Strathmore: Canada's sale of ambassador's residence no pot of gold

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Strathmore

Lee Berthiaume – October 7, 2011

As the Irish real estate market began to crash in 2008, Canadian foreign affairs officials recommended the government not move ahead with plans to sell Canada's historic ambassadorial residence in Dublin, newly released documents show.

But the government ultimately rejected the advice — and appears to have lost millions of taxpayer dollars in the subsequent deal.

Strathmore

Strathmore, a sprawling 19th-century mansion on the outskirts of Dublin, had served as home to various Canadian ambassadors to Ireland since being purchased for $54,000 in 1957.

The sprawling eight-bedroom residence, situated on 11 acres of "prime real estate overlooking the sea," was valued at $25 million to $30 million in summer 2007, according to a briefing note prepared for then-foreign minister Peter MacKay and obtained through access to information.

Another note for MacKay's successor, Maxime Bernier, said Strathmore was put up for sale "with optimism" in November 2007.

Several potential buyers initially expressed interest, with three offers submitted. However, none came to fruition before the bottom began to fall out of the Irish real estate market in early 2008.

"The most promising buyer of Strathmore . . . has recently informed the department that he cannot obtain financing," reads the undated note to Bernier, which said the residence was valued at $24.4 million in January 2008.

Officials identified two other factors hindering the sale.

In March 2008, Dublin city officials announced a moratorium on re-zoning residential properties for development projects until 2019.

"Most of the proponents who expressed an interest in acquiring the official residence were developers who saw value in transforming the site on which Strathmore is situated," the briefing note reads. "These purchasers have now cooled on the development potential of the site."

In addition, the neighbourhood around Strathmore was known for the presence of well-known celebrities, including U2 singer Bono, Van Morrison, Sinead O'Connor and movie makers Neil Jordan and Jim Sheridan — all of whom had enjoyed tax exemptions for artists residing in Ireland.

"This tax benefit has now been cancelled, making (the neighbourhood) less attractive to this particular group," the briefing note reads.

While officials told Bernier the long-term goal of selling Strathmore should not change, they said the market was not expected to recover for at least three years.

"In light of the current market conditions in Ireland, and on the recommendation of local real estate experts," officials wrote, "we believe Strathmore House should be removed from the market and prepared for occupancy by the current head of mission."

Those preparations, in the form of repairs and refurbishments, would cost $500,000, officials said. Canada's ambassador to Ireland, former Prince Edward Island premier Pat Binns, was supportive of the proposal, they added.

However, rather than approve the recommendation, the government went ahead and off-loaded Strathmore later that year.

The final deal saw the government swap the residence for a new residence in central Dublin valued at $12.8 million and receive a cash payment of $4.8 million, for a total value of $17.6 million — significantly less than the $25 million officials had originally expected to generate from the sale.

Toronto-area Irish-Canadian Terry Smith, who created a "Save Strathmore" group on Facebook upon learning of the pending sale in 2007, said the fact the government sold the historic property at what appears to be a loss was "heartbreaking."

"The Canadian government not only lost a beautiful home, it also lost much more in the whole process," she said. "It's abominable."

When news broke in 2007 that Strathmore was being sold, former diplomats, including Michael Phillips, who lived in Strathmore as Canada's ambassador to Ireland from 1996 to 1998, called the planned sale short-sighted and a big mistake.

Original article on Vancouver Sun website

Comments

Almost two decades after Joanna Gualtieri began to report extraordinary waste and extravagance in Foreign Affair's accommodations for diplomats abroad, the department has been quietly trimming its inventory of lavish properties around the globe: Strathmore was one of many.

In the early 1990's Gualtieri observed  abuses such as:

  • a large mansion in Tokyo valued at approximately $18 million was allowed to stand empty for 3-4 years while the intended occupant was provided with public moneys (approximately $350,000 per year) to rent a luxury apartment of his own choosing
  • million dollar Crown-owned condominiums in Tokyo were used to house the Ambassador’s Japanese butler and chef, in clear violation of stated rules and despite the fact that the Official Residence was approximately 25,000 square feet with dedicated servants’ quarters.

Strathmore became a lightning rod, symbolizing the attitude of entitlement by senior diplomats, who – apparently accustomed to living like royalty and indifferent to the spiralling costs borne by taxpayers – publicly opposed the proposed sale.

This 2003 CBC documentary shows how, after numerous studies and recommendations by the responsible agency, plans to sell the property were nixed by the minister – in a one-line email.

David Hutton