Kilkenny council eyes landmark Abbey Quarter move worth up to €24 million

Kilkenny County Council will seek to borrow up to €24 million to outrightly purchase a designated plot on the Abbey Quarter and subsequently manage the delivery of a large commercial building that was envisaged in the Abbey Quarter Masterplan.

The building (known as ‘building seven’) was originally set to be developed by Kilkenny Abbey Quarter Development Partnership, a 50:50 partnership between Kilkenny County Council and funding partner Ireland Strategic Investment Fund.

Elected members were informed at their latest plenary meeting that due to factors including rising construction costs, the ‘overall return [on investment] required by ISIF’ was ‘not achievable in the current market’.

As a result, Kilkenny County Council proposed purchasing the site outright, thus taking back full ownership, leaving them to complete the detailed design phase and procure a contractor.

Picture: The location of ‘building seven’ within the Abbey Quarter (in blue)

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Putting the proposal before elected members, Head of Finance Martin Prendiville explained that Kilkenny County Council planned to consolidate their own operations in the building by occupying at least 50% of the planned office space.

Whilst the council still plan to remain in County Hall, their presence in various other commercial buildings in the city would change as they move those operations to building seven in the Abbey Quarter.

Mr Prendiville further added that the council are in discussions with a prospective tenant in relation to potentially occupying a further 24% of the office space in building seven.

He noted that third party tenant rental income would assist in repaying the loan, and that this income would be supplemented by savings the council would make from ceasing to pay rental costs currently being accrued by their tenancy agreements in other commercial buildings.

The remaining balance, Mr Prendiville estimated, would be approximately €150,000 - €200,000 per annum.

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With that sum in mind, Mr Prendiville drew elected members’ attention to the fact that a number of existing commitments currently being repaid by the council will have expired by the end of 2027.

Once those commitments have been paid off, it is envisaged that the council would have ample capacity to fund the loan repayments.

“It may not be €24 million,” Mr Prendiville clarified. “But we need headroom.”

REACTION FROM ELECTED MEMBERS

Cllr David Fitzgerald formally proposed the council’s plan, describing it as ‘an investment in the future’.

“This is one of the most important decisions this group of councillors will make in their five year term,” he said, describing the proposal as ‘transformative’.

Cllr Fitzgerald’s proposal was seconded by Cllr Andrew McGuinness, who described it as ‘a great opportunity to make a positive decision that will impact Kilkenny for many years to come’.

While no councillor outrightly objected to the proposal, some had reservations, and Cllr Maria Dollard requested that the membership of the Abbey Quarter Partnership Board of Directors be reviewed to include three county councillors.

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Cllr Eugene McGuinness stated that the request from Cllr Dollard, if fulfilled, ‘would be helpful’.

Mr Prendiville stated that the structure of the board was agreed at the time it was set up, and that ‘any changes would have to be negotiated’ with the relevant partners.

He further stressed that the board operates with ‘full transparency’, with accounts ‘audited, filed and available to the public’.

RELEVANT SITE AND PROJECT DETAILS

The subject site is located directly east of the new Brewhouse Building.

Its development will consist of the delivery of a new mixed-use building varying in height from four to five storeys.

The development’s gross floor space is stated as 5,176 sq m, intended for commercial use and consisting of four floors of office above and ground-floor retail, office, reception and support space.

Plans for the development of building seven were originally lodged by the Kilkenny Abbey Quarter Development Partnership back in May of 2022.

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The decision by the local authority to grant conditional planning permission almost a year later was appealed to An Bord Pleanála.

An Bord Pleanála subsequently granted planning permission, subject to revised conditions in July 2024.

FURTHER BACKGROUND (MILESTONES)

The Abbey Quarter project began in 2012 with Diageo’s decision to close the brewery, followed by a decision by Kilkenny County Council and KBC to purchase the former brewery site. The Abbey Quarter Masterplan was approved in July 2015.

In November 2016, the site purchase from Diageo was completed. A partnership was then established in December 2016 through the Ireland Strategic Investment Fund.

Most recently, in September 2023, an Abbey Quarter Masterplan Review was approved, setting out the next phase of the development.

More updates on other Abbey Quarter projects to follow soon...