Developers may come and go but debts are here to stay for us to clear
People who owe the same as the GDP of an African nation still live comfortably in their mansions, writes Ronald Quinlan
'WHO knows? Perhaps in time we'll revise our revised opinion of the boom years. Perhaps when William and Kate come to call on us in 30 years time, we'll all troop down to the skeletal remains of the Anglo Irish HQ on the docks, lay a wreath beside the Prada till in BTs, invite the Dunne/Killilea grandchildren to come home and join the garden party. We can start a whole new round of forgiveness and reconciliation."
So said Ireland's high priestess of probity, Ombudsman Emily O'Reilly, in the annual Hennessy Lecture, which she delivered at the Royal College of Surgeons last month on the weighty subject of "the citizen and society in turbulent times".
One can only wonder what Sean and Gayle Dunne would make of O'Reilly's comments since neither wished to take up the invitation from the Sunday Independent to respond when invited to do so last week.
But then again, why would they waste their time worrying about anything O'Reilly has to say about them or the "blinging lifestyle" she believes "they both clearly crave" while their next fortune is ready and waiting to be made in America?
"Newsflash. Sean's a builder. He builds houses. What do you expect him to do? Stay in Ireland and do nothing?" was how one friend of the Dunnes put it when asked about the erstwhile Baron of Ballsbridge's move last year to the elite enclave of Greenwich, Connecticut.
Among the others who have decided not to hang around to be convicted in the court of public opinion are former Revenue Commissioner turned property speculator Derek Quinlan and the Cork developer John Fleming.
While Quinlan -- who personally owes Nama some €600m -- decamped for "tax and personal reasons" to Switzerland in July 2009 (even bringing his Dublin-registered Mercedes S350 with him), Fleming, whose construction company collapsed under the weight of €1.1bn in debts in March of last year, promptly made the move to the UK to avail of its more benign bankruptcy regime. There, a person declared bankrupt remains so for just 12 months as opposed to the 12 years which pertains under Irish law.
So having duly been declared bankrupt last November, Fleming -- whose unfinished Rockbrook development sits as a stubborn stain on the south Dublin landscape -- will receive the proverbial clean bill of financial health just five months from now and will be free, with the permission of a court, to set himself up in business again. Fleming's 12-month sojourn in a modest semi in Essex isn't such a bad deal when one considers the appalling price Irish taxpayers will have to pay, now and for several generations through increased taxes, to clear the multibillion euro debts incurred by him and the other developers and bankers through the rampant speculation that in many cases was encouraged by our political establishment.
Lest anyone needs reminding, €41.8bn of the hole blown in the banks' balance sheets arises as a direct result of the so-called haircuts imposed by Nama on the €72.3bn in development loans it took over from them. It's a hole that the taxpayer has been left to fill.
But back to those who helped to do the damage. In a presentation to the British-Irish Parliamentary Assembly last Tuesday morning, Nama chairman Frank Daly revealed how 29 of Ireland's biggest developers currently owe the agency an eye-watering €34bn between them. The agency's top 10 debtors account for €15.3bn of that sum. But while those figures are staggering in themselves, they do not include the additional billions these same developers also owe to non-Irish banks not covered by Nama.
And while Daly reiterated his oft-repeated mantra that Nama isn't a bailout for developers, it's difficult to square that statement with the arrangements the agency enters into with borrowers once they agree to a business plan and adhere to its terms.
Put simply, co-operation with Nama brings its own rewards, with salaries of €200,000 already being paid to a number of the country's biggest developers for their assistance in managing their property portfolios.
A salary to match the Taoiseach. It's all a far cry from the doom-laden missive sent to developers by the CIF (Construction Industry Federation) in June of last year in which they were warned how they must "accept the consequences" if they were "unrealistic" or refused to adjust their lifestyles. "Lifestyle of borrowers must adjust to reflect business realities," the letter intoned grimly.
But while Nama might argue -- and some would say justifiably -- that it is ultimately better for them to work with developers to maximise the return for the taxpayer, its seeming inability to curb the extravagant lifestyles still enjoyed by some of those on its books has been nothing short of galling for the public.
For while members of the country's coping class groan silently under the weight of mortgages on homes in negative equity and pray that they will hold their jobs and never have to avail of the State's 12-month moratorium, developers with debts to match the GDP of Lesotho ($1.58bn, or e1.1bn, in 2009 according to the World Bank) still live comfortably in their mansions, both at home and abroad.
Johnny Ronan of Treasury Holdings is a case in point. Even as the full horror of Ireland's economic meltdown was unfolding, the so-called 'buccaneer' went on a spur-of-the-moment €60,000 jaunt at the end of February last year on his private jet to Morocco with former Miss World Rosanna Davison and her friend Sarah Leckie.
Notwithstanding those antics, Ronan's Treasury Holdings still managed to ink a memorandum of understanding (MOU) with Nama, allowing him (albeit unintentionally) to continue living a life that most people could only dream of.
Even where developers are in financial freefall, their circumstances continue to outstrip the silent majority now paying a heavy price for the property bubble.
Take the case of Clare-born developer Bernard McNamara for example, who eight months on from Nama's appointment of a receiver over Michael McNamara Construction, continues to live in his 16,000 sq ft mansion on Dublin's Ailesbury Road in between business trips to the United Arab Emirates. While the 61-year-old developer may have finally put the palatial property on the market three weeks ago, an optimistic asking price of €12.5m would suggest that he and his wife, Moira, will still have plenty of opportunities to take a dip in their indoor swimming pool, which when covered with its transparent glass cover is instantly transformed into a dance floor.
Having assets put into receivership by Nama hasn't been all bad for Swiss-based financier Quinlan either, when one considers the sums the agency will recover from the sale of the Dublin properties it has seized from him to date relative to the €600m he owes personally.
Indeed, of the six residential properties currently up for sale through Nama-appointed receiver Paul McDowell, of Knight Frank, the most expensive -- Quinlan's former office at 1 Elgin Road -- has a price tag of just €2.95m.
Of the other Quinlan properties on the block, the next most expensive are a 3,800 sq ft house at 43 Ailesbury Road and a 2,000 sq ft house to its rear at nearby Ailesbury Wood. While the two properties were put on the market for a total of €3.75m, it is understood they may be close to a sale with a current offer hovering in the region of €2.5m. Over in Rathmines, meanwhile, three 1,000 sq ft mews buildings Quinlan owned next to Grosvenor Square are up for sale for €400,000 apiece.
Quite apart from its move on Quinlan, Nama's recent appointment of receivers to development and investment properties owned by Glenkerrin's Ray and Danny Grehan, both here and in the UK, hasn't done much to dent the Kildare-based brothers' confidence.
For even as Nama closes in on the Grehans' assets in an effort to recover the €660m they owe, the Sunday Independent understands the developers are already making plans to start up all over again, with Brazil -- where the economy is booming and demand for housing at an all-time high -- currently featuring among the countries they are considering.
As our developers busy themselves with rebuilding the fortunes they made in the boom and lost in the crash, Emily O'Reilly's 'plans' for a garden party to promote forgiveness and reconciliation may have to be put on hold for a while.