Government urged to write off debt on landbank

There have been calls for the Government to write off the debt on a publicly owned landbank in Cork City earmarked for up to 600 homes after it emerged that the cost to the city of servicing the interest on the loans has soared to over €5m.

Fianna Fáil councillor Sean Martin said it was a scandal that Cork City Council has to service the debt linked to the 22-hectare site off the Whitechurch Road, especially during the midst of a housing crises.

“We, like other councils around the country, were asked to accumulate landbanks with housing development potential, and the council bought these lands in good faith,” he said.

“But when the economic crash happened, the housing plans were shelved and we were left saddled with the debt. We are now in a situation where we are using our scarce resources to pay back interest on debt — debt which has been written off in other local authority areas.

“All we are looking for is parity. This [debt writeoff] is something that other councils got, and all we want is the same opportunity. The debt should be written off now to give us a real chance of getting people housed at really affordable prices.”

He said clearing the debt would allow officials to engage with developers and bring “really affordable homes” to market quickly and offer hope to that section of society — young working couples who can’t get mortgages.

The city council spent just over €25m before the property boom buying four parcels of land off the Whitechurch Rd for housing.

The site included Geaney’s Field, McElhinney’s land, Na Piarsaigh land, and an area known as the O’Mullane lands, which cost just over €18.8m alone.

However, when the economic crash hit, the housing development plans were shelved.

It emerged last year that the council had forked out almost €3m in interest payments to service the debts linked to the purchase of the landbank.

However, in response to a question from Mr Martin last night, it emerged the outstanding debt on the Whitechurch Rd sites has soared to just over €30.4m. The Government approved a €9.89m package last year to fund enabling infrastructure to finally facilitate housing development on the site. The cost of under-grounding national grid powerlines which criss-cross the site will cost almost €5m. Other works will include approach roads, a spine access route and the provision of trunk drainage and utilities.

The city’s head of housing, Valerie O’Sullivan, last night said the site could accommodate up to 600 houses. However, full debt forgiveness is not a realistic option, she said.

“It’s not going to happen but we have a plan to deal with that,” she said.

However, Sinn Féin councillor Thomas Gould said the full extent of the debt should be written off now. He said Sinn Féin will also seek to influence the cost of the houses to ensure they are affordable.

It is hoped the enabling works on the site will be complete by April 2019, subject to planning approval.