in for 20 years.
Peter McVerry Trust planned to run the building as a hostel for 120 to 150 single homeless people but didn’t have planning permission. It, and the council, later dropped the plans after local residents and independent Councillor Mannix Flynn launched a legal challenge.
Flynn says it is surprising that the council and the Peter McVerry Trust were confident the singles hostel would proceed, given opposition to similar projects nearby.
Also, Dublin City Council wasn’t using normal procurement processes to source homeless accommodation at the time of the deal, and this wouldn’t have happened if they had been, says Flynn.
A spokesperson for Dublin City Council says: “DCC took over the pre-existing lease on Avalon House, which had been negotiated by PMVT, as part of the agreed settlement relating to the high court injunction issued by local stakeholders.”
It plans to spend €6m on the works to turn the building into a family hub, he says.
A spokesperson for the Department of Housing didn’t respond to queries as to whether it agreed to the council taking over the lease, and how the costs can be justified compared to the cost of renting a home for each family.
It also didn’t respond to a query as to why it is funding major works on a building that isn’t owned by the state.
When officials took over the lease, the building was owned by a company called Trittkopf Limited, according to the lease.
In May 2022, the property was sold for €45.6 million, according to the Property Price Register. A planning document from June 2022 lists the owner as Irish Social Housing Fund 1, which is a sub fund of Davy Platform ICAV.
Stitched in
In November 2019, the Peter McVerry Trust signed a 20-year lease to rent Avalon House for €2 million a year. The move was backed by the then-director of the Dublin Region Homeless Executive (DRHE), Eileen Gleeson, who agreed to fund the project.
Gleeson had written to Pat Doyle, then CEO of the Peter McVerry Trust, in December 2018.
“I confirm that should you be successful in securing a longterm lease the DRHE will contract bed spaces in Avalon House, Dublin 2, from PMVT at a rental cost of €166,666.67 per month (€2m annually) for the duration of the lease,” she wrote.
In early 2020, independent Councillor Mannix Flynn sought leave from the high court to quash the plans for a homeless hostel, arguing that it didn’t have planning permission and the over-concentration of institutional facilities was a breach of the city development plan.
In June 2020, “due to unforeseen circumstances”, Avalon House was being used to accommodate just four families, according to a council manager’s order issued at the time.
Nevertheless, Gleeson and then council housing manager Brendan Kenny, agreed to pay the full rent to the Peter McVerry Trust, of €2 million a year up to the end of 2023.
“There is provision in the current estimates for this expenditure and the amount payable will be 90 percent recoupable from the Department of Housing, Planning and Local Government,” they said.
In December 2020, Gleeson agreed that the council should take over the lease from the Peter McVerry Trust, according to a manager’s order, which also indicates she intended to procure a private company to run it.
In September 2021, the current director of DRHE, Mary Hayes, issued a new manager’s order, which said the council was talking to homeless charity Depaul Ireland about running it as a homeless hostel for families.
Also in 2021, Hayes sanctioned a payment of up to €150,000 to the Peter McVerry Trust for security on the building for the previous year. Again the council would recoup 90 percent of that cost from the department, it says.
Examining the deal
At the end of December 2021, the city valuer, in Dublin City Council, looked at several options for using the building going forward.
It wasn’t suitable for other civic uses, the report says. The landlord would have to approve any move to reassign the lease again, it says.
It also says the building is “over rented by c. €300,000 per annum”, suggesting that the valuer thought Peter McVerry Trust had agreed to a rent that was above the market rate.
Importantly, the city valuer pointed out, the lease doesn’t appear to have any break clause for the tenant.
In October 2022, an official in the Department of Housing also flagged that the Peter McVerry Trust had signed a lease on the building that it couldn’t get out of.
“It is of significant concern that the AHB [approved housing body] entered into a lease of this value and duration, without a tenant break clause,” wrote Jennifer Peyton, an assistant principal officer at the Department of Housing.
Hayes, the director of the DRHE, wrote to the Department of Housing: “The law department confirmed ‘there is no potential exit strategy available to the DRHE relating to this 20 year lease.’”
The Peter McVerry Trust is the largest homeless charity in Dublin, but has run into financial trouble and has been unable to pay its debts and taxes.
The Minister for Housing has agreed to a government bailout of the charity which is under investigation by both the Charities Regulator and the Approved Housing Bodies Regulatory Authority regarding financial and governance concerns.
The longtime CEO of the Peter McVerry Trust Pat Doyle retired earlier this year.
Meanwhile, the most feasible future for the Avalon House building in the city valuer’s report, Hayes wrote, was as a family hub with “18-20 large family rooms”, essentially a homeless hostel for families.
In February 2023 the Department of Housing agreed to fund design works, with a view to converting the building, which is a protected structure, into a family hub, at an estimated cost of €6 million.
The draft plans for the family hub include 19 multi-bedroom units with family rooms, private shower rooms and kitchenettes, as well as a communal lounge, two kitchens and a dining area, a toddler’s playroom, a homework or study room, storage facilities, a laundry room and staff offices.
Finger pointing
The current plan is some distance from the original vision of Peter McVerry Trust, to use Avalon House to accommodate 120 to 150 single homeless people.
The change, and the transfer of the lease, was triggered when local residents objected to a singles hostel and independent Councillor Mannix Flynn launched legal proceedings to stop the project. Peter McVerry Trust didn’t have planning permission for the conversion, he said.
By phone on Thursday, Flynn said that the council should have known there would likely be objections to the conversion of Avalon House from a tourist hostel to a homeless hostel.
Some local residents had previously objected to what they said was an overconcentration of homeless hostels in the area, he says.
In 2017, amid local objections, the council and the Peter McVerry Trust abandoned plans to turn another protected structure on Aungier Street, the Staircase building, into a homeless hostel, says Flynn.
Further west, at Carman’s Hall in the Liberties, residents had also brought legal challenges against the conversion of the community centre to a homeless facility.
The issue with Avalon House was the council didn’t have planning permission, says Flynn. “They signed this lease in rather dubious and peculiar circumstances.”
A spokesperson for the DRHE said in November 2023 that it tries to provide homeless accommodation across the Dublin region, advertising for accommodation through an open-tender procurement process.
“We work with providers that are identified during this process, where accommodation is available and is most suitable,” he said. “We support other Dublin Local Authorities to develop emergency accommodation in their areas.”
Flynn says that the locked-in lease and high prices wouldn’t have happened if normal public procurement processes were used.
When the Peter McVerry Trust leased Avalon House in 2019 and when the council took over that lease in 2020, Dublin City Council wasn’t using the normal procurement model, which involves advertising for services via the portal eTenders.
In January 2022, Dublin City Council started advertising for a panel of providers of homeless accommodation on eTenders in line with EU procurement rules, a Department of Housing spokesperson has said.
It advertised for five panels for accommodation on the south side and north side of the Dublin City Council area as well as in the Fingal County, South Dublin County and Dún-Laoghaire Rathdown County council areas.
Green Party Councillor Janet Horner sits on the council’s homelessness sub-committee. She says that Avalon House hasn’t been discussed there yet as far as she can recall.
Said Flynn: “There is no transparency here, we don’t get sight of acquisitions.”
“The 20-year thing is insane,” says Horner. Sometimes long-term leases are better value than short-term leases, she says, because of rising rents. But there should always be a get-out clause, she says.
Investing €6m in works on a building that the council doesn’t own is also crazy, says Horner. The solution is for the council to buy or build its own homeless accommodation, she says. “We’re going to have to start acquiring state properties.”
Flynn echoes that. Renting buildings like Avalon House doesn’t provide value for money and that the council should develop its own homeless facilities instead, he says.
“There are loads of sites around where they could have built purpose-built emergency accommodation for families,” he said.
Why don’t all 4 Dublin local authorities share the price.