In response to a failing property market, Limerick City and County Council took the ambitious step to create the first, Local Authority wholly owned special purpose vehicle created in Ireland to deliver a city and countywide programme of property investment. It required the local authority to take on the role of developer of derelict properties in the core of the city setting up this legal entity and raising the investment funding needed to develop key strategic sites.
Innovation Summary
Innovation Overview
In 2014, the ‘Limerick 2030 - An Economic and Spatial Plan for Limerick’ was developed by Limerick City and County Council (LCCC) to address the problem of a lack of economic activity and physical dereliction in Limerick City centre. Small by international standards, with a population of 194,899, Limerick faced structural, economic and social problems that required special policy interventions and an innovated approach.
LCCC took a very bold decision to purchase a number of strategic properties in the city, which were on the market for a number of years. Linked to the financial and banking crisis in the state, the private property development market had failed. The situation of physical dereliction and lack of commercial / business /office space in the city centre led to the situation where the local authority had to act on these projects to create a public investment opportunity. The development of these strategic sites fully embrace social and environmental development for the city as well as assisting its economic objectives.
The aim of LCCC is the development of these key strategic sites, which will act as anchors for enterprise and investment development across Limerick. The innovative delivery mechanism implemented by LCCC for the development of these sites was the creation of 'Limerick Twenty Thirty Strategic Development DAC (Designated Activity Company)' (LTT) - the first, local authority wholly owned special purpose vehicle created in Ireland to deliver a city and countywide programme of investment and property development.
LCCC recognised the need to appoint a highly respected Executive Chairman and Board with strong financial management, specific business expertise and delivered by a dedicated executive team – to drive the Limerick 2030 programme of investment. LTT is tasked, in the first instance, with delivering over €500m worth of transformational investment infrastructure projects across Limerick, focussing on the strategic sites capable of record inward investment and jobs.Each of LTT projects stem from a keen understanding of the needs of the property market, market demands, an understanding of the people who live in, work in and visit Limerick. Critically, LTT’s programme is plan-led, ensuring that all developments fit under the wider objectives of the economic and spatial plan and are entirely complementary to each other and Limerick.
The core objective of LTT is to invest in Limerick through the master planning and development of sites, thereby directly impacting employment levels and improving the general socio-economic conditions of Limerick. LTT is also work in partnership with education providers to provide enhanced education opportunities in the City as well as other stakeholders to maximise the economic, physical and social return to the region.
The 5 key Strategic sites are.
• Gardens International: This office development will be completed by the end of 2018, providing 112,000 sq.ft of Grade A office accommodation. It will be Limerick’s first city centre LEED Gold Certified office scheme meeting the exacting demands of large-scale, knowledge-based enterprise looking to locate in Europe. The building is capable of delivering more than 750 jobs.
• Opera site: This 3.7 acre site will be a landmark commercial development in a regional and national context. It will be developed at an estimated cost of circa €200 million and is funded, in the main, to €170 million from the European Investment Bank and the Council of Europe Development bank.
•Troy Studios: This was a statement of ambition of the emerging new Limerick. Troy Studios is the first fully let and operational facility in LTT portfolio. The 340,000-sq.ft hub includes 70,000sq.ft of sound stages with a 50ft working height.
•Cleeves Riverside Campus: The master planning of this 10-acre site is due to finalise in 2019 but the vision is to provide Limerick with a European type development with a mix of residential, educational and visitor attracting type development.
•Mungret Park: LTT has taken the first step towards one of the largest planned residential projects outside the capital. Located less than ten minutes from the city centre, the site will have the capacity for up to 850 residential units, significantly boosting Limericks residential market.
An investment of this scale into Limerick strategic sites will have a significant social impact on the city and its hinterland. The social impact of the investment is connected with its economic (investment, jobs, skills, enterprise) and environmental impact (removal of physical dereliction by bringing strategic sites back into use for economic purposes, protection of heritage and improving the physical environment).This physical development will act as a catalyst for other investments in public infrastructure and housing, from both public and private sources.This is an innovate model,the first of its kind in Ireland, that can act as a demonstrator for other local/regional authorities
Innovation Description
What Makes Your Project Innovative?
'Limerick Twenty Thirty Strategic Development DAC (Designated Activity Company)' (LTT) is the first, local authority wholly owned special purpose vehicle created in Ireland to deliver a city and countywide programme of property investment. It required the local authority to take on the role of developer of derelict properties in the core of the city because of market failure, setting up this legal entity and raising the investment funding needed to develop the sites. LTT is led by a highly specialized company with a respected Chairman, Board and executive with strong financial management, property development and business expertise who’s focus is solely on the delivery of the key strategic sites. In place since 2016, LTT has completed ‘Troy Studios’ with the Gardens International office space due to complete by year end. Combined these sites are expected to deliver in excess over 1000 jobs, with the first production in Troy studios directly employing 320 people.
What is the current status of your innovation?
Of the five key strategic sites, TROY studios is complete and operational. ‘Nightflyers’ the first production at TROY studios was produced at a cost of €53 million with an estimated economic benefit in Limerick of €122 m. Gardens International office space is due to be completed by the end 2018 and has a current committed tenant with an occupancy rate of 52%. The Opera site has received €170 million in EU funding from the European Investment bank and the Council of Europe Development Bank and is at pre-planning stage. Over two hundred residential units are to be delivered by 2021 at the Mungret Park site with master planning of the Cleeves site expected in 2019.
Innovation Development
Collaborations & Partnerships
Collaboration took place with property developers, citizens, local and national government officials and those with sectorial expertise. The Board members of LTT include 4 public representatives and two executives from LCCC who bring a range of expertise and represent various societal interests. Citizens engaged with the development of all key strategic sites especially Mungret Park plans to ensure the plans would translate the needs of society and build trust in the Limerick 2030 plan.
Users, Stakeholders & Beneficiaries
The ultimate beneficiary will be the citizens of Limerick and local government. With the development of the key strategic sites by LTT it will directly impact positively the employment levels and improve the general socio-economic conditions of Limerick. For example, Mungret Park will provide in excess of 850 residential units, which will help, in part, to respond to the current housing crisis in the region.
Innovation Reflections
Results, Outcomes & Impacts
ECONOMIC IMPACT OF “NIGHTFLYERS” AT TROY studios (fist production)
• €53m spent over 9 months
• 320 people directly employed
• 91% Irish crew
• 91 production trainees
• €4.5m spent on Limerick accommodation/living
• €104k average annualized salary
The ambition of Troy Studios is to have this impact doubled annually. The construction of a new sound stage and support buildings is what will enable this ambition to be achieved.
The Gardens International has secured tenants who will occupy 52% of the building with a capacity within the building to deliver 750 jobs at full occupancy.
EU funding and support from two of the major European Banks totalling €170 million has been secured for the Opera site which is currently at the pre planning stage.
Challenges and Failures
As with all large scale capital projects the main challenges will be the correct scoping of the sites (delivering what is required), delivering them on time and within budget. To make sure these issues are managed and monitored, excellent project management principles and procedure along with good corporate governance have been implemented. The appointment of key personnel and board and executive level within LTT with the experience and skills of delivering major projects had also been implemented.
Conditions for Success
LTT is proving its success with the current results from Troy Studios and Gardens international to the economic impact and job creation to Limerick. The ultimate condition for success will be the rise in Limericks commercial and residential property market, increased employment and an improvement in social and economic of Limerick.
Replication
Yes with other local authorities and regional authorities both nationally and internationally.
Lessons Learned
To implement such a unique and innovate approach, the setting up a wholly owned local authority property development company, Limerick City and County Council had to be very cognisant of both ‘state aid rules’ and ‘competition law’. As all stages in the development of LTT, Limerick City and County Council checked that these two major issues didn’t impact and stop LCCC work.
Limerick City and County Council are always making sure that LTT comply with both public procurement policies and procedures along with good public sector corporate governance.
Status:
- Developing Proposals - turning ideas into business cases that can be assessed and acted on
- Implementation - making the innovation happen
- Evaluation - understanding whether the innovative initiative has delivered what was needed
Innovation provided by:
Date Published:
21 January 2016