Tuesday, 7 May 1991
Dáil Éireann Debate
 1. Mr. Spring asked the Taoiseach if he will outline the legal or statutory basis on which Temple Bar Properties have been established; whether the company have been registered with the Companies Office; if so, the registration number; and if he will make a statement on the matter.
2. Mr. Spring asked the Taoiseach if he will outline the capital and other finance available to Temple Bar Properties; the basis on which this finance has been made available; and if he will make a statement on the matter.
3. Mr. Spring asked the Taoiseach if he will outline (a) the structure of Temple Bar Properties, (b) the board of directors, (c) the number of staff that will be employed on a full-time, part-time, contract or other basis, (d) the way in which staff will be hired and (e) the cost of remunerating staff; and if he will make a statement on the matter.
4. Mr. Spring asked the Taoiseach if he will outline whether Temple Bar Properties have entered into any contracts for the acquisition of properties; if so, the number and the amount of money spent; the source of revenue to finance all such purposes; and if he will make a statement on the matter.
5. Mr. Spring asked the Taoiseach if it is proposed to introduce legislation to establish the two companies involved in the refurbishment of the Temple Bar area; and if he will make a statement on the matter.
7. Mr. Quinn asked the Taoiseach if he will outline the composition of Temple Bar Properties Limited; the names of all the directors; their aims and objectives; to whom they are accountable; if taxpayers money has been allocated to them; and if he will make a statement on the matter.
78. Mr. Nealon asked the Taoiseach if he will outline the urban renewal scheme for the Temple Bar area of Dublin which he announced at a recent press conference; and if he will further outline in relation to (a) Temple Bar Properties and (b) Temple Bar Renewal; (1) the statutory or other basis for their establishment, (2) their purpose, (3) the extent and manner of their financing, (4) the names of the directors, (5) the Minister who will be responsible and (6) whether the bodies will provide regular reports on their operations and progress.
The development of the Temple Bar area has been undertaken by the Government on the basis of unanimous proposals and recommendations made to them by Temple Bar Development Council which represents people from the area itself, in Dublin Corporation's excellent action plan for the area and by representative groups chaired by the two most recent Lord Mayors of Dublin. The development has the full support of the Arts Council and the council are and will be actively involved in its implementation.
The objective of the renewal and development of Temple Bar is to build on what has been taking place in the area spontaneously and to create a living, bustling cultural and tourist quarter which people will visit in significant numbers and in which many more will work and live. The activities and uses will include restaurants, speciality shops, recording studios, a film centre, craft workshops and outlets, theatres, art galleries — both visual and graphic — hotels — especially smaller ones — and a variety of other retail shops and markets, indoor and outdoor, including antique shops, bookshops and clothing shops, especially Temple Bar's already unique second hand bookshops. The objective is, also,  to have significant residential accommodation for students and others who wish to live in the Temple Bar area.
Temple Bar Renewal Ltd. are a company limited by guarantee, chaired by the Lord Mayor of Dublin in office. Up to now, their essential function has been to advise me, and through me the Government, on how the Temple Bar area should be developed. From now on, their essential function will be to decide which development proposals merit the incentives provided for the Temple Bar area in the Finance Bill, 1991 which is currently before the House.
Temple Bar Properties Ltd. are a company limited by shares of which the Taoiseach, through his nominees, is the sole shareholder, as the member of the Government with responsibility for culture. Their essential function is to act as a development company for the Temple Bar area on behalf of the Government in accordance with the recommended development plan.
I am circulating a statement which lists the current boards of directors of Temple Bar Properties Ltd. and of Temple Bar Renewal Ltd. and details of the registration of Temple Bar Properties Ltd. in the Companies Office.
I will be circulating shortly a Temple Bar Area Renewal and Development Bill, 1991 which will establish on a statutory basis Temple Bar Renewal Ltd. as the company to act as provided for in the Finance Bill, and provide that the company shall lay their decisions on the approval of development proposals before both Houses of the Oireachtas for their information; establish on a statutory basis Temple Bar Properties Ltd. as the company to implement the development  of Temple Bar on behalf of the Government; provide that the Minister for Finance may guarantee the borrowings of Temple Bar Properties Ltd.; provide that Temple Bar Renewal and Properties Ltd. will be subject to public service pay guidelines; provide that tenants on less than commercial rents in Temple Bar may not assign or sublet; provide powers of compulsory purchase in the Temple Bar area to Temple Bar Properties Ltd.; and exempt Temple Bar Properties Ltd. from stamp duty in relation to the properties they acquire in the Temple Bar area.
As I have indicated previously, Temple Bar Properties Ltd. will implement the European Commission pilot project for the Temple Bar area for which the Commission have provided funding of IR£3.6 million representing 50 per cent of the total cost. Further, the European Investment Bank have agreed to provide a loan of £5 million to Temple Bar Properties Ltd. for the first phase of the development of the area and to consider favourably further loans for later phases of the development. As I have also indicated to the House previously, Temple Bar Properties Ltd. will be acquiring, on the basis of an independent valuation, all the properties owned in the Temple Bar area by CIE and Dublin Corporation. The company will also acquire such other key properties in the area as they consider essential to their development role.
The detailed day to day operations of Temple Bar Properties Ltd. and of Temple Bar Renewal Ltd., including those in relation to staff and the acquisition of properties, are matters for the companies and not matters appropriate for me to answer in this House.
Temple Bar Properties Ltd. will under the terms of the forthcoming Temple Bar Area Renewal and Development Bill, 1991 be required to provide details of their operation to the Minister for Finance, given that he will give a State guarantee for the company's borrowing. The company's accounts will be audited by the Comptroller and Auditor General.  As a commercial State company, Temple Bar Properties Ltd. can be added to the remit of the Oireachtas Joint Committee on State Companies.
Temple Bar Renewal Ltd. will, again under the terms of the forthcoming Temple Bar Area Renewal and Development Bill, 1991, be required to lay their decisions before both Houses of the Oireachtas for their information.
I believe the method of implementing this Temple Bar project, involving the people who live and work in Temple Bar in co-operation with local and central Government, represents a unique and highly desirable method of development. I believe it is already proving a highly effective way of proceeding. I am confident it will serve as a model for other desirable developments in Dublin and throughout the county. I trust that I have the full support of the House for what is underway in Temple Bar.
Date 8 February 1991.
Mr. Spring: May I ask the Taoiseach why, in relation to this project, he has departed from precedent and made himself the sole shareholder, whereas in the vast majority of cases the shareholder is the Minister for Finance. As the Taoiseach has said in his considered reply, the Minister for Finance will have a lot of responsibility when the Bills are put before this House. May I also ask the Taoiseach, as no Bill has been introduced and I welcome the Taoiseach's announcement that Bills will have to come before the House — how Temple Bar Properties Limited or some other such company have been involved already in property deals, even prior to the company's formation? Perhaps the Taoiseach could tell us when the company were formed, if they have been formed, and how they have been able to conduct property dealings with property owners in the Temple Bar area? Could the Taoiseach outline to the House, perhaps in round figures, the amount of capital outlays which he envisages Temple Bar Properties Limited making, the amount in direct grants or the amount that will be attributed to taxes foregone to the State in the process of  the development in this area? Lastly, could the Taoiseach give some indication of the residential content which he expects to see in the Temple Bar area when the development is completed?
The Taoiseach: On the first point, we are following the normal practice that the shares in these companies are held in the name of the member of the Government responsible for the particular project. As it happens I am the principal member of Government responsible for cultural and artistic affairs and therefore the companies have been set up under the aegis of my Department and the shares are vested in me. I want to assure the Deputy and the public that that is simply a legislative procedure. The shares are held by the Taoiseach in his capacity as Taoiseach and not by me personally, in case there might be any such suggestion.
Mr. Spring: You never know.
The Taoiseach: I understand there has been one property transaction which is quite transparent. It was entered into because the property came on the market and it was important to acquire it. It was a church property, Saints Michael and John's Church, with surrounding buildings and land. It is envisaged that expenditure will be in the region of £7.2 million of which £3.6 million, 50 per cent, is coming from the European Commission. There will also be presumably a lot of capital transactions, and the European Investment Bank have very kindly put up £5 million with the promise of putting up more if desired. I would explain that it is very important that those kinds of capital provisions be made by institutions like the European Investment Bank because many of the activities and premises that we envisage taking part in the Temple Bar area will not necessarily be commercially viable propositions. Therefore, to a large extent there will have to be an element of subsidisation either in their acquisition or otherwise. That is why the finance from the European Investment Bank is very important. Temple Bar  Properties Limited were incorporated on 24 October 1990.
Mr. Quinn: Has an economic analysis of the area been carried out in advance? The Taoiseach will recall that in his written reply he talked about how this area was spontaneously redeveloping itself. Could he indicate to the House if an economic analysis was carried out in advance in this area in terms of the effect of these very generous allowances on other areas within the city which might otherwise have hoped to benefit from such an incentive from the Government?
The Taoiseach: Basically this redevelopment project will be non-commercial. I think the Deputy is aware of the history of the area. The underlying reality is that over a period of years CIE acquired a lot of property in this area for the purpose of establishing a central transport depot.
Pending the establishment of the depot in Temple Bar CIE gave out a number of leases to very desirable small projects, not necessarily at economic rents. The problem we were faced with was how to deal with the cessation of CIE's interest in the area and at the same time maintain the people in the CIE properties who had set up all sorts of desirable enterprises. What we decided was that the new company, Temple Bar Properties Limited, on behalf of the people in the area and the Government, would take over the premises from CIE at an agreed valuation and the company would then be in a position to continue the tenancies of the various people who had established enterprises there. That is the economic basis of the whole operation. Many of the people who are running art galleries, studios, musical venues and so on in the area are not in a position to pay the commercial rents that normal redevelopment would require. That is why Temple Bar Properties Limited, on behalf of the Government are stepping in and becoming a property company who will encourage these people to carry on at rents which they might not otherwise be able to pay.
One supplementary question asked by Deputy Spring which I omitted to answer  was about the residential aspect. It is hoped that we will be able to provide very considerable accommodation there for a large number of students — maybe up to 2,000 — in addition to the normal population. I could not say that any specific economic analysis was made in the terms that Deputy Quinn has in mind, but a great deal of study and investigation was carried out by the local community development organisation of the possibilities of the area and how they would like to see it developed.
Mr. Quinn: A significant component of the provisions in the Finance Bill at present before the House is for allowances against existing properties, some of which are 100 years old and more. Will the decisions that have been taken already but not yet announced cover the area of planning permissions, building regulations and fire standards so as to ensure that there will not be a contradiction between the desire for refurbishment on the one hand and the imposition of 20th century fire standards as currently understood by Dublin Corporation which would require either demolition or major physical transformation of the detrimental kind?
The Taoiseach: Of course, we will have to adhere fully to the corporation's planning requirements. One of the main documents will be the corporation's plan for the area which has been adopted as part of the overall development programme.
Mr. J. Bruton: Does the Taoiseach have an estimate of the likely tax loss to the Exchequer as a result of the tax concessions being granted towards the redevelopment of this property? Will the Taoiseach say why it was considered necessary to allow people to write-off against rent from property in some other part of the country the costs of refurbishment of property within the Temple Bar area? Surely it is not necessary to give them such a generous concession? Furthermore, why do the Revenue Commissioners not decide whether individual properties will qualify for tax relief  instead of Temple Bar Renewal, a company yet to be set up? Surely it would have been better to follow previous precedents of allowing the Revenue, who have a well established tradition of independence, to make a decision in regard to individual properties? Does the Taoiseach believe that the extension of these tax reliefs will have changed in any sense the value of property in this area?
The Taoiseach: On the first point, no, it is not possible, nor is it possible in any of these tax incentive schemes, to estimate what revenue will be foregone. In one way one could say that none will be foregone because, if we were not doing this, nothing would happen there and there would not be any revenue. However, I cannot give the Deputy any estimate at this stage. The Revenue, of course, will still make the final decision on whether anything complies with the Finance Act incentives; the only thing that Temple Bar Renewal will do is to approve of the sort of developments which can take place there and recommend to Temple Bar Properties Limited whether any particular project or enterprise should be approved for property being made available. The implementation of the financial tax incentives will, of course, be a matter for the Revenue Commissioners as usual. What was the Deputy's third point?
Mr. J. Bruton: I asked why it was necessary to allow relief against property outside the area.
The Taoiseach: That is the normal provision.
Mr. J. Bruton: It is not.
The Taoiseach: I am not particularly wedded to it but tax incentives are a matter for the Minister for Finance. I understand that is the normal provision in this sort of tax incentive.
Mr. J. Bruton: Is the Taoiseach aware that these incentives are not normal? In  section 23 cases in general there is a ring fence and one is not allowed to claim against property outside the development the expenses which are being claimed within the development. It is unusual that a person who has done a property development, say in County Mayo, could set off the costs of the Temple Bar development — which they are also doing — against the cost they have incurred in County Mayo. This is quite an unusual removal in section 50 of this year's Finance Bill of a normal ring fence which applies in cases such as this.
An Ceann Comhairle: The issue should not lead to argument.
The Taoiseach: The Deputy should pursue that matter in the Finance Bill, which is still before the House. By way of background, it is important for Deputies to understand that this is not similar to the normal type of urban renewal proposal. It is not, for instance, in the same category as the Financial Services Centre as the people going in there will be commercial concerns who will seek to make — and will make — handsome profits. In the Temple Bar area we hope to encourage many enterprises which would not, in the normal way, be commercially viable. We hope to give them special incentives and favourable treatment which will enable all sorts of desirable little enterprises to flourish there, which would not be the case if we applied the normal strictly commercial considerations.
An Ceann Comhairle: I want to bring this matter to finality. I acknowledge that seven questions were involved but we have spent wellnigh 25 minutes on the subject. I will call Deputy Byrne and, finally, Deputy Spring.
Mr. Byrne: I wish the project well, everybody will be happy to see it succeed. Will the Taoiseach confirm that CIE are satisfied with the sum of £4 million compensation which was negotiated? Was it by agreement? Given that CIE had amassed substantial quantities of land, do they still retain any role or directorship  in any of the companies? Do they retain a functioning role on any of the boards of the Temple Bar Renewal Company or Temple Bar Properties Limited? If there is to be subsidisation to small businesses, restaurants, galleries, and so on and if there is exploitation of the workforce — which has occurred in the Temple Bar area — will the Taoiseach guarantee that those who exploit workers will not receive any subsidies?
An Ceann Comhairle: This is extraneous matter.
The Taoiseach: The last question is not really in my area but I will convey the Deputy's point to the two companies concerned. It is a matter for legislation and normal trade union activities. CIE will not have any further role; we have taken the policy decision that this will not be a transport centre and from now on all sorts of different types of activities and considerations will apply. I understand that CIE are satisfied with the price at which the properties were transferred; they were independently valued and negotiated.
Mr. Spring: Whereas I appreciate the sentiments expressed by the Taoiseach in relation to his ambitions for this area, I am somewhat surprised at the extension of the size of this area from the original Temple Bar area. It now stretches from Westmoreland Street to Fishamble Street, which is way beyond the original intention and, in effect, will make some people very wealthy, particularly property owners outside the original area. Before the Bill is introduced will the Taoiseach give a guarantee to the House that some economic analysis will be carried out? Is the Taoiseach aware that, in addition to the two companies mentioned by the Taoiseach — Temple Bar Properties Limited and Temple Bar Renewal — other companies such as Temple Bar Developments and Temple Bar '91 have recently been registered in the Companies Office? The latter company were registered by people describing themselves as Shelf Company Formation  Agents. They have a range of companies such as Adventure International, Bambi International, Century Computers and Larchfield International. Will the Taoiseach assure the House that there is no conflict or interaction between these companies and Temple Bar Properties and Temple Bar Renewal?
The Taoiseach: I can certainly assure the Deputy very firmly in regard to the last point. His views are a surprise to me but I suspect that the companies are nothing more than aggressive private enterprise. I assure the Deputy that they will have no influence, connection or association with Temple Bar Properties Limited or Temple Bar Renewal Limited, which will have their own specific missions. I do not want to speculate on why this other range of companies is being formed by other groups but it may be that they want to take possession of the names for their own purposes. They will certainly not in any way be associated with the two companies which this House will establish.
I assure the Deputy that I will take his suggestion about some sort of economic analysis being made. There is no particular reason, other than good urban development reasons, for the size of the area. It was not decided by my Department in particular; it was decided mainly by Dublin Corporation and by the local community development people. It is a homogenous area stretching from Fishamble Street to Trinity College and the western part of it should definitely be included because it is very much part of the old Viking Dublin. I am sure the House will have a full opportunity to examine all these aspects when I introduce the legislation. We can fully discuss all these matters and I assure Deputies that I have a very open mind on how we should proceed. This is a fairly good structure. It meets the particular problem which presented itself to us there. If Deputies can come up with better suggestions, better ideas or more interesting proposals I would be very happy to  receive them when we are debating the legislation.
Mr. Quinn: When will we see the Bill?
Mr. J. Bruton: May I——
An Ceann Comhairle: I had hoped to get on to another question, Deputy Bruton.
The Taoiseach: We hope it will be contemporaneous with the Finance Bill.
An Ceann Comhairle: We are now half an hour on these questions.
Mr. J. Bruton: Would the Taoiseach agree that anyone who got advance information about an area which was likely to be included in the designated area could have made quite an amount of money on property transactions? What procedures existed to make sure there was absolute security and confidentiality about the area to be designated before that announcement was made so that no one outside the close area of the public service would have had such information?
The Taoiseach: I doubt very much if anyone could have made any great money. The key properties in the area, the ones which were for sale, were either owned by Dublin Corporation or CIE. It was these properties in which the Government and the local community were interested. It was from the existence and ownership of these properties that the whole idea developed. I could not guarantee that there was not a fair amount of community discussion about the size of the area. I would imagine that the people in the community development council would have had an input into the size of the area. It certainly would have been a matter for Dublin Corporation and I am not aware that there was any particular property interest in it.
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