The new municipal council for the mid-Longford area may have to fork out €120,000 to a developer who is unable to buy property Longford Town Council acquired under CPO to facilitate a town centre development.
County Manager, Tim Caffrey, told the final meeting of the Town Council that legal advice recommended the local authority pay the funds to take control of the town centre property that was valued at €4.2M five years ago.
Longford Town Council had requested a meeting with Mr Caffrey to outline the situation regarding the purchase of three properties by the local authority back in 2009 to facilitate a private commercial development.
At a previous meeting Cllr James Keogh called for a report on the properties in Water Street that were the subject of Compulsory Purchase Orders to facilitate a proposed €100m development of the Longford Town Centre.
The County Manager told the April meeting that the council’s legal team had sought to enforce the terms of a contract with the proposed developer. He said that a letter came back from the company stating that they had no funds to comply with the contract and that if pursued would be forced to go into liquidation.
The council then sought senior counsel advice on the matter. The assessment stated that the council was out €667,000 as a result of the purchase of property and legal fees.
Mr Caffrey told the councillors that the advice from the legal expert was that the council should pay €120,000 proposed by the developer to acquire the entire parcel of land as the limited company has little or no funds to meet their end of the contract.
The legal advice was the if the site was broken up into individual parcels and sold on, the valued of the councils investment would be dramatically reduced.
Cllr Mae Sexton said that she objected to giving any money to a developer who had reneged on the contract. Cllr James Keogh said: “The whole thing stinks to the high heavens”.
Cllr Denis Hughes asked the county manager his opinion. Mr Caffrey said that he felt the wisest decision would be to follow the advice of the senior counsel, but said that if there is strong opposition from the councillors that the council would pull out of the deal.
He added, “In the circumstances we find ourselves in it is a good deal, I think it would be bad for the town if it was put on the market piece by piece.”
Mr Hughes said that it might soften opposition if the developer dropped his price.
In 2009 Longford Town Council agreed to dispose of three properties it had acquired by CPO on Great Water Street to the proposed developer of the Longford Shopping Centre.