Waterford TD John Deasy says there’s still significant scope for the Southeast to share in the €7.9bn Ireland Strategic Investment Fund — the bulk of which has still to be allocated.
Last week the Fund reported that it’s in advanced discussions with over 50 different investment opportunities valued at a combined €2.4bn.
It expects to put over €750m into leveraging additional projects this year and is open to all commercial ideas (see www.isif.ie). Matching private sector capital could double its total worth.
The Fund’s operators, the National Treasury Management Agency, are targeting a minimum average return of 4% from its entire investment portfolio. Commercial viability is a key prerequisite when it comes to sizing up applications.
With “economic impact” also part of its ‘double bottom line’ mandate, Deputy Deasy successfully lobbied at legislation stage to make sure the Fund accounts for where projects are delivered.
“I was concerned Dublin would dominate and so far that’s been borne out, with 47% of approved projects being based in the capital and the remainder spread around the country — two-thirds in the rest of Leinster and 18% in Munster.
“However, there’s still nearly €5.5bn of public capital to work with between now and 2020 so hopefully investors can come in with proposals that target those regions most in need of a lift.”
So far the state stimulus measure — using what was the National Pension Reserve Fund — has invested in capital development projects, finance schemes for SMEs, and recently, in conjunction with Glanbia, an offer of €100m in ‘MilkFlex’ loan supports to the dairy sector.
Deasy says: “I have already flagged with the Department of Transport the potential use some of this money to help generate new business in our regional airports and main sea ports, while still complying with EU State Aid rules.”
He added that regional requirements in the areas of broadband, seafood processing and advance infrastructure for industry would also make good use of some of this catalyst funding.
Taking the initiative from inception to launch
Having lobbied for a new urban regeneration scheme for Waterford to be extended beyond Georgian buildings to all pre-1915 properties, John Deasy says the revised Living City Initiative launched recently means hundreds of additional residences will qualify for the incentives.
“To definitively determine whether their property is included in the scheme people should contact Waterford City and County Council’s Economic Development team,” he said. “The map is strictly defined and there are stringent criteria and various restrictions/options that should be studied.”
Aimed at revitalising run-down town centres, the scheme will see two types of tax allowances applied to works carried out to century-old houses and certain commercial properties within a specific zone, whose scope is wider than originally intended.
Drawn up by the Department of Finance in consultation with the local Council and Revenue, the Waterford ‘special regeneration area’ — which will be operative over a five-year qualifying period — effectively comprises the entire old inner city.
As well as focusing on some of Waterford’s most historic streets and thoroughfares, the designated area also takes in some sites on the far side of Rice Bridge, including the derelict north wharves.
On the opposite bank its boundary begins beyond the brewery block and follows the line of the River Suir right along the South Quays before winding around Waterpark College as far as Glenville.
There it shifts across to the Dunmore Road, back in along Passage Road, and over to Ballytruckle and Poleberry; continues on in to Manor Street, Barrack Street, Cannon Street, Slievekeale Road, Morrissons Road, Upper Yellow Road, Military Road and Gracedieu Road; before rejoining the river at Grattan Quay to complete the main loop.
Having pushed to get the scheme widened to maximise its uptake here — “The initial 2013 version was confined to Georgian era buildings, which Waterford has very few of, so a much broader interpretation of ‘old’ was needed” — John Deasy says it gives those with the resources to renovate an opportunity to write off the cost against their income.
The first type of relief available allows owner-occupiers of properties originally built as dwellings before 1915 to carry out refurbishment or conversion works and deduct the outlay from their income tax over 10 years.
The second element will enable investors to claim capital allowances — spread over seven years — for the refurbishment or conversion of premises used for retail or providing local services.
There’s no ceiling on the total commercial spend, just the relief, which is capped at €200,000 per project — a requirement to get past EU State aid rules, which delayed the scheme’s roll-out. In all cases works must cost at least 10% of the property’s existing market value.
Some 80% of architects and auctioneers surveyed in Waterford suggested a significant direct employment impact from the scheme, which is also being introduced in other main urban centres, including Kilkenny and Cork.
“Refurbishment of old buildings is very labour intensive and high-standard work, and over half the capital spend would be expected to go on tradespeople and related services,” John said.
Detailed proposal submitted by council; John puts it to CEO
The chief executive of the IDA has told Waterford TD John Deasy that the agency will consider a major re-fit of the former recycling plant in Dungarvan as a base for new industry.
A comprehensive proposal to renovate the vacant Shandon facility was submitted to the agency by senior Waterford and City Council officials last week following contacts between Mr Deasy and the IDA.
He then raised the proposal with IDA chief executive Martin Shanahan when he appeared before the Dáil Public Accounts Committee on Thursday.
The local Fine Gael deputy has held a series of meetings with senior IDA executives over the past number of weeks: namely, chairman Frank Ryan, new South East Regional Manager Anne-Marie Tierney-Le Roux, and the CEO. He also spoke with Enterprise Minister Richard Bruton last week about the proposal.
These discussions included the possibility of an advance factory for Dungarvan. “While there are other factors involved, the availability of suitable buildings, both office and manufacturing units, is critical to try and draw investors away from the likes of Dublin and Cork,” Mr Deasy said.
"Council officials believe that, properly refitted, it would compare favourably with the new building at the IDA Technology Park in Waterford."
Martin Shanahan told him the IDA is “happy to engage” with the local authority. “We will examine that and come back to the council’s chief executive in relation to the proposal he has put forward to see what can be done... and within what timeframe.”
It was announced last week that a five-year, €150 million property investment programme is to be rolled out by the IDA to attract foreign direct investment into the regions — including another new advance technology building for Waterford in 2017.
While positive, “it’s too far away,” Mr Deasy said. And though hopeful that a client company will be secured soon for the just-completed 25,274sq-ft advance technology building in Butlerstown, the Dungarvan TD said a similar ‘turn-key solution’ is needed in the west of the county.
Martin Shanahan said advance facilities are “hugely important for us”, and agreed that the funding made available to the IDA for property investment could “potentially” be used to upgrade suitable facilities such as the one in Dungarvan.
Deputy Deasy believes revamping the 27,000sq-ft plant, “which started life as an advance factory before being adapted to accommodate the Materials Recovery Facility, would make sense. Returning it to its original purpose does seem a logical move at this stage. It needs an internal overhaul and an external upgrade, and the detail of that has been outlined to the IDA.”
He added: “Council officials believe that, properly refitted, it would compare favourably with the new building at the IDA Technology Park in Waterford. Another plus is that it wouldn’t require planning and could become a ready-made facility very quickly. Also, the unit sits on a fully-serviced site of almost 4 acres, with plenty of scope for expansion.”
Cllr Damien Geoghegan, Mayor of the Dungarvan-Lismore District, says “retrofitting the plant for a new industry would make it a very marketable proposition, and hopefully accelerate the delivery of additional employment to the town and the wider west Waterford area. The proposal that’s being looked at would be an ideal fit with the enterprise agencies’ new regional strategy.”