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Plan to build social housing in Limerick faces fresh uncertainty over funding

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Plan to build social housing in Limerick faces fresh uncertainty over funding

Plan to build social housing in Limerick faces fresh uncertainty over funding
January 06
11:45 2022

An examiner appointed to a construction firm that has been building a planned social housing development in Limerick has so far failed to secure a scheme of arrangement that would see lenders from an Estonia crowdfunding platform repaid, according to a financial intermediary.

Dublin-based finance firm Property Bridges, which originated loans via Estonia’s Evoestate website for Limerick’s Top Drawer Developments, has told investors in the Baltic country that it intends to oppose an extension to the Irish company’s examinership next week if no solution is found.

That could put a plan by housing charity Focus Ireland to buy the homes for social housing in difficulty.

Top Drawer secured the finance via Property Bridges in order to buy land at Pallaskenry in Limerick and develop 16 houses there.

Limerick City and County signed a fixed-price contract in August 2020 to buy the homes at the more than €3.5m development, called The Orchard Estate, following approval from the Department of Housing, Local Government and Heritage.

But as it was a fixed-price contract, the Council had no mechanism to seek additional funding for the planned acquisition from the Department as inflation costs and supply chain issues hit the overall price of the project.

The Council then assigned the purchase contract to housing charity Focus Ireland, which agreed to pay a materially higher price for the 16 homes than had been agreed by the Council with the developer.

The Council claimed that not doing so would result in an unfinished ghost estate, “with no plans for construction nor any delivery of social housing units in the short to medium term”.

Property Bridges had told investors in Estonia last year that the examiner of Top Drawer Developments had made significant progress in securing alternative funding for the Co Limerick development. 

The examiner believed that a planned scheme of arrangement would provide for the redemption of the loans sometime in December, investors had been told.

“Whilst the examiner has engaged intensively with all the stakeholders involved, he has thus far failed to finalise a scheme of arrangement that would see Property Bridges repaid,” noted the Dublin finance firm in an update this week to investors in Estonia.

Property Bridges said it will oppose any efforts by the examiner next week to secure an extension to the examinership if no solution can be found.

Source: Independent.ie

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