State and Goodman reach deal on âŹ10m department lease error
JENNIFER BRAYThe State has reached an agreement on an estimated âŹ10 million overpayment for the Department of Healthâs 25-year office lease, which will the see the tenancy extended rather than the money being repaid.
It emerged in 2018 that there was a âmismeasurementâ by the Office of Public Works (OPW) of the floor space of Miesian Plaza on Dublinâs Baggot Street before the lease began in December 2016. The building provides accommodation for more than 900 civil servants from the Departments of Health and Children, Finance, and Public Expenditure and Reform.
Talks between the State and landlord Larry Goodman have been ongoing for years in an attempt to recoup the extra money paid due to the mistake.
Minister of State for the OPW Patrick OâDonovan said the parties had agreed to extend the lease on Miesian Plaza by nine months at a nominal rent of âŹ10. Given the State paid âŹ8.25 million in rent last year, this would equate to it receiving an effectively payment-free lease term worth nearly âŹ6.2 million.
The Government had previously estimated that over the term of the lease some âŹ10 million would be lost because of the error.
While the Minister did not reveal how much, if anything, had been lost because of the agreement, he maintained that âthe OPW considers that this agreement is the best possible outcome achievable for the taxpayer in all the circumstancesâ.
In a statement to Fine Gael TD Jennifer Carroll MacNeill, Mr OâDonovan said that âwhile this issue of measurement was unfortunate and should never have arisen, I would acknowledge the efforts of my own officials and the representatives of the landlord in bringing the issue to a conclusionâ.
âWhen the issue was identified, the OPW engaged with the landlord to mitigate the effect of this issue in a manner that would be acceptable to both parties,â he said. âA deed of variation has now been finalised to give effect to this agreement.â
The Public Accounts Committee has examined the issue on multiple occasions, and last year produced a report expressing âconcern that the OPW will not succeed in preventing taxpayers being exposed for an additional âŹ10 million that is a direct result of a fundamental error by OPWâ.
Sinn FĂŠin TD Brian Stanley, who chairs the committee, said he would be bringing the OPW before the committee within the next two months and would be seeking full information in relation to the deal that had been done. âI want to see that there has been full due diligence here, and that the taxpayer has not been left exposed.â