Fallow lie fields in Athenry

FOR the next 10 years sheep will graze on land that was by now supposed to be the imminent home for a new Silicon Valley-style industrial campus.

The flock will live there on the back of annual rent of less than €17,000 a year. This is to get access to a 240-acre site which the IDA bought in Dec 2007 for €36m.

At the time, the agency believed it was in the mix to win a competition for a “very large scale investment” and it pressed on Teagasc, the semi-state body which owned the farm, to complete the deal quickly.

But in its first three years in the market, just one potential client visited the site and the five-year €113m plan has become a staggered 15-year strategy. About 240 acres of fields on the edge of Athenry were designated to benefit from an investment of over €113m which the IDA believed would be required to get the site ready for new clients.

This was to be made up of the €36m to acquire the farm and €77m the IDA said would be required to fit out the campus to suit the needs of biopharmaceutical plants and the manufacturers of silicon wafers.

The sale went through in Dec 2007. The price had never been disclosed but has now been released by Teagasc under the Freedom of Information Act. This showed €36m was effectively taken from the budget of the agency responsible for attracting international employers and used by Teagasc to develop training and research facilities around Ireland.

Taxpayers did not lose out, but the effect has been that €36m allocated for one purpose ended up funding another.

And the original urgency, evident in records kept by Teagasc, has now become a €36m investment in a plan for beyond 2020.

It appears the sale price was more than the IDA had bargained for. It told Teagasc it was in a competition to attract a major investor. And it believed the Athenry site was ideal, except for limits on the amount of waste water the local network could cope with. This proved a major hurdle. In 2008, after the sale was completed, the IDA found itself lobbying to rescue the potential for the site. It had drawn up a planning application and put an estimate on the amount of water firms would need to bring on to the site and discharge back into the system.

But separately, An Bord Pleanála put a restriction on the amount of water the Galway City plant at Mutton Island could take. Coupled with other developments around Galway, it meant there would be no public facility available to accept treated water from the campus.

“IDA Ireland has completed the design of a major information communications technology plant for the Athenry site, an environmental impact statement has been prepared and we are in position to lodge for planning permission. IDA Ireland is aware that Galway County Council and Galway City Council are jointly exploring the options for additional wastewater treatment capacity…

“However, the timescale for this is unknown, but in any event is considerably longer than that required by IDA Ireland if we are to progress planning and development of this major strategic site, which is vital for the economic growth of the region,” it said.

It said the only alternative was for the EPA to approve the development of Mutton Island to allow it receive the required amount water.

A €7m investment was sanctioned by Galway City Council and the project is to be completed this year.

But as this comes on stream the anxiety to progress, which the IDA expressed when it paid €36m for the farm, has waned. Instead it is close to agreement to extend the original leaseback arrangement it worked out with Teagasc for 10 years. This will give Teagasc grazing rights for the 240 acres at a cost close to €16,680 a year.

“We are currently negotiating a 10 year lease with IDA for land in Athenry. Rent per annum per hectare will be the same, within a few euro, as the rent we were paying for the annual grazing lease,” Teagasc said in a statement.

NEGOTIATION reports for Teagasc show the agency was not prepared to roll over when the IDA came calling. Its firm approach paid off handsomely.

The parties began talking in Dec 2004. Teagasc hoped an offer would come by the end of the year.

However, negotiations stalled as Teagasc monitored land sales and refused IDA offers. By Mar 2006, the IDA had valued the site at €125,000 per acre and would make a bid of €30m. But Teagasc was offered €375,000 an acre for an adjoining, but better positioned site.

Teagasc accounts for 2009 show it had drawn up a €26m budget to develop labs, student facilities and a bioscience centre in locations including Moorepark and Ashtown.

This came after the Department of Agriculture granted it permission to retain the bulk of the proceeds from its Athenry windfall. The IDA said its plan was to have all services ready on the site to ensure it is ready for clients. It said it has been marketing Athenry overseas and phase one of the preparation has been completed to get road access.

The IDA also said the lease to Teagasc would ensure its Athenry asset would not fall into disrepair.

“This proposed shovel ready site is proactively marketed by IDA’s global teams to potential investors but in the interim and as part of standard practice, the site will be maintained to an appropriate standard. In respect of Athenry, Teagasc has agreed to enter into a lease on the lands to support their ‘Better Farm Programme’ and terms are as per previous lease agreement,” it said.