Taxpayers pick up €20m tab for land council bought

Taxpayers will have to pick up the tab for over €20 million paid by Meath County Council for a parcel of Navan land which the local authority has handed back to a government agency.
The land of 11.5 hectares (28.6 acres) bought by Meath County Council for €20 million for social housing at the height of the Celtic Tiger is being handed over to the Housing Finance Agency because the economic slump has prevented the council from getting loans to finance new houses.
The land at Farganstown/Ballymacon, close to the Joe Norris Renault dealership on the Kentstown Road, was bought six years ago by the council for €20,550,000, equating to €717,000 an acre, with the aid of loan finance from the Housing Finance Agency.
The agency, established as a State-owned company in 1982, provides loan finance to local authorities and voluntary housing bodies for housing and related purposes.
The council said it bought the land in 2007 in good faith and had a reasonable expectation that it would need the lands for housing units. However, because there is no government money available for capital projects like the one at Farganstown and changes in housing policy towards non-construction projects, it is likely the lands will be ruled out for social housing in the short to medium future.
The council took out two loans from the Housing Finance Agency to finance the project, one for €18,495,000 in 10th April 2007 and another for €2,057,422 in May 2007. While the interest on the loans was not payable by the council for seven years, a roll-up of the interest was continuing and this was due to expire early next year.
In 2014, the council was due to start making repayments on the loans from its own revenue budgets, and the interest would amount to €240,500 for six months. However, with the transfer of the lands to the Housing Finance Agency for a sum of just €1, local ratepayers will not be liable for the payments and, instead, the taxpayer will pay the loans over 25 years.
The council said this week that there would be no burden on local ratepayers.