Rich list's New York shopping spree
On the eve of our bust, Ireland's elite went buying, in many cases courtesy of massive bank loans, writes Ronald Quinlan
Published 24/01/2010 | 05:00
THEY say money talks while wealth whispers. In 2007, there appears to have a been a lot of talking going on behind cupped hands in the offices of Bank of Ireland's Private Banking division.
For just as the global financial crisis was beginning to take hold, a plethora of the country's wealthiest individuals snapped up luxurious apartments and condominiums at the choicest of addresses in New York city.
Locations of choice included Fifth Avenue, Rockefeller Plaza and the Chelsea district of Greenwich Village, documents seen by the Sunday Independent show.
Among the high-net-worth individuals (HNWIs) availing of what the bank itself terms its "unique, exclusive and completely private service" that year to buy a slice of the Big Apple were Jim Corr of The Corrs, broadcaster Pat Kenny's neighbour Gerard Charlton and his family, the late developer John O'Dolan, as well as a host of other builders, wealth managers and businessmen from across the country.
Riverdance creators Moya Doherty and John McColgan, both veterans of the US real estate market, also had dealings with the bank, taking the opportunity to consolidate existing loans on three apartments they own in New York city into a single facility for $7.8m ($5.5m).
In the case of Jim Corr, records seen by this newspaper show Bank of Ireland Private Banking extended a mortgage of €1,473,750 to the musician on June 12, 2007, for the purchase of an apartment in the Centria Building at Rockefeller Plaza on West 48th Street and Fifth Avenue.
According to the terms of the loan, Corr agreed to repay the full amount over a period of five years.
Information from real estate sources in New York, however, shows that the musician sold on the two-bedroom apartment within a year of a acquiring it.
Records of the 2008 sale show the 1,200sq ft unit was first put on the market with an asking price of $2.35m on June 10, 2008, and that contracts for sale were issued just two months later, on August 28. The sale was completed on October 2.
Solicitor Gerard Charlton appears to have had a keen appetite for New York real estate in 2007. The septuagenarian legal eagle, who is perhaps best known for the very public falling out with his neighbour, RTE broadcaster Pat Kenny, over the right of way between their Dalkey homes, acquired two apartments in Manhattan within walking distance of the city's theatre district at West 42nd Street and on Fifth Avenue respectively through his family's company, Metropolitan Properties, the records show.
According to official records of the transactions, Mr Charlton's company availed of two mortgages for $1.6m in March 2007 to assist with the purchase of apartments at the Orion Condominium on West 42nd Street and 321 Fifth Avenue. The loan agreement with Bank of Ireland Private Banking shows Metropolitan Properties undertook to repay the full $3.2m with interest by February 28, 2012.
Moya Doherty and John McColgan, meanwhile, took the opportunity to refinance existing mortgages with Bank of Ireland on three of their New York properties in November 2004, the records show.
According to the files, Doherty and McColgan consolidated outstanding loans of $3.81m and $4m into one facility of $7.81m on November 23, 2004.
In the case of the original $3.81m loan, the money was borrowed to assist with the purchase of two single condominium units at the La Residence Building on Madison Avenue. The second loan of $4m was given towards the cost of acquiring a penthouse unit at the Park Imperial Building on West 56th Street.
Another well-known Irish figure who availed of Bank of Ireland's private banking division, albeit towards the end of the boom, was the late Galway developer John O'Dolan.
Already a heavily debted client of Anglo Irish Bank, Mr O'Dolan took two mortgages with Bank of Ireland for the purchase of two apartments at the Centria Building overlooking Rockefeller Plaza in June and July 2007. The loan amounts were for $954,000 and $884,000 respectively.
The Galway developer, who sprang to prominence off the back of ambitious plans to develop the island of Ireland in the World at Dubai, took his own life tragically less than a year later, hanging himself in a horse shed at his home in Barna in February 2008.
Another Galway developer who invested in the Centria Building off the back of a mortgage facility from Bank of Ireland's private banking unit was Stephen Harris from Chapel Wood in Stradbally, Co Laois.
According to the files, Mr Harris took a loan for $875,000 to buy a one-bed unit at the exclusive development. Less than two years later, however, Mr Harris's fortunes were clearly in decline.
Appearing with his business partner Bernard McKeown before the Commercial Court, the developer suffered the indignity of having an application for an order of summary judgment of €2.89m granted against him by Mr Justice Peter Kelly. In the case of Mr McKeown, an order for judgment of €1.45m was granted.
The judgment orders, which were granted to the Bank of Ireland, related to two separate loans. The first of these -- €1.455m -- was given to the men in 2004 for the financing of a development of 14 two-bedroom apartments at Ballymote Road in Tubercurry, Co Sligo. The second loan for €1.44m was given to Mr Harris personally in November 2007.
Another Galway businessman drawn to the bright lights of the big city was the well-known jeweller and racehorse owner Robert Blacoe.
In Mr Blacoe's case, the $1.786m he borrowed went towards the purchase in July 2008 of a condominium at the legendary Plaza Hotel on Fifth Avenue.
Mr Blacoe previously featured in newspaper headlines in April 2005 with a report in the sports pages of the Irish Times noting how he had "struck gold with the first horse he has ever owned".
According to the report, the Dermot Weld-trained Bob's Pride won the PW McGrath Memorial Ballysax stakes at Leopardstown in a victory the paper suggested could have been another step towards a possible attempt at the Budweiser Irish Derby.
Another Galway-based developer and entrepreneur who put his money into New York property in the last days of the boom was Maurice Gillen.
According to the records, the Hastonvale Properties chief purchased a single residential condominium unit at the Centria Building at Rockefeller Plaza in August 2007, availing of a mortgage for $1.493m.
Bank of Ireland Private Banking also managed to attract wealthy clients from Co Limerick, according to the files seen by the Sunday Independent.
In September 2007, for example, Limerick city-based investment advisers Colm Kennedy and Noel Gallivan of GK Wealth Management purchased an apartment at the Centria Building with the assistance of a $927,000 mortgage from the bank.
In Co Westmeath, meanwhile, Sheever Developments boss Michael Kelly and his wife Liz secured a mortgage for $934,500 in June 2007 to assist with the purchase of an apartment at the Centria Building on West 48th Street at Rockefeller Plaza.
Clearly optimistic with regard to the future of the Irish economy at the time, Mr Kelly undertook to repay the full amount he borrowed from Bank of Ireland Private Banking by June 7 of this year.
Another businessman clearly flush with success, as the global and domestic financial crisis loomed, was Dublin-based bathroom and plumbing supplies tycoon James Boucher.
The Castleknock resident borrowed $788,000 in July 2007 to purchase a condominium in the Centria Building at Rockefeller Plaza.
Closer to home, Mr Boucher had ambitious plans outside of his Vogue Bathrooms business with his partners in Uxbridge Properties for the development of a new shopping and medical centre in Castleknock village.
According to the application, the company sought to develop 15 shops and commercial units in addition to a 1,667sqm anchor store, a 123sqm retail pavilion, as well as 49 apartments.
Following a campaign of staunch opposition from local residents, the application was finally withdrawn in January 2009.
Leading Dublin-based law firm BCM Hanby Wallace was well represented in the Centria Building, according to official loan documents.
The files show partners Jim Moran and Gerard Butler and former partner Dan Murphy all bought apartments in the development in 2007, availing of loans for $805,000, $983,400 and $931,000 respectively from Bank of Ireland Private Banking.
In the case of Mr Murphy -- who is still retained by his former employer on a consultancy basis -- investing in the New York property market was hardly surprising given his level of expertise in the area of real estate.
According to the BCM website, Mr Murphy is credited here at home as having advised on the "acquisition of over 10 sites by one of the state's leading residential developers" as well as acting for "four of the five developers of the first high-density mixed development in Tyrellstown in Dublin".
Not that Bank of Ireland Private Banking was alone in extending massive loans to the country's wealthy elite for the purchase of prime properties in New York during the boom.
Prior to its nationalisation, Anglo Irish Bank lent millions of dollars to such well-known figures as the champion jockey Mick Kinane and the daughter of the late Taoiseach Charles Haughey, Eimear Mulhern, to buy apartments in Manhattan's most exclusive neighbourhoods.
The bank also gave a mortgage to David FitzPatrick, an Anglo Irish Bank employee and a son of its now disgraced former chairman Sean FitzPatrick.
An examination of the loan documents relating to Mr FitzPatrick's purchase in 2008 of the apartment at Pear Tree Place in Greenwich Village shows how the deal was completed and the property officially transferred into his ownership on October 1 -- just one day after the Government here gave its formal commitment to guarantee the deposits of all the Irish banks to the tune of €400bn.
That hugely risky undertaking is now known to have come about chiefly as a consequence of fears within the Department of Finance and the Central Bank that Anglo was on the brink of total collapse. Fearing the potential domino effect of such a catastrophic event for the entire Irish banking system, the Government moved quickly to put the multibillion-euro deposit guarantee scheme in place.
Official documents show that an additional mortgage of $50,000 was registered on David FitzPatrick's property in February 2009, and this is noted as being part of an overall credit facility of €87m given by the bank to Sean FitzPatrick and his immediate family.
While New York experienced a fresh wave of Irish investors during the dying days of the boom, there are records of other more seasoned visitors.
According to the files seen by the Sunday Independent, U2 frontman Bono and his wife Ali Hewson did a little legal housekeeping in relation to their apartment at Central Park West in 2008, giving their New York-based lawyers formal power of attorney over the property.
Neither the U2 singer nor his wife travelled to the United States to complete the paperwork in the real estate deal, choosing instead to sign the necessary legal documents at a solicitor's practice close to their home in the affluent suburb of Killiney on Dublin's southside.