Council pays twice what houses are worth

Waterford City Council will spend €2.2m to buy 11 houses it was informed were worth considerably less than half that amount.

The properties are being bought from the trustees of the Holy Ghost Hospital, which is run by a board of local politicians, solicitors, and professions specified under its charter.

Three councillors who voted to approve the local authority’s purchase sit on the board of the trust, along with another councillor’s father.

The councillors were Hilary Quinlan, Patrick Hayes, and David Dan-iels. Senator Maurice Cu-mmins is also a trustee. His son, Cllr John Cummins, voted to sanction the deal.

The councillors did not absent themselves from the vote on the purchase when it came up for decision in Oct 2010.

However, a solicitor acting for the trust said both the council and the trust were aware of the connections and it was officials, not elected members, who negotiated the €2.2m deal.

“I believe this sale/acquisition was negotiated by the trustees of the Holy Ghost Hospital and the executive of Waterford City Council,” said the trust’s solicitor Mark A Keller.

“The elected members of Waterford City Council had no involvement in the purchase and the executive of Waterford City Council were fully aware that Mr Quinlan, Mr Daniels, and Mr Hayes were members of the board of trustees of the Holy Ghost Hospital.”

Mr Keller added that to obtain consent for the sale, all the deeds, valuations, and engineers’ reports were submitted to the Commissioners of Charitable Donations & Bequests: “The commissioners sanctioned this disposal without query.”

The payment for the houses will be staggered over 20 years, which the trust said increased the price. The council said it was willing to pay a premium to develop its cultural hub. The units are part of the Viking Triangle heritage project in the city, which is also home to the Waterford Crystal visitors centre.

The 11 houses were bought in 2011 under an agreement that will see the city council pay €110,000 each year until 2031. The deal was reached despite a valuer’s report telling the council the portfolio could be worth €1.1m if the trust was able to sell them without any encumbrances.

However, because some of the units were tied to lease agreements, the council’s valuer said they were worth “considerably less” than the €1.1m estimate.

The trustees of the Holy Ghost Hospital still manage its primary health facility, on the Cork road.

The overpayment was highlighted by the Local Government Audit Service in its recently published review of the council. “The €2.2m was in excess of a professional valuation obtained by the council which placed a value of €1.145m on the premises with vacant possession and ‘considerably less’ due to the existences of various leases,” it said.

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