Waste of space: empty IDA factories to cost taxpayers millions in rent bill

FOLLOWING this year’s electronic voting debacle, more than 7,000 voting machines are gathering dust, many in specially rented warehouses throughout the country.

Yet 87 IDA industrial units and factories - many of which would make fine warehouses - are lying idle.

Thanks to a combination of an ambitious IDA property campaign in the 1980s and the traditional lack of joined-up thinking associated with Government bureaucracies, more than 30 of these factories are still being rented at a cost of millions each year despite remaining empty.

All told, the IDA rents 91 factories from the private sector while the agency owns an additional 164 facilities outright.

But 53 of the buildings owned by IDA are empty. In addition, 34 units being rented - all on a 35-year lease - are also vacant.

The cost of renting this empty space is almost €2.4 million annually and a commitment which will not run out until between 2015 and 2020.

Calculated at that rate, the taxpayer will end up paying over €80m in unnecessary rent by the time the leases on all the vacant units expire in 15 year’s time.

At a time when the Department of Defence is busily selling off property and land in order to raise funds - as is the Department of Health and the Office of Public Works - it is ironic the IDA and the Department of Enterprise, Trade and Employment continue to waste funds on needless property.

While stuck with the 35-year leases on the rented factories, the IDA says it is now pursuing a policy of selling its owned factories in favour of retaining land banks for development through Public Private Partnerships (PPPs).

But this year’s sales record is far from impressive. In June last year, the IDA owned 22 empty units. This year, thanks to a poor sales rate and more companies leaving, it owns 53 vacant facilities.

And to make matters even more absurd, Government legislation is preventing any of the vacant rented properties from being used for any other purpose.

“There is legislation there. We can’t actually change that issue without permission from the minister,” said Paul Cronin, a unit manager in the IDA’s property division.

“They were acquired for the purpose of industrial use and if we were to put it to another use then there would be questions to be asked about what we were doing in the first place.”

However, Mr Cronin said it was unfair to criticise the practice of leasing factories since all had been rented in the 1980s at a time when rapidly deteriorating public finances didn’t leave any other option.

“If people don’t remember the context then it is a bit unfair to take this era and assume it was always like this,” he said.

But Fine Gael Mayo TD Michael Ring, who has frequently complained of a long-time vacant IDA unit in Ballinrobe, said it was unacceptable to continue using public finances to pay for unused facilities.

“It’s a national scandal paying money for empty factories that nothing has gone into for years,” he said.

Mr Ring also criticised the Government’s failure to allow empty units be used for non-industrial purposes.

“This is crazy. There is many a playgroup out there finding it very difficult to get premises. Even FÁS or some other group could use them. And if a company does want to move in they are not going to do so immediately. You could let people use the premises on a six-month basis or something like that,” he said.

Green Party finance spokesman Dan Boyle agreed: “We’d prefer the buildings to be used somehow. We would want them to somehow buy out those leases or find a way the buildings can be used.”

Tánaiste and Minister for Enterprise, Trade and Employment Mary Harney has defended the size of the IDA’s property portfolio, saying the factories “had an enormous impact on its ability to carry out future negotiations and obtain value for the taxpayer”.

However, a spokesman for the Department of Enterprise last night said the matter was one for the IDA to initiate.

“It is an operational mater for the IDA but it is open for the IDA to make a submission to the minister or the department about other uses.

“They are generally for industrial use but that’s not to say they couldn’t be looked at for other uses as long as there are no lease terms preventing that,” he said.

Meanwhile, the IDA continued to insist it could do nothing without the say so of the department.

The list of IDA factories lying idle

Dublin: 22 empty facilities, including six to be rented until between 2015 and 2017 at a cost of €1,060,256 annually.

Cork: 21 empty facilities, eight of which are being rented until between 2015 and 2028 at a cost of €505,217 a year.

Kerry: 10 empty facilities, all owned by the IDA.

Waterford: Seven empty units, six of which are being rented until between 2017 and 2018 at a cost of €153,832 a year.

Galway: Six empty factories, four of which are being rented until between 2017 and 2018 at a cost of €280,732 a year.

Donegal: Five empty facilities including three units to be rented until 2020 at a cost of €33,447 annually.

Kildare: Four empty units all rented until 2018 at a cost of €127,040 a year.

Roscommon and Mayo: Two empty units each IDA-owned.

Westmeath and Wexford: One rented factory each until between 2017 and 2018 at a cost of €227,305 annually.

Wicklow, Longford, Sligo, Kilkenny, Tipperary and Offaly: One empty facility each, owned by the IDA.

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