COMHAIRLE CONTAE ÁTHA CLIATH THEAS
SOUTH DUBLIN COUNTY COUNCIL
MEETING OF SOUTH DUBLIN COUNTY COUNCIL
Monday, March 10, 2014
HEADED ITEM NO. 7d)
Consent of Council to Assignment and Variation of Lease of a site and to the Novation of a Building Licence at Cookstown Road, Fortunestown from Avorado Holdings Ltd. (In receivership) to Teal Properties Ltd
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The Council at its meetings held on 9th June 2003 and on 12th December 2005 approved the disposal of a site at Cookstown Road, Fortunestown, Tallaght, Dublin 24 to Avorado Holdings Ltd by way of a 999 year lease, subject to terms and conditions. Minutes Nos C/0571/03, C/0806/05 and Manager's Orders Nos. LA/76/2003 and LA/300/2005 refer.
The Council subsequently entered into a lease with Avorado Holdings Ltd dated 27th November 2006 which lease is registered on Folio DN142741L. The Company was subsequently placed in receivership on 16th December 2009 leaving the development on the leased lands in a partially completed state. The Receiver appointed to the Company, Tom Caulfield of O'Donovan, Caulfield, Lavin, Chartered Accountants, has endeavoured to sell on the development in the meantime and has now entered into a contract with a Purchaser to sell the property subject to the consent of the Council to the assignment and variation of the existing lease.
The Receiver and the proposed Purchaser, Teal Properties Ltd, have requested variations to the lease to update the terms to reflect the current position of the development, i.e. revised completion timescale, increase in number of apartments for which planning permission has since been obtained, amended requirements for bond etc.
The Receiver has also advised that it has come to his attention that the development has been partly constructed outside of the area comprised in Folio DN142741L and has requested the agreement of the Council to vary the lease map to conform with the boundaries of the development site on the ground.
One of the terms of grant of the lease required the Lessee to construct a new section of roadway along the northern boundary of the development site to 'taking in charge standard' under Licence from the Council. The road is partially completed and the Receiver and the proposed Purchaser also require the Council to enter into a Deed of Novation of the Building Licence in favour of the Purchaser to enable the road to be completed .
I recommend that the Council grant its consent to the assignment of lease dated 27th November 2006 entered into between South Dublin County Council and Avorado Holdings Ltd in respect of a site at Cookstown Road, Fortunestown, Tallaght to Teal Properties Ltd subject to the conditions contained therein and the variations to terms as set out hereunder:
Clause 4(c) be amended by the deletion of the last sentence: 'The Building works to be completed within a period of twenty four months' The amount of bond required to be reduced from €3.5 million to €448,643.00.
Clause 4(d) be amended by the deletion of the words 'twenty four months from the 1st day of July 2006' and replaced with 'prior to the 5th of October 2015'
Clause 4(e) be amended by deleting '40 units' from the third sentence and replacing them with '49 ' the number of units permitted by said planning permission and subsequent planning permissions obtained in respect of the said lands'
Clause 4(f) be amended by deleting the entire clause and replacing it with ' The Lessees shall pay the Lessor €130,275.00 in full and final discharge of its obligations pursuant to Part V of the Planning and Development Act 2000, as amended'.
Clause 4(o) be amended by deleting the words 'Clause 3(iii)' and replacing them with ' Clause 4(d)'.
The site disposed of under Lease dated 27th November 2006 comprised an area of 0.4427 Hectares(1.09 acres). The area now incorporated into the development site comprises an area of 0.521 Hectares (1.28 acres). I recommend that the Council vary the lease map to rectify the boundary to conform with the on-site boundary, as shown outlined in red on revised Drawing No. LR/38/13. This to be done by way of Deed of Rectification.
The Council's Chief Valuer was requested to review the initial transaction arising from the additional number of apartments for which planning permission has now been obtained (see Clause 4(e) above) and also taking into account the additional strip of land incorporated into the site. The Chief Valuer recommended the payment of a further consideration in the sum of €62,500.00 to the Council.
The Receiver was advised accordingly and responded by stating that he was fearful that the additional consideration would totally undermine the sale of the development. He asked that the Council take into account the difficulties he had encountered over years of repeated attempts to dispose of the site and the extraordinary security costs incurred by him in protecting the development over the years since the developers went into receivership and requested that the Council waive the additional charge.
The Council's Housing Department has received full approval from the Department of the Environment, Heritage and Local Government to lease the units in this development for social use if and when completed. The development adjoins and overlooks the Council's parklands at Butler Park. The unfinished development is deteriorating and is in danger of becoming a dangerous and derelict site. To prevent this and in the interest of having the sale of the development finalised and the works on the apartment complex and new road completed without any further delay, it is considered essential that this assignment be completed. Accordingly, it is recommended that the Council take payment of the additional consideration in the sum of €62,500.00 proposed by the Chief Valuer but refund same to the assignee on the strict condition that the development be fully completed by the end date specified in Clause 4(d) above i.e the 5th of October 2015 with all 49 apartments ready for occupation and the road completed to full taking in charge standard.
I also recommend that the Council enter into a Deed of Novation of the Licence Agreement entered into with Avorado Holdings Ltd in respect of the construction of a section of roadway as required as a condition of the above lease and the planning permission. The benefit of the Licence Agreement is to be assigned to the Purchaser, Teal Properties Ltd subject to the completion date for the development being amended as set out in Clause 2 of the Licence i.e. delete the words 'for a period of 24 months from the date hereof' and inserting in their place 'until the 5th day of October 2015'.
The lands being disposed of form part of the lands acquired from Dublin City Council (formerly Dublin Corporation) in 1997 under the Scheme of Transfer of Lands pursuant to the Local Government (Dublin) Act, 1993.
D. McLoughlin
County Manager