Council to pay €400,000 in interest on fallow land

Interest payments on loans for land bought by Galway City Council at the height of the construction boom, but which was never developed, will amount to more than €400,000 next year.

Chief Executive of the City Council, Brendan McGrath, confirmed that €400,000 was the ‘interest-only’ payment to the banks for parcels of land that were bought for social housing but were never developed.

The lands, in Knocknacarra and Rahoon, were not transferred to the Land Aggregation Scheme, which was effectively a NAMA for local authorities set up by Government during the economic crash.

Mr McGrath confirmed to Cllr Collette Connolly (Ind) that the total amount of monies owing for the land purchases was €32 million; and it was costing €400,000 annually to service the debt.

Cllr Connolly said it was “madness” that the Council pays so much to private banks to service loans on land that was never used as it was intended – to build social housing.

She said the City Council was “allergic to building social housing”, even though that was the only valid solution to tackling the housing shortage.

Cllr Connolly said that the €400,000 would only be a drop in the ocean in terms of building new houses but it could have been put to better use, such as for housing adaptation grants for the elderly.

Some of the land that was never used is within the footprint of the proposed Galway City Ring Road (bypass).

In response to Cllr Frank Fahy (FG), Mr McGrath confirmed that the Council would be recouping some money for that land when Compulsory Purchase Orders (CPOs) are issued this week. He confirmed the amount of money received for the CPOs would be based on the market value of the land now, and not based on the amount paid for the land at the height of the boom over a decade ago.