UCC satisfied it paid market value for council-owned building

University College Cork has said it is satisfied it paid market value when it bought a former bank from a local authority for €800,000 more than its purchase price two years earlier.

UCC satisfied it paid market value for council-owned building

The college acquired the old Cork Savings Bank at Lapps Quay from Cork City Council for €1.42m last year and has received planning permission for modifications that will see it used for executive training provided by the Cork University Business School.

Cork City council had bought the building for a reported figure of €600,000 from Permanent TSB in 2014, but subsequently decided not to use it. The sale agreement with UCC includes a provision that the building would be made available to the council for functions up to 12 times a year.

At the Dáil Public Accounts Committee (PAC) on Thursday, Labour TD Alan Kelly asked UCC how an €800,000 difference in less than two years was justified. He pressed UCC chief financial officer Diarmuid Collins, who said that property prices have moved considerably over the last number of years, on whether he was happy with the price.

“We would have got it valued pre-purchase, so we were comfortable the price we were paying reflected the value of that property,” Mr Collins said.

“The price we paid, irrespective of what it was bought for originally, reflected the value at the time of that property for us,” he said.

He also detailed the takeover by UCC last year of the Irish Management Institute, saying it acquired it for no cost but it is now a wholly-owned subsidiary company of UCC. However, the deal saw UCC buy the institute’s 13-acre campus in Sandyford for €20m from that company, and is now leasing it back to the IMI.

Mr Collins said UCC did not take on any pension liabilities of the institute as part of the deal. In response to questions from Sinn Féin TD David Cullinane, he said the €20m paid to IMI was used to discharge liabilities, primarily borrowings for the development of a housing complex on the campus.

Comptroller and Auditor General Seamus McCarthy told the PAC that the Department of Education and UCC are in dispute over who should be liable for pension liabilities which had a future estimated cost of over €14m in September 2014. These relate to some staff who transferred to UCC from elsewhere in the public sector for whom the college agreed to award professional added years for pension purposes.

The department has told the university it will not meet those liabilities in its funding of UCC. But the college’s view is that these costs should be covered in line with a previous commitment, and it has initiated litigation against the State.

However, Mr Collins said negotiations with the department and Higher Education Authority are making progress towards a resolution.

Fianna Fáil TD Mark McSharry suggested that, in the interest of the taxpayer, UCC should consider postponing its litigation pending the outcome of those ongoing negotiations.

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