I propose to take Questions Nos. 11,17 and 18 together. I would refer the Deputies to the statement I made on the Seanad Adjournment on 21 November which covered most of the matters raised in these questions.
In relation to the valuation of £3.8 million received from the Valuation Office in August 1989, the Department's understanding was that the Valuation Office determined the valuation from a commercial point of view, i.e. market value, and not on the basis of its value for appropriate use as an educational institution, and that the valuation for the property was equivalent to its land value. While professional reports are confidential I can indicate to the House that the report of the Valuation Office was in the form of a short letter which expressed the opinion that the market value of the property at that time, August 1989, was in the region of £3.8 million.
My Department have clarified that the valuation related to the position at a particular time and that, in addition, in arriving at what was a low valuation the valuers took account of specific conditions which imposed restrictions on the use of the property. For example, the sisters would be occupying part of the building for two years, which would limit development in that period, and despite this a purchaser would have to undertake over that period at a cost of the order of up to £2 million maintenance and security.
The valuation did not include a sports complex and related land which was part of the property. A separate five acres of land was included as playing fields; this area is zoned for housing and would have a substantial saleable value in its own right. The valuation was somewhat lower than the value which would have been arrived at if calculated simply on the basis of a cost per acre for the overall site area. The valuation would clearly have been much higher if the restrictive conditions had not been a factor, which was the position when the property was being acquired by UCD. In addition, the Valuation Office have confirmed that a valuation carried out in August 1989, would have little relevance at the time of acquisition almost one and a half years later, when completely different market conditions would apply.
I would emphasise that ultimately an agreed price would be determined on the basis of negotiations rather than a valuation arrived at separate from such negotiations when, of necessity, any valuation would have a subjective element. In this regard an alternative valuation provided for the Mercy Order by a reputable firm of valuers fully supported their offer for sale to my Department of the buildings and 15 acres of land for £8.5 million.
In the circumstances the valuation of £3.8 million provided by the Valuation Office would have served as a basis for an opening offer should it have proved possible to enter into meaningful negotiations for its purchase at that time. This was not possible then as the price was stated to be not negotiable and the time allowed for consideration of the offer was unrealistic.
Solicitors for the vendors subsequently stated, on 2 October 1989, that they were open to an offer but one which they confirmed would have to be firm, and realistic, in the context of the vendors' asking price of £8.5 million for the buildings and 15 acres or £10 million for the buildings and 20 acres, and be received before 5 October 1989, i.e. within three days, which was the date on which tenders were due for the entire property. This option could not be taken up because of the time scale and because an appropriate use had not been found for the property.
A greatly reduced offer of £8.25 million for the buildings and 20 acres, received in February 1990 was similarly not taken up on the grounds that an appropriate educational use for the buildings had still not been determined.
I want to stress that at no time was an offer of sale made to the Department at a price less than the eventual purchase price of £8 million negotiated by UCD.
Suggestions were made that the Department should purchase Carysfort on the basis of negotiation. This suggestion was not feasible since the Department do not operate third-level colleges. A further consideration was that unless a definite use for the premises had been established before its acquisition, substantial maintenance, insurance and security costs would have arisen. The suitability of the premises for use as a regional technical college was considered. A detailed study carried out by technical officers of the Department made it clear that it was not suitable for this purpose. Its use for the business graduate school was not in question at that time in view of the plans to develop it at Roebuck.
As the President of UCD noted in his recent statement, the situation changed in 1990 when financial problems arose regarding the development of the business school on the Roebuck site. The possibility thus presented itself for the first time that the Government's policy on expanding third level places and UCD development plans for its business school could not coincide.
The proposal by UCD to develop their graduate business school at Carysfort presented an ideal use for the property. The range of facilities available in Carysfort, residential accommodation, language laboratories, lecture theatres, sports facilities, etc., make it ideally suited as a business school.