NAMA swoops on developer's hotels
Paddy Kelly loses control over swathes of his properties
NAMA yesterday dramatically seized control of seven hotels and a swathe of other properties connected to Paddy Kelly -- once one of the country's wealthiest developers.
The move means Mr Kelly faces having the properties sold to pay his debts and will no longer get any of the income they bring in.
Instead the rental income will go to NAMA.
The action was triggered because the developer failed to agree a plan with NAMA to start selling off assets in order to begin paying back debts of more than €1.5bn.
The loans agency is expected to seize control of more of Mr Kelly's properties over the coming weeks unless he agrees a deal. He still owns vast amounts of property, including a hotel in Malta and the Carton House Hotel here.
The move comes days after NAMA chairman Frank Daly warned the agency would take a more aggressive approach with developers who were "making little effort" to deal with their massive debts.
Ten other major developers are also in the firing line and may have control of their businesses seized over the coming months unless they agree to sell off assets so they can repay loans.
Several smaller investors who were involved in some of Mr Kelly's deals have also been caught up in the swoop and face losing their cash.
These include former Ireland rugby manager-turned-developer Pat Whelan and his business partner Pat Chesser, as well as Meath builder John McCabe and a number of clients of Davy Stockbrokers.
The six hotels include the Clarion Hotels in the IFSC, Dublin Airport, Liffey Valley and Limerick, as well as the Maldron in Citywest, the Day's Inn on Talbot Street and the Marriott in Ashbourne.
The hotels, which employ more than 1,000 people, will all continue trading normally since the move mainly affects the buildings they are in and not the hotel companies themselves.
Only one of the seven hotels, the Liffey Valley Clarion, will actually be controlled by the receiver that NAMA has sent in to look after its assets.
"The only thing this means is that someone else is getting the rent," said Frankie Whelehan, who oversees the four Clarion properties.
The receiver, KPMG insolvency expert Kieran Wallace, is also dealing with suites that Mr Kelly and other investors owned in the Maldron Hotels in Cardiff Lane, Dublin, and in Limerick City.
His mandate is to sell all the hotels and suites on to new buyers as quickly as possible. In a statement last night he stressed that it would be "business as usual" over the coming months.
NAMA has also appointed estate agents Savills as receiver over a number of other properties connected to Mr Kelly.
These include the prestigious Smurfit Headquarters in Clonskeagh, an office block in Blackrock and a medical centre, leisure centre, car park and seven shop units, including two Paddy Power shops in Dublin's Smithfield.
As with the hotels, the only change for the tenants and their customers is the name of the person benefiting from the rent.
The developer could not be reached for comment last night, but a spokesperson for his family stressed that the Kellys were the "minority partner" in a number of the properties involved.
"The family understands the need for NAMA to put them into receivership and we support NAMA in their work," she added, describing the relationship with the agency as "very civil".
The move against Mr Kelly has been building for several weeks and his representatives were only formally notified of the action at a meeting with NAMA yesterday.
The properties NAMA has already swooped on were used to secure loans of several hundred million euro.
The debts of 100 different named borrowers were caught up in the NAMA swoop. They include Mr Kelly and his children, three of whom, Simon, Christopher and John, worked in the family business.
Porsche-driving Simon has been an outspoken critic of the lending culture at Anglo Irish Bank and other financial institutions he says fuelled the expansion of the Kelly empire.
The 100 includes builder John McCabe, a NAMA name in his own right. His McCabe Builders company worked alongside Mr Kelly on the €12.5m Marriott Hotel development in Ashbourne, Co Meath, and was involved in a development project of Mr Kelly's in Sarasota, Florida.
Former Ireland rugby manager Pat Whelan and his business partner Pat Chesser are also investors in the syndicate.
Mr Whelan managed the national rugby team until 1998 and was one-time Limerick Person of the Year.
Pat Chesser is a well known auctioneer and developer in Limerick city.
The two were involved in developing Ireland's tallest hotel, the 17-story Clarion Hotel in Limerick city.