On Saturday 10th September, a fire broke out in the City Arts building.

RTE’s report that morning read: “Homeless people rescued from Dublin fire”, where they claimed that 8 homeless people had to be rescued. View here: http://www.rte.ie/news/2011/0910/dublin.html

TV3 news stated that: “A number of homeless people had to be rescued from a burning building.” http://tv3.ie/article.php?article_id=62574&locID=1.2.&pagename=home

However, it was reported on the Journal.ie that: “A spokesperson for Dublin Fire Brigade has told TheJournal.ie that reports that several homeless people were rescued by the fire service are inaccurate. The spokesperson said that while they believe there may have been people in the building prior to the arrival of the emergency services, no rescue took place.” http://www.thejournal.ie/firefighters-tackle-blaze-in-dublin-city-centre-222496-Sep2011/

The blaze was tackled at approximately 8:30 that morning, where the fire was allegedly put out. However, one eye-witness took these photographs later that same day at 5:30pm, where a fire had to be put out again:

A critical summary and analysis of NAMA can be found here.

Simon Carswell’s Anatomy of NAMA, from 2009,  exlains how the agency works and sumamrises the headline figures.

NAMA: A breif guide and NAMA: Modus Operandi, both publications of NAMA, also give useful overviews of the agencies operation.

More up to date information is available in Simon Carswell’s summary of NAMA’s 2010 Annual Report. The Annual Report itself contains all the important information for 2010 as do the Cheif Executive’s speach at the launch of the report and NAMA’s summary of the report.

An estimated list of all properties under NAMA is available here.

A list of all the properties under NAMA’s management as a result of enforcement actions is available here.

Namawinelake and irelandafternama are two useful blog sites with anlaysis and information. I have found that posting questions on NAMA wine lake produces quick and accurate answers.

Social exclusion relates to the alienation or disenfranchisement of certain people within a society. It is often connected to a person’s social class, educational status, relationships in childhood and living standards and how these might affect access to various opportunities. It also applies to some degree to people with a disability, to minority men and women of all races, of all sexual orientations and gender identities (the LGBT community), to the elderly, and to youth. Anyone who deviates in any perceived way from the norm of a population may become subject to coarse or subtle forms of social exclusion. Additionally, communities may self-exclude by removing themselves physically from the larger community.

Social movements and social centres often make an explicit attempt to diminish all forms of social exclusion through, for example, the use of policies and the adoption of participative, empowering forms of organisation and descision making. However, in reality it can be extremely difficult to be truly socially inclusive.

Why NAMA was set up and with what objectives

What NAMA basically does is to take loans (good and bad) related to property development and land speculation with a view to development. These loans are taken off the banks. Banks got into big difficulties as a result of the financial crisis. They had ‘liquidity problems’, meaning they couldn’t get money themselves. A banking crisis can lead to a general economic crisis. By taking the riskiest assets it is thought the banks can become viable again because there is less uncertainty: ‘Replacing these property loans with Government Guaranteed Securities [aka NAMA bonds] will remove uncertainty about the soundness of banks’ balance sheets and make it easier for them to access funds in the international financial markets. Banks cleansed of risky categories of loans will be free to concentrate on their core business of lending to and supporting businesses and house holds’ (NAMA, 2010).

So NAMA attempts to do two things: (1) ease the overall financial crisis by stabilizing banks; (2) provide liquidity (cash) to banks so they can start lending again, hence stimulating investment.

So far NAMA has not been successful: ‘NAMA has failed to deliver on a primary aim, to create liquidity in the Irish banking sector, which needed further recapitalization and nationalization’ (Kitchin, 2010). In other words, the banks have not been stabilized, we have to keep throwing money at them and they are not lending.

Loan transfer breakdown

We can break down a bit what was involved in the transferring of loans to NAMA. NAMA identified the property-related loans the participating banks had on their books. Initially this related to loans of over 5 million issued before December 2008, but apparently this has been changing over time. These loans amounted to 77 billion, of which 49 billion are ‘land and development’ and 28 billion are ‘associated loans’ (loans backed by commercial investment properties). This amounts to between 14,000 and 15,000 loans (NAMA, 2010).

NAMA provides the banks with money in return for the loans, hence providing the banks with liquidity. NAMA does not pay the full original value for the assets. This is because their value has decreased hugely due to the property crisis. NAMA pays the estimated current value of the loans plus an additional 15% which is supposed to represent ‘long-term economic value’. This 15% mark-up is one of the most controversial aspects of NAMA because the idea that the long-term value of property will amount to a 15% increase over the next ten years, at a time when property prices are collapsing, is highly implausible. Altogether, NAMA has paid 30.5 billion to banks (NAMA, 2011).

Alan Dukes (chairman of Anglo Irish Bank) recently indicated that NAMA may require a further 75 billion to take on additional loans. While NAMA denies this, the continuing banking and property crisis means that NAMA may indeed end up increasing its spending.

NAMA doesn’t give the banks cash directly. NAMA gives them NAMA bonds, or Government Guaranteed Securities. These are like IOUs. The banks give these to the European Central Bank in exchange for money. Then NAMA at some stage (presumably before 2020 when it is supposed to wind up) will pay the ECB back the money.

NAMA initially claimed that it would generate 5.5 billion in profit by 2020 when it will be wound up. The idea was that NAMA will generate money from ‘performing loans’ (loans that are being paid off). For non-performing loans, as explained in more detail below, NAMA can take over the related property or commercial assets. These can also generate money, typically by selling them.  More recently NAMA Chief Executive Brendan McDonagh declared that the organization now hopes to generate 1 billion over its lifetime. In 2010 NAMA lost 1.1 billion.

In terms of where the assets transferred to NAMA come from: 67% of assets are in the Republic of Ireland; 6% in the North; and 21% in the UK. About 36% of assets are land; about 28% are development loans; and about 36% are associated loans (Kitchin, 2010). The breakdown by bank is as follows: AIB-24b; BoI-15b; Irish Nationwide-0.8b; Anglo-Irish Bank-28b. I think ESB is also participating but I’m not sure to what extent.

To sum up at this point, NAMA effectively gives the banks 15% above what the assets were worth at the time of purchase and then takes the assets wholesale off the bank’s hands. Property prices have continued to fall dramatically since 2009, so at this point NAMA (i.e. me and you) has massively overpaid for the assets. NAMA’s claim that it will make the money back is based on the prediction that property value will increase by 10% over the next ten years (NAMA, 2009). In other words ‘to recover the state investment the property market will need to be re-inflated’ (Kitchin, 2010).

What happens next?

Once NAMA has acquired the loans its job is to manage them. This can go two ways. Borrowers have to submit a 3-year business plan to NAMA within 30 days of loan transfer (NAMA, 2010). If they are approved, all continues as if it was a normal bank, the developer continues paying interest as if it was dealing with a bank and will eventually pay off the loan.

However, if NAMA considers that a specific loan will not be repaid it can take action by appointing a receiver to take control of the property. It can also seize other assets supporting the loans (residential property, commercial investment properties, shares etc). This is often referred to as ‘enforcement action’. NAMA then has six options: sell; lease; hold; develop; manage/maintain; demolish. NAMA can make funds available (solely or as a joint venture) for developments to be completed. If the property is, say, a shopping centre, the receiver will run this with the objective of maximizing profit. Receiver’s often run businesses in a ruthless fashion, for example firing staff and reducing wages. It would be interesting to see if this is occurring in commercial activity under NAMA. If the properties are to be sold a receiver can also take charge of that process.

According to Simon Carswell, NAMA has reviewed business plans for 91 of the top 180 borrowers and enforcement action has been taken against 27 of these.

NAMA governance

NAMA is a Special Purpose Vehicle and is a separate legal entity set up by the State. It is 49% State owned and 51% private. However, my understanding is that AIB and Bank of Ireland make up most if not all of the private investment. AIB is around 99% state owned. BoI was about 34% state owned, but state share has been reduced to around 15% of late as a result of new private investment. The structure is such that NAMA’s debt is kept of the State’s balance sheet. This is basically a trick which the EU goes along with because, on the basis of the Stability Pact, countries aren’t supposed to be generating that kind of debt and this is a way to make it look like we’re not. However, according to a Namawinelake article, the NAMA bonds are being considered as State debt by Standards and Poor and other International Credit Ratings Agencies. As such, NAMA debt is one of the reasons Ireland has had its credit rating continually downgraded, which is why we’ve ended up in the EU/IMF bailout.

On paper NAMA has decision-making autonomy, although people don’t take this too seriously because the government has a veto.

Importantly, NAMA, because it is majority ‘private’ owned, isn’t subject to the Freedom of Information Act. This means that little is known about its operations. We don’t know, for example, the full extent of the loans NAMA has and what properties are actually attached to those loans.

The running costs for NAMA in 2010, according to the agency itself, were 46 million (NAMA, 2011). Between NAMA and NTMA (National Treasury Management Agency), its parent organization, there are 16 people on over €200,000 a year.

 The Irish State: the world’s worst property speculator?

NAMA crystallizes the most grotesque and dangerous dynamics which are at work in Europe today. First of all, it socializes risky assets leading to losses for ordinary people. This means public debt has increased and reached unsustainable levels, a fact which the State is responding to by attacking public services, working conditions etc. NAMA has exaggerated this socialization of losses by over-estimating the value of the assets, through it ludicrously inflated estimations of long-term economic value.

Secondly, while the NAMA Act includes ‘social and economic development’ as an objective, this has been ignored by NAMA.  NAMA as instead pursued limited economic objectives, meaning it perceives its assets in pure economic terms, despite the fact that NAMA’s assets are our homes, our cities and our countryside. This ignores possible social uses. Many of these assets are idle or being run at a loss (like the hotels). They could, and indeed should, be used by citizens for social and public projects. NAMA’s narrow economic remit also means the cities and country we live in will continue to be over-determined by a short-term and property-obsessed view. Finally, and perhaps most disturbingly, NAMA ties together the public interest and property-lead growth (and as such credit). In recent decades ordinary people have gained an interest in the economic system by becoming property owners and indeed property speculators, through easy credit and low interest rates. NAMA goes one step further because it links the State itself to the property market and speculation. The property market needs to undergo a dramatic increase in order for NAMA to recoup its money. This has a chain effect: for property to go up, easy credit needs to be available, for this we need strong banks, this requires more support to the banks at the expense of public services etc; easy credit makes house prices go up, which means we have to borrow more and more. And so on.

More generally, NAMA is a key part of the set of processes through which the very distinction between public and private has disappeared. In Ireland today we have something akin to state-capitalism: the State controls virtually the entire banking sector plus a large amount of the property sector. Through NAMA it is indirectly running everything from pubs and hotels to apartment blocks. In this context appeals to the State to protect the interests of citizens and workers are naive. All our basic assumptions about politics are being put to the test.

Fighting NAMA means fighting the financialisation of life, indebtedness, and property-lead growth. It means fighting the collapse of the public and the expansion of capital.

Fighting back: life after property speculation

One of the difficulties in fighting back against NAMA, and this is probably true of the crisis in general, is the overwhelming nature of the amounts of money and the facts and figures. This is no coincidence; NAMA’s first line of defense is secrecy and mystification. So finding, gathering, analyzing and sharing information on NAMA is one way of attacking NAMA. Some resources for those who want to undertake further research on NAMA are available here.

Second of all NAMA has a number of physical and material manifestations. These are points at which we can intervene. The offices of NAMA are at the

The belly of the beast: the Treasury Buildings

Treasury Building, Grand Canal Street, Dublin 2, Ireland. NAMA, as mentioned has two sets of assets. Those which have been placed into receivership and hence which NAMA has more direct control over can be seen here.

NAMAs overall (estimated) list of assets is available here.

But what demands and analysis should we advance? In other words, what would constitute a radically egalitarian and democratic approach to NAMA?

The first thing to point out is that if NAMA’s assets are not sold then we loose out in the sense that NAMA accrues more loses which are paid for by the State. This is not an unfortunate side-effect; as already argued one of the main features of NAMA is to weave together the State and property speculation.

So this could mean that any action against NAMA is represented by the media as an attack on the national interest.

That said, the following points should be the point of departure for the struggle against NAMA:

-         We reject the premise of NAMA: socializing losses

-         We reject the linking together of the State and property speculation in any form

So if we reject property speculation, which is one system for valuing and organizing property, and we reject the socialization of losses, what alternative do we propose? My argument is that the we can advance an alternative approach to the use of properties (and other asstes), one in which social and cultural value would be emphasized above economic value. This would take place through the socialization of resources, rather than losses. We could directly show how NAMA properties can be given another use, rather than being sold-off on the cheap.

There have already been a number of attempts to give alternative uses to NAMA buildings. Limerick City Council has apparently been facilitating artists using NAMA buildings. The Complex theatre space in Smithfield (Dublin) is located in a NAMA property. However, while it is positive to see NAMA buildings being used for art and culture, we also need to question the political implications here. It is well known that art and culture play a key role in urban regeneration, property speculation and gentrification by revitalizing areas. If alternative uses are simply ways to increase the value of NAMA buildings then we reproduce the logic of speculation. This doesn’t mean its ‘wrong’ to have art spaces in NAMA buildings. It does mean that doing so does not in itself break with the logic of NAMA, the socialization of losses and State-led property speculation. There is a second issue here, evidenced by the case of the Complex. When the building which houses the Complex was repossessed by NAMA, the agency issued an eviction order with a view to renting the property to a Tesco Express. Again this indicates NAMA’s inability to see anything ebyond the speculative value of property.

However, the Complex has been challenging the eviction and the use of art/culture under the banner of property speculation. One element of their strategy has been to highlight the ‘social dividend’ promised in the NAMA legislation, and also in the Labour and Fine Gael election manifestos. This strategy represents a way for social movements to resist the logic of property speculation and make a legtimate claim to another type of value. Such a strategy could be developed into a general demand that the NAMA legislation be changed such that all assets are fully open for public and social uses.

In this regard we can show how resources can be socialized in practice, by direct action. Social movements could begin putting existing NAMA resources to social uses.

To facilitate this we should also be putting pressure on NAMA to become a more democratic and transparent organization by (a) making all information publicly available and (b) developing genuine, participative and democratic engagement with the citizens. I think these demands would most effectively be pursued through a broad strategy including direct action.

It would also be interesting to investigate if NAMA can default on its bonds. This would be effectively a State default and the European Central Bank would be picking up the tab, so it’s no doubt complex. But so is paying back the kind of debt the State has been generating through the transfer of wealth to the banks.

Mick O’Broin

References

NAMA. 2011. Annual Report and Financial Statement 2010. Available here.

McDonagh. 2011. Breandan McDonagh, NAMA Chief Executive, speech at launch of 2010 annual report. Available here.

NAMA. 2010. NAMA: A brief guide. Available here.

NAMA. 2009. Draft Business Plan 2009. Available here.

Rob Kitchin. 2010. ‘Property Crises in Ireland and NAMA’ presentation for the Provisional University at Exchange Dublin, 7^th of February 2010.

Monday 25 July, 7pm in Seomra Spraoi

The idea of the citizen has a long and ambigous history. In the Campaign for the Old City Arts Building we have been using this term to talk about ourselves as political actors and as people with rights, specifically the right to use empty NAMA buildings. But while citizenship can be used in this way, to talk about people’s politics as opposed to the state, it also raises important questions. For example, many people are excluded from official citizenship on the basis of nationality or race. Citizenship also describes the legal relation between people and the state, a relation which many people oppose.

In this Talking Shop we’ll talk about the idea of the citizen and question the politics wrapped up with that term.

All welcome!

Our last breakfast on July 2nd

This Saturday (July 23) join us for late breakfast at the Old City Arts Building. We’ll have tea and coffee and we’re planning to bake some bread/cakes and maybe bbq a few suasages.

We’ll be chatting to passers-by about NAMA and what they’d like to do with the building.

We’ll also be begining our ‘Book of Hopes and Grievances’ as part of the current spectacle of defiance project, through which communtiy groups are collecting the thoughts and anger of the people in the run up to a big event this December.

Those who came to the meeting suggested what they were personally interested in doing with the building. There were several suggestions for educational projects that were explicitly in opposition to the forms of teaching and research that currently prevail in schools and universities. These included critical pedagogical and research methods that sought to learn from concrete, everyday experiences and problems, learning and researching with people rather than at distance; holding regular and ongoing courses on subjects that were not usually taught or available to people and workshops or collaborative projects, including, for example, a hacker space. Related to these projects was the idea of using the building as a resource or archive, such as a library, but including recordings or records of various events that took place in the building. Also as a place to generate publications, zines etc.

A specific project called ‘Radical Love’ was proposed to take place from the 13th-15th September. This would take the form of an ongoing seminar involving up to 30 people presenting their various work.

Following on from the recent emergence of people’s assemblies in North Africa, Spain and Greece, and now in Ireland through Real Democracy Now, it was suggested the building could be used to hold regular and ongoing assemblies for people in the city. There are not many indoor spaces in the city where this kind of event can happen. The assembly would be a place for people to meet, to voice their problems and angers but also a way to generate political projects.

Other suggestions were more general in terms of how the building could be a place to support other projects: a roof garden or community garden; a cafe; language classes.

The question arose again, a question which had defined the discussion from the start: how much was the building to be defined by us and our desires and how much by others?

On one hand it was argued that it is more important to fight with people than fight for them: that it is better to put forward our own problems and needs in the hope that they will resonate with people rather than setting up a building to ‘facilitate’ other people.

On the other it was argued that the building could quickly turn into another ‘independent space’ which was full of ‘our’ creativity and desires but had no impact politically in terms of creating some sort of counter-power to the state and market. The danger in this situation is that the building becomes another ‘island’ with no concrete support from beyond its limited circle, no political potency. In order to become a stronger force, more than just a building, requires strong connections of solidarity to be formed with other communities and individuals around the city.

Rather than being two opposing sides a common idea is that there needs to be something concrete and real in our demands for the building (something more than just getting an empty space) but these demands need to be universal not just specific to us.

But there has been a concrete demand that has resonated with people from the beginning: a frustration and anger at the way our collective lives are being constantly undermined and destroyed by a present and future ‘reality’ which the government and other ‘experts’ tell us is unavoidable. The campaign for the building came out of this anger, and a desire to do something to challenge it- by claiming a building. This anger has the capacity to resonate.

Autonomy was suggested as a term or concept that seemed to encapsulate much of what we had been talking about. Autonomy from an ideology that tells us we can’t do anything on our own: whether that be a ‘reliance’ on state funding (community development, arts, university) or a ‘reliance’ on keeping the market happy (austerity, commercialization of education). The building is an assertion of our autonomy. Within it people can pursue what they want as an expression of this political statement of autonomy. This seemed to overcome the problem of labeling it ‘educational’ or ‘cultural’ or ‘social’ which can, especially now, tend to be generic and meaningless. At the same time autonomy can suggest ideas of self-reliance which is the opposite of what is intended in terms of the building being part of the generation of a real, concrete counter-power in the city and country. But concepts are not static. Having a term like autonomy at least allows us to develop some common understanding of what we are doing, or feel we are doing.

We ended by deciding to hold a series of events over three days at the end of August (Thursday, 18th- Saturday, 20th) outside the building. These events would be a demonstration of the things we would like to see happen in the building. By doing something, with people, we also leave the comfort, and sometimes frustration, of only thinking in meetings.

If people have ideas for the three days please come along to our weekly meetings, Mondays at 6pm in Seomra Spraoi, or else email campaigncityarts@gmail.com.

Debtocracy: http://www.youtube.com/watch?v=qKpxPo-lInk

Part I features Sandy Fitzgerald talking about the history of City Arts:

Part II features MIck O’Broin descibring what the Campaign is all about: