Times and tribulations for Ballsbridge developer Sean Dunne

THE man in the crisp light grey suit standing outside Court 14 just after 2pm last Tuesday looked lost.

Surrounded by be-suited assistants and barristers in gowns and wigs, his demeanour couldn’t have been more different from the strident swash and buckle of his more public persona.

This was Seán Dunne as he has rarely been seen and how he would least like to be seen – seemingly lost and bewildered.

One who observed him standing in the busy corridor outside Dublin’s Commercial Court said last night: ‘His body language spoke volumes. His shoulders were hunched, his hands stuffed into his trouser pockets.

‘While he listened to what his advisers had to say, he seemed so dejected. ‘At times he just stared out into the middle distance in front of him.’

But however uncomfortable that brief court appearance at the beginning of the week might have been for him, what would happen days later would not have made him feel any better.

The decision on Friday by An Bord Pleanála to reject his €1.5bn plans to develop a seven-acre site in Dublin’s embassy belt in Ballsbridge will have come as a hammer blow.

Typically, he has vowed to fight on by submitting a new set of proposals for the former Jury’s Hotel site at the junction of Northumberland Road and Lansdowne Road that he is estimated to have already ploughed more than €500m into.

But his customary bravado belies the biggest single crisis he has yet to face, and it’s just a few short months away.

An Irish Mail on Sunday investigation into Mr Dunne’s finances reveals that he has to renegotiate – or settle – his main bank borrowings by as early as July.

His main parent company has – as of the financial year ending July 31, 2007 accounts approved last October – total debts of €624,838,631.

The accounts note that the loans, which are secured on his various company assets and personal guarantees, are due ‘within one to two years’.

His court battle on Tuesday against former business partner John Brennan might well have cost him dear and is being seen by some of his enemies as a lesson in humility.

In legal fees alone, the year-long row – over the rights to the domain D4hotels.com, which is used to draw in bookings for his two hotels at the former Jury’s site – is said to have set him back more than €1m.

That doesn’t include a settlement figure agreed so that the domain reverted to Mr Dunne’s ownership.

Astonishingly, when asked in court on Tuesday if he knew what a domain name was when D4hotels.com was set up, he replied: ‘No.’

Days later Mr Dunne would release a press release on his website in response to An Bord Pleanála’s decision.

While neither party will divulge the settlement figure, Mr Brennan celebrated the outcome over an astonishing 11-hour ‘meal’ with his legal team and advisers at the exclusive Dublin restaurant l’Ecrivain.

But the debt from the case pales into insignificance when cast against Mr Dunne’s company borrowings.

A trawl of his company accounts reveals massive debts, a web of intercompany loans and even a €5m personal guarantee against bank overdrafts.

According to the latest accounts for his company DCD Builders Ltd, Mr Dunne’s web of some 22 companies owes a total of €624m with interest costing him a staggering €250m.

Against this, he lists his assets as being worth around €765.5m.

But many of these values are based on figures from 2007, since when commercial property values may have fallen by as much as 50pc.

Filed in October last year for the year ending July 31, 2007, accounts show Mr Dunne’s development companies owe a total of €624,838,631 in loans to various banks.

The documents filed at the Companies Registration Office also reveal that Mr Dunne is personally liable for €4m of that total debt through a ‘personal guarantee’.

They also show that the loans are secured against ‘second ranking mortgages over certain properties held by Mr Dunne,’ though the accounts don’t specify which.

He also appears to be personally liable for the group’s €5m overdraft.. There are a total of 52 outstanding mortgages and charges against Mr Dunne’s companies.

These include MJBCH Ltd, the leaseholders of the E380m Ballsbridge hotel sites. DCD Builders’ accounts show that Mr Dunne’s current assets are valued at €765,975,779.

DCD also operated at a loss of €14,766,153 in 2007, in contrast to its profit of €26,412,425 in 2006.

The financial strain could go some way towards explaining why the company faced six resignations from board members between September 2007 and June 2008, with one director serving for just four months before tendering his resignation.

Auditors KPMG cite the risk across the board for his companies that: ‘The valuation of all property assets, including the group’s and company’s property related assets’ are ‘subject to global market conditions’.

More worryingly, they noted that the risks faced by the company also included ‘interest rates and/or inflation, unrealistic increases in development and operating costs and the impact of planning decisions on the group’s assets’.

John Brennan, whom Mr Dunne faced in the Commercial Court in the battle over the rights to the domain D4hotels.com, said last night: ‘Whatever anybody says about Seán Dunne, you have to admire him for having pulled off the Ballsbridge deal in the first place.

‘That was no mean achievement.

‘I think the deal is probably unprecedented anywhere else in the world. ‘But things are very different now and his failure to get planning permission will not just have repercussions for him, but right across the spectrum.’

Such financial machinations are all a world away from Mr Dunne’s humble beginnings. The son of a fire officer and council clerk in his native Tullow, Co. Carlow, he is the fourth of five children.

Growing up in a background considerably more austere than the world he now inhabits, he has recalled swimming in the River Slaney when he needed a bath.

He has also talked of making hay and picking potatoes before he hit his teens. Little is known of his years at the local vocational school.

But he left Bolton Street College of Technology with a degree in quantity surveying.

And before emigrating to Canada in the late 1970s, he received a bachelor of science in surveying from TCD.

He returned from Canada – where he worked on oil exploration – after two years in 1979 to build local authority houses in Tallaght, Co. Dublin.

But like so many other Irishmen and women of the time, he was forced to leave the country again in 1985 as the economic downturn hit home.

This time he headed for London with his wife, Jennifer, and their three children, but he returned after four years – just before Britain’s spectacular property crash.

In 1990, he secured his first major property deal, paying IR£14m for the St Helen’s estate in Booterstown, Co. Dublin.

The resulting Mountbrook Homes development – St Helen’s Wood – is one of the country’s most prestigious and in 2005 had risen in value by a staggering 1,000pc.

Another investment in 1997 included Woodtown Manor in Rathfarnham, Co. Dublin, for which – along with 150 acres of land – he paid just €2.4m and which a few years ago was valued at more than E150m.

He is estimated to have made E100m profit from the Whitewater Shopping Centre in Newbridge, co.

Kildare, which he built. A large development at Charlesland in Greystones, Co. Wicklow, netted him a profit of E80m, while he has also made millions from a string of exclusive penthouse apartments he built in Foxrock.

The properties at Holybrook were sold for around €3.5m each. And while his reputation for business dealings steadily grew, so too had his political influence – and his emergence from relative anonymity..

He has been friends with former finance minister Charlie McCreevy – whose Kildare home Dunne built – and former taoiseach Bertie Ahern for more than 20 years. He befriended both when they were humble TDs.

Mr Ahern was a guest at the lavish house-warming party Mr Dunne threw after he moved into his home on Shrewsbury Road.

In 2007, Mr Ahern invited Mr Dunne to attend his honorary address to the House of Commons in Westminster, and the following year he accompanied Mr Ahern to Washington DC for his address to the joint Houses of Congress.

Mr Dunne is one of the few property magnates not to have been embroiled in a tribunal.

His links to Fianna Fáil may well have helped him open lucrative doors in the business world – but they also led to him being introduced to his second wife, journalist Gayle Killilea.

They met at the party’s infamous Galway Races tent and married in the summer of 2004..

Blessed at a 17th century villa in Santa Margherita in Italy, the wedding was celebrated in style during a two-week cruise aboard the yacht Christina O, which was owned by Aristotle Onassis and where the Greek shipping tycoon married President John F Kennedy’s widow, Jacqueline.

Guests at the lavish bash aboard the yacht included Irish Nationwide boss Michael Fingleton, rugby star Ronan O’Gara and theatre impresario Michael Colgan.

Congratulatory calls the happy couple received during a memorable celebratory dinner included one each from Mr McCreevy and Mr Ahern.

Their calls were relayed to the Dunnes and their guests via speakerphone. As the epitome of the self-made millionaire who hails from humble beginnings, Mr Dunne may well have become the embodiment of Celtic Tiger Ireland.

But given what has happened to that particular beast – and to the likes of Bertie Ahern who presided over it all – it remains to be seen what happens to him. While his fortunes are so closely tied to the crest of the unprecedented wave of wealth and prosperity that swept the country over the past 10 years, how they fare in the downturn remains to be seen.

While his flair for business and his singular determination to succeed has got him as far as it has, so much of that success was invested in a world that has suddenly and terrifyingly moved on.

There seems no denying his relationship with Bertie Ahern was pivotal in his success.

When you can count among your friends the very people running the country, it is hard not to understand how anybody like Mr Dunne could not have helped to feel a certain sense of invincibility when confronted with the challenge of securing a deal as monumental as the Ballsbridge site.

Added to that will have been the support his plans had received from Dublin City Council planners. At the time he went for the site, the country was still in an unprecedented building boom.

And given all his carefully cultivated connections over the years, if anybody was going to succeed at Ballsbridge it was going to be Seán Dunne.

But sadly for him, many of the friends he made – not least the former taoiseach – that he could count on from high places are no longer around to be of any help to him.

And the position in which he now finds himself cannot possibility be alleviated given the number of enemies he seems to have acquired over the years.

Indeed, it is almost as if the number of high-powered friends Mr Dunne made over the years has been replaced by an equal number – and calibre – of enemies.

Falling out with Mr Brennan – who is one of the country’s most respected hoteliers – was careless at the very least. But falling out with billionaire financier Dermot Desmond seems downright stupid.

He took on the billionaire in a highprofile row over Mr Desmond’s touted leadership of Aer Lingus. A minor shareholder in the national airline, Mr Dunne wrote to the board questioning Mr Desmond’s suitability for the job.

In doing so, he re-ignited the controversy over Mr Desmond’s role in the sale of the Johnston Mooney and O’Brien bakery in Ballsbridge to Telecom Éireann (now Eircom) in the Nineties, which was later investigated in the Glackin Report.

Mr Desmond has always denied any wrongdoing in the affair but resigned his position on the board of airport operator Aer Rianta at that time.

Mr Dunne also referred to Mr Desmond’s appearances before the Moriarty Tribunal in relation to controversial payments to CJ Haughey.

Consequently, Mr Desmond turned out to be the most highprofile objector to Mr Dunne’s Ballsbridge plans.

A large number of well-heeled residents of D4 who objected are said to have been greatly swayed and influenced by the fact that someone like Desmond was so opposed to the development plans.

Mr Dunne parted company with his lawyers Arthur Cox, and there was a spectacularly nasty parting of the ways between himself and Charlie Chawke, who had run the Dubliner pub franchise at his D4 hotels.

On the very day his daughter was getting married in Adare, Mr Chawke is said to have been told by the hotel’s management that he had been locked out of the pub, the locks having been changed the night before.

The row that sparked this is believed to have been over an outstanding fee for €100,000 due for Mr Chawke’s provision of breakfasts for hotel residents.

Mr Dunne says that Mr Chawke’s contract was terminated in a proper and lawful manner. Mr Chawke disputes this.

Whatever the outcome of that battle, this succession of rows helps explain why the blocking of his Ballsbridge dream has not elicited widespread outpourings of sympathy.

And that rare sight of his vulnerability outside the Commercial Court last Tuesday may well have been the first chink in the armour of a man used to getting his own way.

As he considers An Bord Pleanála’s decision, Seán Dunne must now surely be wondering how he will be able to shore up his property empire.

With that date with the banks looming in July, words attributed to him during an interview last month in an American newspaper may well end up haunting him sooner rather than later.

‘If,’ he is said to have told journalist Landon Thomas Jr, ‘the banking crisis continues, I could be considered insolvent.’

Although he would later deny that he said this, he did qualify his remarks with the following: ‘With banks in almost every country going bust, I would not bet against myself or anybody else being taken out.’

Comments Off

Filed under News

Comments are closed.