Value of ‘ghost’ e-towns reduced by over €2m

SHANNON Development has written down the value of its €7 million e-town projects by €2.4m.

The regional development agency has sold only one of its 12 live-work units at its €4m e-town in Miltown Malbay, Co Clare — in spite of the project being launched two years ago.

Earlier this year the agency opened its second e-town project in Tarbert, Co Kerry, at a cost of €3m, prompting Miltown Malbay resident, Ann Rynne, to question why Shannon Development has “gone ahead with another project in these recessionary times.

“It is galling and a waste of taxpayers’ money”.

Ms Rynne described the Miltown Malbay venture as a “ghost” development with one exception.

Its accounts for 2009 show the agency has written down the value of its Miltown Malbay investment by €1.4m and its e-town project at Tarbert by €1m.

The company has also written down the value of Kilrush Creek Marina by €351,000.

The agency was hit by a separate impairment charge of €776,000 relating to a site it sold for €3,108,000 in 2008, recording a profit of €2,775,339.

The accounts state: “The sale agreement included an option for Shannon Development to repurchase the site under certain conditions and conversely for the purchaser to call on Shannon Development to repurchase the site. In 2009, the purchaser exercised their option and Shannon Development repurchased the site for €3,107,000, being the original sale price less €1,000 towards cost.

“The repurchase of the site has been recorded at cost in the 2009 financial statements and impaired to its current market value of €2.3m.”

The accounts also record the impairment charge of €377,000 for industrial and tourism assets.

Yesterday, a spokeswoman for the agency said: “As the regional development agency or the Shannon region, Shannon Development has a remit to stimulate economic development in the less developed areas of the region. The whole idea of live/work balance is a very strong concept which is getting more and more world-wide recognition…

“We have one client operating successfully from our Miltown Malbay E-Town, with negotiations around the sale of a second property at an advanced stage, and a strong pipeline of enquiries. We also have enquiries around our Tarbert E-Town development which was only officially launched in April.

“We would, however, acknowledge that the down turn in the property market and the slowdown in bank lending have effected sales.”