(Updates with deal details starting in fifth paragraph.)
Nov. 25 (Bloomberg) -- Ireland’s National Asset Management Agency took over the site of a project known as the U2 Tower after reaching an agreement with the state-owned Dublin Docklands Development Authority.
As part of the deal, NAMA agreed to cancel a loan guarantee connected to the DDDA’s 413 million-euro ($546 million) purchase of a different site, the asset-management agency said in a statement today.
Plans to develop the Norman Foster-designed skyscraper by the rock band U2 and its partners have been on hold since 2008 after Ireland’s property market collapsed. Prime land prices in Dublin have fallen 90 percent since 2008, according to research by real estate broker Savills Plc.
The tower was to be built with funding from the band members and developers Paddy McKillen, a shareholder in luxury hotel Claridge’s, and Sean Mulryan’s Ballymore Properties, one of the major landowners in London’s docklands. Negotiations on the project were suspended by the DDDA in 2008 for as many as 12 months. The real estate market continued to decline and the 120- meter (394 foot) tower, featuring U2’s studio on the top floor, was put on hold.
NAMA will also take control of eight properties as part of the deal announced today with the DDDA, giving it “the opportunity to extract greater value from them than would otherwise have been the case,” NAMA said in the statement.
The guarantee was given by the DDDA when it bought the site nicknamed the Irish Glass Bottle in Dublin’s south docks with property developers Bernard McNamara and Derek Quinlan in 2006, less than a year before the property market crashed. The site lost 88 percent of its value, to about 50 million euros, by December 2008, the DDDA said two years ago.
The DDDA marked down the value of its property assets, including its 26 percent share in the Glass Bottle, by 196 million euros between 2008 and 2009.
The terms of the loan guarantee between NAMA and the DDDA are confidential, the NAMA statement said.
--Editors: Ross Larsen, Jeff St.Onge
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