Property developers claim to want to develop the ‘docklands’ of the city area. The phrase conjures up images of unused warehouses, squalor, deprivation and empty quays. The project is designed to make us think of regeneration projects in London, Liverpool and elsewhere. But let’s not be taken in by a rhetoric designed to seduce.
Most of the lands in question are not in fact docklands at all but prime city centre residential sites, mainly in the Marina area. The 420 acres are not located in a socio-economically blighted area or an unemployment blackspot, or in a remote and deprived region.
Attractively sited alongside the River Lee, the area is largely used for sport and recreation and is only a few minutes walk from the city centre. Thus far, the presentation of the project has been really about lobbying for direct State funding and lucrative tax designation.
Major property development companies are engaged in a massive public relations campaign for State financial support and new tax incentives for the Marina area.
In 2005, the Department of Finance retained international consultants Indecon to conduct a detailed review of certain sectoral property-based tax incentive schemes. This review led to the ’06 budget announcement that such schemes were to be wound down by the end of July this year.
Certainly in the 1990s, tax reliefs benefited the economy and investors and helped to kick-start a building boom in the Republic. But Indecon’s findings confirmed that property-based incentives had outlived their usefulness.
In addition, such schemes facilitate wealthy companies and individuals in avoiding their fair share of tax. Indecon pointed out that the people who invested in these schemes were, as a general rule, high income-earners.
Already it is clear that taxpayers are to fund the circa €60 million payment from Cork City Council to Port of Cork to relocate the city centre docking facilities to Ringaskiddy. Taxpayers can also expect to fund all necessary infrastructure, roads, two new bridges (circa €120m) and public transport for the Marina area. (Taxpayers already subsidise the property development business with a low 12.5% corporation tax rate).
The proposal that taxpayers would now subsidise property development in the Marina area by new incentive reliefs is astounding, to say the least.
This area is likely to see billions invested in new property. The proposed allowances cost to the Exchequer could also run to billions. These costs are not likely to be offset by indirect gains to the revenue and general economic benefits thereby leaving a substantial net “tax foregone” cost of many hundreds, if not billions, of euro.
Last Sunday it was reported the Government is coming under increasing pressure from developers to alter the national roads programme so that the relocation of the Cork port container terminal to Ringaskiddy can be accelerated. The developers are reported to have lobbied Government departments, ministers and the NRA to facilitate the relocation and in the process free up lands in the Tivoli area of the city that they propose to develop with the aid of a tax relief package yet to be secured. These lands belong to the Port of Cork — a commercial semi-state body.
It is worth noting that Tivoli is 3km from the city centre and is not part of the Cork docklands project.
The endless press release spin of “commitment to design excellence”, “landmark buildings” and “green buildings” and “family of tower apartment cylinders” should be taken with a pinch of salt. Maximising the number of apartments in high-rise blocs is what it is all about.
No small or medium-sized city in western Europe would desecrate its waterfront environment and skyline by permitting 20 or 30-storey towers of apartments more than 300-feet-high.
Such high-rise development is of course inappropriate. It is risible to claim that this kind of development could be an example to the rest of Europe. One hopes Cork city planners will cut through the volumes of spin in assessing the planning applications. Expecting the taxpayer to subsidise this should be out of the question for the Government and the EU Commission.
17 Whitepoint Ave