DEVELOPER NOEL Smyth has borrowings of almost half a billion and rental income of just €13 million arising from his planned €300 million development of The Square shopping centre in Tallaght. The development has been allegedly thwarted by three other developers including Liam Carroll, a judge was told yesterday.
Under cross-examination by Hugh Mohan, for Mr Carroll, Mr Smyth denied he was the “luckiest man alive” because his development had not proceeded. “That is exactly what Liam Carroll said when I spoke to him. He decided I was lucky because he stopped me.” Mr Mohan said a development of the magnitude proposed by Mr Smyth’s Jersey-registered company Redfern would, like many others, be “significantly under water” at this point.
Mr Smyth, who is also a solicitor, said part of the development would have gone ahead and would have increased the footfall in Tallaght. He denied his plans conflicted with the local area plan for Tallaght and would not have secured permission. Counsel could not compare the situation now, where the property market is in “a tailspin”, with “Celtic Tiger days” a few years earlier, he said.
He agreed the only bank prepared to fund his scheme was Anglo Irish Bank. Because of previous borrowings with Anglo, it was the “obvious” lender and Anglo was confident about the planned development “on a long-term basis”, he said.
Denying suggestions that he would never have secured bank financing for the proposed phases three and four of the Tallaght development, he said he believed the banks, in certain circumstances, would loan further funds.
Yesterday was the 21st day of the action before Mr Justice Brian McGovern by Redfern Ltd, which alleges that developers Larry O’Mahony and Thomas McFeely broke a binding agreement of August 2005 with Redfern for the proposed Tallaght development by, unknown to Redfern, entering a secret deal with Mr Carroll, who had a rival development in Tallaght.
Mr Smyth agreed yesterday he committed to €320 million for the Tallaght development when he had no funds actually in place, and on the basis of a 2.9 per cent return. He had spoken to Anglo, and it was understood they would commit “to do something for us”.
He had not anticipated difficulties which arose, including difficulty securing control over adjacent plots – known as the Lowe licence – necessary to secure access to large areas of The Square centre, he said. It was Mr Carroll who had stopped his development “dead in our tracks”. It was being suggested his side should have foreseen “an economic tsunami” but it was Mr Carroll who “started the circumstances”.
Mr Smyth is claiming damages of €140 million against Mr O’Mahony, Mr McFeely and Mr Carroll and various companies. He said he is suing because “whatever way I turn, I cannot get Mr McFeely and Mr O’Mahony to complete the Redfern agreement because they have been taken off the pitch by Mr Carroll”.
Redfern claims it was in a key position to develop The Square centre some years ago but needed ownership of the Lowe licence, later bought by Mr McFeely and Mr O’Mahony for €55 million and held through Aifca Ltd.
Redfern claims a binding agreement of August 2005 involved the disposal of the Lowe interest to Alburn, a subsidiary of Redfern, and a joint-venture development of the centre, but that Mr O’Mahony and Mr McFeely secretly brokered a deal with Mr Carroll causing Aifca’s shares in Lowe to be transferred to Tafica Ltd, controlled by Mr Carroll.
In separate defences, the defendants allege Redfern failed to complete the August 2005 agreement, causing serious financial difficulties for Mr O’Mahony and Mr McFeely and leading to their agreement with Mr Carroll to refinance their borrowings. Mr Carroll and his companies deny any liability under the August 2005 agreement as they were not party to it.
