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Ireland's political and cultural magazine
12 October-November 2024
The vendors did no wish
NAMA o become wre
of he rue vlue of heir
sse which hey were in
he process of securing
he relese of for he sum
of circ €7 million
O
ne of NAMA’s biggest debtors
secured a property valued at
more than €25 million for just
€7 million from the agency in
recent years.
A company connected to developer Joe
O’Reilly, of Castlethorn Construction Ltd,
purchased Killeen Castle in County Meath
and the surrounding 560-acre estate,
luxury housing and golf resort for just €7
million from NAMA in 2020. It currently has
an estimated worth of more than €50
million.
Before NAMA released its security on the
property four years ago, O’Reilly and his
co-director John Fitzsimons were
negotiating for the sale of the entire estate
to Meath developer, Paddy White, for €26.5
million.
The purchase agreement with White, first
made in 2017, was subject to the granting
of planning permission by Meath County
Council for a 177-bedroom hotel and 130
housing units on the site. White
subsequently agreed to purchase the
property, subject to planning permission,
and including 100 housing units, for €18.5
million.
As an earlier planning permission for the
housing units was due to expire, it required
a new application. O’Reilly accompanied
White to meetings with senior officials in
Meath County Council. They included
senior executive, Kevin Stewart and planner
Pat Gallagher, both of whom have since
retired from the local authority. The new
planning permission was later granted
without objections.
How o mke Killeen
Swings and
roundabouts at
Killeen Castle as
Joe O’Reilly gets his
property back from
Nama, at enormous
discount, and in
flagrant breach of the
bad bank’s policy of
not selling properties
back to the former
owner
By Frank Connolly
However, when White sought to close the
deal in 2020, he discovered that the
Castlethorn directors had decided to
terminate their discussions. He has
explained that he was approached by
O’Reilly on the golf course in 2016 to help
secure the renewed planning permissions
and to develop a hotel at the castle. A
dispute between the developers ended up
in the Commercial Court in 2021 after the
vendor, Sasula Unlimited, part of the
Castlethorn group, pulled out of the deal.
Since 2021, Castlethorn has sold more
than 67 sites for housing for an estimated
€300,000 each, netting a potential €20
million. The company has recently sought
up to €35 million from investors for the
redevelopment of the hotel, luxury housing
and the Jack Nicklaus designed, golf course.
O’Reilly has also developed a large housing
estate in nearby Dunshaughlin.
Last month, auctioneers CBRE invited
proposals from “experienced hotel, leisure
and golf investors interested in delivering
on the multi-phased and sensitive
refurbishment and redevelopment of the
castle as a hotel to complement the estate’s
existing championship golf course,
ancillary facilities, lodges, luxury
residences and events venue”.
NEWS
VillageOctNov24.indb 12 03/10/2024 14:27
October-November 2024 13
“Having acquired Killeen Castle in 1997,
developer Joe O’Reilly’s company,
Castlethorn Construction, has, over the
years, transformed the historic Meath
estate into an exclusive golf destination
with an 18-hole championship course
designed by Jack Nicklaus as its
centrepiece”. CBRE said.
“Now 27 years on and with much work
done and much more left to do to fulfil his
overall vision for the 12th century Norman
castle and its 226-hectare (560-acre)
expanse, O’Reilly has decided to seek out a
strategic investment partner”.
Paul Collins, CBRE’s executive director
and head of hotels for Ireland, said he
expected “offers for the entire estate to
range between €25 million and €30 million.
Interested parties may alternatively submit
their proposals for individual elements of
the Meath resort”.
According to CBRE, a further 88 housing
sites are also available for sale while there
are previously granted planning
permissions for a hotel with up to 250
bedrooms and an adjacent hotel village
comprising 46 lodges.
It is evident that the disposal by NAMA of
the estate for €7 million in 2020 represented
an extraordinary gift of a prime public asset
to O’Reilly. Contrary to its own policy, it also
appears that the property was sold back by
the agency to the original debtor and was
not put out for public tender.
As one of the three largest debtors in
NAMA, with debts of almost €2 billion,
O’Reilly was paid €200,000 a year to assist
with the management of his distressed
assets including, through his company
Chartered Land, the Dundrum Shopping
Centre and the long-derelict Carlton site on
O’Connell Street in Dublin. The Killeen
Castle asset was transferred to NAMA with
debts of more than €60 million which was
spent on servicing the land, including with
roads and sewerage and developing the
golf course and the Castle, before the
financial crash.
NAMA has since funded other residential
developments by Castlethorn while the
company also completed the most
expensive luxury apartment scheme in the
State on the former Burlington Hotel site on
Lansdowne Road in Dublin 4.
Close to the commuter town of
Dunshaughlin in Meath, the fully-serviced
Killeen Castle estate could have been
developed for much needed social,
affordable and mixed-tenure housing while
retaining its amenity and heritage value if
it had been released by NAMA for the public
good.
Paddy White has claimed that he had
been “set up to fail” after spending almost
€1 million on the project management of
the development including the plans for a
Marriott hotel in Killeen Castle.
He said that in a text message in
November, 2020, he was informed by
Fitzsimons of “the decision now made by
the company to move on to explore new
options and opportunities for Killeen next
year”. A month later, NAMA released its
security on the property but it became the
subject of a restrictive covenant requiring
the agency to provide its consent to any
sale.
In an affidavit to the High Court hearing
in October 2021, White stated that, in 2017,
he “was advised that there were certain
sensitivities surrounding the transaction as
the vendors did not wish NAMA to become
aware of the true value of their asset which
they were in the process of securing the
release of for the sum of circa €7 million and
that there would be a requirement that the
proper ty remain in control of the Castlethorn
Group until 2020”. He continued: “While I
was most surprised at NAMA’s valuation of
the property this was clearly a matter
between the Vendors and NAMA.” White
denied that he was in breach of a Non-
Disclosure Agreement made with A&L
Goodbody, acting for Castlethorn, in June
2018.
White claimed that he was encouraged to
invest heavily in the planning for the
refurbishment of Killeen Castle into a hotel,
and to engage with MCC officials until
planning permission was granted to Susula
in June 2018. The High Court heard that
White also agreed to structure his purchase
as an acquisition of shares in Sasula,
through another vehicle Kalondra, rather
than as a direct acquisition. This would
permit White to secure funding to finance
the transaction while not immediately
taking ownership of the property. A deposit
of €12,300 of a final purchase price of €18.5
million was paid by White in March 2019,
allowing the vendors, Castlethorn, to retain
30 of the 130 sites for housing on the
property.
In January 2020, Castlethorn sought to
restructure the deal and proceed by way of
an asset sale requiring a Memorandum of
Understanding (MOU). An MOU was agreed
with KC Killeen Holdings, owned by White,
and draft contracts were drawn up. Over
subsequent months, Castlethorn began
advertising the sites for sale, prompting
White’s concerns about its commitment to
their purchase agreement and a series of
fraught exchanges between his solicitors
and A&L Goodbody, leading to the High
Court. After some of his investment was
recovered, White later dropped his action
over concerns that further litigation would
cost him more than he could gain.
For its part, the High Court was told by
A&L Goodbody in 2021 that Castlethorn
had never “entered into any legally binding
commitment” with White or his solicitors,
Tully Rinckey, and that “all communications
had been non-binding and subject to
contract”. The firm claimed that White had
been unable to procure evidence of funding
for the transaction within the agreed
timelines and that here was no basis for him
seeking compensation.
It is eviden h he disposl by NAMA
of he ese for €7 million in 2020
represened n exrordinry gif of
prime sse o O’Reilly. Conrry o is own
policy, i lso ppers h he propery
ws sold bck by he gency o he
originl debor nd ws no pu ou for
public ender
The historic Killeen Cstle nd its Jck
Nicklus-designed chmpionship golf
course sit on 226 hectres (560 cres) in
Dunsny, Co Meth
Joe O’Reilly
VillageOctNov24.indb 13 03/10/2024 14:27
