Note - Dude's wife in 1st picture is hot.
http://www.nytimes.com/2009/01/04/business/worldbusiness/04ireland.html?_r=1
The Irish Economyâs Rise Was Steep, and the Fall Was Fast
By LANDON THOMAS Jr.
Published: January 3, 2009
The developer Sean Dunne and his wife, Gayle Killilea, at home in Dublin. It is not known whether Mr. Dunne will fall victim to the global financial crisis, but there is no doubt Ireland has.
Dublin
ITâS 3 a.m. at Doheny & Nesbitt, a favorite watering hole of Dublinâs political and business elite, and the property tycoon Sean Dunne stoops to retrieve a penny from the pubâs grimy floor.
One would think that Mr. Dunne, Irelandâs best-known building developer, would be in bed at this hour. Itâs a weeknight, after all, and he has meetings that begin before first light.
Whatâs more, the Irish economy, pummeled by the most severe housing bust in Europe, has collapsed. And the gossip around town is that Mr. Dunne, whose brazen deal-making and Donald Trump-like lifestyle epitomized the countryâs euphoric boom, might be going bankrupt.
But, no matter, a penny is a penny.
âI am never, never too proud to pick a penny up from the floor,â Mr. Dunne said. He is on perhaps his fifth pint of Guinness, capping a rollicking night of Champagne cocktails, followed by a wine-soaked dinner â yet his thick brogue is clear of even the faintest slurring.
âI grew up with nothing and I know the value of money,â he adds. âThe Celtic Tiger may be dead and if the banking crisis continues I could be considered insolvent. But the one thing that I have is my wife and children â that they canât take away from me.â
It is not known whether Mr. Dunne will fall victim to todayâs world financial catastrophe, but there is no doubt that his country has.
Everything, it seems, has grown worse here. The recession started earlier and its bite has been deeper. Housing prices have fallen by as much as 50 percent. Bank shares have plummeted by more than 90 percent. Unemployment is approaching 10 percent.
The roots of Irelandâs fall date to more than 20 years ago, when a clutch of economists, politicians and civil servants put their heads together in this very pub and planted the philosophical seeds for the Irish economic miracle.
Known widely as the âDoheny & Nesbitt School of Economics,â these beery musings soon became government policy that chopped taxes in half, sharply reduced import duties and embraced foreign investment â a radical transformation that gave birth to the Celtic Tiger and perhaps the most open and vibrant economy in Europe.
But beyond the glow of this sudden efflorescence that made Ireland the fourth most-affluent country in the Organization for Economic Cooperation and Development, a housing bubble had begun to form. Low interest rates, a wave of inward immigration and a bank lending spree drove housingâs share of the economy to 14 percent, the highest in Europe, from 5 percent.
Developers like Mr. Dunne became multimillionaires and â much like the hedge fund and private-equity elite in America â became visible public and cultural figures. They were living large in a country just coming to grips with its ability to show a little swagger.
Irelandâs policy makers, like their counterparts in the United States and Britain, were seduced by record tax inflows and a full-employment economy. They paid little heed to the lonely voices that warned of the crash that finally came over the summer, when interest rates in Europe began to rise. Banks that had steered more than 60 percent of their loans toward property stopped lending, and asset values plummeted.
âWe have repeatedly warned that the governmentâs housing policy was extremely dangerous,â said John Fitz Gerald, an economist at the Economic and Social Research Institute, a leading policy center in Dublin, who has long urged that the government stanch housing demand by raising taxes. âYou will now see unemployment going to 10 percent and we will experience a sharp drop in output.â
He shakes his head and sighs: âThis was predictable, but the government just did not deal with it.â
BY wide consensus here, two events have come to define â both culturally and financially â the sweep and excess of the Irish property boom. Both revolve around Sean Dunne.
In July 2005, Mr. Dunne paid 379 million euros for a seven-acre plot in the exclusive Ballsbridge neighborhood of Dublin and promptly announced that he would tear down the two luxury hotels on the site to build a high-end commercial and residential development.
That deal amounted to 54 million euros an acre, one of the highest amounts ever paid for land in Europe. His subsequent architectural plan featured a soaring Dubai-like office tower cut in the shape of a diamond that anchored a futuristic community of expensive houses and glamorous shops, and the price tag of one billion euros shocked Dubliners with its gall and ambition.
Hobbled by delays and vocal neighborhood opposition, the project sits before a local planning board that on Jan. 30 will either approve or scrap the plan.
The second moment occurred in 2004 when Mr. Dunne, who is now 54, celebrated his second marriage, to Gayle Killilea, a former gossip columnist 20 years his junior, by inviting 44 of his friends on a two-week Mediterranean wedding cruise on the yacht Christina O, on which Aristotle Onassis and Jacqueline Kennedy married.
A site in Limerick, Ireland, where work on a shopping center was halted. The city has been hit hard by the downturn.
Much as the $3 million birthday party for Stephen A. Schwarzman, the Blackstone Group founder, came to be seen as a crass display of private equityâs manifold riches, the Dunne wedding was viewed similarly in Ireland: as a conspicuous and garish expression of the man and his business.
That a billion euro property plan and a gaudy wedding celebration should be held up as cautionary exemplars of Irelandâs pursuit of money angers Mr. Dunne. In his view, it speaks to what some call the Irish disease.
âJealousy and begrudgery are still alive and well in Ireland, and whoever eradicates them should be prime minister for life,â he says as he tucks into a heaping plate of gravy-drenched turkey and mashed potatoes in the restaurant of one of the two hotels he owns â and is hoping to raze. âItâs part of the Irish psyche and it is the result of 800 years of being controlled by other people, of watching everything the master or landlord is doing.â
Mr. Dunneâs compact paunch, reddish cheeks and mischievous grin â which he occasionally deploys with a wink of his eye â can give him the air of a department store Santa. But his business methods are far from jolly: he is notorious for taking legal action against all who cross him, from local newspapers to rival property developers.
He defends his purchase of the Ballsbridge site as responsible, not reckless, as his critics have deemed it. He points out, too, that his winning bid was just slightly more than the second-highest offer and that subsequent property sales had far exceeded his submission of 54 million euros an acre.
Still, he recognizes that times have changed. Just recently, he pruned staff at his development company, and some of his senior executives agreed to take 50 percent pay cuts.
Asked where he will find the 600 million euros that he needs to tear down the two hotels, dig a massive hole in the ground and erect his vision of a new Dublin, he ruefully remarks: âIt is fair to say that there is not a queue of bankers lining up to lend to me right now.â
But he says the project will be completed, assuming that it wins approval of the planning board. âIf anyone wants to bet I canât do this, I will take that bet,â he says, citing, without specifics, talks with Asian banks and a sovereign wealth fund. âYou have to have steel in a certain part of your body to do this job, and as one of my bankers recently said to me, âSean, the only thing that will take you out is a stray bullet.â â
IN many ways, the ups and downs of Mr. Dunneâs life and career mirror the Irish economyâs own rise and fall. Born into a house without electricity or running water in the small provincial town of Tullow, outside Dublin, Mr. Dunne studied construction economics at a technical college in the 1970s.
Along with many of his countrymen, he forsook the stagnant Irish economy â in his case, choosing bartending in New York City and working on an oil rig in Canada.
With the Irish economy still afflicted by an unemployment rate of about 20 percent in the 1980s, and a punitive overall tax rate, he began his real estate career in London. He moved back to Ireland in 1990 and began a string of property deals.
http://www.nytimes.com/2009/01/04/business/worldbusiness/04ireland.html?_r=1
The Irish Economyâs Rise Was Steep, and the Fall Was Fast
By LANDON THOMAS Jr.
Published: January 3, 2009
The developer Sean Dunne and his wife, Gayle Killilea, at home in Dublin. It is not known whether Mr. Dunne will fall victim to the global financial crisis, but there is no doubt Ireland has.
Dublin
ITâS 3 a.m. at Doheny & Nesbitt, a favorite watering hole of Dublinâs political and business elite, and the property tycoon Sean Dunne stoops to retrieve a penny from the pubâs grimy floor.
One would think that Mr. Dunne, Irelandâs best-known building developer, would be in bed at this hour. Itâs a weeknight, after all, and he has meetings that begin before first light.
Whatâs more, the Irish economy, pummeled by the most severe housing bust in Europe, has collapsed. And the gossip around town is that Mr. Dunne, whose brazen deal-making and Donald Trump-like lifestyle epitomized the countryâs euphoric boom, might be going bankrupt.
But, no matter, a penny is a penny.
âI am never, never too proud to pick a penny up from the floor,â Mr. Dunne said. He is on perhaps his fifth pint of Guinness, capping a rollicking night of Champagne cocktails, followed by a wine-soaked dinner â yet his thick brogue is clear of even the faintest slurring.
âI grew up with nothing and I know the value of money,â he adds. âThe Celtic Tiger may be dead and if the banking crisis continues I could be considered insolvent. But the one thing that I have is my wife and children â that they canât take away from me.â
It is not known whether Mr. Dunne will fall victim to todayâs world financial catastrophe, but there is no doubt that his country has.
Everything, it seems, has grown worse here. The recession started earlier and its bite has been deeper. Housing prices have fallen by as much as 50 percent. Bank shares have plummeted by more than 90 percent. Unemployment is approaching 10 percent.
The roots of Irelandâs fall date to more than 20 years ago, when a clutch of economists, politicians and civil servants put their heads together in this very pub and planted the philosophical seeds for the Irish economic miracle.
Known widely as the âDoheny & Nesbitt School of Economics,â these beery musings soon became government policy that chopped taxes in half, sharply reduced import duties and embraced foreign investment â a radical transformation that gave birth to the Celtic Tiger and perhaps the most open and vibrant economy in Europe.
But beyond the glow of this sudden efflorescence that made Ireland the fourth most-affluent country in the Organization for Economic Cooperation and Development, a housing bubble had begun to form. Low interest rates, a wave of inward immigration and a bank lending spree drove housingâs share of the economy to 14 percent, the highest in Europe, from 5 percent.
Developers like Mr. Dunne became multimillionaires and â much like the hedge fund and private-equity elite in America â became visible public and cultural figures. They were living large in a country just coming to grips with its ability to show a little swagger.
Irelandâs policy makers, like their counterparts in the United States and Britain, were seduced by record tax inflows and a full-employment economy. They paid little heed to the lonely voices that warned of the crash that finally came over the summer, when interest rates in Europe began to rise. Banks that had steered more than 60 percent of their loans toward property stopped lending, and asset values plummeted.
âWe have repeatedly warned that the governmentâs housing policy was extremely dangerous,â said John Fitz Gerald, an economist at the Economic and Social Research Institute, a leading policy center in Dublin, who has long urged that the government stanch housing demand by raising taxes. âYou will now see unemployment going to 10 percent and we will experience a sharp drop in output.â
He shakes his head and sighs: âThis was predictable, but the government just did not deal with it.â
BY wide consensus here, two events have come to define â both culturally and financially â the sweep and excess of the Irish property boom. Both revolve around Sean Dunne.
In July 2005, Mr. Dunne paid 379 million euros for a seven-acre plot in the exclusive Ballsbridge neighborhood of Dublin and promptly announced that he would tear down the two luxury hotels on the site to build a high-end commercial and residential development.
That deal amounted to 54 million euros an acre, one of the highest amounts ever paid for land in Europe. His subsequent architectural plan featured a soaring Dubai-like office tower cut in the shape of a diamond that anchored a futuristic community of expensive houses and glamorous shops, and the price tag of one billion euros shocked Dubliners with its gall and ambition.
Hobbled by delays and vocal neighborhood opposition, the project sits before a local planning board that on Jan. 30 will either approve or scrap the plan.
The second moment occurred in 2004 when Mr. Dunne, who is now 54, celebrated his second marriage, to Gayle Killilea, a former gossip columnist 20 years his junior, by inviting 44 of his friends on a two-week Mediterranean wedding cruise on the yacht Christina O, on which Aristotle Onassis and Jacqueline Kennedy married.
A site in Limerick, Ireland, where work on a shopping center was halted. The city has been hit hard by the downturn.
Much as the $3 million birthday party for Stephen A. Schwarzman, the Blackstone Group founder, came to be seen as a crass display of private equityâs manifold riches, the Dunne wedding was viewed similarly in Ireland: as a conspicuous and garish expression of the man and his business.
That a billion euro property plan and a gaudy wedding celebration should be held up as cautionary exemplars of Irelandâs pursuit of money angers Mr. Dunne. In his view, it speaks to what some call the Irish disease.
âJealousy and begrudgery are still alive and well in Ireland, and whoever eradicates them should be prime minister for life,â he says as he tucks into a heaping plate of gravy-drenched turkey and mashed potatoes in the restaurant of one of the two hotels he owns â and is hoping to raze. âItâs part of the Irish psyche and it is the result of 800 years of being controlled by other people, of watching everything the master or landlord is doing.â
Mr. Dunneâs compact paunch, reddish cheeks and mischievous grin â which he occasionally deploys with a wink of his eye â can give him the air of a department store Santa. But his business methods are far from jolly: he is notorious for taking legal action against all who cross him, from local newspapers to rival property developers.
He defends his purchase of the Ballsbridge site as responsible, not reckless, as his critics have deemed it. He points out, too, that his winning bid was just slightly more than the second-highest offer and that subsequent property sales had far exceeded his submission of 54 million euros an acre.
Still, he recognizes that times have changed. Just recently, he pruned staff at his development company, and some of his senior executives agreed to take 50 percent pay cuts.
Asked where he will find the 600 million euros that he needs to tear down the two hotels, dig a massive hole in the ground and erect his vision of a new Dublin, he ruefully remarks: âIt is fair to say that there is not a queue of bankers lining up to lend to me right now.â
But he says the project will be completed, assuming that it wins approval of the planning board. âIf anyone wants to bet I canât do this, I will take that bet,â he says, citing, without specifics, talks with Asian banks and a sovereign wealth fund. âYou have to have steel in a certain part of your body to do this job, and as one of my bankers recently said to me, âSean, the only thing that will take you out is a stray bullet.â â
IN many ways, the ups and downs of Mr. Dunneâs life and career mirror the Irish economyâs own rise and fall. Born into a house without electricity or running water in the small provincial town of Tullow, outside Dublin, Mr. Dunne studied construction economics at a technical college in the 1970s.
Along with many of his countrymen, he forsook the stagnant Irish economy â in his case, choosing bartending in New York City and working on an oil rig in Canada.
With the Irish economy still afflicted by an unemployment rate of about 20 percent in the 1980s, and a punitive overall tax rate, he began his real estate career in London. He moved back to Ireland in 1990 and began a string of property deals.
