A Tipperary councillor has called for an “audit or investigation” into a disputed county council land sale to a big developer, after questioning the deal for months over planning issues.
At issue is a 2019 transaction in which Tipperary County Council transferred the freehold interest in Clonmel Park Hotel free of charge to Tetrarch Capital, one of Ireland’s biggest real estate investors.
The freehold interest gave Tetrarch absolute ownership of the hotel lands. It later made a big return when selling the hotel.
The sale by the local authority was foreseen in a 2003 lease between the former South Tipperary County Council and the original developers, the Poppyfield Consortium partnership. It went ahead even though the hotel did not comply with planning permission, breaching a lease requirement.
Niall Dennehy, a former mayor of Clonmel, says councillors who voted to endorse the deal were never told that requirement was not fulfilled.
[ Row over a Tipperary land deal involving the council, a hotel and a property firmOpens in new window ]
Correspondence from 2014 shows the breach was recognised within the council at that time, when a planning official said it “not possible” to state the building was “in line with the permissions”.
However, the council has now said “there were no planning enforcement issues on the planning file” and that it was too late for enforcement action when the freehold was transferred.
The building was “substantially in compliance” with planning “apart from some design variations”, which were “not regarded as significant enough to attract enforcement proceedings” in the 20 years since works were carried out,” the council said.
“The lease required the hotel to be built ‘in accordance’ with and not ‘in compliance with’ the planning permissions. ‘In accordance with’ focuses on agreement or alignment, while ‘in compliance with’ emphasises adherence to specific rules or regulations.”
Saying he was not satisfied with council answers, Mr Dennehy wants the Department of Housing and Local Government to examine the affair.
Asked about Mr Dennehy’s concerns, the department said Minister for Housing James Browne had “no role” in such matters. “Matters relating to the enforcement of planning rules are for the local authority concerned,” it said.
The council insists “at all times acted appropriately, transparently and in accordance with its statutory remit” in the deal.
“The executive of the council has made every effort to allay any concerns that Cllr Dennehy has, that the disposal of these lands was in some way flawed or inappropriate,” a council statement said.
Mr Dennehy, who is now an Independent and was formerly a Fianna Fáil member, said the executive did not fully set the scene before he proposed the December 2019 council vote on the deal.
“If all the information which is now available to me had been made available to me at the time, I would not have proposed the adoption of the said section 183 notice disposal,” he said, citing the legal clause underpinning the deal.
“I think that the department itself needs to embark on an independent audit or investigation of corporate governance at Tipperary County Council … It should specifically examine this transaction.”
Tetrarch acquired the hotel for €4.48 million in May 2019, moving quickly to seek the freehold interest, which the council granted. In 2022, Tetrarch sold the property to Talbot hotel group for €7.95 million. Tetrarch had no comment for this piece.
The council previously said the freehold sale was a “tidying-up” action required under an old lease and “did not amount to the acquisition of a valuable interest”.
The “peppercorn” rent meant this was not the sale of an interest in which the council was entitled to a “market-value” rent, it has said.
The hotel became embroiled in the financial crisis when the loans of Poppyfield, the original developer, went into Nama, the State agency that took over troubled property loans from domestic banks post the 2008 crash.
Poppyfield’s partners included John Fraher, who went bankrupt in Britain in 2013. He has filed a Revenue complaint saying Poppyfield used his tax number without his “knowledge or consent” after his bankruptcy.
In recent months information came to light showing the hotel did not follow certain planning restrictions, meaning some terms were breached. Instead of 96 bedrooms, there were 99 bedrooms.
There was no enforcement action even though the breaches were known. But the council later said that was “probably indicative of the relatively minor nature” of the variation.
“In response to the allegation that this council ignored the contract and planning breaches in considering the section 183 disposal, this is incorrect,” the council said.
The purpose of the disputed lease clauses was to ensure a hotel was built in a timely fashion. “In the spirit of the agreement this condition had been met, with the hotel opening in June 2006,” the council said.
The regularisation of planning variances was a matter for the original developers, it added.
