While Shannon Development would definitely prefer if it were a closely guarded secret, the substantial war chest that the company has built up from its property dealings has been a closely guarded possession.
The stash that the company has built up has proven itself in many ways. It has made Shannon Development self-financing. On that score it has been a key defence when the company came under scrutiny or attack. So when Colm McCarthy’s ‘Bord Snip’ recommendations questioned the very purpose and reasons for keeping Shannon Development going, the agency had the instant response of pointing out that there would be no cost saving involved. Apart from less than €900,000 that Shannon Development is granted towards tourism promotion and the management of the money-sapping tourism information offices network, the company pays its own way.
The fund built up from what Shannon Development tags “property solutions” has been coveted in the past and the likelihood is that there are interests elsewhere which would dearly like to get hold of the reservoir that the agency has established and the feed of income that comes off the 57 business parks, industrial estates and technology parks that the company manages in a property empire stretching from South West Offaly to North Kerry.
When Minister Mary Harney was in place at Enterprise, Trade and Employment, which is the senior overseeing department for Shannon Development, she was anxious to turn the moneymaking property portfolio to the benefit of Shannon Airport. As the airport ran into the financial squalls, which have so far held off the autonomy promised at the 2004 break up of Aer Rianta, Minister Harney wanted the flow of income from the Development company property portfolio to be tapped into by the airport. Since her departure to the Department of Health, Shannon Development has successfully fended off any attempt for others to dip into the company coffers.
The value of the property portfolio is illustrated in the last available annual reports from Shannon Development. The tightening property market was reflected in the 2008 returns, which showed that the company sold off seven sites and 12 buildings in the year. Those transactions brought something over €10.6 million and meant that the agency just about broke even on the €11million that it ploughed into buildings and infrastructure that year. The more profitable times for property dealings were shown in the 2007 annual report. In that year Shannon Development sold off 17 sites and 10 buildings to bring in €18 million. That year saw the company invest over €8 million in properties to leave a tidy surplus of €6 million. The property empire owned or managed by Shannon Development extends to almost 2,000 acres of development land and 3.7 million square feet of industrial buildings.
When the implications of the property slump were raised at the release last July of the Shannon Development annual report for 2008, company chairman John Brassil made a tactical intervention to head off in-depth questioning. While the newly installed chief executive, Dr Vincent Cunnane had been fielding the questions, the company chairman stepped in to point out that a property slump was not the right time for disposing of property and would only serve to weaken the future value of the company’s property portfolio.