12 May 2009

I’m not sure if it's the case that I don’t understand the purpose of Sean Dunne’s proposed Developers-Against-Nama-Association, or that I do and I just don’t give a damn.
 
Either way I’ve been having a hard time getting my head around the whole National Asset Management Agency thing myself: it’s characteristically hard to find anything that explains it in the thought-through-detail you’d find if we were living in the US, Germany or wherever. And on that basis alone, it deserves to be rejected.

Am I right in understanding that the Government is basically intending to buy dodgy assets from banks at alleged bargain prices in the hope that most of these assets will eventually be worth more than they (we) paid for them and that somehow, God willing, everything will turn out okay in the end? Now, sue me if I’m wrong, but I’m guessing most of these dodgy assets, directly or indirectly, involve parcels of land for which planning permission has been granted for large development schemes. And I would imagine that some of these assets are parcels of land in inner urban locations for which enormous amounts of money were paid in the hope of getting planning approval for huge development projects and for which planning approval was never granted. In other words, some of these presumed assets may not be assets at all. For example, is the Sean Dunne land in Ballsbridge (or some derivative of it) one of the dodgy assets the banks will pass on to Nama in order that they may go back to the good old days of voracious usury? I’ve no idea if that particular Site Of Doom is actually one of the assets we might end up owning but, if it were, consider what might happen: the tax payer becomes part owner of the site at the knock down price of, let’s say €200m. In order for us, the tax payer, to get our money back on the investment, we’d still need to develop the site to practically the same degree of intensity which Dunne was famously proposing to do. In other words, we the people would be lodging a planning application to Dublin City Council for approval of some thirty storey towers. Under such circumstances, eye ee, where the fortunes of the entire country were riding on the back of the success of a planning application, the Could DCC or An Bord Planeala refuse such an application?

Maybe I’m all wrong about this, but it seems to me that if we accept the NAMA proposal, we’re practically guaranteeing ourselves that the planning mess we created in this country over the past fifteen years will continue at least until we get back whatever money we put into the NAMA: in order to realise the inflated value of most of these assets, we'll have to grant permission for very large scale developments whether we want them or not.  In other words, we will be abandoning our planning system for at least a generation.
 
What’s wrong with just liquidating the banks?

If I’m getting this all wrong, let me know.

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