Hub still home to digital dream


25 Aug 2005

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In an ironic way, the history of Dublin’s Digital Hub reads like a game of Monopoly, with the most common refrain — do not pass go, do not collect your cash. When the project was first unveiled in 1999 amidst much fanfare no one then could have foreseen the tortuous route ahead. The Digital Hub began life as a pet project of Taoiseach Bertie Ahern TD.

It was to be a digital district boasting not only an exciting industry of the future employing hundreds, if not thousands of media, technology and creative workers, but an entire district of apartments, retail units and leisure areas resting harmoniously within one of Dublin’s most ancient communities, the Liberties. The €250m Digital Hub project, it was hoped, would act not only as a propellant for industries of the future but as a catalyst to spread prosperity into one of the most economically disadvantaged areas of Dublin.

Six years later, only two of the total nine-acre site have been in any way developed and the project is now resting on a knife-edge in terms of graduating to the second phase of its development. A steering committee has been established involving the Digital Hub Development Agency (DHDA), the Office of Public Works (OPW) and chaired by the Minister for Communications, Marine and Natural Resources Noel Dempsey TD, to try to figure out where to go next.

It is understood the Digital Hub has so far received €50m from the State and a further €20m to develop the two acres of the site. A further €150m-€200m is needed to develop the remaining seven acres and build the complete 250,000sq ft of office space, retail and residential property. A public-private partnership process recently broke down and the task of completing the project is now in the hands of the OPW.

As well as this, one of the Digital Hub’s star anchor tenants, Media Lab Europe, closed its doors in January with the loss of 60 jobs.

The decline of the hub was precipitated by the bursting of the internet bubble, which created a negative perception of digital media and technology endeavours. In 2001, the Department of Finance cut the project’s budget and it lost momentum. As well as this, unwelcome controversy surrounding the appointment of Magahy & Company to project manage the development, and the subsequent resignation of executive chairman Paddy Teahon in 2002 in the fallout of the Campus Stadium Ireland controversy, served to create a distance at a political level.

Things begin to look up in 2003 when the DHDA was incorporated as a state agency. Seasoned entrepreneur Philip Flynn was appointed as full-time chief executive and IBM veteran William Burgess joined the DHDA as chairman.

In the intervening years, the Digital Hub has become an unexpected weapon of choice for IDA Ireland and Enterprise Ireland. The existing tenants include some 50 companies employing 450 people between them. Indigenous companies based there include Riverdeep, Havok, Kratos and Twelve Horses. Overseas companies that have chosen to locate there include TKO Software, Canadian games developer DC Studios and Australian e-procurement player MarketBoomer. More recently the Digital Hub was revealed as the location of choice for Amazon.com’s European systems and network operations centre.

The most recent debate, and perhaps the most integral to the future of the development, is the additional €150-€200m needed from the private sector to transform the remaining seven acres. A drawn-out three-year tender process yielded Manor Park Homes as the preferred bidder to manage the project. However, failure to come to a final agreement saw Manor Park Homes exit the process. It emerged in May the OPW will now manage the final build-out. However, instead of seeking to develop the site in one process, the OPW will develop the site on a phased basis. It is envisaged by 2012 the Digital Hub will host some 250 companies, employing at least 3,000 people.

With the absence of private sector money, the DHDA will be challenged to raise funds and may have to seek the relaxation of borrowing restrictions of €10m because of its status as a state agency.

Unperturbed, the DHDA’s de-facto second-in-command Dr Stephen Brennan, marketing and strategic co-ordinator of the Digital Hub, is encouraged by the growth in the number of companies and workers now based there. “In terms of getting to phase two and beyond, we have a core that we established from nothing — 450 people working in 50 companies is a concrete result.

“Looking to phase two, we need to take that kernel and expand it into the project that we talked about a few years ago — filling city blocks and becoming a economic catalyst for Ireland. The global market will influence ongoing growth and development. Companies will expand and contract, and we need to be able to do that too. Our project needs to move with those changes in the global market. In Seoul, the South Korean Government is spending €1bn a year on its digital media city.

“In terms of what we’re doing here, my thoughts are not buildings with cafes, but I would like to see killer digital media products coming out of here from companies that have taken an idea and created a tangible impact on the local and international economy — an internationally recognised brand. And I’d like to think this part of the city will reap some benefit from that. Kids earning a living from some of the cool stuff they’ve seen in the classroom. Irish companies can do this,” Brennan said.

The DHDA reports to the Minister for Communications, Marine and Natural Resources Noel Dempsey TD who, summing up the difficulties of the Digital Hub, kindly describes DHDA’s lot over recent years as a tall order and concedes too much may have been expected from too few. “In some respects that’s the difficulty the DHDA had, it was trying to do too much. The core job it has of creating a Digital Hub in the sense of getting small, indigenous companies to set up it succeeded very well. It was also instrumental in attracting companies such as Google and Amazon.

“The development part of it was not successful because the developer competition went on too long. I suppose legitimately the question is: were we asking it to do too much — attracting high-quality industries of the future and running a developer competition at the same time?” Dempsey asks.

“From where we are at, the property development is progressing the physical rejuvenation of the area and the first stage of this will be the production of an area framework plan,” which will have significant input from the local population on what they would like to see going into the district, Dempsey says.

“Basically, portions of the district will be divided into three or four lots that developers could bid for. This will be done as a commercial venture. There has been a major meeting between the OPW, my department and the DHDA to finalise the detail of the plan and the risks involved and who is responsible for what. This will be public and private in every sense.

“But instead of a concept where one developer builds whatever he was building, these three or four developers will come in and build digital media-related buildings that will complement the Digital Hub and the needs of the local population,” Minister Dempsey explained.

The Digital Hub’s success to date in terms of fostering Ireland’s nascent digital community has been dogged by its failure to excite the imagination of politicians and loosen the purse strings of property developers. It urgently needs to make a firm decision on its identity — is it a property developer or a home for digital talent? Unless it resolves this identity crisis, the road ahead looks increasingly rocky.

By John Kennedy