Galway City Councillors have given their backing to the drawdown of a €60 million ‘capital investment’ loan — a significant portion of which will go to fund the fitout of their new HQ at Crown Square in Mervue.

The Council borrowed €45.5 million in 2022 to purchase the new office block, which it conceded earlier this year had haemorrhaged by €8 million in value since.

Following a special meeting to discuss Crown Square on Monday morning, and a behind-closed-doors meeting on Monday afternoon, they approved the drawdown of the loan at their normal public meeting on Monday evening.

All but two of the councillors present at Monday backed seeking the loan from the Housing Finance Agency — a State-backed lender — which Director of Finance Helen Kilroy told the meeting would require a €3.1 million annual repayment and would be borrowed at an interest rate of 3.3%.

An annual repayment of €1.6 million is already being made to cover the borrowing for purchasing Crown Square, at an interest rate that the meeting was told was less than 2%.

The meeting on Monday evening heard that the €60 million loan would also be used to partially fund a number of recreation and amenity projects, an upgrade of the City Museum and an upgrade of public lighting which was damaged in Storm Éowyn.

However, neither councillors nor the public have been told the breakdown of how the €60 million will be spent.

Ms Kilroy said this was to protect the Council as they set about procuring contractors to carry out these projects, while she stressed the urgency of proceeding with the loan.

“Regarding not putting forward a breakdown of the loan — that is not to obscure. That decision is to protect the integrity of the procurement process. It could undermine our negotiating position and, ultimately, drive up costs.

“The timing here is critical. Any delays will only cause costs to grow because of inflation,” she said.

The entirety of the loan may not need to be drawn down if costs do not require it, continued Ms Kilroy, who described it as a “flexible fund”.

In order to “ensure transparency”, she said, the Executive would inform the Corporate Policy Group (CPG) of the Council of drawdown amounts when they occurred.

The loan would need to be approved by the Minister for Local Government following the councillors’ approval, continued Ms Kilroy.

All but two of the 17 councillors present on Monday backed the loan — the two Social Democrats, Cllr Alan Curran and Cllr Eibhlín Seoighthe, voted against it.

Cllr Curran said the first he had heard of the loan was one week before they were being asked to vote on it — and in the period since, it had risen from €50 million to €60 million.

He said he was “not against the idea of a loan” and proposed that the decision be deferred to allow councillors more time to consider the proposal, but that his proposal was defeated.

Supporting the loan, Cllr Mike Crowe (FF) said it was an investment in the city and described it as “a brave decision to make”.

“I have trust in senior management and I think we should give them the go-ahead and trust that they will manage and mind this money — because there has been money wasted before,” he said.

The Mayor, Cllr Mike Cubbard (Ind) echoed this trust of the Executive and said councillors had “a mature conversation” about the loan at their in-camera meeting.

Pictured: Galway City Hall: Council aims to get the ‘maximum return’  from the sale of the city centre four-acre site.