18 April 2014

The Point: Harry's rock n'roll Village

09:36, Ian Kehoe, Business Editor

* This story was originally published in The Sunday Business Post in December 2012 *

Harry Crosbie was in garrulous form in July 2008, rolling out the rhetoric about his grand plan for Dublin's docklands and Irish music.

The concert impresario had just inked a €25 million deal with the telecoms firm O2 for the naming rights for his newly renovated Point Depot, and Crosbie was brimful with optimism for his wider plans to build an €850 million village on a 12-acre piece of land wrapped around the music venue.

He had a plan, and he had a vision. The O2 would officially open later that year, and then, at six monthly intervals, Crosbie said he would launch a different piece of the Point Village jigsaw.

Crosbie planned to turn his docklands site into a village of shops, homes, offices, restaurants and cafes. The signature building was to be a 40-storey high rise tower known as the Watchtower, which was designed to complement the proposed U2 tower on the other side of the Liffey.

At the time, during a lengthy interview, Crosbie told me that his development would tap into a catchment of 65,000 people living in the area, an Irish "coastal wealth belt" between Clontarf and Sandymount.

Yes, the world was changing, and the international money markets were starting to harden. But few people doubted that Crosbie could pull off this massive urban regeneration scheme, let alone Crosbie himself.

Dunnes Stores believed him, signing on to become the anchor tenant at his shopping centre. Odeon, the British cinema chain, came on board to build a major cinema. AIB, his financier for the project, was supportive.

However, the world changed more than anyone imagined, leaving Crosbie developing one of the country's largest and most ambitious regeneration schemes in the middle of an international and domestic financial crisis.

Unsurprisingly, the Point Village project has not gone quite as planned. There have been successes - the Odeon cinema recently opened its doors, while the Gibson Hotel, another central piece of the project, has been trading handsomely for some time now.

The skyscraper, however, has not materialised, while the shopping centre has become embroiled in litigation. In 2009, Crosbie was forced to take legal action against Dunnes Stores in an effort to force the Irish retail giant to follow through with an agreement to become the centre's anchor tenant.

A compromise was reached, whereby the terms of the deal were altered. This year, however, the two sides were back in court again. The High Court said last week that Dunnes must fit out the store, but only after seven other tenants are secured for the development.

This is a significant issue. With Dunnes on board, other retailers would be drawn to the shopping centre. The uncertainty over the retail giant's commitment is not helping Crosbie.

Meanwhile, Crosbie's debts have been transferred to the National Asset Management Agency (Nama). Last March, he cut a deal with the state agency, following crunch talks about his debts.

Under the deal, Nama took greater control over his property empire. In September, the state agency took an extensive charge over the Point Village Development Company, the main company behind the development, including a charge over a number of the company's bank accounts.

The company itself has relatively minor bank debts - €3.6 million was owed to Nama at the end of 2010, secured over a fixed and floating charge over certain assets belonging to Crosbie.

However, the big kicker is this - the company owes Crosbie €286 million, which he advanced through a director's loan. Put bluntly, Crosbie has a lot riding on the Point Village.

Adjacent to the Point Village is Spencer Dock, a prime 24-acre site that was due to become the largest regeneration project in the history of the state, stretching from the Liffey up to the Tolka.

Crosbie is a partner in the €4 billion project with Treasury Holdings duo Richard Barrett and Johnny Ronan, while CIE is also involved. However, uncertainly surrounds this plan, with receivers and a liquidator currently picking their way through much of Ronan's and Barrett's Irish business property empire.

Belgian lender KBC recently issued a demand for Crosbie's share of the €300 million debt used to finance Spencer Dock Developments.

The news from the O2 is better. Dividends paid out by the company that operates the venue increased by 150 per cent last year. Amphitheatre Ireland which runs the Dublin music venue, sharply increased its dividend in a year in which more than half a million concert-goers passed through its doors.

Last year, it received €2.5 million in dividends from the O2, compared with €1 million in 2010, the accounts show.

For Crosbie, it seems, rock and roll is working out much better than bricks and mortar.

....

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