This week the Dundalk Democrat asks why Dundalk Town Council attempted to sell a plot of land at the Point Road for €186,000 per acre, having bought another plot of land 100 metres away three months earlier for six times the price.
In 2007, not long before the property crash, the Dundalk Town Council, through Town Clerk Frank Pentony, negotiated a deal with Martin McCaughey of McCaughey Developments Ltd to sell a strip of land which was to be used as access to a 10.8 acre site on the Lower Point Road.
The 0.83 acre strip of land that was to be sold formed part of the Dundalk Sewerage Plant lands, and would have allowed the developer access to the 10.8 acre plot of land which had been earmarked by McCaughey for a residential development.
Yet the Dundalk Town Council had just three months earlier passed a motion to acquire a loan for €6.2 million from the Department of Finance to buy a 5.1 acre plot of land, a stone’s throw from the access strip. The difference being that this land was bought at a price of €1.2million per acre.
Further to this, the Dundalk Democrat understands that the 0.83 acre access strip would normally have demanded a premium on its normal market value as it would have granted access to a larger residential development.
The Democrat spoke to two independent estate agents who confirmed that such land, known in the industry as a “ransom strip”, would demand a higher value, with one suggesting that such land would be in the region of five times more expensive then its normal market value.
There is no allegation of any wrongdoing on behalf of the council or any of its officials or members or indeed by the developer. We merely wanted to get the council’s explanation for the apparent disparity in price between the two lots of land.
Dundalk Town Clerk Frank Pentony told the Dundalk Democrat that in comparing the two plots of land we were “not comparing like with like”.
“The town council are entitled to have land valued, and equally when we get a land valuation, when we are trying to buy land, we obviously try to negotiate the best price we can, and equally we’re selling land but obviously the purchaser will try and get the best price.”
The strip of land was never sold to Mr McCaughey, whose relationship with the Town Council turned frosty following the dezoning of the 10.8 acre site he had bought for residential development.
“The land has not been sold. To my knowledge the contract hasn’t been signed, so it’s not an issue,” Mr. Pentony told this paper.
The Democrat also understands that no written valuation on the land was carried out by GVA Donal O Buachalla, the agency which normally value land for DTC.
In an email sent to Mr Pentony, which was obtained under the Freedom of Information Act by the Louth Environmental Group, the valuer says in reference to the plot of land: “As I recall we offered you certain verbal advices initially with the assumption that we would follow up with a written report on receipt of your further confirmation of instructions. ”
This is confirmed by Mr Pentony, who told the paper: “There was no written valuation on that. But that would not be unusual. There was certainly discussion with our valuers . . . and I’m happy that I got the best price possible.”
“They didn’t do a formal written valuation, we would have referred the matter to them but a lot of this is done over the phone, before a formal valuation was done.
“The developer’s starting out position would have been that he shouldn’t have to pay for it at all, because it was only going to be a public road, and ultimately the public road would be taken in charge by the town council, that was the starting position of the developer.”
It was later pointed out to the Town Council that the land was in fact in the possession of Louth County Council, and later passed by a motion before the county council.
“When the negotiations began initially it belonged to the Town Council. What happened was by the time the land deal was going through, all of the town council property to do with water services vested by the 2001 Act was to be vested in the name of the County Council. So it was felt it would be more appropriate that it should go before the Louth County Council.
“The members of County Council or the Town Council were entitled to say ‘sorry, we are not getting enough’, or that we are asking too much.
“I would not be be prepared to put into the public domain how we do our business and how we come up with valuations, for obvious reasons. Going forward we will be selling and buying land in the future.
“The Town Council are not in the business of screwing developers or householders or anyone else.
“That was the price that was agreed and if go back and look at what the council would have paid for the land all those years ago, we would have made quite a substantial profit.