Dunne admits he could be insolvent
THE DEVELOPER behind one of the biggest property deals in the Republic's history has admitted that he could be considered insolvent if the banking crisis continues.
Mountbrook Homes founder, Seán Dunne, who paid €379 million for the Jurys and Berkeley Court hotels and an adjoining site in Ballsbridge, Dublin, in 2005, believes his ambitious plans for the area can still succeed, despite the recession and property market crash.
But Mr Dunne tells the New York Times newspaper in an interview published at the weekend that "the Celtic Tiger may be dead and if the banking crisis continues I could be considered insolvent".
Last March, Dublin City Council gave Mr Dunne permission to go ahead with a mixed commercial and residential development on the Ballsbridge site that included an 18-storey tower block.
The authority rejected part of the plan that proposed a 32-storey tower. The decision attracted a record 127 appeals by April.
These included one from the developer himself, but were largely from residents in the prestigious area who are opposed to redeveloping the Jurys-Berkeley Court site.
An Bord Pleanála is due to hear an appeal into the issue at the end of the month.
Dublin city management has backed a rezoning proposal that would allow Mr Dunne's plans to go ahead, along with those of other developers who paid high prices to buy land in the district.
Two years ago, planners said that Ballsbridge was suitable for high-density developments.
Even if the plan gets the green light, Mr Dunne says that there is not a queue of bankers lining up to loan him money to build on the site.
However, he stresses that he can complete the project, assuming he gets planning permission, and refers to other sources of finance that are open to him. The newspaper, not Mr Dunne, suggests that this could include Asian banks and a sovereign wealth fund.
He says that he paid 35 per cent of the purchase price, over €130 million, and added that despite the plunge in asset values over the last year, he still believes that he can deliver the project. "Failure is not an option for me," he tells the newspaper.
However, in the same article, Ronan Lyons, economist with property website, Daft, says he would be "surprised" if the proposed development is built.
He argues that migrants are returning home from the Republic, and there is a surplus of properties already on the market and points out that there is little appetite for big projects in the current environment.
The article charts Mr Dunne's rise from a modest upbringing in Tullow, Co Carlow, through his time as an emigrant in the US and Canada and his return to Ireland in 1990, when he began his career as a property developer.
It also details the path that the economy has followed over the same period.
The New York Times quotes Economic and Social Research Institute economist John Fitzgerald who says the Government followed an "extremely dangerous" housing policy, and argues that the subsequent collapse of the property bubble was entirely predictable.