CORK City Council has spent almost €3 million in interest payments servicing the debts associated with massive landbanks in the city centre since 2013.
The payments concern seven plots of land throughout the city, with the local authority liable for interest payments on central government loans prior to commencing development on the sites.
The local authority may also be subject to further payments if ground isn't broken on developments on the sites by the end of the year, potentially hitting the local authority with millions in repayments each year under rules from the Housing Finance Agency.
The sites include the Gerald Griffin Street site which recently saw the start of development, as well as major plots of land at Nash's Boreen, Na Piarsaigh and several other city locations.
In total, the local authority has spent €2,829,059 in interest servicing loans worth more than €34 million.
Fianna Fáil councillor Seán Martin slammed the current situation, describing it as 'farcical.'
Mr Martin hit out at central government policy which saw local authorities purchase vast amounts of land to commence development prior to the economic collapse.
When central government funds and grants dried up, the local authorities were left footing the bill, he said.
"It is farcical," he said.
"If work doesn't start on some more of these lands by the end of the year, we will be looking at an average of €2 million in principle and interest. From 2013 to 2016, Cork City Council spent €2.89 million in interest payments on these lands, which have been lying idle."
The landbanks in question include the Old Whitechurch Road site which is the subject of significant government investment in a bid to deliver social housing to the city.
Some €9.98 million has been earmarked for the development of the site under the Local Infrastructure Housing Activation Fund (LIHAF), including €2.5 million from Cork City Council.
This is in addition to a further €11.6 million in LIHAF funding earmarked for the development of the city's docklands.
Mr Martin said, "If we turn the sod on the Old Whitechurch Road project by the end of the year, we are back down to just interest payments instead of the principle on these farcical debts."
The situation is exacerbated by the ongoing rates revaluation nationally, he added.
"Nationally, we are missing out on €25 million in rates from properties which have yet to be revalued. No business would operate in that manner and that money could be used against these debts."
The matter was raised at last night's meeting of Cork City Council, with Mr Martin and several others calling on city officials to seek debt forgiveness in relation to housing projects.
Officials from the city's finance department confirmed that the intention is that work will start on a number of the sites in question before the end of the year in order to minimise the monies owed.
A spokesperson also said that the local authority is 'continually in contact'
with government agencies in relation to debt forgiveness, though it has not yet been successful.