NAAS Town Council has been thrown a financial landline by the decision to remove an expensive E1m.-an-acre loan from its books.
As reported in last week’s Leader, the State has effectively taken responsibility for the huge loan taken out by the local authority for land close to the Kildare County Council offices, off the Newbridge Road.
The E11.8m. loan was taken out to purchase 4.82 hectares (11.9 acres) at the former Devoy Barracks site in 2001.
The cost of servicing the loan – E600,000 – was placing a huge strain on the town’s council finances.
It was taken out with the intention of providing housing to meet the demands of people seeking residential accommodation from the council.
However no houses were built and land remains unused, except for parking purposes.
The cost of servicing the loan effectively meant there was less money available to provide other services or to provide a meaningful rates reduction for local business owners when the budget was adopted earlier this year.
Town Manager Eamonn O’Sullivan clashed with Cllr. Darren Scully over how best to deal with the loan, which was taken out from the Housing Finance Agency.
Mr. O’Sullivan felt the best approach was to have the loan taken into the Land Aggregation Scheme – effectively a NAMA-like arrangement but for local authorities rather than private developers.
Cllr. Scully felt that the HFA should be approached with the aim of having the terms of the loan re-negotiated.
Now the State has taken over the loan at its calculated value on June 30, 2010, which was E10.2.
The Department of the Environment Community and Local Government has stressed there is no loss to the exchequer as the loans would have had to be repaid anyway. Effectively the state takes over the loan and the burden is lifted from the local authority, so Naas Town Council won’t have to make any further repayments on the approved applications.
The Housing and Sustainable Communities agency will be responsible for the management of lands transferred under the scheme.