November 2009

As it has been for over a decade, Dublin Docklands is still making headline news but in the current economic crisis it is for all the wrong reasons, What has transpired in this part of Dublin city over the last decade epitomises the best and worst of Celtic Tiger Ireland. It is indisputable that a major transformation has occurred making the area unrecognisable from the docklands of the late 1980s and many improvements have been made in areas such as housing, employment and education. But for over two decades, local communities and others have questioned the means employed to achieve this regeneration and the role of the state and its partners in fuelling what was perhaps one of the greatest speculative booms ever generated.

According to weekend media reports, two independent investigations into the financial and planning activities of the Dublin Docklands Development Authority (DDDA) have been commissioned by recently appointed Chair of the Board of Directors, Professor Niamh Brennan.  One of the key impetuses leading to an emergent questioning of the activities of the DDDA has been the disastrous consequences of a decision by the DDDA Board to enter a partnership arrangement with Bernard McNamara and Derek Quinlan to purchase the Irish Glass Bottle site for €413million in late 2006. Writing in the Irish Times on 4 December 2006, John McManus questioned the ethics of a State development agency getting involved in such a massively leveraged project highlighting the conflict of interest inherent in the DDDA acting as co-developer and planning authority. As recently as last month, this site was devalued by 85% to just €60million. Originally financed by Anglo-Irish bank and subsequently transferred to AIB, it is likely that these loans will be transferred to NAMA so the tax payer is exposed by a state agency for the second time to significant risk on this one site.

Yet the Irish Glass Bottle site is only the most visible project on which the activities of the DDDA have been less than transparent. The controversy over the redevelopment of the Stack A warehouse in the north docklands, now known as chq, highlighted the total lack of transparency and accountability within the DDDA. In internal confidential correspondence at the Department of Arts, Sport and Tourism, one senior government official argued that ‘it is the view of this division that [the DDDA] setting this target range for a brand new museum is tantamount to vetoing the concept’. In a clear case of the tail wagging the dog, the unlimited and uncontrolled power of the DDDA to force Government acquiescence on key projects within the docklands is a matter of serious concern.

But why has it taken a financial crisis for the activities of this state agency to come under such scrutiny? How could it have been considered acceptable practice for a state agency to become so entangled with private sector interests and a solely profit-based vision of acceptable land use and functions? But lest we get carried away, the reports about the DDDA are just the latest in a series of revelations about the actions of some state agencies during the boom. What is more worrying is that while there were many people sounding the alarm bells they went unheeded for as long as the boom party remained in full swing. Even those at the heart of Government seemed to brush aside the questionable tactics of some state agencies. For example on the morning that the news broke that the national public transport company (CIÉ) had entered a private partnership arrangement with Treasury Holdings to form the Spencer Dock Development Consortium, the Minister for Transport and by extension the cabinet had no knowledge of it. CIE pitted themselves against other state agencies such as the DDDA and Dublin City Council in the bid to profiteer from this prime site at the heart of the north docklands.

So this maverick buccaneering approach appears to be almost systemic among some state agencies. Appointments to the Boards of the DDDA, CIE and other state agencies including NAMA are within the gift of the relevant Minister. If the failure of these Boards to perform their scrutinising function with relevant local government officials, accountants, consultants, bankers and others literally ‘on board’ why will NAMA be any different? If the Government has failed to do its job and control the operations of these other institutions, will they succeed with NAMA? If the same political ideology underpins decision-making, will we just have old patterns repeated? Will we ever know what the taxpayer has taken on, at what real cost and to whose benefit? It is time to broaden the scope, to appoint people with no vested interest in the operation of these agencies. Maybe with a bit of common sense prevailing the job that state Boards are tasked to do will actually get done. Now is the time to make the change. Although unlikely, NAMA could be the first step in a new dawn for Irish politics if only the Minister goes beyond the same old tired faces.

Niamh Moore

Much as NAMA merits ridicule and revulsion, it would be a mistake to focus our discussions and analysis on NAMA itself.  Ultimately, NAMA exists because of key dysfunctionalities both in global capitalism and its petty Irish variant, and we should focus on these dysfunctionalities rather than NAMA itself.

This is not to say that we should ignore NAMA in our analyses.  There are two key and interconnected aspects of  NAMA upon which we should focus as geographers.  Firstly there is the very strong geography associated with the building bubble which triggered off the crisis and NAMA i.e. the concentration of bubble investments in the Dublin region and especially the crazy prices being paid for property in the Dublin 4 area, as well illustrated by Sinéad on Monday.  Secondly, there is the geography of sell-off of toxic assets which is what NAMA will essentially be trying to do over the next several years.  A key feature of the whole NAMA debate/discourse has been the absence of any broader vision apart from the singular focus on maximising the return to the state of the sale of NAMA assets.  There has been no mention of the broader economic and social dimensions of the pursuit of high property prices which this focus necessarily entails e.g. keeping house prices above affordable levels, deterring inward investment or skilled in-migration.  There has been no mention of the idea of diverting empty or uncompleted houses to the homeless or those who cannot afford proper accommodation.  And what are the chances that NAMA will utilise its huge property portfolio as a vehicle for creative and imaginative urban planning?

Nevertheless, in my view our prime focus as geographers should be on the processes which brought NAMA into being in the first place, and the negative outcomes of these processes such as the exclusion of large swathes of the population from access to decent housing, the condemnation of further swathes to lengthy commutes with all their environmental and social downsides, the destruction of urban and rural landscapes by ghastly housing developments with no social facilities attached, the plastering of flood plains with concrete with no accountability on the part of those responsible and, following the crash, the creation of ghost estates and the sacrificing of public services for the needy in order to bail out the very people who got us into this mess in the first place.  We also need to look at how communites have been coping, or can cope, with the impending nightmares of NAMA-land and how resistance can be mobilised against the “There is no alternative” brigade.  Above all, we need to identify a different vision for Irish society in which bubble behavious has no part.

In terms of specific pieces of research, the following ideas were aired at last Monday’s sessions:

Local inventories of empty and unfinished housing, shopping and commercial developments, and of land bought for development purposes but now lying idle.  Can we organise geography students to carry out the required research on the ground?  This would be a wonderful form of education and consciousness for the students concerned as well as generating the data required for a detailed deconstruction of the NAMA-scape.

The local geographies of commuter towns created by the bubble, and the ghost estates created by its bursting.

How are people trapped in negative equity and in unfinished housing developments coping and organising?

New forms of land management and planning which give priority to social need over private profit.

New forms of regional planning which will spatially disperse development pressures and cool down property markets.

How have cities and communities in other countries been impacted by the downturn and how are they coping?

What will be the spatial impacts of the measures to be introduced in the forthcoming budget?

The distinctive geographies of the new unemployed.

The geography of loan defaults and foreclosures.

Emerging geographies of post-crash social pathologies (drugs, illness, suicide, crime, violence).

Identify and monitor a set of indicators of distress arising from the crash.

A geography of An Bord Pleanála decision-making and how this might have fed the crisis.

Create a central repository for titbits of information relating to the crisis which may be of use for research purposes.

Proinnsias Breathnach

One of the major ‘known unknowns’ about Ireland after Nama is whether there will be any economic growth in the country during Nama’s lifespan. And such growth is needed if property prices are to rise 10% in ten years. There are many reasons for pessimism here. The U.S. capitalist economy isn’t exactly surging back to life. And even if it does, the U.S. is so riddled with debt that any recovery won’t necessarily mean demand for services or good produced in Ireland. China, to which many commentators look for signs of a global recovery, is too export-dependent and too dominated by its coastal elites to lay the conditions for a much-needed boost in demand from its rural sector – a source of demand that was critical to the success of other Asian NICs (that is, ‘success’ as measured by surging economic growth rates, if not in equality).

So, if not from resurgent growth in the U.S. or China, just how will the anticipated recovery occur? Or, is there some other reason to be cheerful? Might it be that Ireland’s European partners offer succour here? Are we on the verge of a new period in Ireland’s economic relationship with Europe? Or, as lots of people in the country expect, is Ireland just on the verge of a sustained downturn / fully-fledged long term crisis? If the latter, how can Nama expect to return a profit to Irish taxpayers? And if it will make a loss, just how much of a loss, year-on-year, are we looking at? And precisely which sectors of Irish society are going to have to pay for those losses?

Alistair Fraser

Here’s something to ponder – how many of the 21,500 pieces of land and property to be acquired by NAMA is presently under water given the widespread floods across the south and west of Ireland? Given the propensity

Apartments next to river

in recent years for developers to build on floodplains, and the complicity of local authorities in letting them, one has to wonder whether it would make sense to allow such sites to be developed in the future?

Cork flooding

Of course, if such sites are left as agricultural land (or in some cases as marshland) then their market value becomes significantly lower than the prices paid for them by both the developer and in turn the government (probably around only 15% of the zoned development value). In such a situation the government will only be able to realise an asset’s potential worth by pushing ahead with irresponsible development – either way it would constitute a potential poor investment of tax payers’ money.

Rob Kitchin

Simon Carswell, the Finance Correspondant of The Irish Times, published a piece on “The Anatomy of NAMA” on Friday November 13th, 2009. There are some basic facts and figures about NAMA in it. It is available as a PDF document here.

"The Anatomy of NAMA" by Simon Carswell in The Irish Times (13/11/09)

Delphine Ancien

During the period of the Celtic Tiger, Ireland experienced an unprecedented level of growth and prosperity.  One of the most significant outcomes of this boom was the transformation of the built environment.  Housing estates sprouted up like weeds throughout the countryside, while cities and towns were increasingly characterised by the spectacle of speculation and spectacular transformations in the property sector.  The advocating of the creation of regional ‘Gateways’ and ‘hubs’ in the National Spatial Strategy (NSS) was central in driving a re-emphasis of Irish spatial policies on urban areas, with the major force being towards the development of a number of strong clusters of cities and towns to counterbalance the economic dominance of Dublin.  Within this system the imperative was on local authorities to produce development strategies that linked up with the ideals of the NSS, in order to draw down funding earmarked through the specifically formulated Gateway Initiative Fund.  Local authorities were therefore encouraged to plan in an ‘entrepreneurial’ manner; producing strategies that sought to guide development and investment, instead of planning acting as a controller and regulator of development.  Thus Irish towns and cities produced a series of plans that were concerned with growing their urban areas through investment in business, retail and residential spaces.  New developments of apartments, office blocks and shopping centres became a barometer of success indicating the growth in importance of different towns and cities.

In the larger cities, this often took the form of large-scale strategies to transform significant parcels of land.  Dublin was the first Irish city to play around with urban strategies of this ilk.  Docklands regeneration and the transformation of Temple Bar into a cultural or ‘creative’ quarter provided the basis of much of the new growth and investment in the city during the 1990s.  At the beginning of the 2000s similar strategies were launched in places like Cork and Limerick.  Like the plans for Dublin, those for Cork and Limerick were heavily dependent on private development sector investment, while still being reliant on central government to finance the upgrading of infrastructure that such projects required.  This is indicative of a general trend globally towards viewing cities as drivers of economic growth and as sites which compete with each other for investment.  Many critics have suggested the highly unequal geographies that such entrepreneurial urban policies create – both in terms of winner and loser cities, and winner and loser areas within cities.  Ireland has similarly been affected by these trends.  During Dublin’s property and investment boom existing working class populations were increasingly marginalised by new developments geared towards an influx of upwardly mobile middle class workers in the city’s emerging financial and knowledge industries.  More generally, the state’s support of the property industry pushed up average house prices to unsustainable and indefensible levels, which the now plummeting prices in this sector is testament to.

Following on from the recent recession, the assumptions that underpinned this model of urban and economic development have been fundamentally challenged.  Post Celtic Tiger Ireland is increasingly haunted by the spectre of an over-inflated property sector that fuelled the excesses of the boom.  The primacy of property development and speculation to the apparatus of the Irish economy, combined with irresponsible lending practices by banks and poor policy regulation in both sectors, has left a banking system bereft of credit, choking with ‘toxic’ debt, and a landscape charred with these aborted plans and failed spaces.  Within a context where capital funding has been removed and developer and investor confidence has plummeted, as banks balk under ‘toxic debt’ and flagrant corruption and the National Asset Management Agency has been established to resuscitate the bloated property industry, an urban ‘growth agenda’ no longer seems tenable.  Nevertheless, this rationale continues in the wake of recession.  Political and popular discussion is still concerned with getting the economy ‘performing’ again as opposed to dealing with social problems created by both the recession and the growing inequality of the boom that preceded it  Late bloomers like Limerick and Cork are now characterised by a silent echo where the spectacular growth plans used to resound, as mega-developments along the waterfront fully poised to proceed a year and a half ago are now conspicuous though the absence of any media fanfare surrounding them.  The entrepreneurial urban growth model was based on just that: the continuation of urban growth.  As the current moment suggests this was an unsustainable demand.  So far the state’s response to the crisis, in terms of recapitalising the banks and the establishment of NAMA has been an attempt to resuscitate this same system in its old form.  As we are now all feeling the sting of the over reliance on these type of policies, we should be questioning do we want a return to this boom-bust cycle, bearing in mind that the next recession will be just around the corner.  If not, then what are our alternatives for our cities and towns?  What priorities do we have and what development agendas do we now need to be pursuing?  The spatial impacts of the economic crisis warrants consideration, lest we fall into the trap of seeing the economy as ‘up in the air’ as opposed to written on the ground.

Cian O’Callaghan

Anglo Irish bank headquarters - Docklands - Dublin

The current moment is a critical one for Irish geography. The NAMA (National Asset Management Agency) legislation will have dramatic impacts on the spatial and economic profile of the Irish landscape. Already the nation is increasingly haunted by a series of ghost estates, while many new office and apartment developments stand deathly still echoing their own emptiness. The primacy of property development and speculation to the apparatus of the Irish economy, combined with irresponsible lending practices by banks and poor policy regulation in both sectors, has left a banking system bereft of credit, choking with ‘toxic’ debt, and a landscape charred with these aborted plans and failed spaces. The outcomes of this type of ‘rip-and-run’ development are only now beginning to be felt.

This type of spatiality is arguably the product of a set of neoliberal policies that have increasingly characterised the Irish political landscape over the last two decades. Looked at through the lens of theories in economic, urban, and political geography, the neoliberalisation of the Irish state has broadly resulted the increasing withdrawal of state support for social policy, in favour of policies supporting businesses and property developers. Spatially, this has meant burgeoning emphasis on landscapes of consumption, the financialisation of the city, and the disenfranchisement of working class populations. The over-reliance on policies of this sort left Ireland vulnerable to the global crash of 2008 and, in part, heralded in a national recession. With the NAMA legislation, the state’s response has been to attempt to solve a neoliberal problem with a neoliberal solution.

With this in mind we organised a one-day round-table discussion on ‘Geography after NAMA’ on November 23rd, 2009, which accounted for a planning/policy and a disciplinary perspective on this statement. The aim was to stimulate a discussion on the state of play for Irish geography and the geography of Ireland in the wake of the recession, to provide a statement of where we are at, how we got there, where we are headed, and what should geographers be doing. The goal is to stimulate an agenda of questions with which to interrogate the current moment, and the future impact of NAMA on Irish space, society, and politics. By situating Ireland within its relational geographies and drawing upon what we now see as global economy, urban geography and spatial and social theory, we seek to provide a platform upon which to envision a series of alternatives – narratives, policies, futures – with which to address current problems through a geographical or spatial perspective. This meeting is meant to form the first in a sequence, with the aim of publishing a multi-authored statement on the theme, and creating some sort of media profile for Geographical perspectives on the economic crisis. This blog was created with a view to emulate debate on an on-going basis, providing a platform to share thoughts, ideas, comments and reactions around the geography and spatiality of NAMA and the economic crisis, as well as a forum for proposing alternatives.

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