The battle for Cork – Two Out of the Three Private Hospital Plans In Disarray

There has been a lot of talk recently about the competition between private hospitals in Cork and the three way battle to be the first open there for decades with proposals from the Beacon Medical Group and Sheehan Medical that were initiated during the boom and the newcomer to the market O’Callaghan Properties.

The problematic co-location proposals by the Beacon Group at CUH have been well documented in Ireland. In June they emerged from An Bord Pleanala with an approval only to find that during the year the project was delayed, the investment market has changed drastically and what they are now facing is very a different situation than before, with funding now much harder to raise.

The Beacon Group stated publicly on the front page of the Cork Echo on 18^thJune that, whereas before they could have got funding from three banks, now they are having to approach eight. Not a nice situation to be in especially during a recession, but it is symptomatic of how much the business sector can change whilst they are stuck in protracted delays caused at An Bord Pleanalla.

Another very high profile project that has run into problems this week are the proposals by O’Callaghan Properties  for a private hospital on Western Road, Cork City, which is now the subject of multiple appeals to An Bord Pleanalla. This project has been very highly publicised despite not have planning permission, with Owen Callaghan himself appearing on Newstalk’s ‘Down To Business’.  In my eyes this is always a dangerous strategy in which clients are setting themselves up for a fall until their projects have passed the appeals process, which is why I advised my clients Sheehan Medical not to announce their proposals until they had a project with full planning and were sure that it was definitely going ahead.

The O’Callaghan’s proposals want to redevelop a residential site where they already have planning permission for apartments although this was not without its problems and itself went to An Bord Pleanalla where the size was drastically reduced in order to protect St Finbarre’s Cathedral. The hospital proposals went way past this protected view and were only marginally reduced when the City Council granted permission.  This now means that another private hospital is bogged down for year at An Bord Pleanala and possibly faces refusal as it contrary to the residential zoning of the site and the surrounding area, and it severely harms the views and setting of the Cathedral.

As a former planning consultant, abeit not for the past ten years, I am only too aware of the ups and downs of property development. In Ireland the system is particularly problematic because any third party can appeal a planning approval. This means anyone anywhere in the country can appeal against any planning application as long as they objected to it during the application consultation period. This system is open to widespread abuse with serial objectors looking to hold developers to ransom in return for withdrawing their objections or appeal.

Sometimes though the system allows those with genuine concerns to make their feelings known and helps keep an eye on powerful developers who find it all too easy to get their developments approved by the local councils. This all leads to a very uncertain planning process. What makes the problem worse is that An Bord Pleanalla currently takes ten to twelve months to come to a decision on appeals, this is especially problematic in the current market when developers are looking for investment because things change rapidly and to have to suffer uncertainty for a year whilst in appeal means developers have to go back to the drawing board when fundraising as Beacon now are now finding out.

I have seen this first hand since acting on behalf of Sheehan Medical (the Chairman was the founder of the Blackrock Clinic and Galway Clinic). When I was brought on board to handle their PR they had already been embroiled in a development site in Bishopstown Cork that was at appeal. The appeal delayed the project by two years and added millions of euros to their costs. I advised them to re-structure their approach to obtaining a site and only go for sites that had planning permission, thus taking away a planning risk. This led us to finding the City Gate business park in Mahon, which was fully built with full planning permission for a private hospital. Bingo! The deal was announced in June http://www.republicpr.ie/?p=45 and gained wide national publicity in broadcast media and press. The simplicity of project i.e. fully built with full planning permission meant that all was needed the fit out of the building allowing us to announce the opening of the hospital on 19th April next year only ten months after the deal was announced.

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