‘Go-away money’: When property developers and objectors do deals

As the housing crisis persists and developments face planning delays in the courts, questions are being asked about whether developers are being asked for, or are offering, “go-away” payments to objectors. The answers vary.

“We don’t make payments to individual objectors; that’s not to say they haven’t been asked for,” says a senior executive at one large development firm.

The company, he says, has made substantial compensation payments to community and resident groups by way of, for example, funding a community project or landscaping, but it does not make payments to individuals.

Cork property developer Michael O’Flynn unequivocally says he has never been asked for – and has never made – go-away payments to objectors.

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“I haven’t experienced it and under no circumstances would I engage in it. I don’t think it’s as prevalent as some are suggesting,” he says.

Other developers privately confirm they have received requests for significant payments from residents around nearby planned developments.

“Have I been asked for money? Yes. I never paid anybody, but claims are active,” one prominent property developer told The Irish Times.

The controversy centred on a small group of residents in south Dublin who sought payments of more than €200,000 each from a developer

There is a fear among the industry that if people believe these types of payments are taking place, it will only lead to more demands.

Several sources in the sector said that while the reported amounts sought could be large, the cost of fighting a judicial review and the associated time a development could be held up as a result could likely be even greater.

One developer, who did not wish to be named, detailed a case where they had secured planning permission for a large housing development in north Dublin.

A resident who lived near the site allegedly wrote to the developer with a proposal that the company buy the resident’s home in order to see off a judicial review seeking to block the development.

It is understood that under the proposal the sale price was to be an estimated €1 million above the market rate, according to the developer.

Go-away payments have come under the spotlight after recent reports that an unidentified developer was asked to make substantial payments to some unnamed individuals to dissuade them from blocking a proposed housing development in south Dublin.

No payments were made and the development is still making its way through the planning process.

The controversy centred on a small group of residents in south Dublin who sought payments of more than €200,000 each from a developer.

In exchange, the residents said they would not take a legal challenge against housing the developer was seeking to build in the area.

The group of residents, who lived on the same road, presented their requests to two senior staff in a meeting in the developer’s offices.

One of the residents is alleged to have said agreeing to the deal would reduce the risk of a legal challenge against the development significantly, according to notes of the meeting written up afterwards that were seen by The Irish Times.

A subsequent email to the developer from one of the group detailed the proposed terms of the agreement.

The group would agree “not to take a judicial review”, or support others taking a legal challenge against the housing development, it said.

In exchange, the residents sought “€125k per house after tax” to be paid upfront, followed by another payment after the period to take a judicial review had passed, or any legal challenge taken by others was unsuccessful.

None of the residents allegedly involved in the proposed deal responded to requests for comment.

The names of the residents, the developer and the location of the site have not been published for legal reasons.

Locally, the controversy has been the talk of the road in question in recent weeks.

Many neighbours on the road sought to distance themselves from the alleged actions of the small number of homeowners.

“It was something they did alone – that’s all I’ll say,” one neighbour said.

Negotiations

There is nothing new about negotiations between developers and objectors. Many on both sides agreed that compromise is a good thing, especially in the context of an acute housing crisis.

In most cases, any negotiations begin only after planning permission has been granted.

There are different views about the ethics of the practice as a way of avoiding litigation.

Labour Party leader Ivana Bacik says she would be concerned if developers were being asked, or are seeking, to pay off potential objectors.

Any such practice, she says, underlines the urgency for an overall review of the planning process.

“A review is under way but the system is bedevilled by delays and concerns over conflicts of interests,” she says.

The Government has advanced legislative proposals for an overhaul of the planning system, which include a reorganisation of An Bord Pleanála and changes to how judicial reviews may be brought.

The draft legislation, the Planning and Development Bill 2022, underwent pre-legislative scrutiny earlier this year and is expected to be published later in the year.

The controversial Strategic Housing Development (SHD) process has been replaced by the Large Scale Residential Development (LRD) process. While it remains to be seen how the LRD process, in place now for about a year, will work out, early indications suggest it may not be subject to the same level of judicial review cases – legal challenges to the High Court contesting the decision-making processes of administrative bodies – as the SHD process.

Seeking mitigation

Engagement between developers and communities is important, Bacik says. The Dublin Bay South TD has worked with local residents’ groups liaising with construction companies and developers in seeking mitigation of the impact of developments in their areas.

“That engagement comes after planning permission has been granted. It is of concern if money is being sought to buy off objections to proposed developments. This all goes to the more general issues and difficulties with the planning process,” she says.

I am aware of people accepting substantial sums which would help them move house or maybe fund some mitigation measures if they cannot afford to move or simply don’t want to

—  Unnamed senior counsel

One senior counsel with long experience of planning litigation says he is aware of some objectors being offered, and accepting, substantial go-away payments.

“I don’t see anything wrong with that. A lot of people would be very unhappy if they were going to have a 10-storey apartment block put up beside them affecting their views, light and property value,” says the senior counsel.

[ Property developers ‘intimidating’ residents’ groups over planning, committee hears ]

“I am aware of people accepting substantial sums which would help them move house or maybe fund some mitigation measures if they cannot afford to move or simply don’t want to.”

If you ask people would they prefer to get money or prefer that the development would just go away, they all want it to go away, he says.

People do not take judicial reviews for enjoyment, they are entitled to object and if they are offered a mitigation payment – and are advised, or decide for themselves that is the best solution – that is a reasonable decision, he adds.

Solicitor Fred Logue, whose firm represents many residents’ groups and others in planning challenges, and has had a particularly high success rate in overturning permissions for SHDs, rejects the idea that people take legal challenges for financial motives.

“I have never seen a case where a judicial review was taken as a leverage. These are genuine cases by people who have genuine concerns,” he says.

‘Riding roughshod’

According to Logue, the litigation is rooted in concern about overdevelopment.

“The assumption that it is about blocking development is wrong; it is about achieving an appropriate level of development,” he says.

A lot of issues could be resolved without planning permission being quashed but some developers are better at communicating and listening than others, according to Logue.

Some developers have never had their permissions judicially reviewed but some, often the bigger ones, “try and ride roughshod over people”, says Logue.

“All that does is put people’s backs up. A lot could be resolved if there was better communication and listening by some developers. That goes for local authorities too,” he says.

“Listening and communicating is a skill but some local authorities and developers think it’s about putting pressure on people to accept. That’s the wrong approach; it’s about listening to the concerns and reaching a compromise.”

About one in 10 judicial reviews over housing settle or are withdrawn, he says.

Logue says he sees no difficulty with compensation being paid by a developer to a community impacted by a development, noting that many developments incorporate a community fund.

‘Private agreements’

Compensation can happen either through the planning process or by private agreement between applicants and developers, he says.

“People are entitled to have private agreements with developers. As long as it’s not abused, I think it’s okay,” he says.

Noting that a minority of developers had sought to engage in what is known as SLAPP – Strategic Litigation Against Public Participation – against objectors, Logue says he strongly advises any clients who believe they are subject to it not to engage directly with the developer.

Another solicitor with decades of experience of taking planning and environmental cases endorses Logue’s view that those who bring planning judicial reviews do so for bona fide legal reasons.

“People have genuine problems, the courts have identified real legal flaws and that is why the cases succeed in such numbers,” the solicitor says.

If people are making deals with developers and that leads to proceedings being withdrawn, then it would be better, for transparency reasons, to have a requirement that the terms of any such arrangement or agreement be formally disclosed and placed on the court file, he adds.

[ Ballyboden apartments given green light despite local opposition ]

Environmentalist Peter Sweetman, whose concern is to ensure that the Habitats Directive is adhered to by planning authorities and developers, has successfully litigated multiple court actions over decades.

He says developers regularly make approaches to litigants and objectors, and he believes some have paid go-away money.

‘Very strange’

“They find the fact I am not interested in money very strange,” says Sweetman.

Having been told that a developer against whom he had brought judicial review proceedings wanted to have a face-to-face meeting with him, Sweetman says he asked that the man be told that “all my negotiations are through my legal team”.

There is clear frustration among developers about delayed projects and the development firm senior executive reflects the views of many in blaming lawyers and objectors.

His firm has made substantial payments through community initiatives, but not to individuals, as part of its efforts to progress developments, he says.

It is “often forgotten”, he says, that developments are done in consultation with local authorities and An Bord Pleanála and are dictated by the requirements of local area and development plans.

“If the local authority says the development is appropriate, then, in the context of a housing crisis, it should be built,” he said.

Once permission is granted, the firm’s policy is to have consultations with neighbours and adjoining landowners immediately affected by the project, as well as residents’ groups, he says.

Some have genuine concerns and that can lead to changes to developments, he says.

‘It’s not fair’

“Changes are made all the time – there’s no issue with that. Where I have an issue is with the objectors who are very comfortable themselves and might live 500 metres or a kilometre away but they look for funds for a lot of stuff – landscaping, even electric gates,” he says.

“It’s not fair, a lot of these people don’t look at the bigger picture, it’s the new homeowner who is paying the bill, not us.

“It’s a cultural issue, the haves here do little or nothing to help the have-nots, the younger generation, get access to housing. Most countries understand the next generation needs to be housed but here the haves had a sense of entitlement, it’s all about themselves.”

The “real problem” is that millions of euro in legal fees are being paid to lawyers promising people that legal action will stop the developments, he added.

[ Two-thirds of developers expect pace of new home delivery to fall this year ]

“The legal fees usually far outstrip any compensation that the local community has been paid. The Law Society should be looking into this,” he said.

Angela O’Donoghue, chairwoman of Ballyboden Tidy Towns Group, which has taken several successful judicial reviews over a number of proposed housing and other developments, takes issue with any suggestion that objectors are unconcerned about the housing crisis.

I felt I was being sounded out and bullied. There was a white van outside my house at one point. Anyone who knows me knows I was never going to do a deal with a developer

—  Angela O'Donoghue, chairwoman of Ballyboden Tidy Towns Group

“They would say that, wouldn’t they? Look at the thousands of vacant and derelict properties – what is being done about those?” she says.

O’Donoghue has been approached, directly and indirectly, over the years on behalf of some developers, and some approaches have been through politicians.

‘Shenanigans’

“I could write a book about the shenanigans. It started out all nicey-nicey, someone came round to my house and asked: ‘Is there anything we can do for you?’” she said.

“I felt I was being sounded out and bullied. There was a white van outside my house at one point. Anyone who knows me knows I was never going to do a deal with a developer. Then our group got a solicitor’s letter, there was talk about suing us.”

Some developers, she says, tried to sow division in the community, including through providing support for some projects.

“A lot of low-level insidious intimidation goes on,” she says.

Her group did have a positive experience with a smaller developer some years back who had genuinely engaged with the community’s concerns about the environmental impact of a particular development and made changes, she says.

“The bottom line for a lot of developers is profit. Our priority is proper planning, compliance and sustainability. The bottom line for a community is community, people, quality of life,” she says.

“We have to raise money through cake sales, etc, for legal actions – we don’t go into it lightly. We do it because we don’t want to be worried about the environmental impact and things like sewerage or being stuck in cars because there was no thought about public transport links.

“We don’t do it for money.”