BUILDING A seven-level car park behind Cavan’s Main Street was an idea that the late county manager Brian Johnson ran with. But the way in which it was procured was complex, involving a local construction company and investors availing of tax incentives.
According to Pacelli Lynch, of Cavan chamber, there was “absolutely no demand from retailers in the town for such an extravagant car park”.
Even at the height of the boom it was rarely used, and now it had become “a millstone round the [town] council’s neck”.
Town manager Ger Finn said the proposal “came in from developers” and a report by Dublin-based economic consultants had forecast it would be viable. However, demand had remained low and the council was “still paying towards the cost”, using revenue from surface parking.
The car park – long seen as a “white elephant” – was built by Cavan builders P Elliott and Co (now in receivership, with debts of €120 million) and sold to the Virginia Consortium, which then leased it to the town council and its wholly-owned operating company Glassell Ltd.
Glassell, which is effectively a subsidiary of Cavan Town Council, recorded a loss of €504,637 in 2009, according to its annual report for the year. Its outgoings in operating the car park amounted to €549,280, while revenue was only €45,775.
Under an agreement dated December 14th, 2001, Glassell and the town council agreed to pay a yearly rent of IR£315,000 (€399,967) for the facility until 2014 “and thereafter to pay such increased rent as may be determined” under a review every five years.
Having already paid the Virginia Consortium €3.6 million in rent over the past nine years, the council has now agreed to purchase it in 2014 for €6.5 million. The nine members of the consortium have also received the benefit of lucrative tax incentives.
Under a 1998 scheme to encourage the development of multi-storey car parks – one of the fiscal measures that inflated the property bubble – they would have been entitled to write off 50 per cent of the capital cost of its construction against their tax liabilities.
The members of the Virginia Consortium are: John Brennan, Ashlawn, Ballinteer, Dublin; David Simpson, Fortfield Park, Terenure, Dublin; Brendan Horan, Castledillon, Straffan, Co Kildare; Alan Dillon, Deerpark, Castleknock, Dublin; Gerard Dillon, Avoca Park, Blackrock, Co Dublin; Anthony Gallagher, Herbert Park, Ballsbridge, Dublin; Richard McHale, Castilla Park, Clontarf, Dublin; Eileen Monaghan, Ballincar, Co Sligo; John Lynch, Bellevue Park, Blackrock, Co Dublin; Owen Owens, The Burnaby, Greystones, Co Wicklow, and Gerard Ryan, Pallas Green, Co Limerick.
At their June meeting members of Cavan Town Council were told by town clerk Brian Hora that the electricity bill for lighting the car park was more than €25,000 per year – over half of the annual revenue – and there were plans to cut this by changing the lighting system.
A report by a project team set up to examine what could be done to make the car park more attractive before the council purchases it in 2014 proposed increasing the width of parking spaces (thereby reducing the number) as well as improving access and signage.
The renovation costs, which have yet to be quantified, would have to be met by Glassell rather than the owners.
The cost of building the car park is unknown, but it would have been considerably less than the €10 million earned by the Virginia Consortium for its investment.
