DSD spent £670,000 suing city developer

Over 1,053,000 was spent on the Department of Social Development (DSD) site over the past decade despite its remaining dormant for the ten year period.

It has now emerged that the DSD forked out almost 700,000 of this for compensation and legal fees arising from legal action taken against a development company granted a licence to build on the Foyle Street site in 1996.

Social Development Minister Alex Attwood outlined the expenditure on the vacant development block in response to a question tabled by Foyle MLA Martina Anderson.

He said the Department spent 1,053k on the Foyle Street site over the past 10 years; 674,700 on compensation/legal costs; 214,200 on service diversions; 100,000 on additional land purchase; 51,000 on rates and maintenance; 8,900 on preparation of development brief and site marketing; and 3,8000 on completion of due diligence.

Nearly two third of the spending arose from DSD suing a developer for failing to progress a proposed development scheme at the site.

Mr Attwood explained: "In 1999 the Department was forced to take legal action against the Development Company which it had granted a licence to construct a hotel on the site in 1996 following the company's failure to progress the scheme.

"This was resisted by the company leading to protracted legal action in both the High Court and Lands Tribunal which ended with the Department successfully repossessing the site in 2005.

"However the total cost of this, which included compensation of 557k and legal fees, was some 675k."

He added: "The expenditure on the site also includes the purchase of an additional portion of land from DRD Roads Service and the relocation of BT and NIE services to enhance the site and make it more attractive to prospective developers.

"These costs will be recovered in the premium obtained for the site when it is marketed.

"A further 134k will be spent in the current financial year to create a shared space which will include a small urban park.

"This will form an important link between the new public realm in the Guildhall Square and the Peace Bridge."

A new fifty space car park on the site opened within recently with a small urban park on the same site due for completion by March next year.