IDA’s €36m investment site used for grazing sheep

A site bought by the IDA for €36m at the height of the boom is to be leased out to graze sheep at a rent of less than €17,000 a year.

At that rate, it would take the IDA over 2,000 years to recoup its investment.

The 240-acre plot on the edge of Athenry was bought from Teagasc in 2007 for the planned development of a campus for biopharmaceutical plants and silicon chip manufacturers.

Ahead of the Dec 2007 sale, the IDA told Teagasc it would cost another €77m to fully service the land to meet the needs of international investors.

It said it needed to make the purchase quickly due to “the possibility of competing for a very large-scale investment which, if won for Athenry, would have a huge beneficial impact”.

The IDA also spent an additional €2m constructing access bridges off the new M6 motorway, and it subsidised Galway County Council’s construction of a relief road around Athenry.

Records of the sale negotiations show the IDA initially believed it would need the site to be ready for development within five years of purchase.

However, in its first three years on the market, just one prospective IDA client visited the site to assess its potential. In 2008, the IDA told the Environmental Protection Agency its plans for the site had suffered a “major setback” because of planning restrictions on a waste water plant in Galway.

In a statement, the IDA said it was taking a long-term view of its investment.

It said the lease to Teagasc will allow the site to remain “shovel ready” while it is seeking a client. It said the access road had been completed and the investment in utilities would ensure the site was ready for long-term development.

Until now, the price the IDA paid for the plot was unknown, as it was considered commercially sensitive.

It had been rumoured to be €25m. However, documents released to the Irish Examiner under the Freedom of Information Act show the IDA paid Teagasc €36m in two instalments following three years of staggered negotiations.

This included €750,000 to allow Teagasc build a bridge over the new N6 to allow it access the rest of its lands. In addition, Teagasc had its legal and professional fees covered by the IDA.

An initial four-year leaseback arrangement was signed by the IDA with Teagasc in 2008. This generated a total rental income of €66,720, but has expired.

Teagasc confirmed it was concluding negotiations to remain on the land for the next decade.

“We are currently negotiating a 10-year lease with the IDA for land in Athenry. Rent per annum per hectare will be the same, within a few euro, as the rent we were paying for the annual grazing lease,” it said.