Temple Bar Properties (TBP) has handed over the operation of the Urbana shopping arcade in the Temple Bar area of Dublin to one of its tenants following differences with some of the traders. The decision to withdraw from the running of the retail complex comes only weeks after the State agency acquired the freehold interest in the three-storey building for £1.5 million.

TBP set up Urbana in June, 1998, to enable people with little or no retail experience to run their own business. Around £350,000 had been spent on refurbishing the former warehouse, which has 5,500 sq ft on three levels. All 21 retail units on the ground and first floors were let when the centre was officially opened but within a short time, some businesses on the upper floor in particular ran into trading difficulties. Several of them closed down within months, leaving a good deal of empty space on the first floor. The vacant units were not relet and were eventually used as storage by one of the two anchor tenants, SKK Lighting and The Source.

Now The Source, owned by Brian Stein, who leases his unit, is to take over the leasehold interest of the entire two floors from TBP. The new arrangement has come as a surprise to the other traders who have now been told by TBP that their six monthly licences have expired and that if they wish to continue trading they will have to negotiate directly with The Source.

Una Carmody of TBP contended that "nobody is being thrown out" but said that under the deal there is now a new landlord and "if tenants want to stay they will need to talk to him". Ms Carmody said subsequently in a statement issued to The Irish Times that "all of the current occupiers, each of whose licence expired, have been told that the new leaseholder is very open to the possibility of their remaining in Urbana, and we have further offered to talk to them about alternative premises in the Old City (west end of Temple Bar) if that is their wish".

It is not yet known how many of the tenants plan to stay on. However, two of them have opted for new shops under construction in the west end of Temple Bar.

Some of the traders are particularly critical of TBP's failure to replace the tenants who moved out of Urbana. One of the original traders, Tom Keane, whose company, Ovne, sells wood-burning stoves, said he had already moved to alternative premises on Bachelors Walk because of dissatisfaction with TBP. He recalled that he had been "severely reprimanded" by TBP for putting an advertisement in a newspaper seeking replacement tenants for the first floor on which he traded. Before he left, there were six empty units on this level and this obviously affected his business.

The tenants management committee, he said, did not have the power to bring in new tenants and in the end he had no option but to bail out.

Temple Bar Properties said initial rents averaged £25 per sq ft on the ground floor and £15 per sq ft on the first floor.

The company statement said it was approached by The Source with an offer to take over the leasehold at an annual rent of £40 per sq ft on the ground floor and £25 per sq ft on the first floor. TBP accepted the offer.

However, some of the other tenants contend that they should have been made aware of TBP's decision to trade its leasehold interests. Even more surprising, they point out, is the fact that TBP did not offer it for sale on the open market where, conceivably, a considerable premium could have been secured. Emma Jane Lenehan, the fifth generation of a leading Dublin business family, whose Innen company sells bathroom and kitchen accessories in Urbana, said that like other small traders she had spent 18 months building up her business. TBP was now pulling the plug and she would have to close for up to three months until she found an alternative outlet.

David Cox, who operates the Lavender and Linen business in Urbana, said TBP never put sufficient resources into the management of the arcade and the inevitable result was that it began to fall apart. After insisting that all the traders should be first time retailers, it was inevitable that that there would be problems. Once TBP discovered that the venture was problematic, it decided to get rid of it. "My basic gripe is that we were building up a nice business with good potential and suddenly they pull the plug on it."