British Land, McAleer & Rushe, Bank of Ireland and NAMA all Subject to Debate and Question in the Irish Parliament – Re-Sale of (planning enhanced) 10 Portman Square (2-14 Baker Street) for 50% of Value Questioned by Senator Mark Daly


Portman Square, 1813

Portman Square, 1813 (Photo credit: Wikipedia)

Subject: NAMA and Irish Bank Resolution Corporation Transparency Bill 2011, Second Stage Wednesday, 6 June 2012.

The proceedings and debate on this Bill in Irish National Parliament makes for interesting reading. It raises serious questions about the responsibility of organisations such as NAMA (and those who act under NAMA Authority) to the People of Ireland and to the Taxpayers who bear the burden of the failures of the Irish Property Market. The Bill, introduced by Senator Mark Daly proposed a substantive and necessary oversight of what continues to go on behind closed doors.

In the proceedings and debate, Senator Mark Daly raised specific and serious questions about the British Land development site at 10 Portman Square (formerly known as 2-14 Baker Street) – and the manner and structure of the deal between McAleer & Rushe and British Land. Senator Mark Daly also raised a question about the nature and role of Bank of Ireland and of NAMA (who British Land claim, in a document available on their website, that the repurchase of the development site on Baker Street was “with the consent of NAMA”).

Some of the questions and comments in the debate include:

“The NAMA Act set out clearly what should happen.  Section 35 of the NAMA Act stated that a code of practice should be set up by NAMA on how it would dispose of assets.  This code of practice was adopted three months later, when it said all credit facilities or securities on credit facilities would be sold in accordance with the code of practice for the governance of State bodies.  What the guidelines outlined was as follows: “The disposal of assets of State bodies or the granting of access to properties should be by auction or competitive tendering process . . . The method used should be both transparent and likely to achieve a fair and market-related price.”  That is simply not happening.

NAMA and I have been in constant contact and communication.  It disputes whether the properties it has control of through banks come under this Act.  We must ask ourselves, and any judge would ask himself or herself, what was the intention of this House when it passed the NAMA Act.  The intention of this House was that all properties would be sold in an open and transparent manner.

I have a legal opinion from barrister Mr. Donal O’Laoire, which I can provide to the Minister, that all assets, whether they be properties or loans which NAMA has control of, should be sold under the code of conduct for the sale of State assets.  Whether they are controlled by Bank of Ireland or AIB, ultimately, NAMA has given Irish taxpayers’ money to those institutions in order to keep those institutions afloat.  What we have is a situation where, as we all know, NAMA is simply not following the laws set out by this House.  That is why we are introducing the Bill, namely, to make clear that it should sell all properties and assets it has control of under the code of conduct — when I say assets, I mean loans as well as properties.  To facilitate this, it should list them on a website.”

“a more disturbing case, the details of which I will give to the Minister, is the situation of Nos. 2 to 14 Baker Street, which is an extraordinary loss to the taxpayer. ”

“For his benefit, let me outline what happened.  In September 2005, Nos. 2 to 14 Baker Street was purchased from British Land for €47.5 million.  When the bust came, they sold it after receiving planning for 50% more square footage on the site in 2009.

On 16 April they sold it back to British Land for €29 million, representing a loss of €28.2 million to the Irish taxpayer.”

“This property was not placed on the open market.  How was that in the best interests of the Irish taxpayer?  Could my colleague, Senator Coghlan, outline how on 16 April, a trust was set up in Jersey?  A legal agreement signed in Westminster City Council shows that McAleer and Rushe had a beneficial interest in this trust.  Was this to deceive the Irish taxpayer?  On 21 September 2011, in a report and a press release to the market, British Land said:

“We repurchased approximately 50% of the value it previously sold for in 2004.  We structured a three-way deal to purchase the site from McAleer and Rushe, Bank of Ireland, with the consent of NAMA”, [ I ask Senator Coghlan to note].  This acquisition has already performed very well.  Since purchased the valuers have increased the site value by 52%.”

“Does this tell us it was undersold?  Does this tell us that the market value was achieved?  It most certainly tells us that.  I could get no answer from either Bank of Ireland or NAMA — as to why McAleer and Rushe when they went into that agreement with the consent of Bank of Ireland and with the consent of NAMA, were profit sharing, which means that the money achieved first day was not the entire market value.  Was Bank of Ireland aware of this profit-sharing agreement?  Was NAMA aware?  I do not know the answer.”

“If a situation like Baker Street (referring to 10 Portmen Square – formerly known as 2-14 Baker Street) arose in the future, this Bill would ensure that everybody would know the property was for sale, that anyone could bid for it and there would be confidence in NAMA and the IBRC as a result.  At present there are back room deals going on which are not anything to do with the Department of Finance.  I have confidence in the people in NAMA but the way this is being structured at the moment, they are not selling it in accordance with the rules laid down by this House and by the laws passed in this House.”

Maybe Sherlock Holmes might be minded to add his tuppence-worth to all the shenanigan around this site and into the deal between British Land and McAleer & Rushe…..?

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About 10 Portman Square | 2-14 Baker Street

10 Portman Square | 2-14 Baker Street Campaign This blog makes no claim of association or representation of the development known as 10 Portman Square | 2-14 Baker Street in London. This blog is a communication tool only and serves to highlight issues affecting members of the public and residents in the vacinity of that site. The development site at 2-14 Baker Street (10 Portman Square) was acquired by McAleer and Rushe in 2005 with a loan from Bank of Ireland. The price paid was £57.2m. Unable to repay the loan, the debt was designated for NAMA. Before NAMA assumed the debt, McAleer and Rushe sold the site back to British Land in 2010 for nearly £30m less than it had paid. The deal appears to have benefited McAleer and Rushe in a number of ways that may not be realised financially by NAMA. This includes a share of the development profits and the awarding of the construction contract to McAleer at a time that their auditors (KMPG) suggest that this company may not be "a going concern". According to McAleer & Rushe's latest available accounts (filed 2011) all the company's debts are "payable on demand" suggesting that they have not met their repayment schedule on their loans. There are ongoing issues at the site at 2-14 Baker Street (10 Portman Square) affecting members of the public and local residents. Members of the public and local residents have been put at risk many times and, too date, neither British Land or McAleer & Rushe appear to have faced no real consequences from a regulatory or legal persective. McAleer & Rushe have resorted to threats, harrassment and intimidation towards local residents objecting to unsafe practices and affected by the practices employed on and around the site. There have been a number of safety failures leading to deaths on other McAleer & Rushe sites in the UK. Full information and supporting evidence is available on request to interested parties.
This entry was posted in 10 Portman Square, 10 Portman Square l W1, 10portmansquare, 2-14 Baker Street, Bank of Ireland, British Land, Building Site, Commercial Development, Construction, Ireland Construction News, Irish National Parliament, Irish Parliament, Legal Action, London, McAleer & Rushe, McAleer and Rushe, Mob, NAMA, Retail Development, Tax Avoidance, UK Construction News, Uncategorized, West End, Westminster, Westminster City Council and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

One Response to British Land, McAleer & Rushe, Bank of Ireland and NAMA all Subject to Debate and Question in the Irish Parliament – Re-Sale of (planning enhanced) 10 Portman Square (2-14 Baker Street) for 50% of Value Questioned by Senator Mark Daly

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