Treasury Holdings' real estate empire stretches from Sligo to Shanghai - and they haven't got there without developing a ruthless streak, writes Frank McDonald, Environment Editor
Treasury Holdings is a big player in the property market. Having started out as informal partners in the early 1980s, dabbling in smallish deals, old schoolfriends Richard Barrett and Johnny Ronan now control a real estate empire stretching from Sligo to Shanghai, via Dublin, London and St Petersburg.
Rarely out of the news, they've been involved in numerous scraps over the years, establishing a formidable - even fearsome - reputation for prevailing over their opponents. As several campaigners, competitors and public officials know by now, you take on Treasury at your peril.
Controversy has swirled around Barrett and Ronan, even in London, where their 2001 bid to buy the ill-fated Millennium Dome (in partnership with British developer Robert Bourne) collapsed amid a welter of lurid stories, including the wholly unfounded allegation that Treasury might be a vehicle for IRA money.
Last November, the company hit the headlines in London again after buying the long-disused Battersea power station for £400 million (€573 million), on behalf of the publicly-quoted Real Estate Opportunities (REO), which it controls, and then hiring Montevideo-born "starchitect" Rafael Viñoly to a master plan for the 38-acre site.
Purchased from Hong Kong developer Victor Hwang, whose plans for a leisure complex never materialised, the site is just over two kilometres from Big Ben. So the price REO paid looks cheap compared with a record £900 million shelled out by a consortium headed by London developer Christian Candy last April for the 13-acre site of Chelsea Barracks, across the Thames. What Battersea needs to make it work is better access, particularly by public transport. "If there was a bridge going diagonally across the river, it would be within walking distance of Sloane Square tube station," Barrett says. The only real constraint is that the power station, with its four landmark chimneys, is a listed building.
In Dublin, Treasury was severely criticised by An Taisce for its treatment of protected structures on the site of the Westin Hotel. With the exception of a former banking hall on College Street, only facades were retained under the scheme permitted by An Bord Pleanála, and this led to protracted legal proceedings by Lancefort Ltd, the vehicle set up in 1996 by former An Taisce chairman Michael Smith to fight planning battles through the courts. But Lancefort lost its case over the Westin and suffered the indignity of being wound up in 2002 at Treasury's behest because it couldn't pay £233,000 in legal costs - a mere fraction of what was racked up on the site.
Rival developer Garrett Kelleher accused Treasury of "torturing" him by taking planning appeals and legal actions against his Jurys Inn scheme on Parnell Street, with the aim of gaining a share of the spoils. Similar claims were made by the Carlton Group, which notoriously failed to develop the Carlton cinema site on O'Connell Street.
The tables were turned when both Dublin City Council and An Bord Pleanála rejected plans by Treasury subsidiary Keelgrove for the small but crucial site it owns beside Jurys Inn. The council said the proposed eight-storey apartment block would be "unacceptably congested", while An Bord Pleanála said it was of "poor architectural value".
THE LEAST POPULAR of Treasury's legal actions was the recent case involving Bewley's on Grafton Street. The Campbell Bewley Group (CBG) had agreed to allow Jay Bourke and Eoin Foyle to reopen the legendary cafe as Café Bar Deli and Mackerel, but Treasury subsidiary Ickendel Ltd, as the landlord, strongly objected to this arrangement.
Ickendel sought forfeiture of CBG's lease after the catering group declined an offer of €6 million to relinquish it, so that the premises could be more profitably let to a fashion outlet. But Treasury was refused an injunction in 2005 to halt renovation works, and the action was settled last February. The cafe remains open.
But Treasury has bigger fish to fry than anything on the menu in Mackerel. The most ambitious development project by far is Dongtan, China's first "eco-city", which is to be built on Chongming Island, north of Shanghai. More than 80,000 people will live there, in what New Scientist described as a "zero-pollution, largely car-free . . . green-fringed utopia". Work on this €1.2 billion project, which is being planned in partnership with the Shanghai Industrial Investment Company, will get under way following the completion of a 10-kilometre suspension bridge and nine-kilometre tunnel connecting the island to China's financial capital. It will be overseen by Treasury's Shanghai office, where Richard Barrett is now based.
But doing business in China is not without its difficulties. A deal to buy a large shopping centre, hotel and office complex in downtown Beijing for €362 million last December subsequently fell through. And this setback led to a public flotation of the Treasury-controlled vehicle, China Real Estate Opportunities, being postponed for several months. More than 40 staff are employed in Shanghai, half of them Chinese, and the number is expected to rise to nearly 100 as more architects, engineers, planners, surveyors and marketing people are taken on. Treasury also has 87 staff at its headquarters in Connaught House, a swish office block on Burlington Road in Dublin 4 by architects Henry J Lyons.
Another significant project involves the grounds of the Catherine Palace, outside St Petersburg in Russia, which the company bought two years ago, after being handed the prospect on a plate by its Shanghai partners. It plans to develop a five-star hotel, spa and two golf courses; Russia has very few golf courses, but a fast-growing army of golfers.
In Sweden, Treasury is planning a golf resort in Gothenburg, with two 18-hole courses, a 200-bedroom hotel and 800 villas on a 390-acre site called Landvetter Park, not far from the city's airport.
THIS MONTH ALSO saw the opening of its long-planned Ritz Carlton Hotel at Powerscourt, in Enniskerry, Co Wicklow, with a Gordon Ramsay restaurant. Another golf resort is planned for Milverton, in north Co Dublin, a historic parkland demesne of some 425 acres, with views over Skerries Bay. Two Arnold Palmer-designed golf courses are planned, plus a five-star hotel and "exclusive residential accommodation".
Work is finally underway on the National Convention Centre (NCC) at Spencer Dock. A Treasury-led consortium was originally awarded the multi-million-euro project in 1998, but it fell apart in July 2000 when An Bord Pleanála rejected the massive high-rise office scheme, which the developers claimed was necessary to support the centre. This was because no public money was available to fund it, even though the procurement of an NCC had been a Government objective since 1989. The scheme put forward for Spencer Dock was also opposed by the Dublin Docklands Development Authority, Dermot Desmond and others; Bertie Ahern, the local TD, described it as "a monstrosity".
But now, following yet another competition for the project, renowned Irish-born architect Kevin Roche, who is 85, is being given the chance to leave a legacy to his native city in the form of a major public building. Other elements of the Spencer Dock development, such as the new Price Waterhouse Coopers headquarters, have been designed by Scott Tallon Walker.
Another long-running saga involves the 40-year-old shopping centre in Stillorgan, which Barrett and Ronan bought for £38 million in 1996 from the Bank of Ireland Pension Fund. Plans to redevelop it were rejected by An Bord Pleanála three times, before it finally gave approval for a revised scheme by Duffy Mitchell O'Donoghue in August 2006.
A few months earlier, Treasury acquired the five-acre Stillorgan Leisureplex site for €65 million from Ciarán and Colum Butler, who had been refused permission to build 15 apartment blocks. It is located directly opposite the Treasury-owned Blake's site, where a scheme for 215 apartments - including a 12-storey block - was approved in 2005. The Leisureplex acquisition brought Barrett and Ronan's portfolio in Stillorgan to 13.5 acres on three pivotal sites, giving them leverage in shaping a new local area plan in consultation with Dún Laoghaire-Rathdown County Council and local residents.
In Leopardstown, the sluggish market for out-of-town offices has slowed the roll-out of Central Park by Castle Market Holdings, a Treasury subsidiary, and developer David Arnold. Though full planning permission was granted in 1999 for 150,000sq m of offices on the former Legion of Christ land, much of it remains to be built.
Another consortium involving Treasury, Arnold and financier Derek Quinlan did much better on the Allegro site in Sandyford. A week after securing approval for 880 apartments as well as major retail and leisure facilities in November 2005, the 7.5-acre site was sold to Fleming Construction for €165 million - 10 times what was paid for it in 1997.
From 2001 to 2003, Treasury fought off strong opposition from local residents and conservationists to win planning permission - eventually - for a scheme of 173 apartments and a Hilton hotel on the former Rowntree Mackintosh site, facing Kilmainham Gaol. As with Allegro, it was sold on to another developer, who went on to build the scheme.
WHAT PUT TREASURY on the road to riches was its acquisition of an Irish Life property portfolio in 1994, which included the Stokes Place office complex on St Stephen's Green, for the knock-down price of £46 million. Irish Life's unit trust funds were not doing well at the time, and it needed to get cash quickly - hence the "sacrifice sale". Three years later, in partnership with a British company, Treasury bought another portfolio in the UK, mostly office blocks, from equally hard-pressed General Accident for £62.5 million (sterling). In June 2006, three of the office blocks - in Banbury, Kingston-upon-Thames and Peterborough - were sold very profitably for £112 million.
In mid-2000, Barrett and Ronan negotiated with the late Charlie Haughey to buy almost 10 acres on the Malahide Road frontage of his Kinsealy estate for £6 million, which the former taoiseach needed to pay tax and legal bills. The remainder of the 250-acre Abbeville estate was sold to Manor Park Homes in 2003 for €45 million.
Other Treasury projects in north Dublin are the M1 business park on a 188-acre site near Balbriggan and the redevelopment of Ballymun Town Centre, including restaurants, bars, a multiplex cinema and 500 apartments, for which approval was granted in 2004. But this socially-important scheme must await demolition of the last Ballymun tower.
In 2003, as part of its drive to be "greener", the company paid €20 million for Herhof, a German waste management firm with a proprietary system for turning municipal waste into refuse-derived fuel. However, the venture turned sour and, after Herhof went into liquidation only 18 months later, it had to be bailed out by a Quinlan Private consortium.
Treasury had been refused planning permission to build Herhof plants at Courtlough, near Balbriggan, and Belview, in Waterford port. Earlier, opposition from the ESB thwarted its plan to build a combined heat and power plant at Spencer Dock, although it did manage to develop wind farms elsewhere, cashing in on tax incentives.
THE COMPANY WILL also benefit from the designation in 2006 of 400 acres of land at Balgaddy/Clonburris as a Strategic Development Zone, even though its plans to develop its 15-acre site as a town centre were fought tooth-and-nail by South Dublin County Council and Barkhill Ltd, the O'Callaghan-Grosvenor consortium that owns Liffey Valley. But Treasury has another plan up its sleeves for a rival shopping centre, with up to 50,000sq m of retail space, at Collinstown, near Leixlip, Co Kildare. The company paid €43 million for its 39-acre stake in the designated town centre, which would also serve Celbridge and Maynooth, as well as sucking some business from Liffey Valley.
Last February, Treasury suffered a setback when its plans for 119 apartments and 54 houses on an eight-acre site at Brennanstown Road, in Cabinteely, Dublin, were rejected by An Bord Pleanála as premature, pending the adoption of a local area plan. It also had to withdraw plans for a 32-storey tower at Barrow Street, for the same reason.
But it got planning approval for two other high-rise schemes at either end of the Grand Canal Dock's inner basin - Altovetro, a 16-storey glazed residential tower at the corner of Pearse Street, billed as "the most beautiful building in Dublin", is currently under construction, and it is to be followed by Montevetro, next to the area's Dart station.
Treasury also partnered Sisk in bidding to build the U2 tower at Britain Quay, at the confluence of the Liffey and the Dodder, with Baghdad-born superstar Zaha Hadid as their architect. But it was pipped at the post by Norman Foster's even more vaulting scheme, commissioned by Ballymore Properties, Paddy McKillen and U2.
In the property game, as in every other, you win some, you lose some.
Series concluded