November 2009

Ringsend bottle plant

According to the Dublin Docklands Development Authority (DDDA) accounts, published last Thursday, the 24.9 acre Irish Glass Bottle (IGB) site in Ringsend (of which it has a share), is presently worth €50m, while its Long Term Economic Value (LTEV) under Nama is estimated to be €62.5m.  The site was sold for €412m at the height of Ireland’s property boom in 2006 to the Becbay consortium, headed by developer Bernard McNamara.  There were two stories over the weekend giving some more details – Irish Times and Irish Independent.

Rob Kitchin


Advertising Hoarding, Sandyford, November 2009

Photographs can tell a story about time and space. Throughout the boom years, I took photographs of advertising hoardings surrounding different developments in Dublin – these included areas around Dublin’s docklands and other new suburban developments. Although cynical about what the hoardings aimed to say, I almost accepted that the marketing of developments was going to be pushed further and further all the time. The images captured a specific period, or stage of development, which has now all but ended. The developments were more or less finished as planned and the hoardings eventually came down. Images taken in 2001 on Macken Street in the docklands read, ‘now these streets have a new story to tell.’ Behind the hoarding is a shot of the builders’ offices, the usual make-shift corrugated box soon replaced by a high-profile apartment development facing on to Grand Canal Docks.

My more recent photos and their attendant hoardings tell a very different story. The challenge was once to try and take a photo of them before they were taken down; now the challenge is to capture them before they are blown down, faded away or, indeed, covered by a new advertisement attempting to sell the development at a slashed rate. Smiling faces of beautiful young couples are replaced by generic ‘to let’ signs – such is indicative of the developers’ desperation to sell or rent remaining spaces. Those that remain seem like something from another age. There is a semi-permanence to these sites that is reminiscent of the half-built spaces in the 1980s, such as the south side of Mountjoy Square and the concrete shell in Salthill. They are all symbolic of a broader phenomenon appearing throughout the country at present.

Sandyford in Dublin is just one example of this. What appears like a docklands enclave airlifted and dumped in low-rise suburbia has gradually been emerging from the industrial park developed in the 1970s and 1980s. The park was supposed to disappear and be replaced by a world of glass, steel and granite-covered concrete for cappuccino lifestyles. This world would never exist. It is the world of hoardings, a world that could not possibly come to fruition, except in the idealised world of city marketing. If finished as desired, Sandyford would gradually have taken on a meaning of its own as ownership passed from the image-makers to the residents and businessses. However, the new reality means that specific facets of it are very different now to how they were originally imagined. Retail units lie vacant but while the signs still promote it as a high-profile destination, the planning application tells a different story: change of use to allow for discount retailers.

Sandyford is a difficult place to grasp. While many of the original industrial buildings and jobs have gone, the remaining ones seem to keep the area going. Some of the spaces imagined as central features of the new Sandyford seem like isolated remnants of a time long gone, like a concierge serviced foyer with flat-screen TV’s and leather couches.


The Plaza

The experience of the central square, ‘The Plaza’, is almost surreal. Upon walking in, the square itself is dominated by an ice-rink installed for the Christmas season. Overlooking this are blocks of apartments. Or so it seems. Closer inspection reveals that a sheet of material has been decorated in the outline of one of the originally planned apartments, covering a concrete shell. The detailing in the covering is impeccable. The window frames almost exactly match that of neighbouring buildings. The only give away is the lack of depth in the balconies and the sheer lack of movement by those presented as using their balconies. Despite the sense of illusion – the combination of a number of retail units, the ice rink, and a children’s learning centre called ‘Imaginosity’ – the square is relatively active. This mix is what makes a place like Sandyford so difficult to understand. While on the one hand, it is symbolic of the mess that is post-boom Ireland, there is a sense that social life somehow adapts.

This raises some pertinent questions (raised by Cian O’Callaghan elsewhere on this blog): How can urban planning deal with the sudden collapse of the property market? From a social perspective, how can it cope with half-finished buildings, half-finished footpaths; the emergence of the concrete bollard as a semi-permanent feature? Does the visual blight of these post-Nama landscapes tell the full story; or, in the same manner that we should not have read the visual clues of boom-time Ireland as a form of social reality, should we now be careful as to how we treat the sight of half-baked projects? We must consider here that these landscapes are now a social reality. In many ways, the slogan ‘A fresh view for a new way of life’ is therefore more fitting to the situation because it is now a new way of life. On one level, such spaces can try to hide behind their illusions, but there is a reality to them that many people have to experience in their everyday lives. What are their hopes and fears regarding a space like Sandyford? Would many of those who bought apartments here return to a ‘business as usual’ model (no matter how unlikely it is), where the physical spaces are completed, and those in negative equity are once again living in an apartment worth somewhere near what they paid for it? This, it seems to me, is the key aspiration of Nama, whether or not it is feasible or desirable. This is a central feature of Ireland’s future.

Philip Lawton

Nama Christmas!

I have inserted below an article which appeared in the Irish Times recently about a new local currency being launched in Kilkenny.  It doesn’t give a lot of real detail but it could be one way of coping with depressed economic conditions i.e. a new kind of localised barter system.  As it happens, the latest issue of Area has a review of a book on local currency systems, and I have included the relevant bibliographic details after the Irish Times article.

Proinnsias Breathnach

‘Cat’ currency could give Kilkenny economy new life


Sat, Nov 14, 2009

THE CELTIC Tiger may be skint but there are tentative plans in Kilkenny to launch a local currency called, inevitably, the Cat.  Community action group Future Proof Kilkenny hopes to launch a paper currency next year that could be used to pay for goods and services in local shops and businesses.  Spokesman Brian Dillon said the Cat would not replace the euro but would be a complementary, parallel currency. He hopes a pilot scheme with the backing of the chamber of commerce may be launched by next summer. The Cat would be issued in notes equivalent in value to €1, €5 and €10.

To encourage usage, he said, one Cat could be bought for 95 cent – but the note would be treated as €1 by a shopkeeper, which would mean an automatic 5 per cent discount on purchases.  He said a competition would be held for the design of the new notes which “could feature famous local faces such as members of the Kilkenny hurling team”, who are known as the Cats.  Cats would have to be spent in Kilkenny, so visitors would have to spend leftover notes before their departure as the currency could not be used elsewhere.  Mr Dillon said the scheme would be similar to other local currency projects such as those launched in Kenmare, Co Kerry, and Brixton in London.

Sceptics of local currency systems say the alternative notes are simply a glorified form of gift- voucher or a formalised system of bartering. Supporters claim, however, that such schemes help to keep money circulating in a local economy.

One of the most widely used and successful local currencies in the world is the Disney Dollar, which is used to pay for goods and services in the eponymous theme parks.

An electronic version of the Cat involving chip-and-pin cards might also be launched, said Mr Dillon. This method would be used to pay local authority rates and other charges, he said.

Talks are planned with the council in January to secure backing for the Cat, but the proposal has already won the support of the mayor, Malcolm Noonan of the Green Party. It could even prove to be “a big money spinner as many tourists might not actually redeem their Cats but instead hang on to them as souvenirs”, he said.

A spokeswoman for the Central Bank in Dublin said the European Central Bank in Frankfurt had issued strict guidelines on reproducing or mimicking euro notes but as long as the Cat notes did not replicate euro notes, there wouldn’t be a problem. She stressed that the Cat would not be legal tender and could not be exchanged for euro at banks.

© 2009 The Irish Times

North Peter 2007 Money and liberation: the micropolitics of alternative currency movements.  Minneapolis: University of Minnesota Press ISBN 978 0 8166 4963 1

The Ryan Tubridy programme on RTE1 radio yesterday (Thursday Nov 26) had a very good section on the experience of people living in ghost estates.  I have downloaded this (hope RTE don’t mind) into the Media library on this site.  Click on Media/Library on the left side of page, and under Tubridy Show Ghost Estates click on View and then click on Tubrdiy Show Ghost Estates in the next window to listen (assuming you have Media Player or some such on your computer).

Proinnsias Breathnach

The Irish Times reports that footfall in the big shopping centres such as Blanchardstown is holding up, but that spend is markedly down. The average value of retail transactions in the third quarter is €46, down from €67 in the same period last year. It is likely that this is geographically skewed, with the large, established indoor centres acting as sites of leisure and window shopping, with smaller retail centres and those along the border suffering disproportionately.  It also reports that people are now saving 12% of their income up from 2.3 per cent in 2007; that 422,500 people are claiming jobseekers’ benefit and assistance in Ireland in October, and that April 2009 to April 2010 net migration will be approximately 40,000.

This story in the same newspaper might also be of interest –Ireland less alluring for Intel 20 years on – what Ireland still has is competitive corporate tax and skilled labour, but then so do other countries so what else do we do to attract and keep FDI.

Rob Kitchin


The true forms of government are those in which the one, or the few, or the many govern with a view to the common interest; but governments which rule with a view to the private interest, whether the one, or the few, or the many, are perversions.’ (Aristotle, Politics, Book III, 7:29)

In the foundational text for modern political theory – Politics – Aristotle was very concerned with conflicts arising from private ownership of property. Although he did not state it explicitly, he was essentially broaching the question of class conflict in ancient state systems. He felt that if in a perfect democracy there were extremes of rich and poor, the poor would use their democratic right to initiate land reform and confiscate property from the rich. He considered this to be unjust on the basis that if one considered this to be just then ‘all the acts of a tyrant must of necessity be just; for he only coerces other men by superior power, just as the multitude coerce the rich’. One could debate Aristotle’s judgement about justice and injustice at length. But it is his potential solutions to the problem that are most insightful and have most contemporary relevance. In democratic states, he saw two ways of dealing with the difficulty: the first option was to reduce inequality so that the poor would not be inclined to initiate land reform; the second option was to reduce democracy so that the poor would not have the power to initiate land reform. The question then arises as to which of Aristotle’s two solutions the state is currently pursuing with regard to contemporary failings arising from private ownership of property: so, is NAMA an attempt to reduce inequality or reduce democracy?

NAMA is being implemented under a veil of secrecy with one TD referring to it as a ‘secretive, tax-funded, politically directed work-out process for 1,500 of the most powerful, well connected business people in Ireland’. This lack of transparency tends towards Aristotle’s second option. The recent news that NAMA is to be submerged into a ‘special purpose vehicle’ which is to have majority (51%) private ownership is further evidence of the pursuit of Aristotle’s second option. There are many other examples pointing towards the adoption of Aristotle’s second option which is essentially a means of preserving the existing power structure in society by reinforcing and likely deepening inequality. Bearing that in mind, it is worth noting that Aristotle favoured the first option – reducing inequality.

Moreover, the scheme is being implemented with minority support from the general public and with little regard, its seems, for the ‘common interest’. A recent Irish Times poll shows that only 26% of the population support it. In a true democracy we would educate and inform the population about the important issues and allow them to make an informed decision on that basis; not here however, because that is not the position favoured by the current system of private power.

Enda Murphy

NAMA – Who are we?

We could get into a philosophical argument but the Interim Managing Director of NAMA says:

“A State agency with a commercial remit to implement Government policy and legislation passed into law by Oireachtas”.

Presentation given by him today seems to illustrate the same old approach and mindset. Just look at the language carefully – so much for innovative thinking!

Niamh Moore

The Global Property Guide reports that Ireland’s house prices are down 14% in the last year (click here for story).  Whilst that is of concern to many home owners, it holds up relatively well compared to some countries.  For example there have been severe falls in Latvia (-59.7% year to date), the UAE (-48.1%), Bulgaria (-28.7%), Iceland (-21.2%), Russia (-19.5%) and Slovakia (-15.3%).  Interestingly, while 17 of the 27 countries have experienced house price falls over the course of the year, during the latest quarter price have risen in 16 countries and falls in only 11.  It seems as if house price falls might have started to bottom out in some countries.  It’s unlikely that Ireland will be reporting the same for some time.

Rob Kitchin

NAMA not a panacea, warns Sheehy – Irish Independent

Nama will not leave country awash with cash, says AIB – Irish Times

“If people think the day after Nama that the country is going to be awash with money – that is not going to happen,” he said. “The banks’ balance sheets will be stronger. That will help the banks access long-term funding cheaper and there will be a trickle down effect.” (Eugene Sheedy, AIB)

So NAMA will help the banks of a hole then and the rest us might – despite it being taxpayers who have bailed the banks out – get a small trickle down effect.  For an initiative that is meant to get liquidity back into the market as quickly as possible to help out small and medium sized businesses this statement from AIB’s head honcho doesn’t inspire a lot of confidence.

Rob Kitchin

It should come as no surprise that people on these shores have had difficulty understanding Nama in recent times. Nama is, after all, the language spoken by the Khoikhoi people of Namaqualand – and I don’t remember that language being on my junior cert syllabus. For a while I was struck by what seemed to be the gross inequity of landing the unsuspecting Khoikhoi people with the unenviable task of gambling billions of Irish taxpayers’ money on mini-bermuda triangles located on the outskirts of every town from Lixnaw to Letterkenny – but, of course, these are difficult times for all concerned and I figured that the Khoikhoi should have to shoulder their fair share of the burden also.

Namaqualand map

Needless to say, I have in the meantime picked up a smattering of the Irish variant of Nama – and, of course, in our local parlance NAMA (National Asset Management Agency) doesn’t lend itself very well to lyrical flourish. However, in the spirit of knowledge-sharing, I’ve decided to put forth the basic NAMA that I have acquired thusfar. Please feel free to correct my NAMA grammar.

  • NAMA will take €68bn of problem loans (+ €9bn unpaid rolled up interest) off the hands of five affected banks (AIB, Bank of Ireland, EBS, Irish Nationwide, and Anglo Irish Bank).  In recent days it has been reported in the media that Ulster Bank (owned by Royal Bank of Scotland) have shown an interest in having their “toxic” Irish-based assets acquired by NAMA rather than being processed through the UK government’s asset protection scheme (APS), the British alternative to Nama.
  • The Draft NAMA Business Plan estimates the current market value of the loans to be €47bn.  How this estimate has been reached isn’t explicitly stated in the business plan. In the discussions surrounding the document, data from CSO, ESRI, and Department of Environment has been referred to, as well as the calculation long term values based on pre-2005 property price indices.
  • NAMA will pay €54bn for the loans it acquired – a discount (“haircut”) of €23bn (30%). Critics have suggested that this 30% was opted for as a more severe “haircut” would create the need to inject further equity in to the banks in question. As it stands, the banks may still require further equity in the foreseeable future.
  • NAMA will issue the five banks with government-backed bonds (with a yield of 1.5%)to the banks, “eligible collateral” which the banks can use to borrow from the ECB.
  • The underlying assets originally valued at €88bn [LTV: 77%,  i.e. €88bn/€68bn]. This implies that the borrowers (property developers) brought, on average, 23% of their own capital to each project.
  • This fall in asset values from €88bn to €47bn suggests that property prices have fallen by 47%. NAMA’s willingness to pay €54bn for these assests indicates its believe that property prices will reach an equilibrium 40% lower than their original values. This 40% write-down brings us back to 2004 property prices. I’m not sure how 2004 prices represent some sort of equilibrium – weren’t we 7 years into the property boom/bubble at that stage? Property prices did, after all, increase by 300% over the period 1997-2007. But, far be it from me to come across all pedantic…
  • As is clear from the above, NAMA will pay €7bn (15%) more than the current value of the underlying assets.
  • 5% of amount paid will be risk sharing payments (in the form of subordinated debt).
  • The NAMA Draft Business Plan (p.10) estimates that 40% of the loans will be cashflow-generating and that 80% of loans will be repaid by borrowers. This default rate is expected to be 20%. This is based on the travails of one British bank over a 5-year period in the 1990s, when it experienced a default rate of 10%. The Draft Business Plan (in the spirit of prudence!) plums or a 20% default rate in the Irish case.
  • The repayments of 80% performing loans will from 2013 onwards change from coming in at a mere trickle to a deluge (p.10, table 5). Some commentators have pointed out that this smacks of giving property developers some breathing space in the hope that their luck will come in and they’ll be somehow able to service their loans!
  • The NAMA Draft Business Plan estimates that should property prices rise by 10% over next ten years, NAMA will make a profit. Such a property price increase, of course, is by no means a given! Even if this sounds like a fairytale, I think you have to admire the symmetry of it all: 10 years, 10% increase, 1% each year……
  • The Government has indicated it is willing to provide capital to banks if required, but only after other options have been explored (raising capital from the stock market etc).
  • 66% of the assets to be managed by NAMA are located in Ireland, 20% are located in the UK,  a further 6% in Northern Ireland, and 2.4% in the USA.  Germany (1.4%) is the largest mainland European location of NAMA-related assets. Eastern European countries, on the other hand,  account for a mere 0.2-0.5% of the assets.
  • AIB will transfer €24bn of loans to NAMA; BOI €16bn, EBS €1bn; Irish Nationwide €8bn; and Anglo Irish Bank €28bn.
  • And lastly (for now), the “special purposes vehicle” – which, by the way, was not mentioned in the NAMA Draft Business Plan: Under the EU stability and growth pact, countries are obliged to have a debt/GDP ratio of 60% or less. To keep the €54billion of government-back bonds from appearing on the state’s accounts, NAMA is to be subsumed into a Eurostat-approved special purposes vehicle (SPV) which, according to Eurostat, is to be majority privately owned and decision making autonomy. Private investors will provide 51% of the equity (the SPV will raise €100 million in capital), with the government holding 49%. If I owned 51% of anything, I would like to think that I would be calling the shots. But no, it’s just not like that. The government has claimed it will retain a veto over the decisions of the SPV board (I will return to this in this in a separate post). How’s that for pro-active decision-making!

I bet this would never happen in Namaqualand.

Declan Curran

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