Boomtime investment in Mount Carmel a casualty of falling birth rate and recession
Gerry Conlan’s healthcare dream came unstuck when the figures simply ceased to add up
Irish Medical Organisation representatives Eileen Finn, Marian Hendrick, Patricia Kelly Maloney and Eleanor Byrne at the now closed Mount Carmel Hospital, Churchtown, Dublin, after the appointment of a provisional liquidator. Photograph: Brenda Fitzsimons
It was a landmark deal of the boom. In July 2006, Kildare developer Gerry Conlan beat all others with a knock-out €50 million bid to buy Mount Carmel Hospital in Churchtown, south Dublin. The Little Company of Mary Sisters, the religious order which founded the hospital in 1949, cashed out and used the money to help its ageing members. Sr Celine Bourke, its province leader, said she was “delighted”.
Conlan was immensely wealthy. After a decade of building up a 308-acre landbank in Naas, Co Kildare, known as Millennium Park, Conlan, with his then business partner Dermot O’Rourke, sold the lot on for €315 million.
Conlan knew he had done well. He decided to diversify into healthcare and property in the US while still dabbling in development back home.
Since 2001, Conlan had been interested in hospitals and, by the time he got Mount Carmel, he owned two other small ones – Aut Even in Kilkenny and St Joseph’s in Sligo.
Harney’s new dawn
At the time, Mary Harney, the then minister for health, was predicting a new dawn for private healthcare which would shake up the public services. Conlan, like other developers such as Bernard McNamara and Paddy Shovlin, wanted in. After buying Mount Carmel, he poured millions into an attempt to build private hospitals alongside their public counterparts.
At the same time in 2007, Conlan spent €80 million buying office blocks in Boston with a loan from Anglo Irish Bank. The US became part of his plan and he spent $4 million on a 7,000sq ft house in Rhode Island and snapped up land which used to be a yacht yard.
Back home it was all go. In Brittas Bay, Co Wicklow, he planned a €100 million tourism resort while, near the seaside town of Tramore in Waterford, he planned a golf resort designed by Jack Nicklaus.
Just as the money had come pouring in, it was going out again. Conlan was dangerously overexposed to debt.
The financial crisis shook the foundations of Irish banking and Conlan was one of 10 clients of Anglo Irish Bank asked to borrow about €45 million each to buy shares in the bank formerly owned by Seán Quinn. Suddenly, it all began to go wrong.
Conlan’s plan to invest €30 million more in Mount Carmel was put on hold. His hospital group defaulted on loans, by now €65 million, to AIB in 2009. He owed €20 million more to KBC relating to his smaller hospitals. In 2010, the National Asset Management Agency took over all his loans owed to Irish banks, taking the Mount Carmel Hospital into its control. Over the next two years, Nama supported the hospital with loans of over €8 million, hoping it would be able to sell it on.
Hospital for sale
Conlan was edged out of the day-to-day running of the hospital and was told by Nama to focus on selling his other assets. In January 2013, Nama appointed Goodbody Stockbrokers to go through the hospital’s books and prepare the documents to sell it. In April it was put on the market.