The redevelopment of the Manhattan Café site at Kelly’s Corner, Dublin, has been blocked by city councillors despite warnings from council management of their decision leading to cuts to the city’s budget.

Councillors had been asked to approve the sale of lands owned by the council surrounding the late-night cafe, which was a haunt of musicians and all-night revellers from the 1950s, for €1.4 million.

Charledev Properties wants the council site at the corner of Harcourt Road and Richmond Street South as part of a nine-storey office development on lands between Richmond Street and Charlemont Street.

The development company was earlier this year granted permission for the office block, including the derelict properties owned by the council, but cannot go ahead with the scheme unless councillors agree to the sale of the lands.

Green Party councillor Ciarán Cuffe said he had “fond memories of the Manhattan and the proprietor who would wake up those who had fallen asleep with a wet facecloth at three in the morning”. He said there should be “better ways to address the regeneration of such sites that have festered for far long beyond what is reasonable”.

Mannix Flynn (Ind) asked for the remains of the Manhattan sign to be given to the Little Museum of Dublin.

Sinn Féin’s Daithí Doolan said he was “a bit alarmed” at the prospect of selling “such a prime part of land in the city centre” and suggested it be used as an arts space or for housing. The council said it had assessed the site and found it unsuitable for housing.

Community uses

Éilis Ryan of the Workers Party said she would like to see other community uses for the site if it was unsuitable for housing.

Council chief executive Owen Keegan said there was a “whole range” of culture and recreation programmes that could not be funded without the sale of surplus council lands.

“Yet every single scheme we bring to this council it’s ‘Oh, we don’t want to sell.’ We can’t have these projects in your capital programme without having a funding source – you can’t have it every way,” he said.

The council’s head of planning, Richard Shakespeare, said he would have to review funding for parks, playgrounds and community rooms “and see what projects are going to be delayed or not happen at all”.

“Without that €1.4 million, something has got to give,” he added.

Councillors voted 21 to 14 against the sale. However, a number of councillors said they had been confused and asked for a second vote. Councillors then voted 23 to 14 against the sale.

Charledev did not respond to requests for comment.