Galway Harbour Company has agreed to transfer ownership of a site to the Land Development Agency (LDA) in a deal that could pave the way for up to 250 new city centre homes to be built.

The LDA said it would lodge a planning application in 2025 for a residential development at the three-acres site overlooking Lough Atalia and Galway Bay.

The commercial, State-sponsored body said the site had potential for 250 units and the development would consist of “mainly affordable apartments”.

An LDA spokesperson confirmed a feasibility study for the site has been drawn-up, and the project will now progress to public consultation with a planning application expected to be lodged next year.

A Department of Housing spokesperson confirmed to the Connacht Tribune that the Minister for Housing, Darragh O’Brien misspoke on Galway Bay FM on Monday morning when he said he expected LDA to ‘break ground’ on the site this year.

The Department confirmed Government had last week approved the partial transfer of land at Galway Harbour to the LDA for the development of “social and affordable housing”.

It said the next stage of the process was the appointment of a design team within the next few weeks.

“The first development phase has the potential to deliver between 200-220 homes across a number of apartment blocks in a mix of one, two and three bed apartments.

“The second land transfer and development phase has the potential to deliver an additional 900 homes. Discussions are ongoing with Galway Harbour and the LDA on its potential,” the Department of Housing said.

Minister O’Brien visited the Harbour site on Monday, with Phelim O’Neill, Head of Property with the LDA; Maurice O’Gorman, Chairperson of Galway Harbour Company; Conor O’Dowd, Chief Executive of the Galway Harbour Company; and Patricia Philbin, Interim Chief Executive of Galway City Council, which owns the Harbour Company.

An LDA report published last March identified Galway Harbour as one of eight sites in Galway with potential to deliver 6,000 affordable and social houses.

Galway Harbour was one of three of those sites identified as “class 3 sites”. The other two were Renmore Barracks and land at Merlin Park Hospital.

Class 3 sites were described by the LDA as sites on “complex land with numerous constraints”. They required infrastructure, “a forward planning led approach” and they have a “long-term delivery potential”, of over five years.

The Galway Harbour site with a masterplan could deliver between 730 and 950 homes at a cost of €238m to €281m, according to LDA analysis last year.

Minister O’Brien this week said negotiations were ongoing between the Harbour and LDA with regard phase two lands at the docks, which he said could deliver another 900 homes.

That would put the number of units earmarked for the harbour at 1,150 or 200 more than then LDA’s report from last year estimated.

He said the harbour was a significant city-centre site that would bring families back living within walking distance of Eyre Square.

Minister O’Brien thanked the City Council and Harbour Company for the “constructive engagement with the LDA” on the transfer of land.

Phelim O’Neill of LDA said the project represented a “fantastic opportunity” for the development of affordable housing and creation of a new community in a wonderful location.

Mr O’Dowd said the Galway Harbour Inner Dock project, presented a “once-in-a generation opportunity to develop a new and sustainable urban quarter in Galway city and solidify Galway’s position as a driver of economic growth for the West of Ireland”.

“It will provide new residential, commercial, recreational, and cultural facilities along the water’s edge leading to employment opportunities and new streams of recreational and cultural tourism for the city,” he said.

Ms Philbin said: “The plans envisaged for the harbour by the LDA provide a much sought after solution to our housing needs by delivering high quality homes in the heart of the city with excellent access to local transport links, retail, and leisure facilities.”

LDA said it was still progressing plans for new homes at Sandy Road and Dyke Road.