I would like to welcome the Minister to the House. I congratulate the Government on their handling of the economy since 1987 and the great work they have done in clearing up the huge financial mess which the country found themselves in at that time. Many commentators then felt we would never be able to stabilise our debt and the various other problems which we took on, but over that period the Government have not alone stabilised that debt but have brought inflation rates down to one of the lowest in Europe, have brought our interest rates down considerably, even though they have risen in the past 18 months. Overall the Government have done a very good job on the economy and the budget is another step in the right direction to try to pull this country around. We still have a major problem with unemployment. Every party sees that as the main problem and I believe it is only a continuation of the present policies that will allow us in the long term to overcome that problem.
I would like to mention one aspect of the budget which was not covered but which I believe is very significant, that is, the urban renewal programme in designated areas. In 1986 the Urban Renewal Act designated a number of areas in Dublin and throughout the country for special tax incentives. The areas designated in Dublin were along the north and south Liffey quays, the north inner city, Henrietta Street — a small Georgian enclave in the north city — and the Custom House Docks area. The Custom House Docks Development authority was set up to administer the Custom House Docks area and Dublin Corporation were given the responsibility of promoting redevelopment in the other designated areas of the city. These areas were characterised by under-used and derelict land and run down buildings. They had very little prospect of being developed without the incentives. For instance, in the 12 years prior to designation there had not been one planning application for development in the designated area of the Liffey quays.
A problem that had to be overcome by the corporation was that only a 50 per cent capital allowance was available to developers in designated areas compared to 100 per cent in the Custom House Docks area and the other areas throughout the country. However, despite this disadvantage, the city saw the incentives as a great opportunity to review the fortunes of the inner city and embarked on a major campaign to do so.
As a first step, they advertised nationally and internationally the benefits of the incentives and advertised for sale sites in their ownership that qualified for incentives. The first major site sold for redevelopment early in 1987 was in High Street and the developers were Hill View Securities. That particular site was derelict for many years and used as a surplus car park. On the site today stands the fine Christchurch Square development, which when completed will be a 80,000 sq. feet development with a mixture of office and residential units.
Since the introduction of the incentives 42 projects have been completed, 17 are in progress and 80 are at a planning stage in the designated areas, including the new areas designated in 1990. These developments cover approximately a floor area of 3.3 million sq. feet, which represents a capital investment of about £230 million. The following are some of the developments that are taking place in the designated areas: Winetavern Street, Bridge Street Lower, Usher's Quay, Ormond Quay Upper, Arran Quay, Merchant's Quay, Marlborough Street, Sarsfield Quay, St. Michael's Close and High Street. In addition, the new developments have many fine refurbishment works carried out on buildings under the tax incentive scheme, including the following: Kinley House, Lord Edward Street, Ormond Hotel, Virgin Megastore, 10-12 Ormond Quay Lower, 1-3 Parliament Street, 24 Merchant's Quay and these complement the magnificent renovation works carried out in Dublin Castle and Government Buildings.
It is evident from these developments and from the high demand for property offered for sale by the corporation that the designated areas in four short years have been transformed from areas of dereliction and depression to areas where you can now fashionably develop, live, work or carry out your business. To encourage development in the designated areas, Dublin Corporation set up a development advisory team which consisted of a town planner, property valuer, a road engineer, an architect and a senior administrator. The team holds consultation on a regular basis with developers, architects, estate agents, property owners and other interested parties and makes planning and architectural advice freely available to those wishing to develop in the inner city.
It is the city's policy to ensure that the developments are designed and built to the highest standard and the advisory team's consultation with developers and their architects have been instrumental in ensuring this. The design of some of the fine new developments in the designated areas has evolved after many meetings between the architects and/or advisory team. The feature of the new buildings is how well they blend in with the old adjacent buildings and, in fact, complement one another. In addition to holding consultations, the advisory team have been involved in the preparation of feasibility studies for selected sites and corporation ownership and these studies have proved to be a great asset in marketing the sites and making developers aware of the development potential.
The corporation have long realised that a major contribution to urban renewal in the city can be made by civic improvements and a number of major improvement schemes have been carried out over the past few years, such as the pedestrianisation of Henry Street, Mary Street, Liffey Street on the north side and the Grafton Street area on the south side and the upgrading of connecting thoroughfares. These improvements have been continued from Grafton Street through South Great George's Street. Within the designated areas civic improvement works have been completed on the Liffey quays in the north inner city area around Mountjoy Square. The civic improvement works are a major factor in promoting development as well as bringing major benefits to existing businesses by giving the area a better environment in which to shop, live, work or carry out business.
The main type of development in the designated areas has been commercial, mainly office, and in this regard the double rent allowance and the rates remission were major factors. In essence, a firm or individual paying tax at the rate of around 50p in the £ could get a new property rent and rates free for ten years. Concern has been expressed in some quarters that when the ten year period runs out tenants will move elsewhere. I do not share that concern. I am confident that the designated areas over the next ten years will become major commercial centres and that businesses starting up now will become well established in the areas and will not wish to move elsewhere in ten years' time.
The designated areas scheme have been so successful that in May 1990 the Minister for the Environment announced an extension of the areas in Dublin and other parts of the country. Four new areas have been designated in Dublin — south inner city, Dorset Street, George's Quay and Smithfield-Capel Street areas. These will provide further scope for the redevelopment of areas and sites that hitherto have been vacant and derelict.
The city will continue to give every encouragement to commercial developments in the designated areas. I am pleased to note the changes of emphasis to more residential development in recent schemes under consideration. That is why we welcome the changes in the budget concerning section 27 and the designated areas and also the announcement of refurbishment expenditure in relation to designated areas. The 1991 budget announced that expenditure incurred in the refurbishment of property for rented accommodation within the designated areas could be set off against rental income from all sources for tax purposes. In all other areas this type of expenditure can only be set off against rental income from the refurbishment property in question. The budget also extends the scheme to the designated areas until 31 May 1993. It expires in all other areas on 21 March 1992. These changes should substantially increase the volume of refurbishment work and the creation of residential accommodation within the designated areas.
This is one of the most significant things that has happened for many years as regards inner city renewal in any budget. There was an over-supply of office accommodation in the inner city and it was very worrying that the trend was almost exclusively towards offices. Because of the changes in the budget we will now see a huge move towards residential accommodation and we will really get what we want — the so-called living city back to the centre of Dublin. I would like to congratulate the Minister on these changes because in the long term they will probably be the most significant thing to have happened for inner city renewal for many years.