Sisters for Mercy made €165m from sales

DESPITE offloading over €670 million worth of land during the property boom, the religious orders at the centre of the redress re-negotiations retained €3.1 billion in property assets.

Even after two years of slumping property prices, the portfolios of the 18 congregations showed a substantial asset base when they were assessed in mid-2009. Many of these sites continue to raise revenue by selling services to the state.

Three of the four orders that ran the notorious Magdalene laundries have earned €86m from the Heath Service Executive in the past five years.

The review of the congregations’ assets was done after €127m had already been paid out to the survivors of abuse in residential homes. The review did not include the transfer of hundreds of millions of euro to religious-run trusts.

And it also came following a 10-year period in which an ageing and dwindling number of nuns and brothers in 17 of these orders made €676m from selling property to a frenzied market.

Education Minister Ruairi Quinn is now demanding the orders sign over €200m worth of school property so their overall contribution for compensation to abuse survivors hits €680m. The orders have so far committed to delivering €476.51m, including a cash sum of €110m towards a statutory fund for survivors of residential abuse.

The renewed deal was formulated on the basis of a review of the orders’ assets that was delivered to the Government in 2009. This involved the orders engaging valuers and consultants to pore over their vast and complex portfolios.

Parts of this were released to the Irish Examiner under the Freedom of Information Act and are reproduced today and tomorrow. These documents show that the Sisters of Mercy — the property sales of which can be seen to the right — is by far the most powerful order in terms of assets and an intriguing case study in its interaction with the state so far.

Of the orders, it made the most amount of money during the boom and diversified widely in terms of its business. It had the assets to offload at the peak of the bubble and utilised these shrewdly.

In terms of value, 44% of its deals (€72m) were done in 2006 and 2007. However. the number of trades in this period accounted for just 20% of its 195 individual transactions over the 10-year period.

These years were crowned by a €32m trade for 16 acres in Killarney and €18m for a car park at Crofton Road in Dun Laoghaire, next to its former laundry.

The Sisters of Mercy also tried to cut out the middle-man by handling its own development project, but it appears to have been stung by arriving to the market too late. In 2009, it put six houses in its Cois Abhainn development in Athlone up for sale and sold them for between €200,000 and €290,000. However, in 2009, 10 of these were still on the market with a value of €125,000 for the smaller units.

At this time, it was still active elsewhere. Despite the nationwide collapse in values, the order sold land in Castlebar for the unusual sum of €666,666 in the months before its assets were reviewed. In mid-2009 it still had land worth €1bn and financial assets of €182m. This did not include what it owned outside the Republic of Ireland.

So far, it has made a €33m contribution to the original redress scheme. On top of that, it has committed €80m in properties to the state, €15m to the voluntary sector and €31m in cash and property to the former residents of its residential institutions.

The congregation said €998m of its remaining assets were restricted and much of the ownership was in the process of being transferred to other religious entities.

Primary schools worth €256m were earmarked for transfer to the various diocesan authorities and €200m was tied up in housing its 2,088 sisters.

The bulk of its restricted property was made up of a €412m network of secondary schools that were due to be handed over to a Catholic education trust incorporating the Sisters of Mercy, the Presentation Sisters, the Sisters of the Christian Retreat, the Missionaries of the Sacred Heart and the Daughters of Charity. This trust is split into two companies: Ceist Ltd and Educena Ltd. Only three of these congregations were involved in the Redress Scheme.

During the boom, these three redress congregations in Ceist/Educena made a combined €268m from the sale of property.

Despite this, the Sisters of Mercy, the Daughters of Charity and the Presentation Sisters retained assets worth €1.7bn. In 2007, 37 of their schools were transferred to Ceist the Daughters of Charity (1) and the Presentation Sisters (36), which took almost €100m off their balance sheets. The Irish Examiner was unable to ascertain the current value of these sites or the extent of its transfers since 2009.

The most recent set of accounts for Ceist Ltd, the company established to oversee the trust, show that the trust’s assets have been kept separate from its business. Accounts filed with the Companies Office last month show Ceist Ltd was trading, had a turnover of €1.6m, but only had €557,209 worth of tangible assets. On account of its small size, it availed of a legal exemption not to make a detailed cashflow statement public. The Educena Foundation had fixed assets of less than €500.

Both were contacted in advance of this article but did not supply a spokesperson to comment.

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