‘What exactly do we get for our rates?’

Judge Olann Kelleher’s pronouncements on the commercial rates system in Cork have struck a chord with business owners across Munster.

“He’s dead right,” was the response of Brian Cleary, chief executive of Clonmel Chamber of Commerce. Mr Cleary said the key question businesspeople often ask is: “What exactly do we get for our rates?”

Of the €16m income received by Clonmel Borough Council, €6.2m (37.5%) comes from rates.

“A number of them [business owners] are very, very angry in that they don’t think they’re getting value for money,” said Mr Cleary.

“None of the members I speak to object to paying rates, everyone will pay their fair share, but what is the fair share?”

The Tipperary town’s Market Place shopping area — recently put on the market in its entirety by Allsop Space on behalf of a private investor — is an example of where things have gone wrong, he said.

More than half empty, Market Place enjoyed zero rates for 20 years after opening in the 1990s, thanks to Section 23 tax incentives for urban renewal. However, tenants have begun to leave since its evaluation for rates in 2007.

“The rates office came down and evaluated it at the top of the economic cycle.

“Other places in town, who were rated in the ’80s or ’90s, were rated more moderately... In Market Place, the rates are so far out of kilter compared to places 50ft away that they couldn’t compete with similar types of shops in the town.”

In Limerick, one issue is the disparity between the rates paid in the city and county.

Major retailing brands operating in the likes of the Crescent Shopping Centre pay rates about 25% less than competitors in the city centre, as the suburbs are in the jurisdiction of Limerick County Council.

Limerick City Council has collected €21m of the €30.5m rates demanded in 2012 and by year’s end expects to have hit €24m.

A spokesperson said it was trying to be flexible with businesses having cashflow problems and would endeavour to reach a plan regarding payment.

As a result, 219 businesses have come to an agreement with the council to pay money owed in stage payments. There are 77 cases ongoing involving €2.3m in overdue rent, the spokesperson confirmed.

The city and county councils will be merged into one authority from the 2014 local elections, which will lead to equalisation of the rates. Limerick Chamber of Commerce insists action needs to start immediately.

In Kerry, the annual commercial rates demand from local authorities is being blamed for long-established businesses going to the wall.

Earlier this year one family-run furniture store in Killarney, which had been trading for 35 years, blamed the burden of rates when it closed the shutters.

Liam O’Brien of Tim O’Brien and Sons, who inherited the business from his father, said the rates would need to have been halved to give him any chance of survival and the costs involved are preventing new start-up ventures.

“Who’s going to open any business when they have to make €500 a week just to pay the rates?” he asked.

The rates crisis is wide-spread, according to Killarney Chamber of Tourism and Commerce president Michael Buckley, who said numerous businesses were coming under increasing pressure and were struggling to survive.

“They are paying massive sums every year and the costs involved are very prohibitive,” he said.

* RELATED STORY: City chief hits back at judge in rates dispute

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