Questions over NAMA raised

Opposition TDs are questioning the relationship between property developers, the Office of Public Works and the National Assets Management Agency after it emerged that the government spend on rents increased 25% last year. By Vincent Ryan.

Figures uncovered by Fine Gael deputy Brian Hayes show that over a three and a half year period €400m was spent renting government offices. The expenditure on rents increased by €22m from 2008 to 2009 rising from €109m to €131m.

Labours finance spokesperson Joan Burton and Deputy Hayes are both calling on the OPW to clarify its position in relation to leases it holds on properties that will ultimately end up in NAMA.

Deputy Hayes believes that a large amount of the performing loans on NAMAs balance sheet are only performing as a result of having the state as a tenant.

Deputy Hayes said, "These properties will ultimately be under NAMA and of course they will be part of the 25% of performing loans that are coming from the developers and the banks to NAMA. I would be really interested in finding out what percentage of the performing loans are developments where effectively the state is renting the property."

The high profile NAMA bound property developer Gerry Gannon secured the Irish National Museum as a tenant for the former Motorola site in Swords Co. Dublin in February. The OPW agreed to pay €1m a year to lease the site for 20 years. It has now emerged that the OPW will also have to carry out adaptation works to the site valued at €1.56m in order to make it suitable for the Irish National Museum.

Other property developers who have benefitted from the €400m of public money spent on rented property over the last three and a half years include Liam Carroll, Bernard McNamara and Jerry O’Reilly.

Both Fine Gael and Labour said that it was inevitable that property the state was renting would end up in NAMA.

"Minister Eamon Ryan gave a big soothing speech in the Dail saying that we were going to get some of these buildings for public use,” said Deputy Hayes. “Well why can’t we have them for government office use? Why can’t we have them for all of the things attached to departments of state or the commercial semi-state sector? If NAMA is going to be the real deal when are we going to get some of these buildings back?”

He continued, "Irony of ironies would be if the developer went into NAMA and the state continued to pay top dollar on a lease on a property that would be transferred to NAMA, that would be the most extraordinary twist to this particular story, which I suspect, is what is going to happen."

Deputy Burton called on the Minister for state with responsibility for the OPW, Martin Mansergh, to clarify the situation. “With the decentralisation process the government was decentralising to 53 sites across the country, a lot of that involved property letting and site buying and so on,” she said. “Inevitably many of those deals and the people involved in those deals have ended up in NAMA. Where the state is paying the money Minister Mansergh should clarify that the state isn’t both paying the developers loans through NAMA and then with the other hand, paying out large amounts for rental leases. So far the OPW has been very coy about what exactly is going on."

A spokesperson for the OPW said whether or not a developer was in NAMA was not within the body’s remit so long as they are tax compliant.

The spokesperson said: "The OPW prior to signing any contract with a developer or contractor ensures that they are in possession of a valid Tax Clearance Certificate. Any parties associated with NAMA or otherwise is not within OPW's remit."