Vital signs are good but recovery will take time

After years in the wilderness Naas, Co Kildare, could almost be said to be on a roll - so long as the small businesses can hold on, writes Caroline O'Doherty.

KERRY Group’s new research facility is already having an impact on the visual landscape around Naas, from the neat blue signs along the M7 motorway announcing its arrival to the tall cranes toiling away on its construction.

But it’s the potential impact on the economic landscape that most excites local people. After seven strained years when not even the Co Kildare town’s enviable location and road network could save it from a slew of business closures, the prospect of 900 new jobs by 2016 is gratifying to say the least.

The Global Technology and Innovation Centre, as Kerry Group call it, is being built on a site at Millennium Park, the 400-acre tract of mainly enterprise-zoned land launched with early boom-time zeal in 2000.

The park hasn’t yet lived up to its promise of 8,000 permanent jobs on site with massive spin-offs for other local businesses, however, so Naas has had to look to its smaller existing enterprises to keep the town of 21,000 afloat.

Those enterprises in turn have looked to the Government for small measures to help them survive, often to be disappointed. So it was with hope tempered with scepticism that they faced into another budget this week.

The challenges facing the town are evident at its very heart. An unfinished shopping mall is a dispiriting reminder of the crash, and the difficulties in securing an anchor tenant to resurrect the project suggest that confidence in consumer spend remains low.

The town centre site of the former Superquinn store, now owned by Penneys and vacant for the last five years, is another sore point, with neighbouring retailers expressing deep frustration that the owners haven’t committed to either occupying it or selling it.

“There were 74 people working there and there are 55 parking spaces and now it’s just a vacant site with a security man sitting there,” says Ciaran Mattimoe of the Londis store next door.

“If Penneys did what they said they were going to do, it would create I’d say in the region of 100 to 150 extra jobs in shops around the centre of Naas.

Whatever about the private sector, there are signs that Naas hasn’t entirely gone off the radar in terms of state investment.

A new post-primary school, Naas Community College, is due to open next year with a capacity for 1,000 students when fully enrolled.

And after years of uncertainty over the future of Naas General Hospital, a planning application has been submitted for a long talked of upgrade

Funding has not been committed yet — it has been included in various capital expenditure programmes since 2004 — but it’s still considered a positive development.

Work has also begun on the €33m expansion of the Osberstown Waste Water Treatment Plant which serves Naas and surrounding villages.

Next on the wishlist is the long-promised interchange that would create a direct link between the M7 and the very centre of Millennium Park.

It got An Bord Pleanála approval last month but some €110m is needed to construct it and associated works so it’s unlikely Kerry Group and other new arrivals will feel the benefit any time soon.

But it does all seem to heading in the right direction for Naas, if only the small local businesses can hold on.

Gerald Kehoe of Acorn Montessori and Creche says he can now see a long-term future.

“We’ve had PAs and scouts out looking at our place on behalf of Kerry Group personnel so I presume they’re checking out others too. That’s a good sign.”

Vital signs are good but recovery will take time

Mary Harte, The Soda Bread Shop

As a café, bakery and take-away, The Soda Bread Shop deals with almost as big a range of VAT rules as tasty treats.

But Mary Harte’s focus has been on one in particular — the 9% rate that was reduced from 13.5% in 2011 to boost the ailing hospitality industry.

“I’ll have a heart attack if they increase it,” she says. “When we’re buying in tea and coffee, there’s no VAT on it, but yet we have to pay VAT when we’re selling it.

“If there was VAT on it when I was buying it in, I could claim it back, but when it’s on sales, you either put it on the price to the customer or try and absorb it yourself.”

It’s a complicated system but Mary says there would be nothing complicated about the effect of an increased rate.

“People are still watching their pennies. If they ask you for something and they think it’s dear, they say no thanks. And our stuff isn’t expensive. So we can’t let it get expensive.”

Mary wishes there were more supports or reliefs for small businesses starting out. “The costs are a big thing. You have rent and rates and electricity. Flour is gone very expensive.

“There are three of us in the business and we’re working 12 hour days to keep it all going. It’s not easy to own a business. It’d be easier to go out and work for somebody.”

But she says it would be made a bit easier if people felt they didn’t have to say no to a bun with their coffee.

“Anything to put a few more euro in people’s pockets would be great. Every extra cup of coffee is important to us.”

What she wanted from the budget: “Don’t touch the VAT rate and give people something back in their pay packet.”

What she got: Mary was relieved the 9% VAT rate was kept. She felt the income tax and USC reliefs would be wiped out by water charges.

Vital signs are good but recovery will take time

Anne Domican, Fleming Florist

Anne Domican has a bouquet ready for Finance Minister Michael Noonan if he’ll make this the year people start spending again.

“If they could reduce the universal social charge and put more disposable income into people’s pockets, that would definitely improve business.

“Our turnover went down 50%. It is improving a bit but it would be great to get a little help by letting people spend a bit more. People will still buy for the big occasions — the anniversaries, Valentine’s Day, Mother’s Day — but our average spend eight or nine years ago was €60-€70. It’s €30-€40 now.

“When all the new houses were going up, we would have done a lot if congratulations bouquets for housewarmings and that ended completely.

“Our customer profile changed too. It’s a slightly older customer base now, the people who have their mortgages paid.”

Anne has had to work hard to keep customers, absorbing rising prices from her suppliers and running special offers.

“We’ve put a lot of work into the website and it gets a lot of use but people also like to see a physical presence. To them it means you’re trustworthy. So we couldn’t abandon the main street and nor would we want to.”

What she wanted from the budget: “Put more disposable income into people’s pockets. A small financial boost can make a big psychological difference.”

What she got: “It’s quite a positive budget. The feeling that it’s all take, take, take is gone. I think people will feel that the worst it over.”

Vital signs are good but recovery will take time

Damien Ward, MM Ward Estate Agents

After setting up in business in 2006, just in time for the property crash, Damien Ward has welcomed the improvement in the market with open arms — but he is worried about the Central Bank’s decision to cap mortgages at 80% of value. “The average around Naas is €300,000 for a three-bed semi so 20% is €60,000. That’s a lot for a first-time buyer especially when they’ve probably been lucky to pay the bills the last six years never mind save money.”

He’s also concerned about the shortage of residential properties and how it might hold up investment in the town generally.

“My data base of potential purchasers is growing every day. We don’t have the supply for them.

“It mightn’t be popular to say it but builders maybe should be encouraged with some kind of breaks to start building again. “

Damien was also hoping for a revival of mortgage interest relief or some similar measure to help home-buyers.

He also said the revised rules on the requirement for private developers to include social housing in their developments needed clarification so as not to hold up planning applications.

What he wanted from the budget: “Some kind of breaks to improve the economics of house-building would help with supply and something to assist first-time house buyers, especially if the Central Bank’s 80-20 plan goes through.”

What he got: Damien felt the end of the 80% windfall tax on rezoned land would free up development land. He said the DIRT refund for first-time buyers was only a small help towards saving their deposit.

Vital signs are good but recovery will take time

Ciaran Mattimoe, Londis

Any more price increases on cigarettes and there’ll be smoke coming out of Ciaran Mattimoe’s ears.

“As cigarettes get dearer and dearer, it’s driving more and more people to the black market. People that you never would have expected are going black market to buy cigarettes. There’s no shame in it any more,” he says.

“That takes customers away from legitimate businesses like mine. I’d be very anti-smoking myself but this is playing into the hands of criminals.”

Ciaran watches the other ‘old reliables’ closely. “The €1 on the bottle of wine two years ago halved my sales of wine.”

But the biggest influence on his trade is footfall.

“Most people find the going tough. We had five full-time staff. We have two now. Our busiest day in the week used to be Saturday. It’s now Thursday — lone parent’s allowance day. You’re depending on the welfare state for business.

“If people got more money in child benefit and social welfare, it’d be a great lift. Generally the people that get an extra tenner, will spend it. That puts money into the local economy.”

Being next door to the vacant Penneys site doesn’t help matters. “A store like Penneys would bring business into the town for everyone but when you see a landmark site in the town centre idle, it sends out all the wrong signals.”

What he wanted from the budget: “Leave the cigarettes and wine alone and give people a few extra euro.”

What he got: Ciaran said it wasn’t a bad budget and he welcomed the €5 on child benefit but the 40c on cigarettes was too steep.

Vital signs are good but recovery will take time

Richie Whelan, Richie Whelan Menswear

Richie Whelan is in the happy position of being busy enough to warrant hiring an extra person — but in the unhappy position of not being able to afford to.

“It’s too expensive because of all the charges, the USC, PRSI, income tax. If any of those was to come down it would be huge benefit.”

The increase in business is a very recent development.

“There has been a slight upturn in the last couple of months but it’s coming back from a very low base. “Business dropped at least 50% from the good times. At one stage here there were 52 empty units in Naas so it’s a long way back.”

Richie is doing his own bit on this front, taking over and reopening a local shoe shop that closed last March.

“It’s a brave move but it was the only shoe shop in the town that was measuring children’s feet.

“If people weren’t coming into Naas to have their children’s feet measured, they were going to other towns and would do all their business that day in those other towns. “

He wishes Penneys thought the same way and says it is vital to get the landmark town centre premises freed up for use.

“They should be penalised for not using it. We’re trying to keep Naas town centre alive and they’re not helping.”

What he wanted from the budget: “Reduce the cost of creating jobs and encourage investment in town centres.”

What he got: He welcomed the USC and income tax breaks and the plan for a public consultation on tax penalties for land hoarding as long as it includes vacant sites.

Vital signs are good but recovery will take time

Gerald Kehoe, Acorn Montessori and Creche

Located just outside Naas with its very own petting farm, Acorn Montessori seems a million miles from the cut and thrust of the business world but financial realities are never far away.

“In our first couple of years here, parents were working five days and we had a lot of full-time kids. Now it’s all three days or two days.

“We would hope there would be some tax relief on child care for parents because it’s a huge outlay for them.”

Acorn offers the ECCE free pre-school year which gives 15 hours a week State-paid care, but while that gives certainty in terms of bookings it carries hidden costs.

“We were only getting paid for three hours a day but we had the staff in the whole time so we lost €10,000 in income the first year.

“Even if you only have staff in a half day, that half day is longer than three hours so you’re still short. It has its benefits in that we’re taking bookings for 2015/2016 and even for 2016/2017 so we can plan ahead but it would be better if it was flexible.”

The sums speak for themselves. The Government pays crèches €237.50 a month for each child attending for three hours a day, five days a week but if a child needs three full days care rather than five short days, then only three-fifths of the fee is paid to the creche and it’s up to the parents to fund the rest.

“We believe these parents should be entitled to the full allowance of €237.50 and that it is only fair for parents to spend it as they see fit.”

What he wanted from the budget: “We hope for tax relief on childcare costs or that changes are made to the ECCE scheme to better reflect the needs of families as well as the economics of running a crèche.”

What he got: No changes to ECCE but the €5 on child benefit was welcome, especially with the promise of more next year.


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