Liam Carroll: I did it my way?

It might sound more than a bit crazy, but in spite of what has happened, I still want to return the company.

To re-build again.

As do many others.

Brian O’ Hanlon

–
My Two Page Rescue Plan for Danninger

Regarding the land at Cherrywood a plan needs to be prepared to extract some of the potential out that site. Designating the land as a strategic development zone is certainly a help. As so often is the case in Ireland, we think putting on a band aid will solve the problem. A comprehensive and sustainable model for development needs to be prepared now, so that we can see a real successful utilization of the site.

On the other hand, this plan should not take 12 months or two years to compile. (DunLaoghaire Rathdown County Council do not seem to understand this) DLR Coco do not care if Danninger falls into an abyss over the next two years. Their jobs will still remain nonetheless. We need to start moving on Cherrywood right now. To keep moving has always been the Danninger way. I definitely subscribe to that thesis. When Dell computer company pulls out of Cherrywood (and it will) we need to retain those workers in the same area. We can’t afford to keep hemorrhaging talent out of the work force as we are doing at the moment. We need to roll out some projects to keep the kindle of the knowledge economy glowing in Ireland.

The other option is to do nothing with the land, which has been served by a new LUAS line. I think we should try, because the presence of that expensive LUAS infrastructure deserves an effort. In the interests of ensuring haste of development on a 400 acre site, and before Danninger can get off its knees, I have a strategy in mind. (Haven’t I always) It is something completely foreign to the culture of Danninger. Something they have never tried before to the best of my knowledge – to work with another builder or developer. But in the case of Cherrywood where the site is much so large there is no other choice. This is how I envision cooperation between Danninger and another builder will work.

I know that residents of the Glenamuck road area, nearby Cabinteely and Carrickmines will wish to protest. But I believe we can come up with a green and sustainable vision that can provide everyone with a return. What I have in mind is a phase one project. The purpose of which would be to service the land, provide basic infrastructure and some employment in advance factory or light industrial buildings. Sean O’Laoire has presented some very interesting ideas of his visions recently in the Irish Times newspaper. Sean is the kind of figure whose presence is needed in the Cherrywood building process.

I would invite another builder to start developments of this nature at the Carrickmines end of the site. Rohan is one builder I know would by ideal for this. They were big in the 1970s, but didn’t bother with the Celtic Tiger madness. (It is interesting the players in the construction industry who were absent from the Celtic Tiger boom. Perhaps they were the wiser ones) I have studied what Rohan built at Dublin Airport Logistics park and I think that sort of model (adjusted to work more like the Carrickmines Retail Park) could serve a purpose in the overall sequence of development.

There are a lot of things about logistical warehousing that are needed in order to deliver a low carbon future for Dublin and for Ireland. At the time I looked at feasibility studies on the Harristown site, Danninger didn’t like the Rohan model. The largest units they built were 4,000 meters squared. The securitization of real estate rents worked best when you had much larger amounts of floor plate. (Hence the monstrosity built at North Wall Quay)

So I suggest now, we look at a mixture of small and large floor plate sizes at Cherrywood. In order to create some kind of low level employment activity. To create a real science and technology park in my opinion demands a kind of bottom up approach. With a clever and sustainable property management model to fit around that. It has to somehow blend seamlessly with the existing neighborhood amenity and eco-system. A good model in that respect is Bernard McNamara’s Elm Park. It has to add sufficient value to what already exists in the location, rather than subtract. That needs to be clearly defined in the contract.

There will be a need for renewable generation of energy on site. The local communities should benefit from greener energy and improved asset valuation of their land and buildings as a result. A lot of the industrial and logistics buildings will require 3-phase power etc, and proper water infrastructure, all of that will be laid out. That is the kind of thing that Danninger needs to learn about as a company to go forward. It can only learn that in cooperation with the right partners. There is an opportunity for many bodies such as ESB Networks, Dublin Airport Authority and the RPA to be involved in the implementation.

Together we can create some model that will underpin and sustain the smarter economy in Ireland. The net present value alone of investment in infrastructure to support light industry on Cherrywood site is worth the effort. We will have proper levels, manholes and digital survey information. We need to buy this infrastructure now rather than wait for Danninger. That is why I feel the Dublin Airport Authority with Turner and Townsend need to get involved. They will complete their upgrade works program soon and need to kick start their new ‘Airport City’ project. There is a considerable amount of expertise we can share with each other.

We can do a lot better than grazing wild ponies on the fields at Cherrywood. Though I see no reason why ponies shouldn’t form part of the overall solution. Part of the sustainable vision at Adamstown ‘Strategic Development Zone’ was to install the infrastructure in advance. Adamstown was very successful in this regard and we have already learned how to deal with the process. Danninger do not know how to build roads and services and never will. But should investigate Adamstown and learn from that model. Danninger does prefer to go someplace like the Dublin Docklands or the city centre. Someplace where there are already services there to hook into. That is my reason for wanting a development partner on the site at Cherrywood to roll out the civil engineering investment in advance.

Danninger should start to build at the Loughlinstown end, exercising the kind of construction it knows best. Which is clever, well organized and high density – a very sustainable kind of building method that only they know how to do. In twenty years time or more as Danninger moves across the site, progressing towards the Carrickmines direction, the industrial buildings shall be demolished as required and re-built over. The average life span for industrial building stock is short anyhow. As ideas about manufacturing and logistics change with the times. You can see this process of removal of industrial and accomodation of mixed used development at Park West near the M50. (Accessible from Kylemore and Nangor Roads)

In return for putting down the infrastructure and a few cheap buildings to get employment and people moving into the area, the development partner should receive the Greencore shares. To be paid to them in installments as the work is completed. The development partner should be the kind that knows what to do with Greencore’s type of land banks. The development partner should also receive the rent from the buildings on the Carrickmines end of Cherrywood site. That is an administrative burden that Danninger is not interested or capable of carrying.

I would like to extend my sustainable model of development in relation to Danninger with the rule of three. Namely, the three sites the company owns: Cherrywood, Harristown and Clonburris. The same development partner who work with Danninger at Cherrywood could be involved at Harristown also. By the time Clonburris site is ready for opening Danninger should be ready to offer the full sustainable vision.

It took Microsoft until version 3.0 of their office product to get it right. At version 1.0 and 2.0 the competition’s product was always much superior. But Microsoft kept on trying. By version 3.0 of MS Office they had put many parts of the jigsaw puzzle together. Indeed, no competitor was able to match what they could offer by then.

All of the elements will converge for Danninger by their third attempt at Clonburris. By that time, I hope that Danninger is the kind of company that has learned all of the right lessons. This is the kind of plan I would take to the marketplace today in search of re-capitalization. The same marketplace that rejected LC so horribly in ’07 and ’08 will not turn down an offer to be in partnership with the new and properly directed version of the company.

Brian O’ Hanlon

–

Very good Managers but no Leaders

The parallels between the organization that Henry Ford built and the one of LC abound. Because in essence, every tiny decision had to be made by one man. Eventually this brought the Ford motor company to its knees, as Henry himself became older and slower. The same thing that became the engine for innovation and value-creation in the beginning, was exactly what caused the destruction in the end.

So how did LC deal with the burden of administration associated with running complex construction projects? (See my definition of Systems Engineering below) The short answer is, he didn’t. A story from the construction of Barrow St development should help to illustrate my point. As always happens on a building site when decisions aren’t made at the top, everything threatens to boil over and things escalate to crisis proportions. LC would arrive into these situations always very calm and cool. There was much debate about what to do. Should we do this? Should we do that? So in the end, LC thought hard for a moment and then announced: Do what we did the last time and walked off.

That was the extent of the contract between site and developer. (You must remember that both were the same company anyway) It didn’t take much administration. That is how LC managed to wring unnecessary costs out of the system. LC had found a way to outsource decision making down the ladder to the guys wearing hard hats. As it turned out, they were often more able in construction management than many of our consultants are. They can be more than willing designers too. Health and safety legislation published now, doesn’t enable that to happen. There is a requirement to have very clear lines of responsibility set out, as to who is the designer.

It is called design build in the USA. The Americans like to give things cool names. It means the the builder becoming a designer. The separation of design and industry is a bit like the separation of Commercial from Investment banking. The separation was imposed at one stage to enable fairer competition. Designers had a tendency to own a stake holding in a building products manufacturing company. That in turn made them biased against other products available to the marketplace. Danninger were known to some in Ireland as the kings of Design Build.

The highly speculative building model that LC introduced to Ireland went hand in hand with his ‘Design Build’ construction management techniques. The clients were getting the floor space at a 50% market discount, they wouldn’t ask questions about how it was built. But that is not to say quality of construction was compromised in Danninger. On the contrary they became very like the Toyota of the building industry. LC embued that philosophy of constant improvement through evolution rather than revolution in all his employees. In the end, I think he was very successful and I am glad to have learn about quality while in Danninger.

What the speculative model really required to work, was that Zoe acquired land in the right place and put ‘X’ no. of rent-able floor plate area on it. Or alternatively, ‘X’ no. of sale-able residential units. No further questions were asked by either party, and anyways no answers would have been forthcoming. All you would meet is a brick wall. (No pun intended) I think this over emphasis on the need to gain land at the right price, ultimately forced Zoe to gamble too much on botched land acquisition strategies on the Irish stock market. There hunger for land became insatiable to the point of affecting their better judgements. Either that, or they were simply plain stupid when it came to understanding how the market works. Certainly I would have made LC step down as company CEO before building a 30% stake in a company stock.

The speculative building model and the Design Build construction management techniques had also joined forces with another innovative element, low cost and lean construction. Much has been written about the Toyota manufacturing process that the Japanese invented. LC likes to drive Japanese cars. Indeed, I have studied Toyota myself in order to understand better what the Danninger culture was about. When I say that Danninger’s system was lean, this is what I mean: An subcontractor only earned €5,000 profit and enough to pay his salary on 50 apartments. If the subcontractor tendered for any more than that, he would lose out to a competitor.

Dell computer manufacturers also studied the Toyota system and engage in a similar ‘tough love’ relationship with their suppliers. That is how LC built 10,000 apartments in Dublin city, like a Japanese automobile running on petrol fumes. That is why today, there isn’t a street in Dublin where LC has not bought a piece of land or built something. My own lasting memory of working for Danninger was completing my first major build project. When you had finished your first project, that was a rite of passage. You were in the family now, so to speak. On that occasion though, the value of the land on which my eight storey building was standing had risen so steeply that LC wanted to knock it again. I had no problem with that and got working on a demolition scheme with my structural engineer. Yeah, you could say I had arrived.

I learned something very important at Zoe developments. Whenever I was struggling with a detail or a specification, I asked myself the question that LC would always ask: Will this prevent or assist in the sale of the product. Often I would realize that doing something, had no impact on the sale of the end product whatsoever. The philosophy being, there was plenty of other aspects that do impact on market-ability which I should focus my time and energy on. I often come across architects who have not learned that lesson.

I know a lot of Zoe company directors and I like them. We did get along together very well. But in many ways Zoe had the worst directors possible. They were a bunch of structural engineers. Within the company itself, LC’s directors didn’t push back. They were not like the sub-contractors that LC had to work with on site. That ultimately proved fatal. As the renowned business teacher Warren Bennis said, we have too many managers and not enough leaders. Zoe directors could not manage so much as a whimper as LC proceeded to squander €800 million of company capital on the stock market.

Easy come, easy go. I believe LC is one of the best construction managers Ireland has ever had. I think he aught to be recognised formally by the Construction Industry Federation while he is still alive. But LC is the last man I would want to have as my company CEO.

I think the reason that Zoe managed to do so well in the business of construction is that sub-contractors answered back. Maybe it was out of ignorance, lack of sophistication or both. But it did have a positive and crucial effect on how Zoe did business. At one stage while renovating the hospital at Brunswick Street North a machine operator broke the main ESB cables servicing the site. It set the project schedule back by a week as the ESB had to come out and re-connect. A sub-contractor was there and said to LC he warned the driver not to do that. LC’s only response was, you didn’t shout loud enough.

In the company, there seemed to be an unshakeable confidence in this man they considered a genius. In fact, there still is. But was the motivation behind obedience a good one? I often heard an expression in Zoe, something like: “I am not the billion dollar developer, he is.” LC was all powerful within the company. But it wasn’t a healthy kind of power. He was left entirely on his own because no one else would stand up to the mark and take responsibility on their shoulders. All were willing and able to try out some innovative practice in construction management. As long as LC took the stick.

I believe that this left LC in a very isolated position. That is probably why he looked for a way out. In the end, the only way out was through market capitalism and the stock market. He lost everything in the process.

Blue Magic

I have read numerous articles by the Irish newspapers in the past about why Zoe developments are the bad guys. But Zoe only engineered their product to dovetail with the requirements of a financial system down the line. That is what gave them the real ‘buzz’, being ‘hot wired’ into the global financial system. All of the banks were competing to provide what they felt was the best financial ‘products’, but in the end there was only only product for Zoe developments – securitisation. A strange word that, for something that turned to be so insecure in the end.

You know, I have personally met employee no. 5 and 6. LC was too ashamed to give them the final handshake. They were men who had worked all their lives. One of them asked me how to apply for social welfare. He had never done this before in his life. It was a strange land in which himself and his family found themselves all of a sudden. LC made a lot of big promises to a lot of people. In the end, he didn’t deliver on any of them.

http://www.tribune.ie/business/article/2009/jun/28/where-did-it-all-go-wrong-for-carroll/

Securitization turned out to be the ‘blue magic’ of the building industry. The Frank Lucas (and it wasn’t Sean Fitzpatrick either) of the banking game introduced into Ireland a product that was better than the competition at a price that was lower than the competition. That is all there was too it. The boys were fairly and squarely hooked, there was no going back.

But no one writes an article which takes into account the fact that Liam Carroll is an intelligent player and designed a product to work seamlessly with the system he was given. The system of market capitalism operated by banks in relation to land and property in this country appears to be beyond reproach. For most of the Celtic Tiger there wasn’t anything like a National asset management agency. Builders had to work with all there was. In every case, that meant a banking institution. It is like the relationship in computer manufacture between OEM’s such as Dell and the company with all of the control, Microsoft. It is called systems engineering I was told while working in the development world. The first paragraph from wikipedia says:

Issues such as logistics, the coordination of different teams, and automatic control of machinery become more difficult when dealing with large, complex projects. Systems engineering deals with work-processes and tools to handle such projects, and it overlaps with both technical and human-centered disciplines such as control engineering and project management.

http://en.wikipedia.org/wiki/Systems_engineering

It is all too easy to write a newspaper article about a building development company such as Zoe developments. We can easily blame the developer in question for his or her work being wrong, or unsightly or whatever else. Should it be the duty of company executives in development companies to re-organize the system in banking? If so, then it begs the question what exactly are our public representatives in Dail Eireann supposed to be doing?

I have great confidence in builders who put sheep’s wool into walls as insulation. They are good intelligent guys with families and a livelihood to preserve. They are interested in building up a business that will last for decades rather than years. But we have to ask ourselves the question, at the scale of Zoe developments (10,000 dwelling units built in Dublin City area alone) who is actually paying for this stuff?

I remember when the insurance companies and pension funds purchased most of the property created at McNamara’s Elm Park development. How else would a country such as Ireland afford to build such a lunatic project? I remember how astonished hardened designers and engineers were at the site photographs that I showed them of Elm Park. Jim Pike congratulated the architect at the site visit. But what Jame Pike did not do is comment on the first stage of any sustainable development model: how is this thing being financed?

Mind you, it was a very different and somewhat chastened James Pike I heard speak at the Architectural Forum’s ‘Open House’ debate at Liberty Hall theatre in late 2008. After he had let go of a hundred staff members. This was the fifth recession he had experienced, he told the audience on that night, feeling somewhat ashamed about the whole mess. On that occasion he sounded pessimistic for Ireland’s chances and did mention the fact that land values in Ireland are at the root of the problem. Particularly the problems of architects. I thought it was a very honest contribution from a man who has a life time’s worth of experience.

Architects or Parasites?

In terms of creating a model for sustainable development in the future, I would add something in relation to the architectural profession. They normally get off the hook, when it comes to allocating responsibility for how builders behave. It is nice to try and pretend that architects are squeaky clean professionals and removed from the dirty business of development. The reality would seem to indicate otherwise. Architects tend to ‘hang around’ the carriers of the disease. Not to remain immune, but so that they can become infected. They are the parasites who effectively spread the virus from one host to another.

Even though the individual host will collapse and die as it did in Danninger’s case. The parasite will live on. I listened to architectural consultants during the Celtic Tiger commonly boast about making their clients millionaires. It sounded like the main feature in their ‘sales pitch’ to me. It is this competition amongst architects to get more clients than the other, is what compromises the entire system. Despite all that has happened, all of the lives that lay in ruins because of what I term ‘blue magic’, nothing has changed. Danninger is still struggling on, possibly still high on the overdose and desperately trying to submit a scheme for East Wall Road that will ‘save’ the company. Attached to that dying corpse as always is a few blood sucking parasites.

We need to drop the pretense for good. We need to accept the fact that architects are in it for the money. Only then we can begin to erase any superfluous boundaries between professionals and builders. Only then can we begin to create a true model for sustainable development. This is why LC was so suspicious of architects. They would try to steer him away from innovation. LC wanted to start afresh and design a whole new approach to construction from the ground up. In the early stages, LC’s company needed to stay away from parasites.

A classic example of the spreading of the virus by a parasite is the idea of putting timber on the outside of buildings. In spite of the fact this doesn’t work in the Irish climate. It was a fad which infected the entire profession, and can be traced back to a single junket holiday organized by RIAI to Barcelona. Spain has a climate which is more forgiving to external timber clad buildings I think you will agree.

Architects can be resistant to systemic change in construction and management in areas that matter most. Except for rare exceptions, they are not interested in working with the fundamentals of what are we doing, how do we do it and why? Liam Carroll was interested in establishing change at a fundamental level. Not in sticking timber on the outside of buildings and pretending to make a contribution that is radical. The architect’s position within the building contract seems to confine them to making those superficial alterations. Change needs to happen now more than ever. But it needs to happen first on a higher part of the food chain than where developers such as Carroll take up position. Then we will see a new generation of developers innovate in a way that is promising for Ireland the long term.

The Final Chapter

LC is quite possibly the best construction manager I will ever work with. But LC should have read the dummies guide to being a CEO. The only thing LC had left to give to his faithful employees in 2009 was honesty. Like a betrayed partner in a broken marriage, the employees could have accepted honesty and been satisfied with it. But in the end, I don’t think the employees were even shown that little bit of dignity. It is the same with many of the sub-contractors I speak to now. The odd thing is, they don’t measure the bad debts in terms of financial cost alone. They also measure it in terms of the honesty displayed to them by the main contractor. From that point of view, Danninger never appears very high on the list.

http://designcomment.blogspot.com/2009/07/covering-up-mistakes.html

The letter I received for their financial director is an insult to someone’s intelligence. The standard letter speaks about the downturn, but fails to mention a small matter of the €800 million they squandered on the markets buying what I call ‘blue magic’ in ’07 and ’08. The letter demonstrates no corporate accountability to employees at all. That is ultimately why the markets rejected LC.

LC did everything the banks expected of him his whole life. LC re-organized the construction industry at such a fundamental level that in the end it became ‘hot-plugged’ into the Irish banking industry. It could think of analogies such as the child in the mother’s womb attached by an umbilical chord. But the purpose of such a close relationship is to grow something at the beginning. Failure to severe that umbilical chord at some stage only leads to a relationship that grows most incestuous and weird as time progresses. The purpose of a banking system should be to enable life to happen, not to strangle it after wards.

The same providers of what I called ‘Blue Magic’ knew that LC was wading in too deep with public quoted companies. The banks follow the markets like you or I would follow the Premier League in soccer. It was like sending Shamrock Rovers up against Manchester United. There might be a millionth of a chance they can pull it off, but the odds are significantly stacked against them.

It seems that Carroll could not have chosen a worse time to move into the stock markets, as he sought to diversify away from property.

The journalist Neil Callanan at the Sunday Tribune has got his analysis back ways. (It is time for the reporters and everyone else to learn some basic economic theory I suggest) That is the trouble in Ireland. We became so far removed from the original goal of exporting a product to a global marketplace, that we find it difficult now to work out the basic logic of how things work. It wasn’t that the market went bad when Liam Carroll moved into it. It was precisely because Liam Carroll and others like him, went into the market selling themselves as the product, that the market turned against them.

It was almost a sure bet that anything they touched would sink to the bottom. They thought they could fool the markets the same way as they tried to fool everyone else. I think we need to get real in this country as George Lee would say. We need to start viewing ourselves and every company in Ireland as a product. Then ask ourselves the question, if I was a potential buyer in the global context would I be buying the product? The answer the market gave in the case of LC was a categorical no! We are not buying your brand.

Brian O’ Hanlon

P.S. The above piece I would have to dedicate to Yvonne Farrell, who designed the world’s best building in Italy this year. She made the comment about Ireland, now what was that? Oh Yes! Ireland had only construction and no architecture.

Even in that statement again, there is a lack of confidence to take on the real challenge and discuss the issue of who is paying for all of the construction in the first place. It is too easy to simply pin the blame on builders.

Brian I’m curious. Do you genuinely think the global collapse of equity markets was because they didn’t trust Liam Carroll? As for the DAA, senior officials didn’t even know if they had a stake in the Horizon lands until I asked them and if Danninger was such a good company why did it let planning lapse on two sites as well as agreeing the deal with Bohs without checking with the DAA. There’s also the Sir John Rogerson’s quay site where Liam accelerated development to try and get sufficient works completed to justify an extension of permission.

the market is some super intelligent place…you’re not the brightest either really

@jdivision wrote:

Brian I’m curious. Do you genuinely think the global collapse of equity markets was because they didn’t trust Liam Carroll?

As for the DAA, senior officials didn’t even know if they had a stake in the Horizon lands until I asked them and if Danninger was such a good company why did it let planning lapse on two sites as well as agreeing the deal with Bohs without checking with the DAA.

There’s also the Sir John Rogerson’s quay site where Liam accelerated development to try and get sufficient works completed to justify an extension of permission.
Neil

All very good questions Neil, and I wish I had time to look at drafting responses to them properly. I have decided to wind down on my analysis of LC and Danninger. I think I left people with some interesting points above, and I think that was worth doing. For your benefit though, there are a couple of issues I have dealt with below.

Best of luck, and good reading.

Brian O’ Hanlon

George’s half of the story

If you are going to tell me that LC’s relationship with the ‘Blue Magic’ kind of financial products offered over the counter by banking institutions in Dublin wasn’t toxic, I don’t know what is. In my view it was pure poison to them. Nuclear waste, subprime and what ever else you can think of rolled into one. The exact same rubbish that sold to the kids nowadays as canabis resin. (Smoke weed kids, if you must, but stay away from soap stone as it known in Britain in the Rege tunes) There are health and safety studies carried out now, to understand the effects of kids enhaling burning plastic, shoe polish and the Lord knows what else. That is effectively what banks handed to these builders and they couldn’t get enough of it while it lasted.

While I think that George Lee did the whole country a great service by making programs such as this:

http://www.rte.ie/news/2009/0318/howweblewtheboom.html

George Lee means very well. I don’t doubt that and I did issue him with a copy of the above documents this week. However, in George’s analysis of the systemic problems were excellent in his TV program, he only could see a half of the picture at best. It is the half of the story to do with the stimulus pumped into the construction boom by McCreevy in order to make it boom-er. That is the push side of things. But what people don’t realize is that the ‘pull’ side of the same machine is in operation as we speak. The public press is fixated on the ‘push’ side, because it enables them an opportunity to take another cut at the government. That is what sells papers and what people want to believe.

My Contribution to NAMA

If we really want to solve the crisis it is essential first that we obtain a whole systems view of the process. Nobody in this country has that trick down better than LC. Why would I see any more of the picture than George Lee? Well, to be frankly honest I wasn’t clever like most of my colleagues in Bolton Street college of technology. I wasn’t degree standard at all. Indeed, if you ask anyone they will tell you I broke all records in the architecture course for being at the bottom of the class. So this person is probably right:

the market is some super intelligent place…you’re not the brightest either really.

But because I had no other choice, and no one else would take me on board, I went to work with Danninger. There my eyes were opened for real. That is where one could see the whole process laid out from end to end. You couldn’t get that anywhere else. Whether you believe it was toxic or not is one thing. But there is way, from end to end and all system engineered. They had it perfected. That is why we need to hold onto Danninger I believe. Danninger’s problems are like Ireland’s problems in microcosm. Danninger is a much more simple kind of problem than the larger Irish problem. If we learn what should be done with Danninger. Then be definition we will learn a great deal about the entire system. What I mean is, we will be working for the first time ever with a whole systems view, rather than a partial one as in the past.

That is why I am interested in helping. That is why I sent my CV to Nama today. I don’t think that many people understand the dynamics and process flows of the construction industry well enough, in order to affect serious change. That is my problem. They are all clean cut professional and well respected professionals. I was a very poor and simple itinerant drafts person or project manager who stumbled from pillar to post. That enabled me in turn to gain such a useful perspective on things.

Liam Carroll, The Genius.

You have to understand how much in awe the directors of the company were of their boss. Right up until the day he fired them and they were left without a pot to piss in. Some of them told me how Liam, if he managed to pull off the land deal with Greencore would have confirmed ‘genius status’ for every more. He would be written into the anals as it were. It was interesting to me, when it came to building the BOSI new headquarters at Cherrywood Science and Technology Park, all of the low cost, design build and lean construction/design techniques that LC had innovated down through the years went out the window. I was told by a director, these BOSI guys aren’t like our normal tenants. They are sharp f***ers. They will have crossed every T and dotted every I.

How right he was. But what he didn’t know, was BOSI had only taken them for a ride. BOSI had them convinced they were really as good as they thought they were. That left them open and very vulnerable to a very clever and kind of manipulative attack. Danninger felt they were still in the driving seat, right down until the last concrete pile had to be stopped due to shortage of funds.

The (Illuminati) Formula

http://www.youtube.com/watch?v=CM4jrODRjJ4

If one had the sense to commission a study of the impacts of LC wading into the markets as deeply as he did, what would it cost? I don’t know. We always complain about the government stalling projects in order to commission a report. But then again, a report that cost €100,000 would be a lot cheaper than €800 million. But you see, here again the Danninger culture of ‘low cost’ worked against them. They often boasted about how they could get reports of all kinds done at a fraction of what other people paid. In many ways, the boasting sounded like ladies talking about the fact they never pay top price for designer wear. But still manage to look a million dollars, or a billion.

Danninger hated consultants

LC was clever in some ways. He hired one top level fellow into the company in early 2008 I remember. I got to know this person over a few months. We had worked with a lot of the same people in the past. His assessment of Danninger was quite revealing. But I recall he wanted to engage Buro Happold consultants to do some engineering analysis of the North Wall Quay project. He reckoned that €100,000 or so spent on the analysis would result in saving of a few million. This is where the arrogance of some of the directors really comes into it. They would insist that they were so much more clever and sophisticated than lazy external consultants, they didn’t need to spend €100,000.

My friend was quite shocked at the display of short sightedness from such a high profile board of directors. He was also quite dismayed at the way in which they had put his good idea down. Kind of like, a kid getting smacked on the wrist, that is how you were brought down to size. He wasn’t long with the company, but it was a very early introduction to the culture. You can sometimes hire a top consultant not to squander money, but in order to save it. My friend’s conclusion was that Danninger reminded him alot of the Dunnes family. Owners of the Dunnes store chain, they would fight tooth and nail over tupence. But when it came to saving a few million Euro they would miss the boat every time. My friend was confirming the same suspicions I had of Danninger. But it was nice to hear the analysis coming from another very intelligent source.

I had come ‘Direct from Dell’ computer factory myself in Limerick city to work at Danninger. Michael Dell wrote in his autobiographical novel, Direct from Dell, wrote of the fact, that when he was making thousands of dollars he knew how to run that business. The growth of his empire was rapid however, and soon it was earning millions, not thousands. Michael Dell didn’t know how to run that kind of business. But he took the brave step and hired a couple of million dollar class managers to run his company. Soon Michael Dell’s company was no longer a million dollar company but was a billion dollar world wide giant. So Michael Dell, had to go searching again for the managers with the right experience to run his billion dollar company.

In contrast, if you look at the Danninger board of directors it is the same couple of guys since the beginning. Yet the company had grown by several orders of magnitude. Growth was indeed its biggest success and its biggest enemy.

Thomond Park Stadium

Look at what Pat Whelan has managed to do with only €40 million Euro at Thomond Park in Limerick. These are the kinds of people that Danninger needed working for them. I know it sounds like I am blowing my own trumpet here, but I believe I was a worthy late addition to the company.

http://www.limerick.ie/Press/Pressreleasesarchive/2009/PatWhelanisthe2008LimerickPersonoftheYear/

Tom Cosgrove working for Punch Consultant Engineers in Limerick noted how Pat Whelan could see the advantage of spending €100,000 on wind tunnel testing of a scale model of the structure. It did end up saving the project many times the test costs later in steel tonnage. Because it enabled the engineers to work outside the normal regulation design for steel in places. That enabled the engineers to make the structure lighter with confidence and still have it certifiable with the codes. Basically the codes are there to help people get by in the absense of expensive testing. The normal road bridge project for instance would not justify the expense.

But my friend at Danninger was proposing €100,000 worth of tests for a project on North Wall Quay worth in the region of a quarter billion Euro! About six times the budget of Thomond Park stadium. But still the arrogance of Danninger directors was astonishing. They were still excellent people when it came to cost control on normal sized infill apartment schemes etc. They paid an awful lot of lip service to the phrase ‘low cost’, but when it came to finding economies in projects of a certain scale, they were simply out of their depth. In the end, they compared themselves a bit too literally with Michael O’ Leary and Ryan Air. They ended up swallowing their own bull shit.

Harristown Football Stadium

By the way, it might be of interest to note, the reason I attended the presentation of the Thomond Park paper at Engineers Ireland was because I was looking ahead to the football stadium project planned for Harristown. But if you look at the Dalymount stadium deal, you can see my point about land taxation and Bertie Ahern. It is like the hoist movie and distributing the loot from the rear of the van. There wasn’t any real urban discussion going on. Now if we had a land taxation attached to urban transport infrastructural projects, as suggested by David Wetzel who had involvement in the Jubilee line in London, Canary Wharf etc, it would have burned the hand off of LC the minute he touched the idea.

If we had land taxation to pay for transportation projects in this country (instead of transportation companies such as RPA trying to pick up miserable pennies off of ticket fares) it would have one further important advantage. It would enable us to have all the breathing space for architects, planners, developers and banks to engage in a more productive and a sustainable design process. It would introduce a necessary ‘brake’ into the system. That is precicely what Zoe developments didn’t want to allow happen. I think they were aided in certain ways, by a Fianna Fail failure to introduce innovative new smart taxes.

The whole Danninger philosophy was to ensure a certain amount of ‘panic’ at all stages. If people were panic-ing, then it meant that everything was going as planned. If people were panic-ing they were probably busy and they were probably doing their job. This is what the whole lean cost, low cost strategy produces. It does cut out with a lot of bull shit. But it is also a very negative way. In other words, you can carry it too far. You can use the strategy to introduce new innovative ideas to the construction sector. But you can become quite resistant to innovation and ideas yourself. If that makes any sense.

Harvard Business Review

Danninger certainly weren’t stupid. If our Irish government could demand the same degree of value from all our consultants, Ireland would be a lot better off today. But I guess you can carry that a stage too far. Remember what I said above about Design Build? Danninger had a contempt for consultants which bordered on the absurd. But it is well founded on an experience that in construction, the consultant only wants to make his life as easy as possible. It is to do with team dynamics and that is an entire area of study in itself. Danninger understood it quite well overall.

Harvard Business Review has published a lot of papers on the subject of joint ventures. Some of the papers I have read focus on the fact, that one partner in the venture will sit there and do nothing. While the other carries all of the load and provides the other with finance. I found one of Rossabeth Moss Kanter’s paper using a Google search as an example:

http://mis.postech.ac.kr/board/upload_data/global/CollabAdvantage.pdf

Why not leave the Rebar out?

The anti-consultant culture at Danninger has its roots in those very early days when LC worked as a young engineer at Jacobs. But while LC did have suspicions about certain aspects of the American construction culture, there were other parts of it which he loved. Namely the Design Build idea, the Lean Construction idea and the entire notion of speculative development. Put together in the right fashion with the right group of directors, it became a lethal concoction.

An old structural engineer I knew had been in the building game for many a long day. His first job as a young graduate was to assemble a pre-fabricated kit of an aircraft hanger in Northern Ireland during the second world war. The building came without a set of instructions. But being full of piss and vinegar at that age, the young engineer set above putting it together. He worked the whole summer, but without success.

Fast forward to the 1980s in Dublin. My old engineer friend told me about the American consultancy firms who arrived in Ireland during the 1980s. They came over in a kind of disguise. The carpet baggers is what he called them. It is a little chapter of Irish construction history that has gone un-recorded. They had arrived as part of a government aided scheme, with the IDA to encourage innovative construction techniques here in Ireland. To try and get something moving. Rather as we are trying to do in 2009. There brief was to come over and build advance factories in Ireland. But rather than doing something silly like that, they had other plans. Ireland was a good base from which to conquer much of this part of the world.

You must recall that droves of military teams became civilian contractors and project managers in the US following WWII. Indeed, the entire discipline of project management really got going as a result of WWII. My old friend worked for the carpet baggers because there was no other work in Dublin. Many of them were ex. US military with contacts in the middle east.

Colonel Gaddafi was one of the early clients. He wanted to build bomb shelters at the time. The only trouble was he couldn’t afford the cost. So rather than lose the contract in the middle east, the ex. US military lead designer in Dublin had a plan. Why not leave out the steel out of the bomb shelter altogether? Who would ever know? The main function of the shelter was to provide the appearance of security anyway. We not half the cost and go ahead and build it. So that is what they done. It is only one example of the kinds of value engineering exercises the American consultants were good at. I suppose it is what you would called ‘Lateral Thinking’. That is the environment in which LC cut his teeth.

Remember that Colonel Gaddafi and Charles Haughey (Innovator behind the Dublin Docklands with Dermot Desmond) had a great mutual admiration from each other. In a famous RTE radio interview, Gaddafi predicted that Haughey would lead Ireland to greatness. LC is still working with Dermot Desmond today. You will notice that almost all of the Irish stock market shares were off loaded by Desmond in ’07 and ’08, Then promptly bought up by Liam Carroll. That is the common link. I suspect the relationship goes right back to the days of Colonel Gaddafi. I think if we really want to find answers we aught to start asking people questions in Libia.

To Hell or to Connaught

To be honest with you, I could see Danninger for exactly what it was and the kind of political system that spawned a company like that. But after all of that is said and done, I would like another crack at the wip. The reason the directors in a company like Danninger are so bent out of shape, is because life and the system we gave them was like that also. Yeah, I believe firmly in Ireland’s case that LC wading in like John Wayne into a bar room brawl to establish 27% or 30% positions all over the place was what really brought down the market.

There is a reason why we do need our public representatives to be honest. I will explain, it is related to how markets operate. When the media carried all of those stories about the Irish prime minister not being able to account for £15,000 in his bank account it wasn’t a very big story. Indeed, it wasn’t a big amount either. But what it did do, was alert people around the world to the Irish situation. People became quite curious and started to have a decent look at some of the stocks in that region. It is like hearing a strange noise coming from your engine. Even if you know nothing about engines, you tend to pull over and pull up the hood anyway. I don’t know, in case a gremlin jumped out and bit you in the face or something. I don’t know. Human nature is what is, human nature.

When the world began to look at Bertie Ahern, they also began to look at LC. All they could see from a long distance was a man who was selling very little. Very little other than the proceeds of cash from favours that had been granted out in years previously as tax breaks, by the same Bertie Ahern. People began to understand there was something wrong with Ireland. Even though we got indepence from Britain in 1922, the story hasn’t changed yet in Ireland. It is still about land. Who has it, who doesn’t. I have no doubt that if the Celtic Tiger continued to roll out, we would see bodies piling up in Connaught as we did in the time of Cromwell. That is the kind of dis-functionality the world saw from a distance, when it looked at the Irish stocks.

Why Save Danninger At All?

Danninger is a nice company to work in. Everyone knows one another and that can be very productive. I am not saying there were not problems with the culture. That is the reason I would like to regain an opportunity to work there. Some employees had gotten quite lazy and it wasn’t a good deal for them. Many of the directors were naive when it came to things that financial controllers should be wise about. That is true of every other building company I know in Ireland though. Danninger weren’t looking ahead at the whole low carbon economy concept, as planners in the local authorities were doing. This was silly. But there were some great aspects about the company. One’s you might not find again in any other company.

That is why, on balance I would like to help to save it. For real, not like some parasite that throws in a planning scheme for extra floor space on East Wall Road. There are elements of the Danninger philosophy and business model that Ireland could use right now. I would be willing to throw in my lot with NAMA as someone experienced in the construction and design side of what goes on. That is where I believe I could affect a difference.

Watch out LC! I’m coming to get you!

Brian O’ Hanlon

But before you ask Neil, I think I had left out one or two items in the above.

Dunnes Stores of the Building Game

The point is, if the new ‘American trained’ breed of 1980s Irish construction managers were willing to pull that kind of stunt with Colonel Gadaffi, they were hardly going to allow a few dandy boys up in Dail Eireann roll over them. Very much the opposite. There were still elements of the same culture remaining in the culture I was exposed to amongst the directors of Danninger. I often heard the following kind of statement from them. The government (meaning Bertie Ahern) are busy going around taking credit for the Celtic Tiger. But the truth is they don’t have a clue why it happened.

Danninger would claim credit for knowing who started the boom instead. There are some revealing things in that attitude, and in some sense Danninger were right. But having placed themselves in a position of such responsibility for having ‘engineered’ an economic up-surge, they also make themselves duty bound to the livelihoods of the people they employ. The guys like the sub-contractor working on the 50 apartments. Here is where they backed down totally from responsibility. Any sense of honesty and fair dealing was absent. Having blown €800 Euro of capital and many peoples’ livelihood on an arrogant and ill conceived plan to corner the stock market.

This is the truth that the people of Ireland want to hear now from their public representatives. Newspaper reporters more than anyone have to stop painting a picture of LC as some kind of hero. As some kind of poor little billionaire victim who lost his piggy bank. It is closer to the truth to say he was a powerful individual, the Ben Dunne of the construction industry who screwed people to the wall, and then some. He is still screwing people today by breaking contracts and promises he made. LC is an old man. The last time I shook his hand I was amazed by how weak his grip was. But in another sense, his control over the Irish nation is still strong. We are unable to stand up to him. I know that LC himself would have more respect for us, if we did.

When the directors of a company such as Danninger are unable or unwilling to do anything that should ring alarm bells at the Construction Industry Federation. It is not only the National Asset Management Agency’s problem. Tom Parlon himself aught to get involved. Unless we have that cooperation on a joint front between both agencies then it is pointless. The reason that directors at Danninger will do as little as possible, is because they know there are things higher up the food chain which aren’t quite right. They will not and cannot allow themselves to become the example for a system that is corrupt. As one director told me, don’t think because you are so far down the pecking order that when they need an example they will not come after you.

You may believe that Brian O’ Hanlon is unfit material to be employed by NAMA. Indeed you might be right. But I know the industry. I have carried the bucket of nails. Even if I made the cups of tea and did the photocopying at NAMA, that much alone would send out a strong message across Ireland. That NAMA is not exclusively made up of people who never saw outside of their executive suite. It would send out a message to the sub-contractor working on the 50 apartments for a developer, that there is someone looking out for his rights. That in turn would enable us to keep working and possibly avoid further strikes, similar to the one we saw recently.

More than that, the directors who worked for LC and other developers would have a chance finally to talk back to their employer. But they would be allowed to do it through a public agency. Even if LC and others had to pay them more compensation to shut them up, even that would be an improvement. Because I am aware from history, that the majority of the American car industry was started up by employees ejected from the Ford Motor company.

The simple reason why LC treated his directors so poorly was that he was afraid they would start the next General Motors. LC didn’t want anyone around him who knew remotely what to do with a billion quid. That was the basic underlying I was fired from Danninger, along with a couple of other individuals in the company’s history. It was Henry Ford who invented the production line. It was Alfred Sloan at General Motors who developed the management and administration system through which the production line realized its full potential. That is how you deal with old men like LC. By taking the system they invented and progressing it to the next level.

Brian O’ Hanlon

Where is this going?

@shadow wrote:

Where is this going?

Okay, if I was to summarise it to a short couple of points, it would go something like this. Liam Carroll and other builders want to believe that the market went bad. That is a great way to look at things from their point of view. Because it relieves them of any need to feel accountable for their own actions. Even though they were very active participants within the system. They had all kinds of choices they could have made. They made the wrong choices.

Companies like Danninger are so used to getting it easy, from government, from every angle . . . that when something finally went wrong, they lashed out at everyone around them. Namely the employees and sub-contractors who had worked their back sides off. I remember going to collect my few personal items at my desk in Parnell Street. I had the door slammed in my face by the company’s second in command. But I was with the company two years, I could deal with that. I knew employees no. 5 and 6 who had worked most of 25 years for Liam Carroll and he didn’t even gratify them with a goodbye handshake. We are being spun a story in the press about Liam Carroll. Especially in articles like this one here by Neil Callanan:

http://www.tribune.ie/business/article/2009/jun/28/where-did-it-all-go-wrong-for-carroll/

The Sunday Tribune article shows one of the worst conclusions we could come to, when thinking about the Irish property developer. In terms of how we think about their position in Irish society in the past. But also how the developer behaves within society from now on. That is why I bring NAMA into the writing here. NAMA will basically define what the role for property developers will be in this country going forward, and nothing short of that. I would like to work for NAMA very much. But it would enable me the chance to ask Sean Dunne some very burning questions I have, about his attitude towards embodied energy in concrete used to construct the office block at North Wall Quay. What is his attitude towards combating climate change, as a builder, as an executive director of a company?

Neil Callanan’s article claims that we should think about Liam Carroll and his mishaps as someone who walked up to a vending machine to buy a tin of coke. The machine accepted his one Euro coin and gave him back nothing in return. That turns Liam Carroll into a victim of circumstance, which is far from being the real truth. If one was to believe Neil Callanan’s analysis, we should now proceed to beat the shit out of the machine. Because it is the machine’s fault. That is what Zoe developments wants the Irish public to believe. Remember what I said about the strength of Liam Carroll’s grip on the Irish nation? There is nothing ‘sustainable’ about the vending machine analogy on any level. You can put all of the sheep’s wool into construction of houses you want. We might as well give in trying to achieve a sustainable economy in Ireland if we are going to continue to believe the Sunday Tribune tripe.

On the other hand, I would claim to know Liam Carroll and how talented and resourceful an individual he is. I would furthermore claim that through his reckless behaviour on the stock markets he left himself down terribly and many others who supplied him with services and skills. In theory the market exists to give the money to people who know what to do with it. That is why electricity power generation was de-regulated in this country. That is the theory anyway. The market place does not exist to give you back your one Euro coin. But to give you back €1.50 or €2.00, if it feels you are doing something worthwhile. If you were an internet company in 1999, it might have given you back €10.00. On the other hand, if the market doesn’t feel you are capable of using the capital in an intelligent fashion, it will keep the Euro and give it to someone else.

In other words, someone else now has Liam Carroll’s one Euro coin. The point I am making is that Liam Carroll squandered the Euro coin recklessly. Because all of the people who worked for Liam Carroll down through the years were an extremely sophisticated and talented bunch of people. Let’s say for arguments sake, that Liam Carroll’s design and construction crew weren’t pushing hard enough on the boundaries of what is possible today with energy saving construction. Fine. Let’s say for arguments sake, we cut the €800 million he lost in half. (Being very generous to the guys with the sheeps wool) Danninger as a company still deserves to have €400 million left in capital to spend on doing projects. That is why Liam Carroll is such a complete arse hole in my opinion.

If you stop looking at the marketplace as a vending machine that gobbles up peoples’ money, then everything changes. Then Liam Carroll becomes accountable for his actions. Then he is no longer a victim, but someone who was careless and dis-regardful of peoples’ livelihoods in the construction industry. We have to restore some sense of morality, dignity and pride to the construction industry that I know and respected. Otherwise we are looking at stopages and strikes by workers in Ireland for the next 50 years. During Liam Carroll’s tenure as a leading builder within the industry, a lot of innovative construction management techniques were introduced. The were techniques and ideas that badly needed to be introduced. He deserves credit on all that account. Indeed, the Irish market place did reward Liam Carroll well.

But that wasn’t enough for Liam Carroll. He felt he deserved more. In the pursuit of more Liam was willing to compromise the values. The basic values of morality, dignity and pride in the construction industry that I know and respect. That goes away beyond money. It goes away beyond redundancy from Danninger. Don’t think those electricians last week were standing outside building sites only for money. Liam Carroll thread on the very legacy of my own people who came before me. They fixed roofs, they built walls and even fought the British in the war. In Liam Carroll’s company, it was values that were allowed to erode. Not high brow values like one would expect from architects or planners, but basic values that every chippie and plumbers knows and understands.

That is Liam Carroll more or less taken care of, for those of you interested. Then we meet the guys like Johnny Owens on the small scale. Johnny Owens became a star of George Lee’s program, How we Blew the Boom. Johnny was also featured in the primetime piece, as a developer of houses in Mullingar that will not sell. His worry is that guys in suits will come down from Dublin and replace the relationship he once had with his local bank manager. Johnny’s fears are justified I think. There is a fear amongst all builders that they are going to be shafted by a bunch of accountants based up in Dublin. That is my reason for wanting to become involved with NAMA.

http://www.rte.ie/news/2009/0409/primetime.html

Like it or lump it, builders are a part of the community we live in. Like teachers, priests and drug dealers. Builders can be a very talented and resourceful bunch of guys. I am not saying they are perfect, and they should be held more accountable for their actions, there is no doubt in my mind. My blog entry tries to emphasize that. They haven’t been honest or fair.

http://designcomment.blogspot.com/2009/07/covering-up-mistakes.html

But I still know there can be some way found to work with them. I guess one could compare it to the treaty of Versailles after WWII, which set out terms that Germany couldn’t possibly meet in order to shame them. Where did that get us? My personal worry is that the treaty that is struck by NAMA will only cater for the Liam Carroll’s of this world. When in reality, it should try to help the Johnny Owens.

Forget about Liam Carroll now. He had his chance and permanently blew it. He could have rode through the storm and out the other end if he wanted. For the love of Christ, €800 million was about all that Dublin Airport Authority had to build what they needed. But in my view, Liam Carroll thinks that the government will still bail him out. That he is simply too big to be allowed to collapse. I suppose, at Liam Carroll’s level, they are so used to gettiing securitization deals, tax incentives, blue magic and whatever else you can think of. They are so overdosed on all of that kind of filth from the credit markets. They cannot even see what reality is anymore.

Brian O’ Hanlon

Brian, Carroll doesn’t talk to the press. What was Zoe just went into examinership.

PS your argument’s all over the place and is impossible to follow, changing by the post.

@jdivision wrote:

Brian, Carroll doesn’t talk to the press.

Your point being that it makes life difficult for the reporter. I know, that is a fair point.

That is why Liam should never have gone near the stock market.

Unless you are a front man, a PR expert like Steve Jobs or someone, the stock market is not the place to venture.

You see, Carroll doesn’t even talk to his own directors and employees anymore.

So you can imagine how they must feel.

The banks knew that Liam wasn’t a front man, and still coaxed him to get into the markets.

It is like encouraging a child to swim in a bath of sulphuric acid.

Watch those millions all dissolve.

What was Zoe just went into examinership.

Can you re-phrase perhaps?

You said that Zoe went into examinership. When?

Have you a link?

PS your argument’s all over the place and is impossible to follow, changing by the post.

I know, it is a complex subject.

Like I said somewhere in the above, Danninger it is a much simpler problem to understand than the whole of Ireland.

If we can sort out what went wrong at Danninger, it gives Ireland a much greater chance to sort out it’s problems at the macro level.

That is my argument for wanting to hold onto Danninger as a company.

The trick is how do we now save the construction management formula that Zoe had developed to such an extent.

But kill off the parts of the company which were unsavory and un-sustainable to say the least.

This is going to have to happen with every single poorly performing company in Ireland.

We are going to have to get used to getting skilled at the art of compromise.

That might sounds a bit stupid.

That is why the arguments above do wander a good deal.

All the above was written for a select audience of trades people who equally as pissed off about not being paid their dues as I am.

I was taken care of financially by Liam, to give him credit there.

(No pun intended)

But there is a stink of dishonesty and ineptitude in corporate relations about the redundancy letter which got so far up my arse, I cannot even begin to describe to you.

http://designcomment.blogspot.com/2009/07/covering-up-mistakes.html

Brian O’ Hanlon

http://www.irishtimes.com/newspaper/breaking/2009/0717/breaking76.htm

@garethace wrote:

Your point being that it makes life difficult for the reporter. I know, that is a fair point.

No my point is that you seem to assume he did. He didn’t. The analysis is based on feedback from others who know him and industry experts.

As for Zoe, it was broken up into different parts, which are now heading for examinership.

@jdivision wrote:

No my point is that you seem to assume he did. He didn’t. The analysis is based on feedback from others who know him and industry experts.

They are experts, I’m sure of it. But still the total picture you get from the expert can be wrong. Liam is quiet. But Liam was great to work with on construction projects. That is what he knew, rather than land. It was other folk who convinced Liam during the Celtic Tiger boom era, that he knew about other things. Isn’t that true of almost all of us? Certainly, in the last year I am finding out things about sustainability and energy conservation that I imagined I understood well. Now I realize I had only scratched at the surface. That is the truth about the Celtic Tiger. We convinced ourselves as a nation we were smarter than we actually are. That is why we ultimately paid a price.

Liam is a quiet man because he thinks about his projects and his work so closely. He doesn’t ever let up, and neither did any of his employees while working with him. As long as he was intensely focussed so were we. I don’t know if I will ever regain that intensity of focus in my life again. I worked 60 hour weeks for the man and even managed to enjoy myself. I like to express my dis-satisfaction sometimes. But while I worked for Liam, I found a lot more time to do work and waste a lot less time on banter. If that makes any sense. I know that is a tall one coming from someone who writes 100 words per minute. But while I worked for Liam I think I got to know myself a lot better. So did other people. It is complex, it is paradoxical, it is the story of human beings since the beginning. Never neat and tidy.

As for Zoe, it was broken up into different parts, which are now heading for examinership.

I asked around about that. Yeah, what is required is some decisiveness on the part of Zoe. Like I said, it is a mini construction industry within the construction industry. It needs to decide which parts of itself are toxic and need to be isolated and dealth with. Exactly like Ireland on the macro level. The industry needs to know where it is headed. A lot of contractors have struggled through 2009 on basic momentum from jobs that had to be finished out etc. Zoe are in un-chartered territory for them. They are fighting for their lives as a company for the first time ever. I really don’t know if there are guys left now in the company up to it.

The one thing of lasting value that Zoe had to offer was an ability to make a problem as simple as possible. That is a great skill to have. You come across situations all the time in construction which threaten to break your will to live. That is when I thought Zoe came into their own. They broke the problem down into some a mere human being is able to tackle. For someone with limited brain capacity such as myself, that approached proved to be a real winner. A lot of our planners and the people who publish legislation should take note of this.

Fallible human beings have to build even the most impressive structures. The construction management should fit around the fact that human beings are flawed, liable to make mistakes and sometimes plain stupid. Architectural consultants in particular often have the luxury of being separated from what they design. They keep asking for too much. They don’t drive for excellence in construction in any good way. They need to understand construction half as well as Zoe understand it. Architects draw things that cannot be built. They tell people to do something, without knowing how to do it themselves. Liam Carroll cut through that kind of rubbish and worked back to the brain bones of the problem. That is Liam Carroll’s real legacy. That is what he was good at.

I look at a development by Zoe like someone else looks at an automobile that was manufactured in a certain way. The traces of that manufacturing process are still left in the eventual artifact. In a lot of Zoe’s work I can see something quite clever, something that was built into the system, ease of assembly. A deep awareness of the logic of how things are put together, in what sequence and by whom. Other people don’t see that. Especially architectural critics who expect something to conform to a certain appearance in order to have design merit.

What can I tell you? You cannot buy this kind of an intelligence of methods of assembly anywhere else in Dublin city. In that respect Danninger was a unique entity. Some of the architects Zoe were obliged to hire in the end simply exported the task of detail drawing to a foreign country. The story came full circle in a way. In the early days the Carpet Baggers Liam Carroll worked with in Ireland did drawings to send to Libia or Berlin military installations. In the end, Eastern Europe did drawings to send back to Ireland. A strange business is construction.

I have no doubt that in the end Liam Carroll wanted to learn more about how finance and construction projects come together in the age of digitally created stock market financial instruments. We were on one floor at Parnell Street using the old technology of computer aided design. While someone on the floor above our heads was breaking the projects we built up into binary 1’s and 0’s in another way. What can I tell you? Liam was too old when he started that experiment and he pushed the innovation of financing of projects too much before its time. Before we understood land taxation, capital investment methods, low carbon accounting and ways to support a smarter economy.

Brian O’ Hanlon

@garethace wrote:

I look at a development by Zoe like someone else looks at an automobile that was manufactured in a certain way. The traces of that manufacturing process are still left in the eventual artifact. In a lot of Zoe’s work I can see something quite clever, something that was built into the system, ease of assembly. A deep awareness of the logic of how things are put together, in what sequence and by whom. Other people don’t see that. Especially architectural critics who expect something to conform to a certain appearance in order to have design merit.

Zoe’s business practice was indeed dynamic, and may very well inspire interest from a mechanical perspective through its resultant developments, but do you think this methodology translated properly into reality Brian? That is to say, into well-planned, attractive, comfortable, sociable, safe, urban-focused homes for human beings?

from a printed paper…

Almost all financial planners derive a large slice of their earnings from commissions.
Financial planners are paid on the basis of products they sell rather than the advice they give.
Many bank financial planners have been richly rewarded for the the volume of investments they sell.

“Beware of the shark”

@GrahamH wrote:

Zoe’s business practice was indeed dynamic, and may very well inspire interest from a mechanical perspective through its resultant developments, but do you think this methodology translated properly into reality Brian? That is to say, into well-planned, attractive, comfortable, sociable, safe, urban-focused homes for human beings?

In short, no. But I am not the person you should ask. I know how to build something and put it together better than most architects do. Especially when I am given access to the people and resources I had to work with in Zoe developments. But I suggest Sally Lewis’s little book, Front to Back for a much better discussion on that subject, than I could ever offer. Engineer’s love how things are made. I tried for ten years at Bolton Street to become a member of the architectural profession. But when I work with engineers, as I did at Zoe developments I feel much more energized and at home.

Too many products

I had a friend who was financial controller of the precast concrete plant in Kildare, the one set up by Menolly homes boss Seamus Ross. It was a plant operated by a bunch of very talented and innovative engineers. Too talented and too innovative perhaps. My friend told me he had been asked to do a re-organization at the facility. He discovered to his dismay that the engineers had no less than 80 different products! None for which the engineers had a clear idea of a market or a consumer. They simply wanted to invent more and more cool ideas.

Until my friend an accountant came along, the engineers in the factory had a free rein. So he simplified matters for them, and told them to perfect the techniques of manufacturing one product first. Then he would allow them to proceed to product item no. 2. You can see now the benefit now of having different points of view within the one organisation. Zoe developments developed a business culture to take advantage of that also. When it worked at Zoe, it worked very well because you had the different inputs feeding into the project together.

Liam Carroll on the lecture circuit

Very few companies in any industry, much less the construction industry find that easy to do. That is why I feel that Zoe developments at its peak had something to offer this country. Not at the moment, because the banks have more or less dominated the situation. The couple of parasite architects remaining, doing the drawings aren’t the kind that would understand the classic Zoe developments culture. They were merely pulled together hurriedly to do planning schemes as fast as possible to keep the bank happy. What a disgraceful mess and a step backward for innovation in Ireland.

The comments I made above about Zoe developments, the good parts of Zoe, have applications in almost every industry we have in Ireland. Outside of construction entirely. If Liam Carroll finds himself out of a job soon, he will be welcome on the university lecture circuit I have no doubt. (Not the consellation prize he wants I am sure, but don’t knock it) Likewise the weaker elements in the Zoe/Danninger culture are things that can be addressed and dealt with, once Liam gives up full authority. (I doubt he would do that, which is why a bank or government agency should take over now) Once a Zoe director is able and willing to stand up to the mark and exercise authority in the company, that is when the company will take off.

Blue Screen of Death

Architects for the most part tried to exclude themselves from Zoe. Instead of the opposite. Get in there and get stuck in like I did. I can assure you the Zoe culture does have potential to become democratic and cater for a large range of view points. Bearing in mind the comments I have made above in relation to the pre-cast concrete factory. Architects wouldn’t get it easy in Zoe. Certainly not as they do hiding behind the RIAI contract as external consultants. But that would challenge is one worth rising to. It would probably make them better architects.

The mechanical dimension and attention to logic in details was lost usually when external consultants were supplying design services to Zoe developments. That includes O’Mahony Pike, Traynor O’Toole and others. I remember a particular night shift I was working at Dell computers in Limerick. It was back in the xmas of 2001/02. In the very depth of the dot.com recession that never was, we were still shipping a million computer systems every three months. I was working on quality control that night, when suddenly all of the ‘smiley faces’ screen savers that show when a computer finishes its installation of MS windows turned to horrible blue screens.

It was a strange feeling, as the 1,500 workers in the Dell plant that night all suddenly ground to a halt. It was the only stoppage like that I remember in 12 months working for Dell. Which is a testiment to how well they had absorbed the lessons of the Toyota type of production line manufacture. I got flash backs of that scary experience several times when external architect consultants, who don’t understand the production line that Liam Carroll created would make stupid design decisions in how to build things. These decisions are made at planning stage on drawings, by architects who design things to look okay on paper. But who haven’t a clue what way it can be constructed.

Learning curve for Irish Architects

The cladding system on one of Liam’s developments cost over €20 million alone. It didn’t include the structure, decorating, excavation, land costs or anything. Only a cladding system. It was touch and go to make it even work. Because the architect in that case designed themselves into all sorts of difficulties in order to maintain a religion or an aesthetic. That is the kind of arrogance they are able to display with other peoples’ money. I wouldn’t mind but architectural practices are only dealing in mickey mouse sums of money in consultancy fees themselves. Most of the people working in architectural practices are let go now. There is so little money available to be made within that profession.

NAMA should not be a bonaza for the consultant architects here in Ireland. It should be an opportunity to investigate better techniques of linking design and knowledge of construction up with decisions that are made on the drawings at planning stage. There needs to be someone with experience in that agency who the developers and builders know they can trust.

(Sorry for the making the plug again)

What I know about the Zoe production line, the Dell production line and what I have studied about the Toyota lean manufacturing system are applicable to all areas of Irish business. That is where I feel the biggest contribution of Liam Carroll was made. But as I realized the first day I worked in Danninger having come from Dell, via another small project management company in the interim, was that Liam should have hired the million dollar managers he required. Liam probably knew what to do with hundreds of thousands of Euro. His directors knew what to do with ten’s of thousands of Euro. Those are the kinds of sums that most building construction breaks down into. But you need someone with experience running a Dell computer factory, or something on that scale, in order to know what is happening to your millions.

Bankers on the drawing boards again

Zoe developments needed good help, and not the form that Irish banks are still trying to offer them now. This so called ‘rescue package’ that Zoe drew up with the banks is the biggest pile of rubbish going. It is in the banks personal interests to keep the old beast alive, as the banks effectively drew the sketches on the drawing board in the end for schemes such as East Wall Road. I think that Ruairi Quinn’s comments here are worth reading and the Will Hutton article about British banks that he referred to.

http://www.ruairiquinn.ie/?p=18

This talk in the newspaper today about Zoe developments, or Dunloe Ewart ‘trading’ it’s way out of difficulty shows me the extent to which the company has lost its way and is now being controlled by a bank. The bank is literally drawing up the planning permission scheme using Liam Carroll as the intermediary. That has nothing to do with the core competency of Zoe Developments. The lean design and manufacturing techniques it developed over the last 25 years.

That was the great dream at Zoe, to have architects and designers working up front at planning permission stage, (not bankers from AIB) who understood the entire Zoe developments production line process. Down to the level of how one trade interfaces with another. David Torpey is the only man left standing at Zoe developments who is fighting some sort of battle to keep that culture alive. But what hope has one man, when a year ago there was 300? Zoe developments was in essence an advanced form of project management. It had ideas of much value to other Irish companies.

The lesson from Intel

Clayton Christensen was asked to come in as a management consultant at Intel a number of years ago. Back in those days Intel believed that it’s designers were its primary asset. That if the chip fabrication side of the business disappeared altogether, they would still be world leaders as a company. Because they would still have their computer chip designers.

However, Clayton Christensen disagreed with this analysis. Christensen believed that in the future the presence of fab-less designers in the marketplace would increase exponentially. It would be harder and harder to keep a competitive edge on that side of the business. Christensen’s proposal to Intel was that they keep developing the silicon fabrication facility side of their business. That in the future, that is where the massive profits would be made. As all kinds of chip designers came to Intel in order to get their products made. It has been a number of years now since I read Christensen’s paper about Intel. But I can tell you, I had a sense of Deja Vue when i saw this report come out in June.

http://www.isuppli.com/NewsDetail.aspx?ID=20345

Is Moore’s Law Becoming Academic?

The high cost of semiconductor manufacturing equipment is making continued chip-making advancements too expensive to use for volume production, relegating Moore’s Law to the laboratory and altering the fundamental economics of the industry, according to iSuppli Corp.

The lesson from Toyota

This is why I believe the banks have got it all wrong in terms of their strategy for Zoe developments. Not that they will carry any of the blame. The banks looked at the company that Liam Carroll built and thought they could understand where the real wealth was coming from – the land, the sites and future planning permissions. They got distracted by the trappings of wealth but they singularly failed to see where the wealth had been generated from in the first place.

The wealth in Liam Carroll’s company wasn’t contained in the sites that he owned. It was in the revolutionary new construction management and design. F*** sake, it is on the top of their letter head! All the banks are proceeding to do is kill what is left of the goose that laid the golden egg. This is why Ireland is served by such a bunch of ass holes in the banks. In other modern countries such as Japan, the banks actually know something.

Make a comparison with Toyota in Japan. Toyota have left their doors wide open for people from all over the world to come in and study their process. Even with numerous attempts by Ford and others to replicate the process in the US, they still cannot manage it. Yet Toyota can introduce factories anywhere in the world it wants, using local labour and make the system work.

Liam Carroll created a unique kind of culture in Zoe developments. It is a unique thing, a one of a kind. It is as native to Dublin, Ireland as Toyota is to the islands of Japan. The banks believe the logical thing is to squash that and build on the land. They are wrong I tell you, and seriously wrong at that. If the banks really had a brain rather than an arse to think with, they would see that in the future Ireland could be exporting Zoe developments, in the same way that Japan can export Toyota. That is big, but much too big for our banks to visualize.

I mean when you read my writing on the subject of Zoe developments you realize where the wealth was created. You realize where and how the value could be added. It is to do with ordinary human beings working on something and adding to it using their brain power, creativity and knowledge. That is all that human beings are able to do anyhow. That is what every good theory of economics states in some way or another. But trust the Irish banks to botch up the theory of economics with everything else.

Long Live DEC

Digital equipment corporation were definitely like that. They were like a small technology industry within the greater technology industry. You will notice I have extensive knowledge and study done in the area of technological development. That is why myself and Liam Carroll get along well as a team. In the end though, Digital Equipment Corporation fell apart for a series of reasons. All of which were traced back to the culture in the company that didn’t know how to cope when it got to a certain size. Interestingly, what happened at Digital too, was the sales force culture took over the manufacturing side of things. That is when past employees of DEC say that all of the bad decisions were first made. Read much more in:

DEC Is Dead, Long Live DEC: The Lasting Legacy of Digital Equipment Corporation
by Edgar H Schein (Author), Paul J Kampas (Contributor), Michael Sonduck (Contributor), Peter Delisi (Contributor)

People who worked at DEC always seem to regard it as the high point of their careers. I will make one comment though, if I may be so bold, because I am not an architect. When I walked around the 150 no. apartments that I did manage to build with Zoe before it all fell to pieces (Essentially the last, and the peak of evolution in terms of the design methods that Liam Carroll initiated 25 years ago) I couldn’t help but get this strange feeling. I had gone to inspect that a few final roofing details had been carried out correctly. It was part of my usual duties exercising quality control on the job. It was towards the end of the job, and the site was kind of quiet.

I looked around and said to myself, you know the men who built this – their faces will be forgotten – even by myself in the passing of time. But there was some part of them embedded in the final artifact. I know it does contribute to a sense of well being to the place we created. Without the positive charma and companionship between the people and trades working with Zoe, the end product would have been missing something in it’s soul.

It has been quite emotional

That sounds kind of silly I know. Because it really doesn’t translate into words. It was an unexpected sense of the human touch in the materials, that made me feel I could live in this place. Or hand it over for other people to do so aswell. Cramped and all though it certainly was! This feeling caught me quite off guard on that day and I do remember feeling a bit teary eyed and emotional standing up there on that roof! I felt like a blubbering fool to be honest. Architects normally have to work on the little jobs in order to experience that. But working with Zoe developments one could also get that on the larger scale project. It was something amazing in my mind.

http://www.daft.ie/searchrental.daft?id=600395

I later had a chat with Merit Bucholz about this and other affairs when he built his project at Elm Park for Bernard McNamara. I suppose ‘The Builders’ do get a very bad press. But I certainly believe there was more motivation in it for them than money. That in the end, I think is what forced them to make some critical judgements in terms of finances they were not qualified to make. Either on their company’s behalf or on behalf of the country either. What more can I add to it? 2009 has been a strange year for me. Seeing two of my favourite past employers, Dell and now Zoe developments go under.

Brian O’ Hanlon

Gordon Bell’s essay on the history of Digital

http://research.microsoft.com/en-us/um/people/gbell/CGB%20Files/DEC_Is_Dead_Bell_Appendix_Schein_Book.pdf

1977 Corporate Philosophy and Organization at Digital.

http://research.microsoft.com/en-us/um/people/gbell/digital/Dig_Corp_Philos_and_Org_7704.pdf

@missarchi wrote:

from a printed paper…

Almost all financial planners derive a large slice of their earnings from commissions.
Financial planners are paid on the basis of products they sell rather than the advice they give.
Many bank financial planners have been richly rewarded for the the volume of investments they sell.

“Beware of the shark”

There are all kinds of conflicts in the whole development cycle like that, which Ireland can change if it wants to. It is like introducing a smoking ban. Most would argue we are now better off for it. I used to enjoy a smoke in the pub myself, but now I look at it differently. I realize that I was creating emissions that would harm other peoples’ health.

In that regard, our small size as a country, as a population of four million people, should be a potential advantage and driver for innovation and positive change. Especially in learning how to build a low carbon society. Lovins and Hawkens have a very interesting chapter five here on the building industry, which I have been encouraged by many people to sit down and read:

http://www.natcap.org/sitepages/pid20.php

Brian O’ Hanlon

–

Under 14 Football

I bought all of the newspapers today and read them with a sheer sense of relief. The last time I sensed an emotion that positive while reading a newspaper, I was thirteen years of age and my name had appeared in a 1985 edition of a local newspaper for winning the under fourteen, grade C football championship in West Limerick. I still have that newspaper page saved somewhere! Now I have a new addition to my modest collection.

I would like to give a personal vote of approval to the Irish Independent newspaper who today printed a story which read very well indeed. It was penned by Thomas Molloy. I would have gone a bit further and claimed that Carroll should have known an out-going Steve Jobs kind of figure was required to pull the stunts he tried to pull with the Irish stock market. I am no journalist and do not understand the rigors and challenges the profession must enforce on its members. But I know this much. Thomas wrote something worth reading for a change. Thomas is correct in his analysis, that the early success of Liam Carroll in taking over Dunloe Ewart in 2002, did encourage Liam to over-value his skills as a corporate and a stock market player.

Casino Royale

The only comparison I can think of, is the initial £25,000 that Lord Lucan won on the roulette wheel at the ‘Real Casino Royale’ featured in a recent Channel 4 documentary. A certain fringe member of the British aristocracy, a mediocre man in terms of success prior to that, identified a certain tendency amongst high society. They loved to gamble big. A parallel could be drawn with some of ‘The Builders’ featured in Frank McDonald’s book of that name. Parallels between both the players and the organisers of the roulette room. The London Casino became really big business. The accountant partner behind it all was actually an Irish man.

http://www.channel4.com/programmes/the-real-casino-royale

Poor old Lord Lucan never won another farthing from that Casino, and one is certainly left asking the question: was that game rigged in his favor the first evening? I am in no doubt that it was. I think that the same is true of Liam Carroll. When Liam sat down at the roulette wheel of the Irish stock market, he became consumed with his own consumption. The people I really blame is the choice few of Haughey’s old mates who introduced Liam to that prestigious gaming room in the first place. What Liam Carroll does not seem able to appreciate is that he was gambling with the future of a company. Possibly even a size-able chunk of this country.

A guy such as LC who will fight over pennies, sometimes is not able to grasp what a billion euro is. Our politicians, love them or hate them are certainly better in that regard. To understand what a billion Euro is, requires you to examine all sorts of fuzzy and abstract ideas about society and the world in general. Liam Carroll was too practical a man for that. Similar to many characters featured in Frank McDonald’s excellent novel ‘The Builders’ Liam did not have the ‘fuzzy’ sense about money like good politicians do.

Hire the A-Team

Somebody sold short on Liam Carroll’s shares, whether through some financial instrument or whatever means. That is where the personal fortune of Liam Carroll was diverted to. It was the closest thing to a daylight robbery you can imagine. History will reveal the full details, I am in no doubt. The beauty of the con, is that everyone bought it, including journalists. Who proceeded to print an easier story about a poor victim or circumstance, rather than a man who was gutted and hung out to dry.

In classic end or dawn of century fashion, the fortune traveled down the fiber optic lines servicing Ireland’s capital city. As Sean Connery once said in the movie ‘Entrapment’, where is the good old fashioned loot? There was no other way the share value can sink so fast in 4 no. separate companies. As someone said, the oldest and most obvious cons are the best. Nobody will even bother to suspect them. I doubt our fumbling fools in the Central Bank and Financial Regulators office would possess the tools necessary to detect such a crime in progress anyhow. That is another good reason that Liam Carroll should have stayed away from the Irish stock market.

The same may even be true of Sean Quinn’s investment at Anglo Irish bank. Sean Quinn had walked into something very incestuous at BUPA Ireland previous to that. My sources tell me (and they are the best sources possible) that Bertie’s buddies did very well out of the deal in Fermoy. Another large extraction of capital took place in that case diverted to specific individuals. If I was Liam Carroll today, I would feck the lot of them and throw my last remaining few bob into the financial computer wizardry equivalent of the ‘A-Team’. Sargent B.A. Baracus is the only person who will sort these people out. I wouldn’t care if I had to hire the Russian mob.

(That is why we need NAMA badly in this country, before things do turn ugly)

There was wholesale pillaging of the wealth of Irish people going on towards the end of the Celtic Tiger. Stuff that would make Sean Fitzpatrick look like a church choir boy. Celtic Tiger sized slices of the pie weren’t enough for some people. A certain few individuals wanted to order the lobster. The fact that Liam Carroll was wiped out like so many Irish corporate leaders should come as no surprise. Zoe developments were too naive to appreciate the gales that were blowing out in the open seas of the Irish market place. Zoe had barely left port when they found themselves buried underneath the waves.

Brehon Law

There is an established tradition in Ireland of politicians cornering the most wealthy business people and taking money off of them. It became publicized with Ben Dunne but it probably goes back much further than that. It is one of the last vestiges of an Irish culture that refuses to go away. It is not specific to Fianna Fail as some people would assume. It is on every side of the house. When I worked for Zoe developments I was frequently cornered by people from across the political spectrum for possible favors. Even from lower members of the squeaky clean and green party.

They feel they are entitled to it. I am no historian of legal matters, but there must be some Breton law scribed down by some druid in a cave back in the dark ages, which gives Irish politicians deed and title to a business man’s wealth. It is no wonder that Liam Carroll tried to keep to himself. He didn’t owe favors to anyone and didn’t want any in return. Unless you count the indirect gains through property development incentives and what not.

I suppose, that is why public representatives feel the need to corner the Irish business man when they feel like it. They believe they are re-claiming what is rightfully theirs to begin with. That is why they don’t know one £15,000.00 from another. Someone mentioned the former Taoiseach as candidate for Dublin mayor on TV the other day. How stupid can four million people actually be? If we keep on sending out the message to the globe that we are in the stone age, we will be pummeled by the market place again, and again, and again.

In the Irish Independent article by Thomas Molloy, I learned with interest that Noel Symth had been a friend of Charles J. Haughey. I didn’t know that, but we certainly cannot count it as a crime. To be honest, Dunloe Ewart’s biggest problem was it was run by a bunch of financiers and solicitors who weren’t real building professionals. The Dunloe Ewart estates before that had been managed by British Land. Who were not builders either. They are a collection of accountants working from their offices in London. Liam Carroll is a builder. He had his big opportunity to turn Dunloe Ewart company around and blew it.

So if friends of Charles Haughey, accountants from London or builders from Dublin are not able to crack the problem of Dunloe Ewart, who is? My suggestion is none of those three enterprises, but some kind of healthy and workable combination of them. (This is another reason why NAMA is showing so much potential) There are considerable challenges for team building and organisation within NAMA. It will require ego’s to be swallowed by everyone. That is going to be a real challenge. But the process could work. It has to work.

An appeal to the RIAI

There are great assets that can be salvaged through the NAMA scheme. Take for example the human resources that a company such as Zoe developments had. The best architect in this country at the moment worked for Liam Carroll for the past ten years. He is a slightly built little man, but one who stands head and shoulders over all the rest in this country. His name appears on Zoe’s standard letterhead and to me he is the Roger Federer of the Irish architectural profession. He is the man with the complete set of moves. However, when I told the current RIAI president I was working alongside this man, the only compliment he could muster was: What are you doing for that fella?

All of our judgements were poorly affected during the intoxicating times of the Celtic Tiger. I humbly submit to the RIAI body responsible for the promotion of design competency in this country, that their current state of unemployment has less to do with the economy and more to do with their failure to recognize real professional quality. The architect I worked with at Zoe developments could not be mistaken for something average in design terms, by anyone who had the privilege of working beside him. However, that man was also a director in a company, in an Irish construction industry that grew so fast in the last decade or two, that it lost its own sense of corporate integrity. There are bridges that need to be re-built on both sides.

New possibilities at NAMA

I applied for a position working at the new NAMA body because I feel supremely confident when Liam Carroll’s assets come floating down in my direction, I will be one of the few individuals uniquely qualified to interface with what is left of Zoe developments. In a manner that is fair to them and also very firm. In other words, I don’t fall into Liam Carroll’s reality distortion field. I know that Liam Carroll and the rest of his directors would respect and work with an agency that included one of their own. Remember when I completed that first major building project for Zoe, I became an un-official family member for life. That is a nice family to be in. It more than made up for losing out on RIAI membership a decade ago.

If NAMA do not see fit to grant me this opportunity I wish them the best of luck in their endeavors anyway. The sheer scale and ambition of the enterprise will require many young and talented people to see it through. It is the right scheme for the turbulent times we live. A much more transparent and open process than a nationalised banking system. More open and transparent is what Ireland need in terms of communication with the rest of the world. The best of my ideas are contained in this thread here:

https://archiseek.com/content/showthread.php?t=7692

But the one word of caution I do humbly submit, is that the Johnny Owens scale of builders are the people who really deserve the sympathy. I don’t have the full legal jargon to describe it. But I think the Johnny Owens scale of builder were second parties to whatever went wrong. I think that it is the larger players in the game and in particular those who did ‘polite introductions’ at the real Casino Royale we should be going after. We can go after the Lord Lucan’s if we want to, but it really doesn’t solve the underlying problem. In the case of the Clermont Club casino, as soon as gambling was legalized in Britain the romance of it being something illegal vanished. Gambling became something the ordinary man could do. I don’t know if that was progress or not. I will leave that judgement entirely up to you.

http://www.rte.ie/news/2009/0409/primetime.html

Brian O’ Hanlon

–

The man who got fired from Danninger for stealing gravel.

I once talked to the foremen who managed the fit out for one of Liam’s large residential developments. They had worked extremely hard to achieve the fit out of 40 no. apartment units per week. A staggering achievement which is un-equaled anywhere in the country. Their attitude was quite pessimistic after the ordeal though. They were only waiting to be fired after all of their hard work.

“We should have robbed him!” someone proclaimed in a defiant and rebellious tone. What is one supposed to do, walk out the front gate with a sink or shower tray shoved underneath one’s jumper? Well, I guess everything can and did walk off a Danninger site at some stage. Liam’s own crew never were up for that kind of messing. But at the same time, those who worked for Liam on large jobs were powerless to watch everything. Large amounts of gear did disappear on the large jobs.

The site that really took the biscuit though was Limerick. Loads of gravel were ordered for Danninger’s Shopping Centre that ended up spread on peoples’ front driveways. A bit of steel, whatever you needed. Some lads at Limerick thought the wealthy property developer was a bit soft. He didn’t need all the wealth and tried to relieve some. Liam came down hard on it and promptly fired people. Imagine going home to your wife and telling her you were fired by Danninger for stealing gravel. Liam knew the game better than anyone did. He had no problem protecting himself when it came to building materials.

I should have remembered from my time working at Dell computers. Where guys would smuggle Intel processors out of the factory in their steel toe capped boots. Not many could find a market for the smuggled loot outside though, as the sockets for the chips were quite specific. However, the human temptation to smuggle a piece of cutting edge technology out in one’s sock proved too difficult to resist for some. One guy, undoubtedly not on his own, escaped with €250,000 worth of gear before being caught.

The truth is though, Liam Carroll was simultaneously keeping an eye on loads of hardcore down in Limerick city. While at the same time trying to manage millions on the stock market in Dublin. One could claim that Liam Carroll tried to manage everything. In the end, he was able to manage nothing and lost everything. There is a lesson in that somewhere about the whole human condition. But the biggest mistake Liam made was in not watching the people who really had their hands in his pockets.

The load of hardcore in someone’s driveway, does seem like such small potatoes now. But small potatoes is what he knew best. He should have stuck with it. Now, I certainly have to find a better hobby than ranting about the Irish construction company. But I felt like sharing the story, while I still had the recollection of it in my mind.

Brian O’ Hanlon

I’ve loads of free time. Too much, in fact.. However, no offence, but I’ve not got enough to read in detail all that old guff above above.

Carroll rolled his dice, used lots of borrowed and some of his own money and failed. Just because he did not have a helicopter, or live in D4 or whatever, is no excuse. He had / has an ego, which made him do what he did. So what. It does not make him special for me.
I have more respect for people who traded prudently and paid their bills. It has been obvious for years to anyone with a modicum of wit to perceive that the construction sector was a bubble. These guys need to get real .
K.

Somebody sold short on Liam Carroll’s shares, whether through some financial instrument or whatever means. That is where the personal fortune of Liam Carroll was diverted to. It was the closest thing to a daylight robbery you can imagine. History will reveal the full details, I am in no doubt.

You are better sticking to topics you have experience of, Brian. The mechanics of markets means the exact opposite; if there had been large short positions in the stocks that LC bought, this would have been of benefit to him and others long in the stocks.

There is no conspiracy involved in figuring why Irish bank shares valuations collapsed last year. We don’t need to wait for history – it is already completely clear. According to market fundamentals, the share price of a company reflect the equity (excess of assets over liabilities) plus the present value of expected future profits. Until the start of 2008, most people still believed that the exponential growth in Irish banking profits would continue their trajectory or at worst slowly level off and the share prices reflected this. Once doubts about future profits grow, share prices fall; this happens in every sector everywhere in the world; there is nothing special about the case with Irish banks.

A few people in Ireland were blinded by their own success and ego and refused to even consider doubting the Irish banks. These are ones who got burned.

I don’t want to sound like a harsh school teacher but I think if you stripped your essays down to just your direct experiences in the trade, you could actually produce some very good and interesting writing which would have wide appeal. As it is, the interesting bits are drowned out by what comes across as an attempt to portray erudition but instead results in disjointed incoherence. I find it difficult or impossible to read an entire message and usually just skim them if not just skip them entirely.

@KerryBog2 wrote:

I’ve loads of free time. Too much, in fact.. However, no offence, but I’ve not got enough to read in detail all that old guff above above.

Carroll rolled his dice, used lots of borrowed and some of his own money and failed. Just because he did not have a helicopter, or live in D4 or whatever, is no excuse. He had / has an ego, which made him do what he did. So what. It does not make him special for me.
I have more respect for people who traded prudently and paid their bills. It has been obvious for years to anyone with a modicum of wit to perceive that the construction sector was a bubble. These guys need to get real .
K.

Thanks for the feedback. I had a feeling this attitude is out there, and I can’t find any faults at all in anything you have presented above. I wanted to try and present some of the other angles, or points of view above, to try and flesh out the issues that an agency such as NAMA might run into.

My biggest fear is that we will rush into some kind of a treaty of versailles nill sum game with builders. That we might end up paying for down the tracks as France did in 1940s. (Or rather future generations in Ireland might)

I know that some of the theories above border on the lunatic, the conspiracy ‘was there ever a moon landing’ sort of rubbish the internet is full of. But I think these are balls that are going to be thrown about, as we get into the serious business of cleaning up the mess. Thanks again, for the response. I do appreciate the knowledge of having people out there, knowledgeable such as yourself, who are not willing to cut builders like Carroll any slack. I think we will need that steel in order to deal with the problem fully.

I can tell you some of my own correspondance with Carroll in recent days has not been too polite either.

Brian O’ Hanlon

@jimg wrote:

You are better sticking to topics you have experience of, Brian. The mechanics of markets means the exact opposite; if there had been large short positions in the stocks that LC bought, this would have been of benefit to him and others long in the stocks.

I appreciate the correction thanks, pretty basic mistake on my part.

The point is taken. I hope people a lot better qualified than myself do get involved, get their shoulders behind the wheel and try and sort out some of the mess soon.

For my own part, I would like this all to stop weighing heavy on my conscience so I can go back to normality. But I don’t want to leave the matter go, and have no one chase after the correct solutions or chase after the people responsible.

I found it diabolical that Liam Carroll’s financial director has the nuts to send out a letter like he did, without mentioning an apology or anything for wasting whatever chances our company had to survive. The idea of them receiving a bail out now from the government simply makes me sick.

There is no conspiracy involved in figuring why Irish bank shares valuations collapsed last year. We don’t need to wait for history – it is already completely clear. According to market fundamentals, the share price of a company reflect the equity (excess of assets over liabilities) plus the present value of expected future profits. Until the start of 2008, most people still believed that the exponential growth in Irish banking profits would continue their trajectory or at worst slowly level off and the share prices reflected this. Once doubts about future profits grow, share prices fall; this happens in every sector everywhere in the world; there is nothing special about the case with Irish banks.

Thanks, yeah, a lot of sense spoken there.

I had a google around this evening and came across snipets like this:

http://www.rte.ie/news/2009/0525/banks.html

There seems to be talk about ‘denial of reality’ by the banking sector. But I also see a problem in Ireland in getting too caught up in the issue of the assets themselves. I mentioned a country like Japan, because it is only a couple of islands stuck together beside China. But it is what those people on those islands do, and how they do it, that creates the wealth for them. How do you classify that in assets and liability terms? Unless you begin to include human resources as an asset.

They talk about it being difficult to put a value on properties in an uncertain market. But what value do you put on the many construction professionals, whose work might have added value to developments down through the years? Those people seem to be completely thrown on the scrap heap now. I notice this change in particular, as the banks took control more or less of Liam Carroll’s operations and ended up dictating to him what to do and how to do it.

I mean, if you have spent 5 years or more studying to become an architect this sounds pretty scary. The Prime Time program on the 30th April, available on RTE’s website has a point made by the Green party. In relation to how NAMA intends to develop the sites and projects. Sometimes the fastest way is not the most sustainable way. That seems to be what got us into difficulty to start with. But that is the basis of the banks ‘rescue plan’ for Liam Carroll. Lash up something as fast as possible. Hoping that it will make the pain go away.

http://www.rte.ie/news/2009/0430/primetime.html

A few people in Ireland were blinded by their own success and ego and refused to even consider doubting the Irish banks. These are ones who got burned.

That does make some sense.

Paddy Kelly’s interview with Eamon Dunphy available to download from RTE’s website is an outstanding example of ‘refusing to even consider doubting the Irish banks’. My favourite sound byte from Kelly’s interview is: “Some very smart guys at Anglo, watch Anglo”. I am surprised that sound byte hasn’t made its way into the media already. Poor old Eamon Dunphy was a bit sucked in too by the charisma of Paddy Kelly during that interview. Which is a rare thing also.

Brian O’ Hanlon

Saturday, 29 November 2008

Paddy Kelly, one of Ireland’s leading property developers, joins Eamon to talk about his childhood and schooling, his family background in building and property since to the 40s and 50s up to the present and how he feels about the current property market and economic situation, and to choose some music.

http://www.rte.ie/arts/2008/1129/conversationswitheamondunphy.html

Remember Paddy Kelly and Liam Carroll are the kinds of pipe dreamers that NAMA will have the very messy job of dealing with. (They are meant to be Ireland’s equivalent of Henry Ford and Alfred Sloan) This is where it gets into all sorts of legal difficulties and complications. The property developers and the banks are in some kind of a romantic relationship it appears to me. Emotions are involved. That is what is messy about it.

One comment on the Prime Time program of 30th April 2009 did strike me as odd. If indeed we do take the €80-90 billion of toxic assets from the six Irish banking institutions . . . as Sunday Business Post journalist said, we leave only 30% of the Irish banks on the stock market to trade. It makes me beg the question, what are we doing in Ireland other than property? If such a large proportion of what an Irish bank does is entirely property related, then why are they so rubbish at it?

Why have they even bothered to devise a rescue plan for Liam Carroll than can only turn out as bad as everything else has done to date! We need to salvage to best of what we can from the organisations that Paddy Kelly, Liam Carroll and others development over a quarter of a century . . . and lump that all into one basket. Then we need a entirely new approach towards sustainable and meaningful development that embraces new ideas and new visions. The rescue plan that the banks pieced together with Liam Carroll could not possibly contain anything like that. If we don’t wrench the control of Zoe developments away from Carroll today, we only deserve what we will get.

I mean, for instance the banks in Japan or South Africa must be have a lot more industrial and technological items outstanding on their books. The banks in those countries would have to develop the necessary awareness and level of judgement to incentive-ise industry and innovation. The Irish banks seem vacant of those kinds of skills. They seem to focus singularly on property to the exclusion of all else. This makes the situation in my mind even more serious than I had first thought. What we are facing in Ireland is not simple bad assets, but a sheer deficit of skills and awareness in the entire banking sector!

Sometimes I think I would be better off taking the first Ryan Air flight out of here, and never coming back.

Brian O’ Hanlon

@garethace wrote:

One comment on the Prime Time program of 30th April 2009 did strike me as odd. If indeed we do take the €80-90 billion of toxic assets from the six Irish banking institutions . . . as Sunday Business Post journalist said, we leave only 30% of the Irish banks on the stock market to trade. It makes me beg the question, what are we doing in Ireland other than property? If such a large proportion of what an Irish bank does is entirely property related, then why are they so rubbish at it?

The big 3 were very good at property banking and built significant market share in the UK and syndicated European commercial transactions many of which the only connection to Ireland was the bank.

Property finance was quite simple there were two types of transaction small transactions; where the underwriting department of Bank A after the necessary checks lends money to the borrower at say 6.50% they transfer the debt to the securities department to be packaged up into corporate bonds and sold at a lower yield of say 5.25% the bank gets to collect 1.25% in return for collecting the payments.

In the case of larger transactions the corporate or investment divisions arranged finance in smaller chunks after lending a large sum of say €200m to say 5 other banks again locking in a margin. The problem on these were that many of the banks stopped syndicating the majority of these loans and at the wrong point in the cycle held onto too high a proportion. I’d not be worried about the prime commercial lending that was done as a lot of the assets will recover within 2-5 years, it is the domestic development land that will need greater scrutiny.

The problem on the smaller transactions was that after concerns were raised that a lot of securities were not the quality they were originally assumed to be the entire system froze up. The Irish banks can’t be blamed for this it was simply a systemic risk that not many people saw. The problem that this freezing created was that banks had already provided loan offers on many ongoing transactions which they were not in a position to back out of as in many cases they had cross lent to the developer building the scheme which would have caused those loans to default. Selling securitised debt that up to that point had involvced simple assumptions on a single variable i.e. price or margin; now hedge funds are pretty much the only buyers and at rates involving much less than the face value of the lending.

Did people see this coming?

Not many, people probably thought a lot of poor quality instruments were over-priced but few saw the stampede out of quality assets as well as deliquent debt. Unfortunately every bubble is built on a set of assumptions that involve people in senior position convincing themselves that this time it is somehow different. It never is the same emotions drive markets fear and greed; with fear exposing the greedy.

Will securisation return?

Probably not anytime soon but when the quality of the debt on the banks balance sheets is fully assessed the quality of what would have been securitised will determine the rates at which the banks can raise finance from the markets.

@garethace wrote:

Sometimes I think I would be better off taking the first Ryan Air flight out of here, and never coming back.

It might do you some good to do a couple of years in the US or Hong Kong or China, you can always go back with frsh ideas and experience. No doubt the banks will be in better shape and projects moving again.

In the case of larger transactions the corporate or investment divisions arranged finance in smaller chunks after lending a large sum of say €200m to say 5 other banks again locking in a margin. The problem on these were that many of the banks stopped syndicating the majority of these loans and at the wrong point in the cycle held onto too high a proportion. I’d not be worried about the prime commercial lending that was done as a lot of the assets will recover within 2-5 years, it is the domestic development land that will need greater scrutiny.

Sounds to me like you are describing a phenomenon like that, that happened at Long Term Capital management in the late 1990s. Where LTCM gave back money to investors, in order to increase their own personal proceeds from their successful formula for doing bond arbitrage. Of course, within months of giving back the capital to their investors they badly needed it to cover their positions. Very bad timing. In that case, the traders working at LTCM were possibly the best in the world. What was that phrase that Roger Lowenstein used? When Genius Failed.

The problem on the smaller transactions was that after concerns were raised that a lot of securities were not the quality they were originally assumed to be the entire system froze up. The Irish banks can’t be blamed for this it was simply a systemic risk that not many people saw.

Thanks very much for taking the trouble to outline some simple explanations of the process to me. That is very valuable kind of insight to have. It reminds me of what Edward De Bono said about the crisis of climate change. Edward said that this is an important challenge, but the main challenge facing human kind at this point in time is a crisis in how we do our thinking. I had so many useful discussions at Zoe developments about the ideas of Edward De Bono. Zoe understood construction management so well, they were more advanced than an architectural consultant, when it came to thinking out a problem. That was the valuable part of Zoe developments, that could have served Ireland well as it moved into the 21st century.

Old Friends on the Assembly Line

It was so tragic to see the idea squashed. I personally know every single tradesperson and installer on the whole Zoe building assembly line. I can put faces and names to each one of them. I know what they like to do at weekends and possibly what their kids names are. When I was at my drawing board (screen) I had those guys in my mind, and the work they would have to carry out to realize the designs I drew on my screen. I feel certain though, that the best architects out there in Ireland, needed to be included in the process. I was interested in working for Zoe developments in order to get to the bottom of that work flow logic. How our designers link up with what happens on the building site.

One example I mentioned was Paul Leech, the pioneer of sustainable architecture in this country. Myself and Paul exchanged emails and discussed how great it might be to integrate some of his ideas into the Zoe developments roll out construction process. It is a pity now, that with the banks working on the drawing board, using Liam Carroll as their intermediary, I will not get the chance any longer. The same I have no doubt will happen with NAMA. I don’t think Ireland will produce it’s own Toyota or Intel kind of company this century. Because we don’t know how to integrate the people working down at the bottom. It was Liam Carroll and his directors who gave me this new wonderful vision for Ireland. It was an all inclusive, democratic and astonishingly beautiful vision. Even though I am pissed off with LC for squandering millions. That was merely stubborness, and over large personal ego and incompetence. I still cannot take his basic thesis away from him.

Did people see this coming?

Not many, people probably thought a lot of poor quality instruments were over-priced but few saw the stampede out of quality assets as well as deliquent debt. Unfortunately every bubble is built on a set of assumptions that involve people in senior position convincing themselves that this time it is somehow different. It never is the same emotions drive markets fear and greed; with fear exposing the greedy.

Very good description of the market there. I used to enjoy reading George Soros’s description in the Open Society and his more recent books. My understanding is that George would not be content until he could discover where his own assumptions were wrong. In fact, I used to like reading George Soros and Edward De Bono at the same time. Because both individuals were discussing some of the same characteristics of how the human brain behaves in situations.

This is the sophistication that the few architects working for Liam Carroll at the moment are missing badly. It is like every kid nowadays who puts together a computer model of a project for a planning permission believes that the computer is going to do all of the thinking on their behalf. Advances in technology have now made it possible that Liam can model his schemes up front in 3-dimensions using software that cuts slices like a Cat-Scan technology through the model in order to produce drawings.

We used to fight against such over simplistic metaphors, as 3-D computer models of buildings, in the design department at Zoe developments as much as possible, in order to maintain the human brain at the centre of the process. Edward De Bono was one of the main arguments backing up our position. It wasn’t that we were ‘back ward’ and could not understand the benefits of advanced design software.

Will securisation return?

Probably not anytime soon but when the quality of the debt on the banks balance sheets is fully assessed the quality of what would have been securitised will determine the rates at which the banks can raise finance from the markets.

I am probably biased in my opinion here, but I believe that it is the project management skills and process by which one develops the land assets, that characterises for me what is valuable or not. That is why I mentioned the progression of different owners of the land bank at Cherrywood. In the 1980s, British Land had a basic enough scheme (fine in terms of 1980s attitudes with regard to sustainable development and creation of social spaces etc) to cover Cherrywood 450 acres in a carpet of 2 storey housing. That land owner at Cherrywood had planning permission for such a scheme and could have easily completed the roll out of that project in a mere couple of years.

The LUAS Cherrywood Aquaduct

We wouldn’t even be in a situation now, where Dun Laoghaire Rathdown county council are able to talk about a sustainable master plan for Cherrywood site. We wouldn’t even be in a situation where Cherrywood site can be designated as a Strategic development zone. We tend to forget that. While the land at Cherrywood was sitting idle in the possession of one builder or another, our local authorities became more sophisticated in their appreciation and in their planning visions for Dublin and Ireland as a whole.

This is what gets up the nose of builders in Ireland to be honest. The more they try and work with planning departments, local authorities and whoever else, the more the playing field underneath their feet keeps on moving. A carpet of two storey houses in Cherrywood would have been an easy thing for Liam Carroll to execute I can tell you. He did it down in Limerick city, he could easily have done it in Cherrywood and walked away with a handsome profit. Instead he pumped what investment he could into the LUAS cherrywood aquaduct and thereby set up the playing field for a really sustainable master plan to be rolled out in Cherrywood. Liam Carroll listens to his architects and respects their input to a certain degree.

But everyone including the planners seem to miss that point. Someone had to put their hand into their pocket in order to build the aquaduct at Cherrywood. All that the planners and the Railway procurement agency could envision was the usual kind of LUAS line running across at grade level like everywhere else. This is my whole point about having people who really know construction management invovled in the process. This is the lesson that was always drummed into me while working for Zoe developments. That is why we really do need a proper appreciation of construction, somehow sitting at the table at NAMA. Liam Carroll is a builder and does have that appreciation. But bankers, accountants, economists, architects or even planners do not have that appreciation of what is possible and feasible through construction ingenuity.

Ten years ago, the 1998 joint planning conference

I could reference several examples in Dublin city centre itself, where Liam Carroll’s involvement in the project resulted in a much better scheme being finally built. (Or Liam Carroll in partnership with architects at certain stages) It is not only about land assets. That is what British Land thought about Cherrywood in the 1980s when they drew up their masterplan of carpet housing and a mickey mouse little ‘shopping centre’ in the middle. But people in the planning department who aren’t aware of construction sequence and vision are often impeeding the process. That is why builders lose all interest in dealing with local authority planners who cannot see the bigger vision. That I believe is the frustration that drove Liam Carroll and others to bet so heavily on the stock market.

Jame Pike, Van der Kamp, the RIAI, the Irish planning Institute and Peter Bacon were a part of this new sustainable planning vision in the 1990s. I can only presume that this journey they started decades ago to deliver a complete solution for Ireland is the reason they are still hanging around today. They want to see the plan brought to fruitition. You can obtain a copy of the report from the joint RIAI and Irish planning insitute 1998 conference from no. 8 Merrion square RIAI headquarters. It is a very interesting document to research ten years later on.

The 1998 conference was indeed a kind of dry run for what the Urban Forum is trying to do today. A collection made up of Engineer’s Ireland, RIAI, Landscape Architects, Chartered Surveyors of Ireland and the Irish planning institute, along with a couple of other university departments and faculties, to try and come up with some advancement on the National Spatial Strategy. It is weird in a way how that activity undertaken by the Urban Forum, the first intelligent collaboration between the land professions, has happened in parallel with something such as NAMA. James Pike and other architectural consultants managed to sell a lot of their ideas to Liam Carroll and others in the nineties, Charlotte Quay being one of the early promises of success. This became part of the engine that drove Liam Carroll’s business from then on.

The 1998 vision, problems with implementation

However, my experience has been that the over-arching sustainable planning ideas incubated by Mr. Pike, Sean O’Laoire and the architectural consultants, were not grafted on properly to Liam Carroll’s original formula of lean design and lean manufacture. This is one of the pitfalls I can see with NAMA. That too little on the construction management side of sustainable development will follow through into the final formula. And that too much high profile, front cover of a magazine sort of Euro-modernism style will be pushed through by James Pike and his crew. Remember they are architectural consultants with ambitions of becoming major players in the world design scene. I believe that their talents can be exported, their visions accomodated in the grand scheme of things. But their lack of sophistication in construction management also leaves Irish consultant architects exposed on a crucial front.

The circular Gasometer apartment block at Barrow St is a perfect example of what not to do, if you want to arrive at ease of construction in your design. I have no problem with the overall concept to put a circular building inside the steel circular frame. But the details of how the architect forced Danninger to implement the concept caused the company enormous difficulties at construction stage. I am concerned to be honest, that with NAMA that kind of logic of assembly and project management will get thrown out of the equation once again. But this time, on a monumental scale. The architects will be let loose without proper skills and level of construction awareness to saddle us with terrible built products. Even if the concepts are right and good in the overall sense.

Peter Bacon is a bit too close to the likes of James Pike etc for my liking. I would like to sit on the board of NAMA not because that would make me feel high and mighty. But rather, to represent something of Liam Carroll’s logic of construction management point of view. The things that Liam was really good at and succeeded in developing in his life time. Not that I don’t think Pike’s ideas are brilliant, but that I think sustainabililty needs to happen at both levels simultaneously. There is no a la carte menu for achieving sustainability. The architectural consultant for all their best intentions, will mostly choose the aspects of sustainable development that suit their purpose, of finding more clients and getting more jobs. Someone has to be around who is sophisticated enough to keep that in check.

I know some of the people at MCO projects run by Laura Magahy and partners. I believe that the same criticism is valid in that case also. I believe that MCO projects can offer solutions in achieving sustainable development to the client, be it the government or whoever else. But it is going to be difficult to balance the desires of a consultant designer with the bigger picture. At Zoe developments, acting on behalf of that client I learned skills that might be of some value. The members of the 1998 RIAI/IPI conference have this tendency to believe that they made their clients into millionaires. I buy into that argument a long ways. They did contribute many of the elements and indeed many of the ideas. But the biggest ideas of all, those of lean construction and design, design build, speculative development under cutting the market and intense focus on land acquisition were all patented in the 1980s by Liam Carroll. The architects and the planners merely went along for the ride.

Zoe developments believed up until the last they and other property developers created the economic boom that was the Celtic Tiger. They are a very brazen sort of bunch. As far as Zoe developments are concerned Fianna Fail didn’t have a clue what they were doing. They only went along for the ride too. I would still have more faith in Fianna Fail to get value for money out of a billion Euro, than I would in Liam Carroll. Many of Liam’s sub-contractors I have spoken to or corresponded with in recent weeks – the famous breakfast roll men as David McWilliams would call them – believe that they are responsible for a lot of spin off jobs in catering and the service industry. On the other hand, the land professionals believe that they handed the developer the documents and the formula to make his or her millions. It is quite a messy debate therefore. But one I would enjoy moderating myself. We will have to arrive at some kind of closure on this, if we intend to move forward in this country.

Ireland becoming the new Japan

If we got this collaboration between designer and contractor right, it would be a win-win opportunity for both sides. The trouble is that one side of the debate doesn’t really interface with the other very well at present. They are different cultures and they don’t mix well. It goes back to how people are trained in the schools of planning, design and construction. It goes back to the lessons that Edward De Bono is trying to teach the world. To be aware of the human brain and its limitations. One side of the construction debate has got pre-conceptions about the other. That is really my interest in being invovled in NAMA. To try and get both sides of the approach to sustainable development to be exercised in tandem, rather than one being exclusive from the other. As is currently the situation. That is why I had to go into the description above about architects and parasites.

I would like to stick around Ireland, if only to institute a sucessful and intelligent blending of both traditions: excellence in sustainable planning and architectural design . . . with a compliment in terms of excellence in construction management and program management. This intelligent kind of approach towards collaboration is what will become the corner stone for future economic success in Ireland. Like what happened in Japan from the 1950’s through to the 1980’s. Because, when we are done with Cherrywood, the next step is Harristown, Dublin Airport city and then to finish out Adamstown and Clonburris. That is why I would advocate a phased approach. Taking one problem at a time and working out an agreement that will suit all of the land professions and the financial people into the bargain. That is not Liam Carroll’s thesis now unfortunately. That is my own thesis.

Brian O’ Hanlon

http://www.irishtimes.com/newspaper/finance/2009/0720/1224250947332.html

@missarchi wrote:

http://www.irishtimes.com/newspaper/finance/2009/0720/1224250947332.html

Thanks for the link. Now that is what I call a proper article at last, that cuts straight to the chase within the first couple of paragraphs. I didn’t even need to read the rest. I have the greatest of respect for Liam Carroll and his directors. I would never go so far as to describe them as a ‘loyal bunch of henchmen’ as Frank McDonald did in his chapter about Zoe developments in his good book, The Builders.

But in a way they were henchmen, not henchmen of the Zoe developments group, or henchmen belonging to Liam Carroll. In reality they were owned by the banking system and its institutions much like everything else. That is why I think Ruairi Quinn’s blog post here hits it straight on the nail:

http://www.ruairiquinn.ie/?p=18

I do hope that Ruairi Quinn puts his CV into NAMA. I don’t really want the job at all. But I am certain we will need someone with his experience and skill. On the other hand, Ruairi would also make a good first Mayor of Dublin city. Perhaps that is where Ruairi’s particular talents are best employed. Or we could invite Ken Livingston and his intelligent team over for a term. It worked for us with Jack Charlton in the late 1980s and early 1990s. Why not with the Lord Mayor position? If Bertie gets it, I am definitely on the first Ryan Air flight to Australia, to go walk about for a couple of years. (Maybe Ryan Air don’t fly that far)

It was the sense of infallibility and immunity from the cold winds blowing outside their offices on the second floor at Chapel House in Parnell Street that I always found extremely strange working for Zoe Developments. As BOSI occupied the two floors above us, slicing and dicing our physical real estate into something binary that could be uploaded to the marketplace as a financial product. (Rather like what I am doing with this Archiseek entry) Yeah, you could say Liam Carroll was in the same mould as Henry Ford, Rockerfeller or Carnegie. Those guys tried to own every part of the logistical supply chain too.

Back in those days, it was railway carriages and oil pipelines. Now it is fibre optic lines, but who cares, the analogy still fits. I remember thinking to myself often, how can these guys be so smug? The answer now seems so simple. Zoe developments were contained within the pockets of the Irish banking system. It wasn’t my pencil that was drawing the lines. It was a guy with a banking issue Parker Pen. I know they give those out, because I got one once from my uncle. It had the bank’s logo on it. Nice pen too, I was sore when I misplaced it somewhere.

The business plan I had in mind as a lowly project manager working at Zoe was quite different from theirs. I could envision Zoe developments expanding it’s wings to embrace ideas of a low carbon city, better capital investment program management skills, stimulation of the knowledge economy in Cherrywood, Harristown, North Wall Quay and where ever else. Not to mention embracing a future in Ireland where land values don’t swing like a wrecking ball destroying eight storey buildings I have just built. I am not trusting of our Irish banks anymore, to embrace any of that vision. Sorry Irish banks, but we need to work together to upgrade our collective awareness.

I remember walking the site at Northwall Quay on one particular morning, with one of Liam’s contract managers. Remember, this man was closer to Liam than most people are. We were munching our breakfast rolls and going through the minutes of a meeting, when he turned to me and asked, ‘Where is Liam getting all of this money?’ Minutes later I made some pot noddles (It was a bad morning) and took it to a different site cabin to eat. A man with grey hair wearing a hard hat entered the cabin and we sat down together and proceeded to chew the fat. I later found out that man was Sean Fitzpatrick, then head of Anglo Irish bank. I thought Sean was alright.

In a way I am glad for what BOSI did. They were the guys who sold Liam the €800 million worth of securitization which enabled Liam to go and choke himself. I am also greatful to Irish Nationwide, the minnow who became the monster. To ACC bank and their parent company Rabobank in Denmark. Last Friday was a rare and real victory for common sense in Ireland. On behalf of everyone who worked on the Zoe developments construction assembly line, I would like to say I am delighted.

I sat this morning having a cup of tea and a scone on Nassau St. One could say, I was trying to quench the fumes still steaming from my engines, having read the article in the Sunday Tribune written by Neil Callanan. It is not Neil’s fault, but there was something in the conventional analysis of Liam Carroll and his company that I found desperately incomplete. Neil, I hope we can still be friends. I was sitting drinking my tea when a young architect, Rossa Tormley who I knew at Bolton Street walked up in the direction of Grafton Street. (Still dressed like a surfer I am glad to note, yeah, keeping it real man)

Then a minute later the architect and parliment member Ciaran Cuffe passed on his bicycle which had a very wobbly back wheel. I wouldn’t approve of that myself. I could not help but be glad I had donated some knowledge out there to the public, which will make their lives some bit better. That is what it is all about at the end of the day. Liam Carroll made a lot of money yes. But in the end, he could not convert those very large sums into what the country needs: Value for money and more shagg’in jobs.

Brian O’ Hanlon

http://www.blogger.com/

These are effectively nuclear options, as they determine the value of developers’ properties. This will in turn quantify the amount the banks have lost on property loans, and influence the rules under which the Government’s rescue agency will operate. The upshot will be that billions more of taxpayers’ money may have to be spent on recapitalising the banks.

http://www.irishtimes.com/newspaper/finance/2009/0721/1224250996305.html

upshot?

–
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Development As Freedom

As recently as last October 2008, a director at Zoe developments told me with his characteristic smugness, he was going to have the cream of the crop on his staff soon. He was glad that his boss Liam Carroll didn’t drive around in Mercs. That everything was completely and absolutely safe at Zoe developments. But was it? Indeed, was Liam Carroll ever the man we thought he was? In my own personal view Liam Carroll was only a phantom created by the Irish banks so that they could operate themselves as property developers. Liam Carroll and his directors were employees of the Irish banks.

There is only one real problem why a bank cannot become a property developer for real. It would mean that young Masterson the carpenter didn’t fall off Liam Carroll’s scaffolding at Charlotte Quay. But that he fell off the Irish bank’s scaffolding instead. If that was the case, men would be throwing themselves willingly off of scaffoldings every week in order to claim the compensation. The banks would not last more than a week as property developers.

My director friend at Zoe development’s confidence was justified at one level. It is now coming into the public knowledge that Zoe developments was never a solvent company. It had been propped up by the Irish banks for years. But in 2008 the Irish banks were in the process of collapse. A convincing ‘professional dive’ to use the soccer tactic analogy had to be found for Zoe developments, and fast. That is why Liam Carroll decided to sell his fortune away on the Irish stock market. The tragic rise and fall of Liam Carroll. That is the fairy tale the Irish people have been asked to swallow. Maybe Leprachauns are real too?

In late 2008 a message was sent to the second floor at Chapel house in Parnell Street that everyone had to be fired and every shred of incriminating evidence thrown in a skip and incinerated. In order to ensure an orderly retreat, most employees were put on ‘temporary’ redundancy. Only to receive final letters six months later when all the dust had died down. I lost my favourite desk ornaments in the clean out before xmas before I was even given a chance to grab them. Like the Irish Catholic Church, the Irish banking system is a staggering old wreck which threatens to fall to the ground at any moment.

1979 – Thatcher takes power

One of the last conversations I had at Zoe developments before the clear out in late 2008 was about Thatcher’s new government of the 1980s. I am told by people who remember those days, that Britain in 1979 was on queer street. Something needed to be done. I can only assume that the Irish economy being so linked to the British in those days, was faced with a similar situation.

A conversation I overheard in the dark 1980s between my father and an Irish bank manager is now revealing to say the least. Various models were used in those days to assess the viability of third world debt. There were all kinds of statistics but one of the best and the simplest to obtain was: How much concrete is the country pouring per annum? That was the basic method used to decide if a country would default on its loan or not.

I think that Ruairi Quinn’s comments about Irish banks needing to become service providers again and not players in their own right is particularly close being right. But do most people understand how much the Irish banks did become players in the Irish economy? Bearing in mind, when the loan book of Irish banks is moved to a toxic asset vault, then only 30% of what the bank consisted of will be left remaining. That means that 70% of Irish banks was involved in pouring concrete in one way or another. Zoe was a company built around concrete like Dublin was a city built around Guinness.

Chasing a Phantom

Noel Symth need not worry about catching anyone out in Tallaght. What Noel Symth doesn’t realise is that he is chasing a phantom. Liam Carroll was never the Liam Carroll we all thought he was. He was a made up character, the stuff of legend created in order to allow the banks to become builders. Working at Zoe developments was like being on the ‘floor that never existing’ in Bernie Madoff’s office building in Manhattan.

You could go to sleep there if you wanted. Many did and others formed dangerous gambling habits while playing online poker all day on their workstations. Indeed it felt to me at many times like I was working inside a mothball, a ridiculous front for something else. Sure the guys who knew their concrete did a bit of work, but that was about all. At times the man in the corner office came out and fired people abruptly. But in some cases that took all of twenty years!

In the end, at Zoe developments I felt like I was standing in Berlin in 1944 firing V2 rockets up at a thousand allied bombers that occupied the skies. There were some desperate attempts made to launch in schemes with floor plates all in the region of 20,000 square meters. If you dropped below 15,000 square meters you were too low. I conducted rough feasibility studies for both Harristown and Cherrywood. North Wall Quay was locked up in litigation and a stop gap needed to be found and fast. Nothing short of rocket propulsion would save the day.

Charles Haughey was ripping off prominent North African leaders with projects he sold to them in the 1970s and 1980s. Colonel Gadaffi was amongst the most famous. Indeed Gadaffi said in a radio interview once, that Charles Haughey was a genius. Haughey invited the ‘carpet bagger’ US construction companies to enter Ireland and set up base under the guise of building IDA factories. Their real purpose was to build in the Middle East. Charles Haughey handed the Irish nation on a plate to the Irish banks in the 1980s. Now that plan that Haughey drew up and executed to fundamentally alter the way things are done in Ireland has jumped up suddenly and bit us all in the ass.

Nationalisation

Now you see why Nationalisation of the Irish banks is so ridiculous. Over twenty years ago Charles Haughey appointed the Irish banks to more or less run things in the country. Haughey himself became as much an employee of those banks as everyone else, including Liam Carroll. With most of Zoe employees I was only a ‘yellow pack’. Our sub-contractors working on €5,000.00 profit margins were the yellow-est of the yellow packs.

Now as we look at the prospect of Nationalisation a comical sort of Tom Foolery has to play out. The banks who run things anyway are giving it back to a bunch in Kildare Street who lost responsibility back in 1979. Fianna Fail are saying to the banks, what do you expect us to do? Remember, you told us all those years ago, we had not got the skills or the know how. We don’t want it.

NAMA is a sham too. It is a delaying tactic as this ‘pass the hot potato’ game plays out between the banks and the Irish government. The system has entirely collapsed but nobody wants to believe it. While the banks were running the country, the Irish government only had to maintain the appearance of being competent. What better man to play that role than Bertie Ahern?

The truth is the Irish banks have lost the country’s pension plan. Civil servants will not be paid next year. It is all gone. We might as well use that realization now and begin to do something. I often heard from directors at Zoe developments, the Irish government do not have a clue why the boom started. We created the boom. I always thought it was an audacious claim to make, even for Zoe developments. But when you realize who was running Zoe developments, the truth all becomes clear.

Brian Cowen and the ESB

Zoe developments had to take loans from other banks in order to keep the appearance of competition. It also proved to be a useful source of additional funding. It spread the risk around so to speak. But you will notice how the Irish banks made sure to be in full control. It wasn’t only the Irish construction sector that was controlled by the banks. Why not look at power generation?

I have listened to some people knowledgeable in the finances of the ESB. They tell me that Ireland is too small a market to create effective competition. The Irish market for power is roughly the size of Manchester. As minister for Finance, Brian Cowen instructed the ESB to raise the price of electricity in Ireland so as to create a margin for foreign competitors to come in. Cowen was under pressure from the EU to create ‘competition’ in the marketplace in Ireland.

But then Dell computer factory in Limerick had to shut down its operations with the loss of 3,000 jobs. Not to mention all of the jobs around Dell’s operations that were lost into the bargain. The real figure could be 15,000 of a workforce. Dell computers was a very large consumer of power and facing very stiff competition on the world market, while operating its lean manufacturing system on razor thin margins.

The hike in power prices was something it could not stomach. Move to Poland, they have tonnes and tonnes of coal and no intention to hold back on using it. The last thing I heard, Taoiseach Brian Cowen had gone back to the ESB. Lower the price of electricity he told them. He didn’t ask them, he told them.

Redundancy Letters from Zoe

There was something about the redundancy letter that I received from the Financial director at Zoe developments that bothered me. On the one hand I knew that Liam had squandered a billion Euro on the Irish stock market. Or that was the story we were spoon fed by the newspapers. The redundancy letter spoke about a downturn in the economy and poor prospects ahead. It all seemed like a story a criminal would learn off by hart to tell to a police man in an interrogation room. What are they hiding I thought to myself?

I smelled a Bernie Madoff scale of conspiracy lurking somewhere. It is okay to smell conspiracies like that now. You cannot be accused of being off your rocker, because the Bernie Madoff Ponzi scheme is true. It seemed to as I read the letter from Zoe developments on that faithful day in May 2009 that some critical line had been crossed. A line where economic theory should end and personal freedoms should begin.

In order to explain what I mean I must make reference to a book written by Dean at Oxford University Amartya Sen. Amartya won a Nobel Prize and wrote his book ‘Development as Freedom’. From my reading of that book I understand that Amartya had attended a lot of UN conferences on poverty in the third world. At a lot of those conferences the discussion focussed around the idea of solving the third world’s economic problems first and then to tackle the political and freedom rights after.

Amartya Sen questioned that thesis in his book. Instead argued Sen, we should establish the foundation of freedom and civil rights. Only then could progress to economic prosperity and improvement be made. Hence the title of his book, Development as Freedom. It is a clever idea that Amartya Sen has proposed. It means that people who have a voice can describe to the system of that country what their basic and real needs are. A system which doesn’t have that feedback mechanism established is already in trouble.

Ireland is such a country. It doesn’t enjoy the feedback mechanism that Amartya Sen described. Ireland had to cope with an emergency in 1979 when nothing seemed to work. It should have only been a temporary measure. The banks were allowed to take a more ‘hands on’ participation in the workings of the economy. According to the most robust model available in the 1980s, that meant starting to pour concrete and starting to pour lots of it. I poured a lot of concrete at Zoe developments myself. Yes, the system does work.

But in the process of all of that, many people got lazy, lost their voice and simply did not participate anymore. We saw ten years of a Fianna Fail government led by Bertie Ahern who really didn’t want to mess with the mechanics the Irish banks had created. Only the Irish banks understood the system and it was theirs one hundred percent. Fianna Fail became the effective security guards of that system and order. The people kept voting them in.

Brian O’ Hanlon

I’ve just come across your posts about the life and times at Zoe Developments.

I worked for Zoe for almost 6 years until 2004 when I left to work closer to home due to family commitments. I remember thinking that I would never work in a better place which was then the offices on Portobello Harbour and to a certain extent I was right.
Working for Zoe was like working for your family. I learnt alot from watching Liam Carroll conduct his business but there is no doubht that it was his sidekick D.T. who was the real success of Zoe’s. I think things started to change when Dunloe Ewart were dragged kicking and screaming in to La Touche House, suddenly Liam Carroll owned a huge land bank around the country and none of them knew how to tackle its potential.
At that time we would all get our annual pay rise without having to ask and inevitablly came away happy following our review with the director. I started to sense that the company were getting a little carried away when out of the blue it was announced that each employee would get €1000 a year extra for turning up on time for work.The thought of it still astounds me.
I now feel fortunate that I left when I did but I cannot but feel for the employees who have been fired at the very end. I have lost contact with alot of the guys over the years but I still remember every one of them by name. Lets hope things work out for them.

Thanks Bricks.

I included a lot of extra padding and possibly unnecessary detail above. It was for the benefit of people who worked on the Zoe construction projects than anything else. One day in the canteen a discussion arose about all of the people over the years such as yourself who stayed for a number of years with the company and moved on. We estimated that some shocking number of people passed through the system at one stage or another. The interesting thing also, it was usually for a period of about six years that people stayed at Zoe. Which I find quite exceptional. Because working in the standard architectural or engineering consultancy out there, the turn over can indeed be quite high. That is why I used the analogy of a company such as Toyota or Intel, although Walmart might be a good comparison to use too. I am glad that some of my writing was of interest to you. There should be a place where ex. Zoe people can deposit some of their memories while still intact.

It is a very, very difficult product to sell to people these days. The idea that Zoe developments was more than a money grabbing flock of vultures. I have tried to tell something like that story above, without disrespecting the points of view of people who believe that developers caused a lot of our current problems. Because, to be honest both sides have a lot of good strong arguments. It was unfortunate the way that David Torpey became so over shadowed by Liam Carroll’s personality in the end.

It was really David who turned around the construction part of the operation around to make it one of the best and safest construction companys in the country. However, he couldn’t police that entirely himself. There were people hired, there were bottles of brandy and stuff being handed around. To forget about safe passes and what not. Along with the fact there were materials etc disappearing off sites too. That is why it is such a dodgy game construction. Architectural consultants out there need to realize that and give Zoe the credit it deserves. You must remember at the height of the Celtic Tiger a sub-contractor might want to save on the administration of applying for safe passes, in order to jump onto the next job quicker. We had a full time job throwing guys off sites until they learned the rules.

But I believe Zoe developments did catch 99% of people on site for all the necessary safety requirements. I know that because I was keeping a close eye on things myself. The Zoe directors wouldn’t like to hear me say that. Since I was a designer and not a site agent. But I could tell on my own job which contractors were good at safety and which were not. I was a designer and representing the client Zoe developments. There is always a range from safety aware and competent to some who are incompetent. That is what you have to watch and manage properly. If they are completely useless on safety and don’t want to learn, we simply didn’t hire them again. That is what I mean about the feedback loop in a company such as Zoe developments. It wasn’t as simple as throwing up a building and hoping it works. Improvements by evolution rather than by revolution. That is the kind of site North Wall Quay was. That is why we need Zoe back in the game again, in order to give Ireland the best service it deserves in terms of construction management.

I feel there was something sordid going on in the end. I read Deaglan De Breadun’s piece in the Irish Times today: Mistakes were made in Irish banking, says former AIB chairman. I think it is disgraceful the way the bullshit that Dermot Gleeson can keeping on shilling the Irish public. The Irish banks strangled Zoe developments I have no doubt about it.

Gleeson still believes that the Irish people are going to ‘buy his brand’. I thought he would have learned enough in what happened to his share price. The fact of the matter is that Irish banks had their fingers so far up Zoe development’s ass, they hadn’t time to develop real banking services in Ireland. The kind that would support and fuel a smart economy now. Gleeson was attending the same conference as the architect of the NAMA rescue plan to salvage this country. It is time that the Irish banks came clean about their involvement with Zoe developments. We need to cut out the crap for once and for all. The counterpart of that problem was that Bertie Ahern had too much time on his hands. Instead of running the country he occupied himself with all kinds of schemes that a politician shouldn’t be in at all. I am surprised this government is still standing. I would advocate that we give the banks a little less work to do and the government a lot more. I would strike a better balance. To illustrate my point I included another blog link below.

Brian O’ Hanlon

@PVC King wrote:

Property finance was quite simple there were two types of transaction small transactions; where the underwriting department of Bank A after the necessary checks lends money to the borrower at say 6.50% they transfer the debt to the securities department to be packaged up into corporate bonds and sold at a lower yield of say 5.25% the bank gets to collect 1.25% in return for collecting the payments.

In the case of larger transactions the corporate or investment divisions arranged finance in smaller chunks after lending a large sum of say €200m to say 5 other banks again locking in a margin. The problem on these were that many of the banks stopped syndicating the majority of these loans and at the wrong point in the cycle held onto too high a proportion. I’d not be worried about the prime commercial lending that was done as a lot of the assets will recover within 2-5 years, it is the domestic development land that will need greater scrutiny.

The Irish banks did relatively little securitisation. You can see it on their balance sheets. The vast majority of their liabilities were deposits – retail, corporate and inter-bank. All retail banks use the commercial paper and bond markets to manage their treasury but that’s not the same as relying on securitisation in the sense of selling mortgage-backed securities.

A part of the Irish banking system had become insolvent. At the height of the boom, Anglo had 3 billion more assets than liabilities but on a massive 100 billion euro balance sheet in which 60% or 70% of their assets comprised of loans backed by property; it was easy to see that they were a busted flush when property started to nosedive. Of course liquidity is always a problem when everyone knows you’re insolvent but they hoodwinked the government into believing their problems were caused by liquidity issues instead of the truth which was they had severe liquidity problems because they were insolvent. No doubt general prevailing market conditions didn’t help but it just meant an inevitable end was hastened. The government then foolishly entered into an agreement which effectively underwrote all future losses in the Irish banking sector at the very time when a bit of fiscal wriggle room would have been very helpful.

Isn’t Nama being directed by the biggest bank?

It is like a Russian doll when you look at it really that the Irish banks have created.

The annoying thing to me is that we are going to set up NAMA but the virus that poisoned the whole lot is being transported neatly into NAMA too.

Zoe developments was only the smallest doll in the set.

If we can fully understand Zoe developments – both the good sides and the bad sides of that company – that is the first stage in the recovery process.

Zoe developments contains all of Ireland’s problems and strengths in microcosm.

Once we have understood the smallest Russian doll, we can gradually work our way out from there.

That aught to be the plan.

I only hope that our weak government is capable of meeting that challenge with all cylinders blazing.

Brian O’ Hanlon

–

1979

The architect Anthony Reddy once wrote an essay about Dublin city in which he refers to the Act of Union. It was the legislation passed which discontinued the parliament in Dublin and all members there after would sit in London instead. What the Act of Union meant was that Dublin went into a death spiral, slow but sure. Charles J. Haughey had devised a clever scheme in Ireland during the 1980s to hand most of the authority for running the country over to the banks. Thatcher had cut a very similar deal in Britain. Now both Ireland and Britain are fighting for their lives as two first world nations.

In many ways what Haughey brokered with the Irish banks was like another Act of Union. But instead of moving the seat of power to London, it only moved a short distance to Ballsbridge and Baggot Street. It was probably the right thing to do in 1979. But what it meant was that Dublin again went into a state of disrepair and neglect. Anthony Reddy’s essay about Dublin is wrong in its analysis therefore. Reddy described an Ireland in the 1990s that was being re-born. All that was really happening was that the banks had become all powerful. The Irish government was left feeling pathetic as it stood on the sidelines. They are still in that kind of ‘space’ even though it is no longer necessary. The likes of Dermot Gleeson and Liam Carroll have them out smarted and out classed.

The Irish banks had a scheme in the 1980s to give executives a brand new top of the range automobile instead of a pay rise in order to avoid taxes by the government. By the time of the Celtic Tiger that scheme had been generalised to encompass much of the Irish population. We were all bank executives in terms of the perks we enjoyed. Except the banks could still deal one better. They paid the utility bills in the homes of their top executives too. Men paid over €100,000 p.a. must find it hard to cope.

During the Celtic Tiger, I looked at all of the huge and expensive automobiles passing me by on the roads. Sure I had flunked out of college. But was I really that badly off? I could only struggle to afford a bicyle. There is a yard stick for inequality if you want one. But I had a simple life and I was happy with it. Until the Celtic Tiger crashed into a brickwall and my prospects along with it. Bertie Ahern’s job as Taoiseach in Ireland over a period of a decade should have been to dismantle what Haughey had built. To re-build using a new paradigm. Bertie Ahern wasn’t man enough to do that. He allowed the system to continue as it was and eventually it spun out of control.

In 1979 the Irish banks had the best models available to them, which gave instructions for what to do in a crisis. The Irish banks had the best managers available in the whole country. In ways the Irish banks were the architects of the Ireland we now see. But what the country also needed was leaders. Men who can think for themselves and develop their own models, their own paradigms. Instead we got Liam Carroll and Dermot Gleeson. This is what Warren Bennis was talking about in his famous book which sold half a million copies world wide. This is what Nobel Prize winner Amartya Sen was talking about in his book, Development as Freedom.

If we really had development as freedom in Ireland today the institute of architects of Ireland would have some real control over their destiny. Instead the bankers still want to be the architects and the real architects have forgotten how. If we really had development as freedom in Ireland, O’Donnell and Tuomey would know a lot better than to use acres of rainforest to build social and affordable housing on Cork Street. What the residents in that area really need is something like the Corcoran Jennison rental model to give them their lives back. Instead Dolphin house stands under siege from drugs after a brave struggle to win using people power.

If we really had development as freedom, a proper architectural debate would have taken place in relation to Metro North, urban regeneration and land taxation. That never happened. Instead the RIAI handed out rubber medals for schemes such as the social and affordable block on Cork Street. People on welfare don’t need rainforest timber to improve their lives. They need something else. We need to give them back their voice. We should be ashamed of ourselves as a nation.

The same could be said of any number of public building projects designed by architects in the last ten years. The real rubber medal award must go to the office block designed by Grafton Architects built on Merrion Row. The credit for allowing it to happen must go to the OPW. What happened when Charles J. Haughey passed the equivalent of a modern day Act of Union was that gradually all of our public services in Ireland forgot their own skills. There was no incentive to participate anymore. Zoe developments got lazy in the final days. But the OPW offices in Stephen’s Green is where you can still get the best snooze of all.

The Merrion Row office building had stone cladding which took one man, one day to install one meter squared. The average should be four meters squared per day per man. That still makes stone cladding a very slow part of the program. I know that not because I am an architect, but because I worked for Zoe developments. I know that architects aren’t interested in program management of stone cladding installation or in Zoe developments. More is the pity.

The really serious point is the following. The contractor for the Merrion Row project had to pay a charge to Dublin Bus each week because of disruption to the primary bus lane. When you added up all the costs for the bus lane it amounts to a million euro. That is before you even pay for a single square foot of the stone. One would think in that case, the choice of the ‘extra-slow’ stone cladding system was ill informed. Snip, snip. That is why we need the banks to stop being the architects. That is why we need the architects to be the architects. That is why the RIAI needs to re-enter the game and re-learn all of those program management skills that were taken away from it.

In the end, Liam Carroll did develop a very sophisticated rental model for property developers. It was called securitization. It wasn’t the kind of model that the residents of Dolphin house or any other residential community needed. It was the model that the Irish banks needed instead. But since the Irish banks owned Zoe developments from the get-go, that was understandable. At the end in Zoe developments Liam Carroll didn’t spend time with his engineers and drafts people anymore. Why bother. His favorite hobby was standing over the shoulders of traders on the third and fourth floors of his office building on Parnell Street. Liam would stand and watch as the traders sliced and diced the physical floorspace area he had just poured into concrete, and it was uploaded on to the global marketplace as a financial product.

That is how the pension plan for the entire country was sold. This is still what is being referred to as a ‘rescue plan’ in the High courts. Trading our way out of difficulty. I respectfully suggest that we have traded our way into enough of difficulty and should stop. Zoe developments should not be allowed to live any longer. Never again should the likes of Dermot Gleeson or Liam Carroll be given that much control over our lives. Never again. Bertie Ahern should have known that. It was what we paid Ahern to do.

Brian O’ Hanlon

Meanwhile, stocks linked with troubled property developer Liam Carroll behaved counter-intuitively, with food group Greencore up almost 5 per cent at €1.11 and ferry operator Irish Continental Group (ICG) gaining 2.5 per cent to €10.25, albeit on light volumes.

AIB and Bank of Ireland, both of which have large exposures arising from Mr Carroll’s developments, came under pressure, slipping by 5.7 per cent and 4 per cent respectively to €1.63 and €1.58.

http://www.irishtimes.com/newspaper/finance/2009/0722/1224251064686.html

Shares behaving counter intuitively!

ROFL

C’mon Liam ya boy ya!

Brian O’ Hanlon

Meanwhile, the landlord of Chapel House yesterday mistakenly advertised the fourth and fifth floors of the building, where BoSI has over 200 people, mainly involved in Halifax product development and handling its intermediary homeloans business.

A few hours later, the internet advertisement was changed, with a different part of the six-storey property being marketed.

Oops!

C’mon Zoe, at least get it right can’t you . . .

http://www.independent.ie/business/irish/bosi-to-reveal-today-its-plans-for-halifax-branch-closures-1833953.html

Brian O’ Hanlon

http://www.myhome.ie/commercial/search/brochure/4th-or-5th-floor-north-city-centre-dublin-co&-city/110153

2nd Floor, Chapel House, 21 – 26 Parnell Street, Dublin 1

That is it, good old Liam has turfed them out on the street.

Zoe developments is finally done and dusted.

The 600 potential new jobs that the Irish Times saw in Zoe’s rescue plan today obviously don’t include the guys with their CAD workstations.

Brian O’ Hanlon

http://www.irishtimes.com/newspaper/ireland/2009/0723/1224251143158.html

But observers say neither bank would be able to tap investors for equity until they can give clarity on the level of writedowns they must take on loans being transferring to the National Asset Management Agency (NAMA).

Clarity is not something we are going to get from an Irish banker.

http://www.independent.ie/business/irish/delay-in-choosing-new-aib-boss-sparks-fears-on-capital-plan-1835653.html

Formal interviews are expected to start in the coming weeks, with Colm Doherty, head of AIB’s highly-profitable capital markets division, the only internal candidate.

From the same piece by Joe Brennan. Ah yes, Capital Markets was going to be the flag ship, high rise component of Liam Carroll’s North Wall Quay project. Weren’t those the days. Now the bank cannot even decide who to put in charge, never mind building towers without planning permission. What a come down for both Liam and Mr. Gleeson. Altogether chastened now I can tell you, altogether chastened.

I still think if we had architects and planners fully integrated in the process, instead of Liam and his office in the bank, we could organize a ‘sequence’ of development that could utilize North Wall Quay site and existing groundworks done, to house a few large tenants from the city centre area and thereby free up those sites for full re-development. Bearing in mind a Metro North will service those city centre sites sometime in the future, they need to be smart and agile knowledge hub centres with radical new management models to cater for new growing business. Not one big ‘snooze’ bunker like Irish Life and Permanent’s brown brick building at Abbey Street.

https://archiseek.com/content/showthread.php?t=7692

The deal means AIB has completed two-thirds of its commitment to the Government of raising €1.5bn of extra capital to ‘fire proof’ its reserves amid spiralling bad-loan losses.

I wonder are executives paying their own ESB bills yet? Or buying their own cars? It is some come down for those fellows from masters of the universe. Being used to what they had for the last 25 years. I don’t even begrudge them somehow, I would have jumped at the deals going myself. But now I do realize that when the banking sector got its claws into so much of Irish life, everything else lost the will to live and thrive. Snagnation became the issue in Ireland, and that is what we are dealing with now. It is time for the whole Irish nation to awaken from the deadening slumber.

Brian O’ Hanlon

“Equitas was put on one side and a lot of dedicated people worked on it for 10 years, while the market got on with its business — admittedly in a chastened and more closely managed operation. I think that is how it will be with the banking crisis.”

From comments by Lord Peter Levene in indo article by Brendan Keenan.

We badly need those Llyods guys over here now.

http://www.independent.ie/business/irish/a-whole-new-ball-game-as-lloyds-makes-big-pitch-for-irish-market-1835656.html

Brian O’ Hanlon

here’s a challenge for you…

calculate how many cubic metres of concrete are in metro north…
(assuming there all the same types)
and how much steel…
Is metro north parametric?

like the loolie jar game at school

—

I was trying to get at something in that blog post. But the Irish independent does it much better than I can. The business section of the Irish Independent has a one page piece about the Michael Somers and the history of the NTMA, set up by Charles Haughey in the dark 1980s. From the piece:

Way back then, the national debt was managed inside the department of finance by civil servants. Constrained by public sector pay guidelines, the Department found itself in the impossible position of training civil servants in the minutiae of the bond market only to find them being poached by banks and stockbrokers offering them a multiple of their state salaries as soon as they were up to speed.

Sounds very like the way RIAI members would poach architects from Liam Carroll’s design office at Parnell street almost at will, whenever they felt like it. I was asked several times myself, what was I doing there? Even by the current RIAI president. I told him I was learning how to do construction drawings to give to bricklayers. He response was: Oh, I see, boring stuff like that!

Sometimes you try to do something a little differently, try to innovate and achieve better. But what thanks do you get in a tiny fart of a place such as Ireland. How did that work out for your RIAI practices, offering all of those huge sums? How many staff members have you let go lately? Along with the ones you poached from Zoe.

I can tell you, when the Engineers of Ireland institute finds that the RIAI were not providing Zoe with a supply of good trained architects, it will be sorely disappointed. Zoe was thought of within the engineering culture as a shining example of what is possible – even in Ireland. Engineers have always been a much bigger lobby than architects in this country too.

Brian O’ Hanlon

@garethace wrote:

I was trying to get at something in that blog post. But the Irish independent does it much better than I can. The business section of the Irish Independent has a one page piece about the Michael Somers and the history of the NTMA, set up by Charles Haughey in the dark 1980s. From the piece:

Sounds very like the way RIAI members would poach architects from Liam Carroll’s design office at Parnell street almost at will, whenever they felt like it. I was asked several times myself, what was I doing there? Even by the current RIAI president. I told him I was learning how to do construction drawings to give to bricklayers. He response was: Oh, I see, boring stuff like that!

Sometimes you try to do something a little differently, try to innovate and achieve better. But what thanks do you get in a tiny fart of a place such as Ireland. How did that work out for your RIAI practices, offering all of those huge sums? How many staff members have you let go lately? Along with the ones you poached from Zoe.

I can tell you, when the Engineers of Ireland institute finds that the RIAI were not providing Zoe with a supply of good trained architects, it will be sorely disappointed. Zoe was thought of within the engineering culture as a shining example of what is possible – even in Ireland. Engineers have always been a much bigger lobby than architects in this country too.

Brian O’ Hanlon

I’m totally lost. Zoe was/is, as I understand it a private company owned and operated by the shoe box king – is that not correct? In that case why should the RIAI “supply” him with anything and why would the institute of engineers give a hoot? People tend to leave companies for other companies for many reasons but mostly cash. If one of the richest men in the country wasn’t paying the going rate for architects then what exactly did you expect?

And if he was paying the going rate then what’s your theory as to why people left?

@wearnicehats wrote:

I’m totally lost. Zoe was/is, as I understand it a private company owned and operated by the shoe box king – is that not correct? In that case why should the RIAI “supply” him with anything and why would the institute of engineers give a hoot? People tend to leave companies for other companies for many reasons but mostly cash. If one of the richest men in the country wasn’t paying the going rate for architects then what exactly did you expect?

And if he was paying the going rate then what’s your theory as to why people left?

Thanks for your reply. Those are all very valid questions and I am glad you took the effort to submit your opinion for the record. I would love to engage with you, the president and directors of the RIAI in further debate when we all not chasing our tails like at the moment. Hopefully, I will have calmed down sufficiently by then too. The thought of my boss lossing a billion euro of our capital and then firing the lot of us, drove a stake through my heart. (Not only that, the network of people in the construction industry I am so familiar with) I am so discusted with humanity at present and need to find some peace with the world again.

Looking forward to discussion in the future,

Brian O’ Hanlon

I would like to personally thank Dr. Garret Fitzgearld, a much smarter man than I will ever be, for his opinion and analysis piece in today’s paper.

First of all, the earlier years of this decade saw a total failure on the part of the government to accept the consequences of the decision to join the euro, which involved the removal of the option of devaluation as a solution to the inflation that the government then chose to create through gross over-spending in a period of full employment.

I have said it before and I wish to repeat, I am glad for every cent of Zoe’ money I spent that an RIAI member didn’t get its hands on. The RIAI needs to grow up and accept the fact that Ireland in order to be perceived as a competitive economy by the global marketplace needs its short players and its long players. I worked on this aspect within the Zoe group to bet against the market.

That was Liam Carroll’s original formula, to bet down the price of things. What I discovered to my dismay was that Liam had changed his tactics towards the end of his career. He threw away a life times good work in acting as a competitive influence on the property market and instead became one of its biggest liabilities. For that I can only thank some of his directors and the misleading advice he was given by certain banking institutions. Liam was a natural competitive player and perhaps too competitive at times.

He was akin to a George Soros within the construction industry in Ireland. He managed to de-value everyones’ currency including that of rival developers, contractors and architects. We sorely need that approach to return in 2009/10. Damn the financial institutions who advised him to enter the Irish stock market in 2002 in pursuit of Dunloe and later in pursuit of other quoted stocks. He was no more equipped for that than the man in the moon. They singularly failed to understand where the real value in Zoe developments lay. (Probably on purpose, so that they could rob him of his candy later on, when he was unaware)

Thanks again to Dr. Garrett Fitzgearld for penning the article in today’s Times. It establishes firmly some of the main points I wanted to make in my own writing.

Brian O’ Hanlon

Again, I thought that John McManus wrote something worth reading today, in his opinion piece in the Monday edition of the Times.

http://www.irishtimes.com/newspaper/finance/2009/0727/1224251384255.html

It would be vaguely amusing if the stakes were not so high. International sentiment may have improved towards Ireland on the basis of what has been done to date, but investors in Irish bonds also presume that we will follow through with the rest of the job.

The funny thing is I am in support of Brian Cowen taking the necessary time to review and scope out his options. I believe that politicians should exercise this skill when they need to. Whether Cowen takes the right action now or in six months isn’t going to make that much difference in my mind, as long as it is the right decision. That basically, Ireland does have a problem in how it governs itself. This was neatly reflected in the piece that Dr. Garrett Fitzgearld wrote in the Irish Times on Saturday last.

If we didn’t have the problems we have in government, we would not have the problems we have with builders today. To the extent that we do anyhow. Government could be getting on with what government is meant to do. Not mopping up other peoples’ mess. (It’s like the TV ad, I’ve had enough) I am glad that Alan Duke and those at Anglo have finally begun the waking up process. Even though Anglo only hold a small amount of the outstanding loan. The signal from them could be critical in the outcome.

The court heard that ACC Bank is adopting a ‘guarded neutral’ position on the examinership plan.

It was also told that Anglo Irish Bank, which has 3.1% of the debt, had adopted a ‘neutral’ position on the plan.

http://www.rte.ie/news/2009/0727/carrolll.html

The decision with regard to Liam Carroll tomorrow has implications that go beyond the scope of this case alone. I am glad to hear that Mr Justice Peter Kelly, is taking the time to consider the matter in full. The Liam Carroll’s of this world have always depended and thrived off a system in Ireland, where the authorities concerned simply don’t have the time to do their job properly.

My own instinct is that if we continue to allow builders to get away with mal-practice and misbehaviour it will create a very poor precedent for the future. All down to line. Professionals such as architects will find themselves in a very compromised position also, when under duress for one reason or another from a builder. So will planning authorities who feel in some way intimidated by these individuals and their supposed ‘unlimited’ wealth status. Lets not even talk about local representatives and get ourselves into tribunal territory.

The truth is, even with life support from two directions – both in terms of handouts given in tax incentive schemes by the Irish government, (non-existent land taxation on builders) and by unlimited credit terms from Irish banks – Zoe developments still wasn’t a resilient company. Keeping it alive is simply too morbid to even contemplate. The first chill wind that shook it and the boys ran for the hills. I can say in years to come, I was at the Battle of Waterloo. I watched in disbelief as Napoleon’s ‘old guard’ came running down the hill in retreat as fast as their legs could carry them.

If we don’t create some example here, we never will. We will be ruled by builders for the rest of our lives. I certainly don’t intend to be. Which would give me, and a whole raft of the Irish workforce the best reason we could ever wish for. To leave the country for good. It is never easy to leave families and good friends behind. But too lenient a judgement here would make it a lot easier.

Brian O’ Hanlon

Interesting to note today that Carroll’s share buying was one of the two specific reasons given for the insovlency of the group. Two wider issues raised as well.

Agreed

Stick to core business

A real pity they put together a damn efficient supply chain and whilst some may not like some of their earlier work; I have no doubt that the Dublin inner Apartment market would have been unlikely to deliver critical mass as quickly as it did in 1994/95 without Zoe.

I really hope that a long term view can be taken on this; the Zoe model of affordable high density City Centre apartments is exactly what could be a major part of the solution in a couple of years when existing supply overhang is dispersed into the market.

The article in the Irish Independent today put it quite neatly I thought. If LC does have an examiner appointed, and recieves the 70/100 days, with the extension will it even be enough? Will he be able to limp his way as far as the doors of Nama? That is the extent of the thrashing the 3rd richest man in the country received from the stock markets. It sheds a whole new light on other things too, such as the Moriarty Tribunal with Denis O’Brien etc. At least LC stuck around and spent his money within our shores. Mr. O’Brien was a little bit smarter than that.

O’Brien, who personally made nearly a quarter of a billion arising from the sale of an asset granted by the State and immediately afterwards became a tax exile, has become an unlikely knight in shining armour for the Irish taxpayer. “We’ve had to take the fight to the tribunal otherwise the Government will be faced with a massive claim for damages,” he told the Sunday Times.

http://www.irishtimes.com/newspaper/opinion/2009/0728/1224251492393.html

Taken from Elaine Byrne’s piece in today’s Times. It is really time we got some common sense into our national debate on Ireland Inc. Without all of the smoke and mirrors that the courts sometimes endeavor to throw at the public.

While working at Zoe, it was suggested to me by one of the Eircom people how cheaply the company and its assets could have been bought. A billion euro could have gone a long ways to laying a foundation for a smarter economy in Ireland. The rental off the lines would have kept LC solvent too, and free to go and do whatever development he wanted. These are the opportunities that Zoe developments missed. That is why Justice Kelly spoke about the ‘captains who steered the ship onto the rocks’. They were a bunch of short sighted clowns when it came to anything outside of construction.

In terms of finding places to put a billion euro, the comms industry certainly would have been a better fit than volatile stocks with land attached to them. Bury the money in the ground, fibre optics silly. It is not as if the comms lines going to any of his spec offices are in ‘state of the art’ condition anyhow. In terms of a rescue plan develop whatever sites he has available now, an involvement in telecoms would be a god send. Microsoft spent only $5 million on a trunk line that circumnavigated the city of Seattle. The investment paid for itself within a month.

Brian O’ Hanlon

@garethace wrote:

Microsoft spent only $5 million on a trunk line that circumnavigated the city of Seattle. The investment paid for itself within a month.
Brian O’ Hanlon

MN and the IC will make it very easy to do that… Anyway the internet is always getting slower because the media keeps increasing its always an excuse…

@missarchi wrote:

MN and the IC will make it very easy to do that… Anyway the internet is always getting slower because the media keeps increasing its always an excuse…

Operating systems keep getting bigger computers get faster…
so there is never a speed boost in upgrading computer/os… all in the name of insecurity
the rules of the game don’t change…

An “extraordinary” number of directorships were held by directors of the petitioning companies “no doubt for the best fiscal reasons”, he added.

Taken from Dearbhail McDonald and Thomas Molloy’s article in the Irish Independent today.

http://www.independent.ie/national-news/embattled-developer-admits-that-hes-broke-1844700.html

A small detour into the exciting world of cultural anthropology is necessary to understand the above quote. It has less to do with fiscal reasoning and a lot more to do with preservation of a culture. The culture of Zoe developments has to do with protection from outside corrosive factors of a kind of ‘basket weaving’ skill only they know how to execute.

That is why Zoe were always so suspicious of external consultants. External consultants would simply march in and smash and trample over whatever indigenous knowledge and tradition that Zoe developments had managed to foster. External consultants and in particular consultant architects don’t give a fiddler’s curse about the building trades. Or how they are supposed to fit together in one harmonious assembly process. This is the kind of ‘basket weave’ I have come to know and love, that is not on the consultant’s radar.

A native dialect was developed within the walled gardens of Zoe developments and for the sake of calling it something, I will call it ‘Liam o’. The reason is, so many sentences in so many conversations at Zoe started with ‘Liam o would do this’ or ‘Liam o would do that’.

Architects don’t like to speak in ‘Liam o’. It offends their pretentions to become designers of world dominating and global stature. Architects long to be plugged into something greater than a domestic network of plumbers, electricians and tradesmen. In an era of Big Brother and reality TV shows, people will do a lot for fame.

Working within the architectural profession is like participating in one of the sickest reality TV shows of all. Designs become a ‘cry for help’, throwing themselves about and making the wildest kind of shapes. All beauty and logic of the ‘basket weaver’s’ approach goes out of the window. That was the kind of cultural disintegration in the building industry that Zoe tried to protect themselves from. That is why so few directors held so many positions in those companies.

There were a couple of different flavours of ‘Liam o’ spoken within the Zoe organisation. A more colourful version was spoken by those closer to the cold face than those priveleged to work in Chapel house. But in all honesty, it was all colourful and spoken by a director, it often turned into poetry.

The particular kind of basket weaving skill the small circle of Zoe’s directors tried to protect was something that can only be visualised if you think of a company such as Toyota. Toyota is a company where every worker on the production line has the ability to pull a chord and to stop the line whenever they want to. The ironic thing about this, the Toyota production line stops very infrequently.

On the other hand, at more traditional American car manufacturers only the highest managers in the plant have the authority to stop the production line. But there, the line stops often. Zoe was not like Ford or General Motors, it was more like Toyota. At any stage, anywhere, any person on the line could pull the chord. That is what the walled garden of Zoe developments was designed to protect, that right of the individual worker. To an external consultant that prospect was simply horrifying.

I remember sitting at the Zoe Christmas dinner at the end of 2007 at the noisiest table of all. It belonged to the close knit group of finishing foremen who had recently completed 1,500 new apartment units at Tallaght Cross. One of the senior members of that group told me (while not acting the mick) the consultant architect at Tallaght Cross had to learn the simple fact, that Zoe finishing foremen were in fact the ‘client’ and that the architects were working for them.

Of course, as the project neared its snagging stages a fight ensued between the Zoe culture and the external architect. Each side keen to enshrine their own importance. At Tallaght Cross, the Zoe men had painted their Mona Lisa. They achieved a fit out rate of 40 apartments a week. Better than Toyota ever could have done.

On one occasion, the architect took the fight to town entirely and ordered the foremen to move every light switch in the 1,500 apartments down 2.5 centimeters. They said, in order to comply with Part M disabled access regulations. Such was the level of petty bitching their relationship with the ‘client’ had collapsed into.

The real truth of the matter was the building boom was over and architects were scratching their behinds. Neither sides’ livelihood would last much longer. No, the consultant architect never spoke fluent ‘Liam o’ and they still don’t. They want to see the culture killed off for good. The culture was protected by a small loyal band of Zoe’s directors.

It humours me these days to meet young architects who have pretentions of grandeur because they have learned to calculate the thermal properties of a construction detail. All I can say, is go and work for a company such as Zoe developments and learn about the 50 or so other dimensions that really must go into a detail for ease of assembly and cost efficiency.

I had a strange flashback to my days spent at Zoe when I listened to Tom Cosgrove demonstrate his structural design for Thomond Park stadium in Limerick. Tom put one slide on the screen of a ‘moment connection’ between the steel roof structure and the concrete terrace. He explained the different tolerances of the two contractors and their materials.

I wanted to ask Tom a question. Why is the culture of the architect based around the fact that one draws ‘only one detail’. That detail of assembly represents only an ideal condition. Where every single component of a huge stadium structure is exactly in the right place. A condition only satisfied in some theoretical parallel universe. In real life, everything has to be assembled and built by human hands.

What we should really be doing, when we issue an instruction to the assembler, is draw three or four details. What to do if this happens, what to do if something else happens. Create diagrams to represent real conditions rather than an ideal condition. The ideal condition may not arise even once in the entire job. But consultant architects build their contract documents around such nonsense.

We didn’t have contract documents at Zoe, so much as assemblers’ instructions. The Airfix model airplane instruction analogy was often used to explain how the no-blame culture of Zoe developments should work. If you could not give your drawings to a kid to put together a project, then the conclusion within Zoe was you hadn’t done your job well enough.

That is the conflict between the consultant culture and the Zoe culture. Zoe aspired to having a ‘no blame’ culture. The consultants tried to blame everyone they could. At Zoe developments, we learned to give the assembler a full set of instructions backed up with contingencies for matters that would no doubt arise in real site conditions.

That is the basket weaving culture that a small group of Zoe directors strove to protect. It was less to do with fiscal reasoning and a lot more to do with cultural anthropology that is specific to the construction industry. It has a language of it’s own, only understood and spoken fluently by those within that industry. They don’t even realise they are using it, it is that native to them. Tom Cosgrove is one of those people who speaks the language well. So were Zoe developments.

The ‘basket weaving’ language was important because it enabled thousands of people to go about their business on sites in an orderly, civilised and above all safe manner. It was an important language and it did save lives and limbs. It will continue to be spoken I have no doubt, despite all efforts from consultants to stamp it out. It will survive because it is ultimately the right way and the sustainable way to conduct business. Architects simply haven’t realized that yet.

The only thing wrong with the basket weaving culture was it meant directors had not learned the skills sufficient to manage large capital investment programs. That is why I did research on another advanced construction industry culture. The one at Dublin Airport Authority that was tailored around ideas of Turner and Townsend program management consultants from Britain.

If the two cultures can be encouraged to ‘blend’ together in developments at Zoe’s 150 acre Harristown site, we would really see something special emerge. Something that would be born and bred of these shores. While at the same time, cross-bybridized with ideas born at the Terminal 5 project in London’s Heathrow airport. Without the cross-hybridization process, it will lead to the small group of directors at Zoe making decisions that are short sighted and for the worst. A suitable balance needs to be struck.

Brian O’ Hanlon

The Dun Laoghaire council action is also against Bank of Scotland (Ireland) and AIB. The council wants a declaration it owns one third or more of these lands which were subject to a joint venture agreement in August 1997 under which it allegedly provided €57m to several companies controlled by Mr Carroll.

http://www.independent.ie/national-news/courts/property-developer-carroll-wins-reprieve-over-claim-for-836460m-1846002.html

The plot thickens even further.

I was aware that Irish banks wanted to act as proxy property developers through Liam Carroll. But now it appears as though mandarins in the lowly position of local authority public servants thought they could do the same! It is like everyone, their uncle and their grandmother’s uncle wanted a piece of Liam Carroll.

I would like to thank Dr. Garret Fitzgearld again for his opinion and analysis piece in last Saturday’s daily paper. We do have a fundamental problem in how we govern in Ireland. Recent conversations I have had with players caught in the ‘cross fire’ between Liam Carroll and local Dublin city council representatives back up my suspicions. Local councillors are abusing the local area plan, LAP, process in order to promise local residents a war chest of goodies they simply cannot deliver. By inviting consultant architects to draw up pie-in-the-sky projects for public urban space projects, which are to be funded somehow by the man who owns the land to be developed, Liam Carroll. This needs to stop!

The LAP that went into legislation for the Bohemian football club site at Phibsboro for instance, is a disgrace. A promise made to the public, the local representatives should not have been allowed to make. And an indirect attempt by Dublin City Council in order to bankrupt Liam Carroll even further. Who is paying for all this mick-acting ultimately? The collapse of Liam Carroll’s empire, is one the whole nation of taxpayers is going to pay for in one way or another. A sense of satisfaction derived by a few mandarins in our local authority simply won’t pay a dime towards that bill. I thought Dick Gleeson had a much better handle on what was going on at LAP level with his local councillors.

There is nothing about Phibsboro LAP that says anything like ‘biomedical cluster’ or campus for me. At the same time, as the people in the Industrial development authority, are brainstorming plans to make Ireland a world wide centre of excellence in all sorts of medical treatments. What is the taxpayer paying salaries of the IDA for, when the plan is being completely sabotaged down at the Local Area Plan level by a different group of civil servants? This has to stop! The local authorities should be strung out, in my opinion. Whatever legislation enabled the Local Area Plan process to happen back in the late 1990s, has blown up in all of our faces now. Peter Bacon, Jim Pike etc should know about this. Since the recommendation to confer a legal status on LAP’s was contained in their 1998 RIAI, IPI joint conference report.

What a real f***ing mess.

Brian O’ Hanlon

@garethace wrote:

http://www.independent.ie/national-news/courts/property-developer-carroll-wins-reprieve-over-claim-for-836460m-1846002.html

Recent conversations I have had with players caught in the ‘cross fire’ between Liam Carroll and local Dublin city council representatives back up my suspicions. Local councillors are abusing the local area plan, LAP, process in order to promise local residents a war chest of goodies they simply cannot deliver. By inviting consultant architects to draw up pie-in-the-sky projects for public urban space projects, which are to be funded somehow by the man who owns the land to be developed, Liam Carroll. This needs to stop!

The LAP that went into legislation for the Bohemian football club site at Phibsboro for instance, is a disgrace. A promise made to the public, the local representatives should not have been allowed to make. And an indirect attempt by Dublin City Council in order to bankrupt Liam Carroll even further. Who is paying for all this mick-acting ultimately? The collapse of Liam Carroll’s empire, is one the whole nation of taxpayers is going to pay for in one way or another. A sense of satisfaction derived by a few mandarins in our local authority simply won’t pay a dime towards that bill. I thought Dick Gleeson had a much better handle on what was going on at LAP level with his local councillors.

There is nothing about Phibsboro LAP that says anything like ‘biomedical cluster’ or campus for me. At the same time, as the people in the Industrial development authority, are brainstorming plans to make Ireland a world wide centre of excellence in all sorts of medical treatments. What is the taxpayer paying salaries of the IDA for, when the plan is being completely sabotaged down at the Local Area Plan level by a different group of civil servants? This has to stop! The local authorities should be strung out, in my opinion. Whatever legislation enabled the Local Area Plan process to happen back in the late 1990s, has blown up in all of our faces now. Peter Bacon, Jim Pike etc should know about this. Since the recommendation to confer a legal status on LAP’s was contained in their 1998 RIAI, IPI joint conference report.

What a f***ing mess.

Brian O’ Hanlon

Why on Earth would Dublin City Council want to “bankrupt Liam Carroll even further. Thats a completely ridiculous assertion.

The problem at the Phibsboro shopping centre site was that Liam Carrolls wheeling and dealing with Bohemians and the intransigence between himself and the owners of the shopping centre blocked the way to any meaningful redevelopment of the site.

Carroll paid over the odds for a landlocked site which was zoned green space. What the LAP sought to achieve there was a compromise which enabled Carroll and Albion properties (owners of the shopping centre) to develop the site, while also addressing the legitimate concerns of the residents to preserve some of the aforementioned green space.

So in order to do this, the LAP proposed a framework plan which allowed a significant level of development while also providing the requisite community gain – ie a plaza and community centre which tied in with the school on the site. There seems to be an attidtude sometimes that just because a developer paid an inordinate amount for a site he should be allowed build whatever it takes to make that site pay off.

You have to remember that these are illustrative framework plans only – guidance to the detailed planning of the site by the respective developers.

The LAP also has a whole section which details how it fits neatly into national and regional legislation – the creation of a centre of medical excellence at the Mater hospital is enabled in the plan as is a plan for the redevelopment of Mountjoy prison which says..

“The re-developed site also presents an opportunity for the development of associated
ancillary medical, service industry, commercial and office employment floorspace and to
create an important economic and employment cluster in the vicinity of the planned
Metro North Station.”

Don’t blame the legislation for Liam Carrolls failures. The LAP process is an important part of producing coherent local planning which extracts a modicum of community gain from developers in return for their developments.

Carroll paid over the odds for a landlocked site which was zoned green space. What the LAP sought to achieve there was a compromise which enabled Carroll and Albion properties (owners of the shopping centre) to develop the site, while also addressing the legitimate concerns of the residents to preserve some of the aforementioned green space.

But this is the very mistake that has ended up screwing Bohemians football club. The council made an assumption that Carroll had bought the land. He didn’t, he only bought an option to buy, quite a standard agreement between himself and the club. I think it was done, by way of a genuinely concerned Bohemians football fan director at Zoe, to stop the club giving away it’s crown jewels for buttons to man with the shopping centre. Nothing more. But in the process of the council ‘dealing’ with their obsession with Mr. Carroll, the council have managed to snooker the main party involved, the football club into a complete corner.

Everything in the Phibsboro LAP was based on the assumption that Carroll had waded in the whole way. Which he didn’t, and far from it. He has renewed payment of the option and that money the football club has received. The loser here isn’t Liam Carroll. He bought something extremely valuable for the equivalent of ‘pocket change’ to him. He purchased a bargaining chip, an ace up his sleeve, nothing more than that. LC was an expert in acquiring valuable bargaining chips for virtually nothing. The real loser in this is the poor old football club, who will end up on the street if it’s luck doesn’t change soon. I call for the entire Phibsboro LAP to be scrapped immediately, because it is based on all incorrect assumptions. Assumptions which Liam Carroll was more than willing to allow the councillors to make.

Grow up people. It is all poker. Deal with it.

It is the same in Cherrywood.

The local representatives sat down at the table with a much better card shark and they didn’t even know it.

Brian O’ Hanlon

@garethace wrote:

One of the senior members of that group told me (while not acting the mick) the consultant architect at Tallaght Cross had to learn the simple fact, that Zoe finishing foremen were in fact the ‘client’ and that the architects were working for them.

Nothing new there. Most foremen I had the pleasure of dealing with had the same attitude.

@garethace wrote:

But this is the very mistake that has ended up screwing Bohemians football club. The council made an assumption that Carroll had bought the land. He didn’t, he only bought an option to buy, quite a standard agreement between himself and the club. I think it was done, by way of a genuinely concerned Bohemians football fan director at Zoe, to stop the club giving away it’s crown jewels for buttons to man with the shopping centre. Nothing more. But in the process of the council ‘dealing’ with their obsession with Mr. Carroll, the council have managed to snooker the main party involved, the football club into a complete corner.

Everything in the Phibsboro LAP was based on the assumption that Carroll had waded in the whole way. Which he didn’t, and far from it. He has renewed payment of the option and that money the football club has received. The loser here isn’t Liam Carroll. He bought something extremely valuable for the equivalent of ‘pocket change’ to him. He purchased a bargaining chip, an ace up his sleeve, nothing more than that. LC was an expert in acquiring valuable bargaining chips for virtually nothing. The real loser in this is the poor old football club, who will end up on the street if it’s luck doesn’t change soon. I call for the entire Phibsboro LAP to be scrapped immediately, because it is based on all incorrect assumptions. Assumptions which Liam Carroll was more than willing to allow the councillors to make.

Grow up people. It is all poker. Deal with it.

It is the same in Cherrywood.

The local representatives sat down at the table with a much better card shark and they didn’t even know it.

Brian O’ Hanlon

The Phibsborough/ Mountjoy LAP is a document which covers a vast chunk of the northsides inner suburbs. Liam Carroll had very very little bearing on it.

The plan was for the LAP to capitalise on the opportunities presented by the release of the major land banks in the area for development, controlling and leveraging those developments to enhance the area.

The football club have not been snookered into any corner on the Dalymount site. The LAP is actually the only document to enable the sale of the current stadium by proposing its rezoning under the strict provisos given in the plan.

Liam Carroll is irrelevant. Don’t overestimate his or your other developer colleagues’ abilities as “card sharks”. It is not in fact “poker”. Its an honest and decent attempt by the local authority to provide a framework for the proper and sustainable development of the area.

Thankyou for dealing with those items and making things much clearer for everyone here. I wanted to make certain points for the record and I am satisfied I have made them. The other assumption of course, inherent in the Dalymount section of the Phibsboro/Mountjoy LAP is the outdated notion that all developers are minted. I hope the current front page news stories about Carroll and others only serve to underline the fact they aren’t. All they are is people with leverage from our banks and an intuitive sense of how to play poker. In the case of Dalymount stadium it only cost Carroll the change in his pocket to ‘test the waters’ before wading in the whole way. When the local authority witnessed the name Carroll come up on the radar they proceeded to murder any prospects of making meaningful financial returns from the Dalymount site. That includes whatever hopes Bohemian football club themselves have of selling the site now, to any investors remaining out there.

It is really time we did grow up in this country and stopped making designs that we cannot possibly pay for. The Phibsboro/Mountjoy LAP does make promises to the local population which will be impossible to keep. Worse still, it has been written in legislation. Albeit only the LAP shows the scheme in question. But if that is anything representative of what we will see with NAMA lands (the Dalymount site muted to become a NAMA site) I would be very worried indeed. I will make the same suggestion that I made in relation to the OPW at St. Stephen’s Green. If public servants are going to become client representatives for the Irish people, then they should have some level of experience being clients in the real world also. It is simply not good enough for a bunch of A-student architects to sit above in the OPW offices and pretend they know anything about the costs involved.

Regards,

Brian O’ Hanlon

What killed the prospect of financial returns was Carroll and Bohs not doing enough due diligence to find that they didn’t control the access point.

@jdivision wrote:

What killed the prospect of financial returns was Carroll and Bohs not doing enough due diligence to find that they didn’t control the access point.

Thanks for the input. It is well noted.

Brian O’ Hanlon

@parka wrote:

Nothing new there. Most foremen I had the pleasure of dealing with had the same attitude.

Parka,

My experience is not as extensive outside the Zoe walled garden as it is inside the same. But I would like to emphasize if I may, that Liam Carroll (and certain directors) did encourage this attitude from their building company, Danninger.

In certain ways, Zoe are not like other Developers.

Other developers could not influence culture, because they outsourced building matters to someone such as Pierse, Hegarty, Paul, Sisk or whoever. Other developers could not effect the culture of the main contractor so much as Liam could. Liam wanted to encourage his trades supervisers on the production line to take some ‘ownership’ of the product they were helping to assemble. If they were more involved they were also much more committed to the enterprise. There is a huge payback.

Some of the ideas are enshrined in the ‘Design Build’ concept. I once heard Henchion Reuter architects describe the situation they experience in Germany, whereby they can leave all of the trades to work on a job and be confident to find an excellent quality of finish upon return. Sometimes it is not enough to issue a drawing or a detail. You also have to specify the sequence in which the pieces have to fit together. That is why the Airfix model airplane instruction is such a useful analogy. Because it does give you instructions and it also gives you a sequence.

In Ireland, if you don’t add another tedious layer of project management to every job, the finished quality is never good. One trade doesn’t worry about the other. Architects don’t appreciate the importance of writing the assembly sequence on their drawings for site operatives to follow. Usually the architect throws a whole pile of stuff on the assembly drawing, so that he or she cannot be accused after the contract is signed of not including a dimension or a specification. But the parts that are omitted such as the sequence, is what leads to loss of quality on site.

When I worked on building projects for the food industry, project management was important because food safety demanded that quality was very high. I have met some architects who have worked in medical projects and I find a similar awareness of how the contract should fit together, to achieve best results.

Danninger as it’s own client

The Danninger culture had a lot to do with health and safety, and general harmony within Danninger’s operation. I was a designer, yet I received no less than 60 hours of health and safety induction with Danninger over a two year period. I wonder now, how I ever managed before. I was completely unaware of the level of risk to live and limb I was designing into my buildings. Again, this is why I would encourage any young architect with sense to work for a company such as Zoe developments. You cannot get this kind of access to knowledge anywhere else. It is worth giving up the work in a high street boutique design bureau for a couple of years, to experience a different side.

To be honest, I use the term sub-contractors to describe an electrician or a plumber working for Zoe. But the real truth is, we never had any subcontractors. In order for a sub-contractor to exist, you need a main contractor. We never had a main contractor. The main contractor was the client. Therefore all of the companies traditionally known as ‘sub-contractors’ in the case of Danninger were actually contractors.

It wasn’t that Danninger foremen thought they were the client. The actually were the client. It was the client’s money the external consultant architect was spending. That was the foreman’s money by definition, so he or she was interested in how it was spent. Zoe had a system they had evolved over a decade or two and it was tried and tested. If an external consultant architect had to make a change to the system, they would have to go through a whole series of rigorous tests to see how the change would affect the Danninger assembly line.

Adding an Extra Brick course

For instance, when Danninger decided to add an extra brick course, to their apartment floor height a number of years ago, that one change rippled through the entire organisation. Everyone had an opinion and open conversations took place about the impact, that adding this extra brick course would have on everyones’ life. That is an additional 75mm to each floor to ceiling height. This is what I am attempting to explain. That Danninger didn’t only ‘lash it up boys’ as Frank McDonald would assume. It was more like how Toyota would operate their assembly line.

It would be a real help if architects could be allowed to work on the assembly line with me at Chapel house, for a period and they would understand that. I was disappointed in the end with Liam, that he pulled the rug out from underneath me. He enabled a few architects to work away from Chapel house and do their own thing. (Although I can see now the kind of options that Liam had available to him at the time were few)

I always felt the few boys who never got to work at Chapel house, lacked some depth of insight into the Zoe culture and client who they were working for. I am not saying that it was always a bed of roses at Chapel house. We worked the exact same hours as the builders did, with the same short breaks in between also. That might seem a bit too much like a factory line to most architects, who have spent years to qualify.

Usually, the cultural conflict would not arise, as the designer, builder and client were all of the same company and spoke the same language. But where the conflict did arise, was where the designer was an external consultant. Then the Zoe culture would prevail over that of the external consultant for the most part. Except when it came to certain things like light switches. But even there, architects still do not understand it is other peoples’ money they are spending.

What we don’t have yet, but something that needs to be developed in parallel with the National Asset Management Agency, is a way in which architects can earn more money for spending less money. I don’t mean to compromise on design. But to get good design and good concepts realized for less money. To get value for money effectively in some way. But the lower the cost, the harder the architect has to work. That is a service he isn’t thanked for often by the clients out there.

This is the point I am making about the one brick course that Zoe developments introduced into their production line. Zoe developments somehow found a way, to pay people more in order to find more economical solutions. In the case of the extra brick course, it was added in order to allow enough space for ‘cross-overs’ between the different fit out trades. That meant that you could hit that 40 apartment per week fit out rate. That is like 6 apartments being finished a day. What Zoe lost in terms of added height to the structure, they gained back in terms of time saved with the fit out trades program.

Has Zoe Developments anything of value to give to NAMA?

The construction management awareness that Zoe developments fostered needs to be at the heart of the NAMA process as far as I am concerned. Designers do have a part to play in that, and can get involved, get experienced working as the ‘client’ as opposed to merely being an external consultant who does not give a hoot. Effectively we are all the client nowadays in Ireland with €80-90 billion in debt to claw back. That is what is so attractive to me about the Zoe developments company. It could be the model for how we build out these lands and sites, as efficiently as possible, using the idea of brain over matter.

The Zoe system worked because they were designer, client and builder all put together. With the advent of NAMA in Ireland we are very close to achieving that. We, the Irish nation are now incentivized to work harder in order to find ways to spend less of our own money, realizing the value from the NAMA land assets. To achieve that end, we should rely less on traditional contracts and boundary line drawing, between consultant and client. We should set up the assembly line. We should build a lot more for a lot less. The whole idea in my mind is to realize projects of sufficient critical mass to support themselves and become sustainable as places.

Failure in achieving the critical mass, is going to stop strategic development zones such as Adamstown in their tracks. Or potential SDZ’s like Cherrywood and so on. As we pick up the right skills to work as both client, designer and builder we will gain confidence in our selves. We can look at exporting our skills and roll out new development on the land assets that NAMA will have abroad. Our building teams can travel abroad to supervise the projects and realise great value there too. It is a big and bright future. Who wants to be a part?

Brian O’ Hanlon

Xanax, anybody?

R O F L

B.

nama will only get value for money if it is transparent put in a glass box at college green for everyone to watch. Big brother style… Reality nama tv…
The public should be able to vote people off! people are assigned different assets…
like the stock market game with weekly stats in the paper including overheads and expenses ect…. As part of the game they get audited daily and the public can watch there computer screens:D

It does have the making for an amazing reality show maybe RTE will take it on?
The ratings would be huge!

I once listened to an interview with the Irish fashion designer Sybil Connolly, who made an interesting observation about design. She said, that discipline is freedom, discipline is freedom. This was the mantra by which she approached her design work and her life. Bear in mind that Sybil was a designer who could sell six dresses to a United States first lady in one afternoon. Such was her reputation and stature on the world stage. Discipline is freedom. I am reminded of that when I look at the culture of Zoe developments. I began to realise that Zoe were not penny pinchers simply for the sake of being penny pinchers. It was more sophisticated than that. It had something to do with design. The Zoe emphasis on economy enabled them certain latitude or freedom in certain regards.

It purchased them more room to maneuvre as they produced apartments at a rate of six fit out completions per day. One designer at Zoe always emphasized to me, the main danger of being a designer in Zoe is that the production line moves so fast. Your designs can fall way behind the rate at which the building is being built. It was known within the company, as ‘being on the back foot’. That is why the fashion industry analogy is so useful. As fashions change and things go out of date, the designer simply must keep pace or be left on the sidelines. I worked on a production line at Dell computers which was similar. It was struggling to keep pace as the price of components going into a product slid down the scale in terms economic value. Every time Intel released a new micro processor, the old stuff took a massive price hit. Dell was always playing ‘on the back foot’ but it had learned to cope with that.

As far as external consultant architects are concerned, Liam Carroll is simply another developer. As someone on the Archiseek forum eloquently put it: Same shite, different arse. To those architectural consultants I would direct a question, is NAMA going to represent for them, a different arse too? To me, and the thousand or so employees inside the Zoe developments company, Liam was a builder. When we worked on a project, we were all Liam. We were all the client. That is what is so interesting about the company. That is the depth of culture the small circle of directors tried to protect from external interference. External consultants could never see that. As far as the external consultants were concerned, Freedom was Freedom. Re-invent the wheel, re-invent the wheel and re-invent the wheel.

Freedom is not freedom unfortunately. The American and Japanese car manufacturers again provide an interesting contrast. While the Japanese could reduce their production run of cars to quite short cycles, the Americans had to leave the same model on the market long after it had become out of date. How were the Japanese able to re-tool, and re-integrate all the components of a complex item such as a car in such a short cycle? This is a very important question. Because everyone these days wants to know what is the ‘cycle’ in which the new National Asset Management Agency will have to operate. According to economist Peter Bacon, no one knows the answer to this. But it probably is in the region of five to ten years.

According to economist Constantin Gurdgiev, the cycle might last 18 to 23 years. This is why I suggest that lean production and lean design techniques pioneered inside Zoe development’s walled garden could be of so much use. In terms of controlling the market, the consumer and shortening the length of the cycle. With a lean manufacturing production system for buildings we can aim our cross hairs much more accurately at what the consumer will need at any given time and place. Make no mistake about it, Zoe developments was the Irish equivalent of Dell computers or Toyota car manufacturer. But instead of treating it with the respect it deserves, Irish journalists and opinion makers want to drag it into the muck. On this day that Zoe developments finally goes for the chop, have people should try to have some pride. Pride might be all that we have left to give our children.

The answer is to be found in Irish fashion designer Sybil Connolly’s mantra: Discipline is Freedom. Zoe developments could unlock the value of so many different sites, and in such short cycles because discipline was at the heart of their enterprise. Every time that an architect approaches a site or project it becomes the equivalent of designing an entire new production car model. The overhead of such an exercise is simply mind boggling. I fear that is the main stumbling block for execution of the NAMA scheme. I can see it in so many of the social housing projects executed by Irish architects throughout the Celtic Tiger era. Some better than others no doubt. But every project designed and built by an Irish architect had less of the basket weave, and more to do with trying experiments using the client’s money.

In every single case, regarding NAMA that will mean more tax payers money squandered on experimentation by our consultants. We will have to start getting smarter than that in Ireland if we want to survive at all. If we want to dig our way out of this €80-90 billion hole. We will have to invent new approaches. There is no other way to tackle this monster undertaking. When I look back at the Celtic Tiger now, I do not look at the couple of flashy over-the-top statements made by some forgotten Irish architect. But I do find comfort in gazing upon the basket weave created by Zoe developments. NAMA would do well to pay attention to this, as it looks at how to execute its own business.

That is the tough choice that Mr. Justic Kelly faces in the Commercial court today. Whether to allow Zoe developments to breath for another 80-100 days or not. I would enjoy watching Zoe bite the bullet as much as the next man would. It has been pointed out by people more intelligent than I, Liam Carroll was highly leveraged and gambling a lot with other peoples’ money. On the other hand, if we take Zoe developments out of the equation, regarding NAMA, we are left at the mercy of our architectural consultants.

That prospect I do not look forward to at all. The RIAI members do not know how to innovate any new business models for lean design and construction. If Zoe was to survive long enough to limp its way into NAMA, I would strongly suggest that no external consultant architects be allowed to work for it. They would only continue to suck it dry as they have always tried to do. An alternative strategy I would envisage, is for the architects to work for the company, and become the client. Gaining the experience that the Irish nation will need, in order to become the managers of the €80-90 in toxic assets.

Brian O’ Hanlon

http://www.irishtimes.com/newspaper/breaking/2009/0731/breaking63.htm

looks like the jig might be up for Zoe Developments

Thanks for the link. Probably for the best. Lets close the book.

(Almost literally in my case . . . I hope I have managed to capture some cultural artifact of what the company was about for posterity to research and study . . . while Frank McDonald’s analysis down through the years has been extensive and lengthy, it did not have the advantage of an insider’s point of view. McDonald’s analysis is still exceptionally valuable)

Brian O’ Hanlon

–

What the barber had to say

I spoke with my barber the other day. You know those guys who know everything in the whole world about everything? They even know more about things than taxi drivers do. Although, taxi drivers still have the edge on certain subjects. What my barber told me on this occasion I think is very true. Ireland is a small and agile, clever and well educated nation. It doesn’t take much to turn it around. We can fight back and we will. However, the barber inserted a qualification I hadn’t thought about. It doesn’t take much to screw up the system in Ireland. I think NAMA is proposing to unlock the system again and get us back on some kind of track.

Two different problems

Listening to the Minister for Finance being interviewed today on the radio, he made a valid point. He made a distinction between two things. On the one hand, there is a capital adequacy problem with the Irish banking system. On the other hand there is a crisis in the financial affairs of the Irish state. These are two problems we need to identify clearly and deal with separately. It is unfortunate for government that both are coming at them at once. But as Ruairi Quinn suggested, there are a lot of members in the Dail. Fianna Fail do not have a monopoly over wisdom.

Investors all over the globe suspect Irish banks aren’t holding enough capital to cover their property loan positions. A possible source of where that suspicion came from is offered to us by this excellent web site, Quotes from the Irish Property Boom. Irish TV presenter Liz O’Kane seems to have played a starring role.

http://quotesfromthebubble.blogspot.com/

If your house is on the market for a long period of time – i.e, 8 to 12 weeks – psychologically there is negativity going to be thrown at it. Potential buyers – even though they haven’t viewed the property – may say ‘God, there’s something wrong with that house because the board’s been up such a long time’.

This sort of worldwide perception of Ireland as a nation, is the problem the Irish banking system is having to deal with. They are getting laughed out of the market place whenever they go out with their begging bowls. It is preventing Irish banks from obtaining cash flow at sustainable rates from the world market. In other words, the Irish nation is being left to ‘starve’ of cash flow, having enjoyed the lion’s feast for the past decade. As Liz might say, we are having ‘negativity thrown at us’.

The Irish banking service problem is a supply side problem. On ther other hand, the problems with the Irish state are more like a demand side problem. The services the state are providing to its people are too expensive for what it can manage using tax income alone. As a consequence, the Irish state is having to borrow from the world markets in order to keep its services functioning as normal. Of course, this further compounds the problem of world wide investor perceptions of Ireland. How they view our country. Elaine Byrne wrote something about it here.

http://www.irishtimes.com/newspaper/opinion/2009/0728/1224251492393.html

O’Brien, who personally made nearly a quarter of a billion arising from the sale of an asset granted by the State and immediately afterwards became a tax exile, has become an unlikely knight in shining armour for the Irish taxpayer. “We’ve had to take the fight to the tribunal otherwise the Government will be faced with a massive claim for damages,” he told the Sunday Times.

How did the experts get it so wrong?

This question of how did all of the ‘experts’ in property during the Celtic Tiger (especially Liz) get it so wrong? This question keeps cropping up in my mind. Indeed, how did all of the experts in property during the Celtic Tiger get it so horribly wrong? The one thing in my mind, we should bear in mind with property in Ireland is the following. That banks depended upon property for 70% of their loan business. That is what went wrong.

There weren’t enough developers out there, that the Irish banks could throw their money at. In fact, as I have previously argued, after Charles Haughey gaves orders to Irish banks to start ‘pouring concrete’ about twenty years ago, the Irish banks effectively became property developers themselves. Banks took it upon themselves to become ‘champions’ of economic prosperity within our shores. That is what went wrong.

It reminds me of the rallying call of ‘Green Murphy’ over in London in the 1960s to Irish navies. ‘Make noise lads, or go home to Camden Town’. Making noise is exactly what the Irish banks set about doing. They really out did themselves. I have discussed the problems that exist when an Irish bank becomes a property developer. Health and safety on building sites is one massive issue. To solve that difficulty, the Irish banks needed an intermediary to stand in their place.

Anybody male, around six foot tall, looking good in a suit for the newspapers would do. Anybody who would look reasonably convincing in other words. (That rules me out straight away) These patsie’s became the eventual fall guys for the Irish property bust. But no developer I know did it for the money. Many of them had more than they could spend in a life time. They were property developers because they liked doing it. They were of the construction industry and they couldn’t help it. Plain and simple.

Why McGregor matters

But the Irish banks identified this instinct and abused it too much. My point is as follows. Because the Irish banks were effectively playing as property developers, but were separated from the workings of the market and the industry by an intermediary player, the developer, they were not part of the feedback loop. NAMA should not and cannot afford to make that same mistake. It is nice in theory to think one can house fifty guys in the Treasury Building on Pearse Street. But it will not work unfortunately. That is the point I tried to cover in my ‘Discipline as Freedom’ blog entry earlier.

I penned what I hope will be one of my final blog entries in this extended series on the subject of property and bad loans. The blog entry was designed to show to people that consultants working for developers were often blind to the industry and its culture.

There is a need in Ireland for the ideas of Douglas McGregor to be taken very seriously as we depart on the NAMA project. To that end, I do suggest that banking institutions and financial providers, whether it be NAMA or Irish banks, evolve into organisations that can learn directly from the business of building.

Perhaps if the Irish banks had not been so blinded by having to work through an intermediary person, such as a developer, the Irish banks would have had much better instincts. Instincts which would have alerted them much earlier to worrying trends and diverted them away from fatal actions. Keeping the sort of pretence which they had to, is what caused most of the problems. Information needs to flow back to the fiancing institutions much faster. Those clowns in the suits who were the ‘made up’ Irish property developers were not interested in working to provide the feedback quickly enough.

Billion Euro mistakes in rescue plan

I suggest that we adopt a construction model like that of Zoe developments. A model that will enable us to change the production lines quickly, to re-shape and re-configure the built product to cater to the needs of the market place. However, unlike Zoe developments we need information to flow back to the financing institution in real time. Instead, what happened in Zoe development’s case, is that Mr. Judge Kelly has to drag it out, bit by bit from Liam Carroll today. The way I see it, Irish banking officials working in glass buildings with hoovered carpets don’t understand the property world well enough. That was certainly a part of the problem during the Celtic Tiger. We need our financing institution from now on to shout much louder when information is coming too slowly and in poor quality.

It took Mr. Judge Kelly to point out errors of a quarter of a billion Euro in Zoe’s December 2008 rescue plan. DunLaoghaire Rathdown county council it was revealed this week, were charged twice for a bill of a million euro by Zoe developments. In addition to another €57 million that somehow got lost in the system. How can this sort of messing continue, and we hope to borrow any money from the international market? This is why I think Douglas McGregor’s writing should be of so much guidance to Irish banking institutions and to NAMA today.

Brian O’ Hanlon

Garethrace
The number and length of posts written by you compared to the few responses makes this a blog in the wrong place.

IMO, this is topic has descended into fantasy or worse.

For example:
@garethace wrote:

– I suggest that we adopt a construction model like that of Zoe developments.

And later:
@garethace wrote:

-It took Mr. Judge Kelly to point out errors of a quarter of a billion Euro in Zoe’s December 2008 rescue plan. DunLaoghaire Rathdown county council it was revealed this week, were charged twice for a bill of a million euro by Zoe developments. In addition to another €57 million that somehow got lost in the system.

Says it all about Zoe’s internal controls, the ineptness of their finance dept, and the bordering on criminal unprofessionalism of their external accountants who signed off on that application.

And you consistently suggest that they get involved with running NAMA?????

Move on.
Rs
K.

I always find it strange why they where on the back of the book…
What I find even more strange is nama is operating out of T old offices.
Like a production line…

@KerryBog2 wrote:

Says it all about Zoe’s internal controls, the ineptness of their finance dept, and the bordering on criminal unprofessionalism of their external accountants who signed off on that application.

And you consistently suggest that they get involved with running NAMA?????

Move on.
Rs
K.

Kerry Bog,

Of course you are completely correct in everything you have said above. Once again, thanks for displaying your common sense, and pointing out the obvious and plain facts of the matter at hand.

I had some friends in the finance department at Zoe, not bad guys and not evil people at all. But I am afraid I have to agree with you. They were so far out of their depth they didn’t seem to know it. Of course, they manipulated the accountancy report and that was a perfect textbook example of what was wrong with the Zoe company in the end. Something I never want to be associated with. However, that does not preclude me from looking into the full depth of the Zoe organisation and seeing the parts that were useful.

Zoe developments was no more or no less than a haven within the construction industry as a whole. A place where the brightest and best of the construction industry could go to develop their ideas with some small degree of finance and support from Liam Carroll. They went to Zoe developments, because they couldn’t get the support anywhere else in the construction industry. It is those peoples’ work and ideas I tried to express in my writing mostly.

I was shocked myself, having met a couple of Zoe finance guys lately and they still were believing their own bull shit. That is why I was so relieved that ACC bank did step in, and throw a bath of cold water reality over the lot of them. (Including the other Irish banks and the department of Fianance in Ireland itself) I wouldn’t have been that generous myself, I would have taken out a blow torch. But that is a story for another day.

Now that all of this news has broke and we are finally well rid of Liam Carroll and Zoe developments, it is easy to claim it was text book. That it was logical and Zoe developments had to fall. The reality is, when I and other workers received these kinds of letters last May, there was no news in the papers about Zoe developments or Liam Carroll.

I wrote several hundred lines of insider information, in order to publish what I knew and what I thought of Zoe developments organisation. A lot of which has helped other claimants out there to try and conceptualize their own strategy and to bring their case against Liam Carroll. Make no mistake about it, myself and Liam Carroll do have a lot of unfinished business. But there are other pressing matters at hand, in particular, the setting up of NAMA. Trying to establish a positive future for this country.

The boys in finance were the only guys left rattling around on the second floor at Chapel House in Parnell Street. I think they believed if they stayed there and kept really quiet that everyone would simply forget about them. Isn’t it always the case with people who borrow beyond their means. They did a very good job at putting on the brave front and pretending to feel ‘relaxed’ about the whole mess. But as Judge Kelly pointed out, with this large amounts of money, it is the lender who has a problem as well as the borrower.

The Zoe finance guys were good guys, nice guys. But boy were they smug about themselves. Where did they get that smugness from? I am glad that the no.2 and no.3 directors were named in addition to Liam Carroll in today’s newspaper. For the first time ever, I might add. David Torpey and John Pope, both men I knew well and I still think were decent guys at the bottom of it. Dave had over a hundred directorships in the Zoe companies, while John had 65. Of course Liam had two hundred and something. Liam ordered the lobster.

For the record, I am not suggesting that we carry on with the same Zoe staff and bring it into NAMA. What I am suggesting is that we glean the structure and set up of the Zoe organisation from those directors (as part of their service to society) and we capture the best ideas from that to re-cycle into NAMA. The trouble is, good ideas are in very short supply these days and Ireland has produced so few home grown companies. We should try to understand the ones we have.

Moving on, is certainly the best advice Kerrybog, by far the best advice. I appreciate you are really pissed off with me right, but allow me to clarify what I was saying if I may one last time . . . I am going to use the analogy of building a race car, so buckle yourself in and wear a crash helmet.

The racing car analogy

What I am trying to suggest is that Zoe’s business model is useful, it is innovative and it is ‘born’ out of the Irish context. It could be economical to run and very efficient when it is wrapped inside the correct chassis, transmission, tyres, aerodynamic design, driver, pit crew and mechanical maintenance. The Zoe developments exercise was disasterous in so many ways. That is, if you judge it as a developer’s company. But if you judge it as a building company, as a designer of a process and a way to build things, I think it was second to none in this country. I know my way around enough of the construction industry in Ireland to know that much.

I always think of Carroll Shelby, the unlikely Texan automobile designer who put together a classic old British sports car chassis with an American pick up truck engine to create the Ford Cobra that became a race winner. In a similar way, I believe that Zoe engine for design and construction management could be transplanted into NAMA’s execution plan in some way and taken advantage of. The Zoe contractual simplicity is the answer to an awful lot of the things that threaten to make NAMA too large, too cumbersome and too hard to handle for everyone concerned. Without the right kind of engine I don’t think that NAMA will make it off the starting line.

http://thecobraferrariwars.com/

With the Zoe type of company, the designer, client and builder are the same person. That buys you a lot of things right there. The culture and the language is very consistent across the one organisation. Everyone is pulling in the same direction. They have no requirement for legal fights, they cannot sue each other because they are the same company. Their only choice is to get on with the job. That is the crucial insight. That is what I mean about transplanting an efficient and powerful ‘engine for construction’ into the heart of NAMA. That might not make sense to a banker. But I guarantee you, to any engineer out there it makes a lot of sense.

Break it into chunks

I am suggesting we break the NAMA portfolio which is away too large and cumbesome into chunks of say €4.0 billion each. (Rather like strategists in the F1 pit crew break a race into stages) We work on those chunks one at a time. Or perhaps a couple at a time, if we can form a couple of Zoe type companies to deal with it. In the same way a couple of cars race together as part of a team on a race track.

Zoe developments ‘engine’ is only required to take care of the construction management side of it. We would need help from designers also, who would work inside the same company as the contractor and the client. This closes the loop and allows us to start fixing projects right away. That is why Liam Carroll could cut all sorts of corners that other developers could not.

The important thing is that we choose someone wisely in this kind of Zoe contractual arrangement to become the client. Because the aim of NAMA is to release all of the assets into the private market within a 5-10 year time frame. The client in my hypothetical Zoe type arrangement would be someone who has run shopping centres, who has run housing rental projects, who has run logistical and warehousing enterprises in the past.

Without that experience on board, NAMA is doomed to fail. The projects will not be carried out in a way, that will enable us to release projects into the private part of the economy in the timeframe of 5-10 years.

How does one manage assets on this colossal scale?

We have some organisations in Ireland at the moment who can understand how to manage up to €4.0 billion Euros in capital. For instance, Dublin Airport Authority with the assistance of their consultant Turner and Townsend. We have the Railway Procurement Agency. We have ESB Networks, and we have the department of Agriculture which has distributed vast amounts of money throughout the Irish system over decades.

Those are the kinds of experts we should have sitting around the table to form the chassis, the transmission, the tyres and the aero-dynamics that NAMA will need. It doesn’t really matter if we have to go back to retired department of agriculture civil servants or whoever, to glean the knowledge and insight we need. A long view will be demanded on this. Everyone has a role to play, even the oldest amongst our community.

ESB Networks are the ones in Ireland charged with management of the largest physical asset class we have over a long period of time. They have a particular and very valuable insight to contribute. I think if one consulted ESB networks they will claim that working with a €4.0 billion size of capital investment program is much too large. They have done it, but would never entertain the idea of doing it again.

I mean, that was a project with a simple straightforward agenda to upgrade all of the country’s medium voltage transmission infrastructure. The plan wasn’t complex like construction of shopping centres and town centres ultimately can be. Yet the Irish nation is looking to resolve €50-90 billion worth of bad real estate debt. Hold on a minute here, lets get some perspective on what it is we are trying to do. Before we saddle our grand children’s grand children with more problems than they already have.

An engine that is proven and works

We do need a good reliable and efficient engine for construction at the heart of all of this. The one that Zoe designed and put into use over 20 odd years is proven and tested on the race track. I say we take advantage of that and we use it to give the Irish nation some fighting chance. It is quite simple. Intelligent people will learn to understand how it works very quickly and enjoy its benefits.

Zoe developments only provides the engine required in order to do construction. What I am suggesting is, we don’t only transfer Liam’s bad debts to NAMA. What we do is we transplant his engine of construction management and design into the heart of the NAMA vehicle also. Daft and all as that may sound.

What went wrong with Zoe developments from the start, it was operating its engine in isolation without all of the other parts. Typical of a group of engineers isn’t it? To get so carried away with the gorgeous technology they are playing around with. But that doesn’t mean it’s engine is due for scrappage.

It’s engine is perfect for the job NAMA has to do. Surviving 24 hours at Le Mans in one piece is no small task. Zoe developments has the only engine with the racing pedigree for that circuit. We must not throw that away. We must not throw out the baby with the bath water. Or else, where is all of the expertise in construction going to come from to build out NAMA’s projects?

Enzo Ferrari of real estate

I often give the example of Michael Dell and his production line. As it grew and his company got into bigger stakes, Michael had the sense to call in the assistance from much better managers than himself. After Michael Dell’s company grew beyond the hundreds of thousands of dollars scale, he hired the best ‘million dollar’ managers he could find.

Michael Dell even had to replace those managers when his business grew into billions of dollars. Obviously, there are less billion dollar standard managers or leaders out there, than there are million dollar men. When it comes to NAMA, it is larger than GE Real Estate Capital for heavens sake! Who are practically the Enzo Ferrari of the real estate financing world.

The small Cobra works that beat Enzo

Ireland is a tiny nation of a few million people, which expects to negotiate something away larger than anyone has tried in the past. We are in exactly the same position relative to the competition that Carroll Shelby found himself back in the early sixties. With his small group of ‘Cobra works’ car builders. What he set out to build was by no means conventional, but it changed the rules of the race at Le Mans.

That is why I offer some background into the Zoe developments organisation. Not everyone had a priveleged insight into the way the best construction company in Ireland did its business. I had to get some of that knowledge published. If any other company than Zoe developments had built as much in Ireland during the Celtic Tiger, it’s debt would be more like four billion than 1.2 billion Euro today.

So the real question is, how do we integrate that very successful engine of design and construction management, into an overall vehicle that is robust and ready for race track conditions? Because the race track is exactly where we are going with this NAMA vehicle, make no mistake about it. If we are to burn our way through this €50-90 billion of toxic debt, (think of it like 24 hours of non-stop driving at Le Mans world championship) we will need the best car and driver to make it to the chequered flag.

Respectfully,

Brian O’ Hanlon

@garethace wrote:

Moving on, is certainly the best advice Kerrybog, by far the best advice. I appreciate you are really pissed off with me right, but allow me to clarify what I was saying if I may one last time.

Agreed, move on. No, I’m not pissed off; I just think you are getting wider off the mark with every successive and ever-lengthening post and it slightly irks me to see balderdash go unchallenged.

I do not want to seem selective, but among the many howlers is this, for example:
@garethace wrote:

The trouble is, good ideas are in very short supply these days and Ireland has produced so few home grown companies. We should try to understand the ones we have.

Ireland is a tiny and very finite market, so the better companies, or those with ambition to grow, export their product or services. Those with good ideas make them work and are understood by the shareholders and business community alike. As for “so few home grown companies”, American companies in Ireland employ about 100k people. Irish companies in the US (e.g. CRH, Smurfit, Kerry, Kingspan, to name just a few) employ about 86k people.. Now compare the relative sizes of the populations and economies……

Companies like Mercury and the old MF Kent built turnkey projects all over North Africa and the Middle East. Kentz is doing similar overseas today. The real tragedy is that for years the population of Ireland has been investing in property both here and overseas to the detriment of seed/venture capital and cash for R&D. In recent years forty times more cash went into property than into VC. Zoe, McNamara, and others lost the plot and in this tiny island were building more houses for our piddling little population that all the builders in the UK were building for theirs, a population size almost twenty times greater. Over a few years the number of hotel rooms trebled, during a post 9/11 period when Americans were not travelling and the price of oil was going through the roof. If Zoe’s management was any good they would have been able to smell the coffee. Whatever model they had (and I’m not convinced they knew that they had one) is flawed and should be binned.

@garethace wrote:

I am going to use the analogy of building a race car, so buckle yourself in and wear a crash helmet.

You seem keen on cars. So here are my two analogies. Liam Carroll is to NAMA what John De Lorean was to Lotus. The second is that Zoe is the Ford Edsel of construction companies.

Anyone who worked in a big now insolvent construction company or in a senior lending role in a bank is tainted. Like it or not, fair or unfair, believe it or not, that is how NAMA will perceive them. Words like touch and bargepole come to mind.
Rs
K.

Ireland is a tiny and very finite market, so the better companies, or those with ambition to grow, export their product or services. Those with good ideas make them work and are understood by the shareholders and business community alike.

Indeed, never a truer word spoken, one must makes one’s ideas understood across a broad spectrum. It is important.

The real tragedy is that for years the population of Ireland has been investing in property both here and overseas to the detriment of seed/venture capital and cash for R&D.

I am glad someone else has mentioned this fact. It really does get up my nose, the scraps that research in Ireland had to exist on, even as the country got richer and richer. What really made me laugh was Brian Cowen’s insistence that money be pumped back into the research system once the collapse entered its really serious stages late last year. It seemed to me, like pumping a mal-nurished child with food, it not having absorbed anything through its digestive system in too long. It would probably do more harm than good.

I hate to pick on Liz O’Kane. She has obviously had a much more successful career than my one. So I shouldn’t throw stones. But I do know the word that Liz was spreading was ‘music to the ears’ of Irish property developers. The notion that Liz and so many others were ‘talking up’ the product they were producing day in day out, week after week, every available hour on the TV set and national radio and newspapers. That was the outside limit of creativity Irish developers had in what to do with their millions. Have TV presenters telling you, you need to buy more and more of their product. It is really shocking.

As I have gone to lengths to point out, the Irish builders did know building, if they knew nothing else. But they didn’t know how irrelevant building aught to be in the context of Ireland, when you compare it to other possible routes to go in terms of investment.

If Zoe’s management was any good they would have been able to smell the coffee.

Zoe’s management were dead as door nails, in terms of ideas outside the narrow field that they knew. That is the honest to goodness truth of the matter. Judge Kelly’s description of the captains that steered the ship onto the rocks could not be more apt. Except, the metaphor could be extended a lot further and encompass a widespread ‘building culture’ in Ireland, most of which steered the entire country onto the rocks. In the writing above, I was simply trying to poke through the wreckage and find something, anything that might be re-useable again. But I take your point, that so much of it was rubbish, even while the ship was sailing on the open seas, that it is hardly worth the effort now.

Don’t get me wrong though. I understand the science, technology and internet economy better than most people in Ireland. I am pretty darn sharp when it comes to that. Innovation and design has always been my primary fascination, not building or architecture. You only have to look at the twentieth century to see all of the achievements humanity has made in science and progress. But I was so disappointed with the representation of the Irish building culture in the media, that I had to write something to try and describe it a bit better. If only for my own purposes. But I wanted to share it also, in case it was of any value to anyone else.

Whatever model they had (and I’m not convinced they knew that they had one) is flawed and should be binned.

They didn’t even know they had one. I am simply trying to retrofit a company with a broad philosophy it never had to begin with. In ways, I am trying to interpret what ‘might have been’. I would imagine if people from Zoe read my writing they would be as puzzled or even more puzzled than everyone else here. There were one or two individuals in the Zoe organisation who had taken considerable trouble to analyse what was going on from anthropological point of view. But those couple of individuals weren’t near the three in charge, Carroll, Torpey and Pope, in order to have authority to steer the company on a different course.

You seem keen on cars. So here are my two analogies. Liam Carroll is to NAMA what John De Lorean was to Lotus. The second is that Zoe is the Ford Edsel of construction companies.

I cannot argue with your point of view. Some things about the construction company that Carroll built weren’t at all as fantastic as I have tried to represent above. Again, it goes back to those couple of people in Zoe developments who weren’t in a position of authority, but could see a future. Not that their vision would have been accomodated within the Zoe organisation. Still, they had some vision and it is what they tried to live by. It is a little like seeing someone who has great ideas, but no resources with which to capitalize on their ideas. It was those people that I really wanted to honour in my writing.

Anyone who worked in a big now insolvent construction company or in a senior lending role in a bank is tainted. Like it or not, fair or unfair, believe it or not, that is how NAMA will perceive them. Words like touch and bargepole come to mind.

I am becoming aware of this and I think you are on the mark. Again, I simply wanted to write something in order to honour a couple of guys I knew at Zoe who were true innovators. Recognized as such, or not.

Brian O’ Hanlon

Ireland is a tiny and very finite market, so the better companies, or those with ambition to grow, export their product or services. Those with good ideas make them work and are understood by the shareholders and business community alike.

I was thinking a little bit about this in relation to agriculture, for instance the Irish beef industry, which is a home grown product that incorporates a lot of leading edge and traditional knowledge, but exports primarily to a world market place.

Funnily enough I lived on a beef farm until I was seventeen years of age and never had any interest whatsoever in that business.

Brian O’ Hanlon

Liam hasn’t changed much.

Work has always been his best therapy.

http://www.irishtimes.com/newspaper/finance/2009/0803/1224251929674.html

Brian O’ Hanlon

–

Joe Brennan, Dearbhail McDonald and Tom Molloy in today’s Indo. They compare the Carroll case to that of the First Equity case from earlier this year.

The country’s highest court is due to sit in a special session today to decide on the fate of six key companies owned by the developer.

http://www.independent.ie/national-news/courts/lawyers-trawl-for-new-evidence-to-rescue-carrolls-ailing-empire-1849922.html

I have to submit a view, that this whole NAMA thing is taking off in a highly political direction now. When you find executive directors of the construction industry federation dishing out advice in relation to economic policy it worries me quite frankly.

The organisation’s director general Tom Parlon said the prospect of major banks seeking recovery of their debts from developers would have a disastrous effect on property prices and the economy.

http://www.irishtimes.com/newspaper/ireland/2009/0804/1224251960911.html

This was the old paradigm I think. In Ireland the cart pushed the horse instead of the other way around. I worked for Zoe developments, and there the directors would try to make everyone ‘fearful’ of them. They were extremely good in that capacity and suceeded in frightening a great deal of people in their industry. But in reality they weren’t nearly as good, or as clever as they thought they were. Certainly, they were some of the most hard working, astute and clever people I have ever met. I am glad for all of the time that I spent working with every one of them. There is no better way to advance in chess, than to play a better opponent. But certainly, the intimidation tactic was one of their basic tools. Yes quite frankly, it was masculine and male dominated.

Builders effectively specified to those in power what they wanted, or imagined they wanted and duly got it handed to them. There was no ‘leadership’ involved in that process. Only a handful of people, each of whom were afraid of the other. To top it all off then, we had someone such as Liz O’Kane (and dozens of others lets be honest about it, including celebrity architects) busy trying to stuff more of the same product down our throats whenever we switched on a TV or opened a magazine. In short, the Irish population were expected to ‘gross themselves out’ on property investment, which we dutifully did. Despite our very limited means and over dependence on credit to do anything. But it still didn’t solve anything and the plan did not work. Liz told young people of Ireland in May 2007 on RTE:

“My advice is to buy now. Whatever monies people have in their back pockets for stamp duty and should the next government abolish stamp duty for first timers this will simply put the price of properties for first time buyers… UP!”

Liz might as well have said put a gun to your head and pull the trigger. (Certainly a lot cheaper) It is the old paradigm, a kind of a follow on from the ultra Catholicism of the early 20th century in Ireland. The population was simple minded, and needed to be forced by a high priest or priestess to think in a certain way and how to behave. It is really scandalous. We thought in Ireland we had shaken off the shackles of religion and tradition. But really, we had only replaced one form of extreme devotion for another. So much for blazing a new trail. When are we going to break out of this vicious loop of self harm and self mutilation? Better to have the fire sale of Zoe’s properties I say, and get on with doing something in this country other than looking backwards.

Brian O’ Hanlon

Good man Brian – can’t read your posts (can’t concentrate on posts over about 4 lines!) but you came across well on radio.

Thank Doc,

RTE told me it was something for the common man or woman, driving home in his or her car yesterday who are trying to get an impression of Liam Carroll.

A man whose business difficulties it appears will have potential bearing on their future.

From today’s Irish Times, Authur Beesley.

By contrast, an immediate examinership would give Carroll and his creditors 100 days to develop a formula acceptable to all parties. Nama would be up and running within that timeframe, opening potential for the “bad bank” to become a party to the examinership and to seek to dictate the direction and pace of the proceedings.

http://www.irishtimes.com/newspaper/finance/2009/0805/1224252010109.html

The pace of the proceedings will be all crucial. I was thinking yesterday after the radio interview, of Carroll’s many unoccupied residential units at the terminus of the LUAS line in Tallaght. Beautiful apartments in my mind. I am wondering if NAMA will finally be the body capable of bringing a long term view of Irish property to fruition. I am reminded of foreign business models to do with handling of residential property, whereby the developer maintains a relationship with the site over a period of many decades. If the Tallaght project built by Carroll for instance, which is complete but unused, were to move into NAMA, what is to stop NAMA realizing the ‘value’ of the Tallaght Cross project over a period of a decade or more using some sort of new rental model? Having proven the value and durability of such a rental model, the project could be handed over to the private portion of the economy to continue with.

I mean, Liam Carroll’s model was to sell the units as fast as you could build them. A more involved and longer term approach was never tried or even considered. But we have a real opportunity with NAMA I think to introduce a new kind of rental product into the Irish market place. This has never been done before in the Irish market. We have no idea how it would be received. But it would represent a significant innovation for Irish property. What I do know is that Liam Carroll’s approach from the beginning, with the shoe box apartment was to enable young people to acquire some equity, which they could put towards a future home purchase later in their lives.

There aught to be some viable financial model whereby, a young person can build up some level of equity through rent paid over time, without having to buy the shoe box outright at all. This requires a new financial model. I think that Dublin City Council and well meaning architectural consultants only managed to muddy the waters recently with the introduction of sustainable living sized apartments. Apartments that would be sustainable for family living. The move by Dublin City Council to introduce higher standards for apartment units attempts to look at a new problem. But it didn’t attempt to address the old problem. Why were young people buying so many shoe boxes to begin with.

If the rental or tenant equity creation model could be proven at Tallaght, it would enable sites much closer to Dublin city centre to be made available, as mixed income residential developments. I am thinking of communities such as Dolphins Barn etc, where the 100% DCC tenant population are under siege from all sorts of difficulties. But still trying to hold on and trying to sustain themselves. A successful implementation of a rental model at Tallaght Cross, would open up such lands for re-development projects in the near to medium term. Imagine, the Hanover Quay project built by Paddy Kelly of around 500 residential units was the first development in the Dublin Docklands where mixed income groups were integrated together. On the back of that success, the DDDA were hoping to extend the idea further across new developments in the Docklands area.

Also from uthur Beesley’s article today:

What is more, ACC has hardened its stance in relation to Carroll’s application for an examinership. No longer “guardedly neutral” in relation to the matter, now it opposes the examinership application. Although ACC declined to comment on the change in the bank’s strategy, it seems likely that the court will hear from it.

I did enjoy listening to Brian Lucey, a professor in Finance at Trinity College, in his interview on Morning Ireland yesterday mentioning that ACC had forced a more open and transparent discussion to take place in Ireland, regarding the question of distressed property developers. For that alone, we owe them some thanks.

http://www.rte.ie/news/2009/0804/carrolll_av.html

Brian’s Morning Ireland interview is audible at that link. Remember, the Dutch people have a very large population in the many millions living on an area the size of Munster. Ireland by contrast, as one architect described it, is an island that is almost ’empty’ of people relative to its size. The Dutch tend to be more open in their dealings and in their culture than the Irish I think. Which speaks of the value of having foreign banking players operating in the Irish market.

Also from Authur Beesley and Mary Carolan in today’s Times.

Mr Cush also argued the High Court erred in how it considered the property valuation element of the application. Mr Justice Kelly, he submitted, had gone beyond the evidence in substituting his own views on the property market for December 2008 valuations provided by two firms of estate agents – CBRE and Hooke McDonald.

http://www.irishtimes.com/newspaper/frontpage/2009/0805/1224252013218.html

This is the entire problem we face in Ireland as I see it. Where it is down to one of the most busy judges in the country to make the effort to express his own view. In the absense of any common sense or attempt at logic from any other direction. It is a black mark after all of our highly trained and highly intelligent professionals in the country that things were allowed to grow to this scale in terms of problems without any alarm bells ringing until now.

The famous architect Mies van der Rohe once said: The architect uses his pencil on his paper in order to understand the building through the act of drawing. The architect can almost feel the building through the pressure of his pencil on the page. When I did drawings of proposed projects for Carroll, what I felt through the pressure of my pencil on the page, was something I had never felt before. Something concerned me. If I had got this feeling, so had many other building professionals a lot more experienced and qualified than myself. But no one raised a red flag.

Brian O’ Hanlon

@garethace wrote:

Enzo Ferrari of real estate
I often give the example of Michael Dell and his production line. As it grew and his company got into bigger stakes, Michael had the sense to call in the assistance from much better managers than himself. After Michael Dell’s company grew beyond the hundreds of thousands of dollars scale, he hired the best ‘million dollar’ managers he could find.

Michael Dell even had to replace those managers when his business grew into billions of dollars. Obviously, there are less billion dollar standard managers or leaders out there, than there are million dollar men. When it comes to NAMA, it is larger than GE Real Estate Capital for heavens sake! Who are practically the Enzo Ferrari of the real estate financing world.
Respectfully,
Brian O’ Hanlon

ahh Michael Dell has taken over the reigns of Dell again cos the super-duper billion dollar managers he broght in have run the company into the ground and Dell are getting trounced by HP and Apple.

did someone mention Zoe at least paid everyone a decent salary.. they didnt pay everyone a decent salary, the borrowed excessively from their Bank and then gve that money to their employees so they would keep stoking the fire , theres a 2 billion euro difference.

enough of the guys in Zoe finance dept are nice guys …
if your homeless or came from a dis-advantaged background and feck someones purse your a dirty little crook but if you wear a suit and talk posh but lump the taxpayer with 2 billion in debt your basically a nice guy
f’ing snobs, the only thing worse than a snob is a wannabe snob !

BostonorBerlin,

Thanks for your input. Some good points raised there. As always, I am open to your suggestions. Contributions all welcome.

Michael Dell makes the point above in his autobiography, Direct from Dell. Michael noticed early on in the game, that his business was doing very well, but was growing at a break-neck speed. Michael Dell in later years has not witnessed the same acceleration of growth, but as you point out, is fighting a different kind of battle. A retreating kind of battle to hang on to market share which is eroding with the advances of other companies.

I made the point in the radio interview yesterday, that a lot of Irish developers began their careers with a bucket of nails and a tin of paint. I wonder is it possible to learn that game well enough to get out of that game and move on, and still have enough of your life time left to learn the bigger scale game. And how do you take a company, which you have nurtured and grown yourself over a long period of time and hand the reigns over to a more capable partner? These are perennial problems with business across the spectrum and not only in building construction.

We can blame Zoe yes. But what about all of the other developers? All of them blew their engines on the race track at around the same point on the speedometer. Around a billion Euro extension of loans. The load was simply too much for the engine they were running. I compare it to my old Renault Five motor car. It could take you around the world for a fiver’s worth of petrol, as long as you didn’t want to do over 45 mph. Anything above that and she became narky and unpredictable. Thankfully I didn’t ask for more or I may not be around today. I think it was the Irish banking institutions who really are going to fail next. They didn’t understand their vehicle nearly well enough and blew out its engine as a result.

This is my point with NAMA, choose the right engine and get to know its limitations like the back of your hand. I honestly don’t know towards the end, what position Liam Carroll was in to say ‘stop’ to the Irish banking institutions, don’t press the accelerator anymore. From a banking point of view, everything had gone well as they had accelerated past 20, 30 and 40 miles per hour. Why not keep going until we hit fifty at least? NAMA needs a more robust engine, and I believe we will burn through a half a dozen prototypes in order to find the right one to get us out of this mess. But they have to be tested on the track and worn in by the right kinds of drivers. In all possibility we will end up needing different customised cars for different tracks NAMA will have to race on.

Brian O’ Hanlon

It sounds like The Borg.

Danninger / Zoe / Carroll produced a a cadre of true-believing zombies. It’s terrifying.

And we’re all going to pay for their hubris.

@Bock the Robber wrote:

It sounds like The Borg.

Danninger / Zoe / Carroll produced a a cadre of true-believing zombies. It’s terrifying.

And we’re all going to pay for their hubris.

Hence, my intention here to test the waters initially. To gauge what kind of public reaction there would be to a company or business process such as that developed at Zoe re-entering the Irish construction game. I don’t know how the public is going to take that quite frankly. I do hope that the Irish public wakes up soon and expresses their opinion in one fashion or another. I have been wondering are people out there completely asleep to be honest.

On foot of the reaction, I hope to further gauge my own future direction. I have every intention to walk away from building for good after the newspaper articles I have read about my previous employer. That is the life decision I am faced with. Nothing would offer me more satisfaction than to see Ireland to improvise or to innovate an alternative model, which proves the Zoe approach completely incorrect and wrong. I would stand well back if that is the case. I hope that something happens soon however. The clock is ticking for all of us.

Regards,

Brian O’ Hanlon

Are you saying there’s a new incarnation of Zoe, or something similar, waiting to step in?

@garethace wrote:

Something concerned me. If I had got this feeling, so had many other building professionals a lot more experienced and qualified than myself. But no one raised a red flag.

Garethace,
Probably one of your better lines.

Lots of people saw a red flag, but most toed the line and ignored it. I know a few people who raised a red flag. They were brave, principled people; they kicked against what they, through years of experience, saw as a spiral with a cliff-edge and a large drop. Usually they were the older guys, who worked through the London property crash of the 80’s, who foresaw what was coming. They lost. They were told that they were not “team players”, that they were “too negative”, that they had “lost touch”, that they could not “move with the market”, they really no longer had a place in the “new world”. “Too old” (unsaid) and “risk averse.” (Ever consider the average age of Drumm, Sheehy, Goggin and their contemporaries?)
If lucky the red flag wavers were sidelined, but most lost their jobs. Sad, because as older guys they since have found it impossible to regain employment in what they are good at. Really good at; but now, as always, there is only one thing worse in the finance/property market than someone who was wrong, it is someone who was right.

Sorry to have missed you on radio,
Rs,
K.

@Bock the Robber wrote:

Are you saying there’s a new incarnation of Zoe, or something similar, waiting to step in?

All I am saying, is that I am delighted that people are forming some opinion of Zoe and expressing themselves. That is a great positive step forward to the future. All our futures. As an employee of the company for two years, I don’t think they had an opportunity to fully set their hooks into me. After all, we were quite busy for those two years. But certainly I was beginning to see the Zoe company as I wanted it to be, rather than how it really was. If that makes any sense. Kerry Bog is always a great help in pointing that out.

But as an employee of the Zoe company, personally speaking I would have felt more comfortable had the public at large voiced their concern as to how we were doing our business. I did get the impression that Liam Carroll imagined if he went about it quietly and did his business, no one would ever bother him. That in itself, I think, created the incentive to take more chances. Chances with what turns out to be a potential €2.3 billions worth of the Irish peoples’ savings. As a nation we need to have an opinion on this and allow it to be heard.

I would still like to rejoin my engineer friends from Zoe to finish that half built shell of a shopping centre at the Parkway roundabout in Limerick. That would be something, if I did nothing else for the remainder of my building career.

Thanks to all here at Archiseek for the feedback received and opinions voiced.

Brian O’ Hanlon

Usually they were the older guys, who worked through the London property crash of the 80’s, who foresaw what was coming. They lost.

I heard a comment recently from one of that generation. He is up and running in Ireland currently. Still only a medium tier player, but those are certainly the next guys to step up the top division. He said he was lucky to get out of London with a million quid and his Mercedes.

(Ever consider the average age of Drumm, Sheehy, Goggin and their contemporaries?)

Very good point.

but now, as always, there is only one thing worse in the finance/property market than someone who was wrong, it is someone who was right.

Sorry to have missed you on radio,

My conclusion I left the interviewer with on radio was basically, that no matter how you played the game in Ireland in property, no matter how well you played it, you were still bound to lose. It seems to me like playing against the house. Only in movies like Ocean’s Thirteen does the punter get away with the money bags. I think with Liam, when he had waded in for a cool billion, he was simply coerced by the banks to wade in even further. He was already compromised by that stage and losing a bit more wasn’t going to improve or disimprove a reputation. That was really my point about the Renault 5. Having sped past 20, 30 and 40 mph, they tried for the all elusive 50mph.

If this is the case, then the whole idea of NAMA stinks to high heavens. Worse than that, it provides no future lesson for which the Irish banks should live by. NAMA is by no means a done deal. The Irish people still have time to raise their point of view. I would fully support them in whatever direction they choose. But choose something now and stick to it.

Basically, there is no transparency whatsoever, in the €2.3 billion worth of dealings between Carroll and Irish banking institutions. If the Irish taxpayer looks set to take possession of that debt sum, then I believe the least it has earned the right to, is a full and proper account of exactly what happened. Otherwise, all of this time wasting by the Supreme Court about this rescue plan, or that rescue plan is simply a smoke screen in order to distract time and attention away from asking the real questions, the Irish tax payers has a right to ask now. What exactly did go on?

Brian O’ Hanlon

It’s looking more like a cult than a construction company.

“I would still like to rejoin my engineer friends from Zoe to finish that half built shell of a shopping centre at the Parkway roundabout in Limerick. That would be something, if I did nothing else for the remainder of my building career” in your opinion can you see this happening Brian? or what outcome can you see for that structure.

As a former employee and with 4 years service i can say that i was treated very well indeed while working for Mr Carroll, the conditions i had while working for that man were second to none.

@wolffkran wrote:

As a former employee and with 4 years service i can say that i was treated very well indeed while working for Mr Carroll, the conditions i had while working for that man were second to none.

Thanks for the input Wolff kran.

You can see how much of a hard sell it is going to be. I liked working for Zoe too, but I am concerned about other peoples’ reactions to what we achieved or set out to do.

Whatever about the money, that reputational problem is what worries me the most. It is very much out there, and I would like to understand what it is all about.

That was my singular motivation in going on radio yesterday. I was glad to receive the opportunity from RTE to speak on former employees’ behalf.

Brian O’ Hanlon

@wolffkran wrote:

“I would still like to rejoin my engineer friends from Zoe to finish that half built shell of a shopping centre at the Parkway roundabout in Limerick. That would be something, if I did nothing else for the remainder of my building career” in your opinion can you see this happening Brian? or what outcome can you see for that structure.

As a former employee and with 4 years service i can say that i was treated very well indeed while working for Mr Carroll, the conditions i had while working for that man were second to none.

I too worked with Zoe for almost 6 years in the so called ‘good times’.
Previous to working in Zoe’s I worked for a couple of Architectural Consultancies as an architectural technician and arriving at the doors of Liam Carrolls office I thought I knew it all. I learnt more in the first month about comon sense approach to detailing and design than I had done in the two years previous.The Zoe culture was unique as we were both the designers, the builders and the client all wrapped up into one entity to achieve the end result. We worked as one, eventough there was friendly rivalries between each of the departments within the office and the hard hats on site. I remember listening to one engineer explain why he designed shallow wider concrete beams instead of narrow deeper beams because the guys on site who would poor it wouldn’t have to worry about wet concrete getting into their wellingtons. Sounds funny but it was true. There was so much emphasis on designing details which made it easier for the guys on site to cope with and therefore resulting in a more effecient and cheaper system. Site formen would often ring me to express their difficulty with a particular aspect of the build, we would discuss the issue, verbally agree on a solution, revise the drawing and the courier would have it on site within an hour. Everyone knew their job within the organisation and the job got done.
It is hard to believe that the whole thing has fallen from its height a few short years ago when I was there to the sight of Liam begging the courts to protect him.

I too was treated very well working for Zoe’s and I think most people who spent time there would agree. I recall meeting with a few former college mates in Dublin one night for a little re-union and we all spoke about our respective employers. When I told some of them who worked for large architectural practices in Ireland that I worked for Zoe’s they laughed loud and wondered why I would work for such a company who ‘designed boxes’.

By the time I was leaving I put out the word to my former college mates that there would be a vacancy in the Zoe household for someone. When I told them about the wages they could expect to get, they all turned up at my farewell party hoping I would put in a good word for them to get a slice of the action.

Liam Carroll may not be described as a gentleman but he was honest and respectful towards his workers and he gained respect in return.

It is hard to imagine a Liam Carroll that is now begging the courrts to protect him when he was the king of Zoeville just a few short years ago. I hope the guy will survive for old time sake.

@wolffkran wrote:

“I would still like to rejoin my engineer friends from Zoe to finish that half built shell of a shopping centre at the Parkway roundabout in Limerick. That would be something, if I did nothing else for the remainder of my building career”

in your opinion can you see this happening Brian?

or what outcome can you see for that structure?

Sorry Wolff Kran, I did not see your question tucked in there beside the quote, late last night.

I read with interest this piece in the Irish Independent today:

http://www.independent.ie/national-news/property-tycoon-seeks-public-support-for-rejected-plan-1852478.html

The normally media-shy Treasury Holdings impresario wants people in his hometown of Carrick-on-Suir, Co Tipperary, to publicly show their support for his multimillion euro development of a biotechnology campus on his family’s land.

While reading the piece about Johnny Ronan in the paper, I was reminded very much about my time spent working at Dell computers. A lot of the people I worked with came from as far away as Tipperary. There was quite high unemployment there even during the best of times. The Tipperary people were very hard working and punctual workers at Dell. Well, maybe that is a bit of an exaggeration. Some weren’t. But when I think about Danninger’s Parkway shopping centre site, I was wondering if it could become a pharmaceutical plant. Then I thought about that and I realized that would be daft. With pharmaceutical plants, yes, they are huge and they create huge employment and contribute to the economy. Those are all of the ‘good’ things. But they are not very public. They demand all sorts of security etc.

I started thinking about the site of the Danninger shopping centre in Limerick. I thought to myself, who needs another shopping centre in Ireland these days? I mean seriously, we could live without it. But then I thought about Dundrum Shopping Centre here in Dublin that I know very well indeed. At the start I was a total snob and hated the sight of Dundrum Shopping Centre. I am almost ashamed to admit now, I have done a complete U-turn on that initial judgement and I find myself going there often. Perhaps not for the shopping itself, but for the general ‘communal’ buzz one gets. It is a much different buzz say, to going down Grafton Street or somewhere.

I thought about the Parkway Danninger site. I thought to myself, it would be wrong to make a pharmaceutical plant on that site. It could be done yes. But what that area of Limerick cries out for is its own Dundrum, it’s own permeable and public domain. Something with the nice finishes and tiles that they have at Dundrum. Something where the shopping centre staff polish the glass every morning and ensure that everything looks sparkling and bling. I think we will get there somehow, because it is the right sort of project that Limerick needs.

Brian O’ Hanlon

We worked as one, even though there was friendly rivalries between each of the departments within the office and the hard hats on site.

There are a couple of Zoe ex. architects and ex. site agents, I wouldn’t mind being stuck in a lift with some time.

I would enjoy watching the fire works fly.

I remember listening to one engineer explain why he designed shallow wider concrete beams instead of narrow deeper beams because the guys on site who would pour it wouldn’t have to worry about wet concrete getting into their wellingtons. Sounds funny but it was true.

I know myself, they often didn’t bother building the formwork to create any beams much. They designed so that there was only one well designed strong slab with a flush face top and bottom. That made it easier to mount services and things afterwards. Anyhow, guaranteed 100% wherever you did go to the trouble of making downstands, that is exactly where Liam Carroll would come along later, and need to knock it out due to some last minute change he would introduce.

Zoe head office was like ‘mission control’. Liam Carroll was out there orbiting around his property galaxy in his second hand Toyota, in constant communication through the mobile phone. We all learned to second guess Liam and not to build beams or downstands if we could help it. If beams or supports were required later on, we could hang steel brackets. And sometimes having hung those steel brackets, Liam Carroll would decide to change his mind again, and the steel brackets would have to be re-done. So you could well say, when I look at any Danninger built project, I can actually see Liam Carroll himself poured into the structural design of the concrete. Such was the closeness of his relationship with his building team.

Everyone knew their job within the organisation and the job got done.

The strength came from the formation. I compare it alot to the Spartan army’s Phalanx formation. How they fought in battle. It gave them the fighting output of an army double the size. Working for Zoe was a lot like a term in an army. One had to be quite committed, or at least I was. It was useful to me, because I was always a misfit as far as architecture was concerned and I benefitted enormously from the discipline. I felt disappointed when Sean O’ Laoire asked me ‘what was I doing working for them?’

http://en.wikipedia.org/wiki/Phalanx_formation

It is hard to believe that the whole thing has fallen from its height a few short years ago when I was there to the sight of Liam begging the courts to protect him.

I might as well let the cat out of the bag now and tell everyone exactly what went wrong for Irish builders during the Celtic Tiger. Well known architect, James Pike expressed his dissatisfaction late last year at an Architectural Foundation event. James believed the property crash meant that design teams all over Ireland had to be broken up with a huge loss of human resources. But James only described some of what happened. The real destruction of design teams had happened a while before, as the boom was gathering up steam and going into overdrive. It is quite simple and straightforward to me, because I got to see the construction industry from two very different angles. Not everyone did. As Alan Kay would say, point of view is worth 80 IQ points.

I worked on some very large masterplans for industrial lands etc. That was my stock in trade and I was satisfied doing that job. My colleagues included people who had built some of the early fabs for Intel at Leixslip, County Kildare. They had a huge quantity of experience working on larger scale projects that I benefitted from. It was the polar opposite to the Zoe developments approach of building on a tight urban site and getting the most out of it. Zoe knew how to make a profit in producing a huge repetition of small units sold to separate small buyers. No one knew how to do that better than Zoe did.

In my favourite hunting grounds on industrial lands, one sizeable company would build 10,000 sq meters of single storey structure on a site maybe three times that size or more. The same industrial company would occupy that site for decades. Typically they would sell that land as an asset as the town moved out in its direction. The sale of this asset would allow them to build a new factory.

I was used to working with a big size of problem and I knew how to manage it very well. However, as 2006 progressed I saw a sudden change in the project management firm I was working for. I think it was all the Liz O’Kane programs they were watching on the TV. They were highly experienced and talented project managers but they saw amateurs running off with wads of money doing small repetitious stuff on small tiny sites. That is what I call the ‘Bertie Ahern factor’. The penny must have dropped for my project management colleagues. They tried to change their whole business model and obtain new clients. They wanted to follow the crowd over to the ‘greener pastures’. I thought it was very short sighted, but who was I to judge?

Instead of sticking around, I said I might as well go and work for the real shoe box king. Here is where the story gets interesting. When I worked for Liam Carroll I helped to finish off his last 150 shoe boxes. That was a great experience. But I witnessed something strange happen to Zoe developments. It was like I was having a sense of Deja Vu. The people who really knew how to build big were opting to build tiny little things. But the people at Zoe who really knew how to build small and repetitive, were trying to learn how to build big! It was the most wasteful and non-productive re-organisation of human resources that the Irish construction industry could have undertaken.

I don’t know why it happened. But ultimately it proved fatal. David Torpey, one of the captains of the Zoe enterprise (over one hundred directorships to his name) described it as ‘competing vigourously’. I will always remember that phrase. Competing vigourously. David seemed to genuinely believe that. In my mind, it was plain ridiculous. David was walking off the map without so much as a swiss army knive. There was no Bear Grylls to watch his back either. That is the primary reason why Irish banks are in hock to the tune of billions now.

The Irish banks funded an excursion that went disasterously wrong. But the Irish banks had no way of knowing that all of their borrowers were about to walk off their own ranches as soon as they obtained finance. The borrower’s previous record showed they were outstanding workers and very clever at what they did. Everyone in the construction industry changed their business plan at the same time. It wasn’t only Zoe developments. They simply had the biggest tent. During the Celtic Tiger, at the peak of it, every firm of designer and builder saw the far away hills as green-er. Old, tried and trusted business models were flung out of the window and were abandoned.

There was a gold rush on and everyone raced to be at the head of the charge. Banks threw money at people to embark on this nonsensical excursion. Everyone waded in up to their armpits and ended up drowning in quick sand in no time. People who had been perfectly comfortable and safe in their old environment, suddenly found they could not read the landscape they were in. There was no Bear Grylls to rescue us. The rest as they say is history, dry bones and skeletons.

Brian O’ Hanlon

why not change the title of this thread to “The Zoe Love-in” so you can all sit about with rose tinted spectacles reminiscing about covering dublin with a succession of undersized averagely designed (with the exception of the floor beams, obviously) humdrum edifices.

I used to work for a company who won the RIAI Gold Medal. We had great craic and won lots of architectural awards. Problem is we never got paid either. I’ve never looked back though.

@wearnicehats wrote:

why not change the title of this thread to “The Zoe Love-in” so you can all sit about with rose tinted spectacles reminiscing about covering dublin with a succession of undersized averagely designed (with the exception of the floor beams, obviously) humdrum edifices.

I used to work for a company who won the RIAI Gold Medal. We had great craic and won lots of architectural awards. Problem is we never got paid either. I’ve never looked back though.

What I always say is that Zoe was a company built by engineers. What they did was they designed and created a revolutionary new engine, which they tested and toyed with in isolation for about twenty years. They were so fascinated with their own ingenuity. But they never really knew how to go off and complete the rest of the vehicle in which to mount this beautiful engine they had fine tuned so carefully and all knew so well.

On the other hand, when I work for an architectural consultant it is like here is a beautiful body and chassis with sleek lines and polished paintwork. But where is the engine? There is no doubt, but Zoe proved you could make money by developing the engine on its own. Whereas with the sleek designed body work, you may win a lot of awards, but fewer are willing to foot the bills. I do hope the two cultures of excellence merge in some productive fashion in the future.

Zoe developments was a client desperately looking for the right designers. Architectural consultancy practices were designers desperately looking for the right clients.

Brian O’ Hanlon

I wish I had seen Gurdgiev’s blog entry a little sooner.

By denying the examinership to Liam Carroll’s six companies, the Irish High Court has put itself out as the sole branch of State that stands between the innocent taxpayers and this redlining reactor.

Written by Constantin Gurdgiev at his blog. I noticed that Constantin has a couple of entries on the Liam Carroll case.

http://trueeconomics.blogspot.com/2009/08/economics-02082009-liam-carrolls-case.html

I agree with him about the High Court acting as a ‘last line of defence’.

I like things about the NAMA scheme as drawn up by Peter Bacon and the legal staff. But then again, I am totally biased being an Irish builder. What is right for the entire population of this island, is much more important than my own selfish preference.

A pipe dream for a businesses that, by his Senior Counsel’s admission generates just €22-23 million in annual revenue against the debts of roughly €1.4 billion. Now, do the maths – a company that was supposed to be bought by us, the taxpayers into NAMA will not be able to cover even 15% of its annual interest bill.

Yeah, that fairly squares it up I reckon.

But it also shows that there is not a snowballs chance in hell that NAMA will be able to recover any positive value from Mr Carroll’s companies, unless it forces his banks to write down at least €1 billion of some €1.4 billion in loans amassed.

I certainly agree with this analysis too, I couldn’t have phrased it any better myself.

But what I understand is that Liam Carroll’s debts would be multiples the size Gurdgiev mentioned, if it were not for the fact that Liam Carroll knew how to run a lean construction operation.

There is also the issue that Liam Carroll’s lean construction little engine of progress was being driven into the ground by the banks who loaded more investment upon it than ever should have been the case.

As I pointed out in my ‘Renault Five’, ‘No Win Casino’ and ‘Far Away Hills’ Designcomment blog entries, Liam Carroll’s engine would have been fine working away below the 45 mph mark, producing repetitive little units on small urban sites.

What went horribly wrong is that someone, somewhere decided that Liam Carroll’s operation was suitable for doing larger stuff than that. There is an important clue in that for NAMA. Keep it steady and easy on that trottle pedal and you will do fine. We will work our way out of this mess somehow or another.

If the Dutch held back an entire sea, then the Irish can do this as well. No thanks whatsoever to our banking institutions.

Brian O’ Hanlon

@garethace wrote:

But what I understand is that Liam Carroll’s debts would be multiples the size Gurdgiev mentioned, if it were not for the fact that Liam Carroll knew how to run a lean construction operation.

There is also the issue that Liam Carroll’s lean construction little engine of progress was being driven into the ground by the banks ………

Brian,
You need to stand back a bit as some good ideas are being spoiled IMO.

OK, you worked for him, had a nice time, played with nice projects, met some nice people. BUT what you are consistently writing – for example in the likes of the above – is akin to Stockholm Syndrome, in which the ex-employee shows signs of loyalty to the employer, regardless of the position and misery in which he has been placed.

Carroll did not have a tarty wife/girlfriend/lover, he lived in a semi-d and drove a banger and was not fond of champagne. So what? It was his business and he ran it / allowed it be run into the ground. When that group goes under, any bit of knowledge worth saving will not be lost, it will be retained by ex-employees and reused elsewhere at the appropriate time. Dunnes Stores was founded by old Ben Dunne after a row with his employers Roches Stores. Penneys/Primark was founded by Dunnes staff after a row with Old Ben. Each of those ventures carried some of the best ideas (and staff) from the old offices.

Personally, I’d be happier if Carroll and his like went off to build townships in some developing country and did not come back. And the senior bankers could be their assistants.
Rs
K.

Yeah, I do agree with what you have said.

But I merely like to highlight the fact, that sometimes Morgan Kelly, Constantin Gurdgiev, Pat Honohan, Brendan Keenan, Brian Lucey and a host of other intelligent commentators are struggling with the whole in’s and out’s of the property and building culture itself.

I expect, due to their lack of indepth knowledge of urban planning and development itself, they are all collectively as economic commentators going to make mistaken observations and suggestions. They are dealing with a subject that is not 100% native to their understanding of the world.

Prime example being: Morgan Kelly’s article for the Irish Times.

The reality is that, because of our surfeit of empty housing, there will be almost no construction activity for the next decade. Empty apartment blocks in Dublin will eventually be rented, albeit at rates so low that many will decay into slums. However, most of the unfinished estates that litter rural Ireland – where the only economic activity was building houses – will never be occupied.

http://www.irishtimes.com/newspaper/opinion/2009/0703/1224249965637.html

Even the average Archiseek visitor will want to object to the conclusions drawn by Morgan in that quote. Bearing in mind, there is nothing at all wrong with Morgan Kelly’s broad economic analysis or with that produced by Constantin Gurdgiev. But when they get into urban design and property, they start to get a little bit unsure of themselves.

What Morgan writes about in terms of urban design and its problems is taken straight out of Robocop and Detroit, not out of the Irish context. We should avoid dramatisations that do not quite translate to our environmental context here in Ireland.

If the slum transformation was going to take place, it certainly would have happened a long, long time before now in Dublin. As bad and all as things are going to get, we should not allow economics journalism and alarmism to paint a picture of Ireland which isn’t real.

There has to be some trade off where the urban design view finishes and the economics view begins, or visa versa. If I was to get involved with NAMA, I hope it would be in some human resources or team building capacity to help to achieve a healthy balance. That will be crucial to how NAMA will work, or not. (Or whatever alternative solution to NAMA we can come up with)

. . . . But much more to the point, how about my ‘Strike Out’ blog entry at Designcomment this evening? That is the big, big fish to fry in my opinion. Is NAMA the big play that will leave us all fully exposed?

Brian O’ Hanlon

Dearbhail McDonald, the Legal Editor of the Irish Independent wrote what I believe is a very important article in today’s newspaper.

http://www.independent.ie/national-news/our-supreme-court-is-one-of-busiest-in-world-survey-finds-1854890.html

A high-level working group yesterday called for a referendum on a new intermediate court that would act as a final court of appeal for all civil cases, unless they involve cases of major public or constitutional importance.

Brian O’ Hanlon

@garethace wrote:

Yeah, I do agree with what you have said. ………..

. . . . But much more to the point, how about my ‘Strike Out’ blog entry at Designcomment this evening? That is the big, big fish to fry in my opinion. Is NAMA the big play that will leave us all fully exposed?

Brian O’ Hanlon

Brian,
Not ignoring you, have guests including 3 small kids to entertain and will respond as soon as I get a chance.
Rs
K.

I don’t know about other people, but I will remember the 11th of August 2009 on my calendar for the rest of my life.

11.08.09

In my own mind, I will call it ‘Liam-o’ day.

Brian O’ Hanlon

@garethace wrote:

I don’t know about other people, but I will remember the 11th of August 2009 on my calendar for the rest of my life.

11.08.09

In my own mind, I will call it ‘Liam-o’ day.

Brian O’ Hanlon

you need to see someone

Wearnicehats,

Yeah, I do get it. It is the rock bottom you are going for, the complete freak show of all freak shows.

It is difficult for people to understand, if you work in the construction industry with others who have made it their life and work. You wish for that industry to exhibit some degree of moral back bone. To see it all come down to this, all of the sweat and tears. I can assure you that is not insignificant. That is something. It is the sheer network of people you live with and work with on a daily basis in the construction industry. There is a very human side to all of that exchange. It improved some people immensely and made them who they are today. They can be proud. To others, it may not have been as rewarding.

I know a lot of guys who worked their whole way through this building roll out in Ireland, who had seen London rise and fall in the 1980s also. It is of them I will be thinking about in the next couple of days. That is what I was referring to above. As always, it’s been a pleasure to converse. I can’t blame you in your reaction to my nonsense writing above. That is all it is, nonsense. But there are thousands literally, who will be going to ‘see someone’ in the next few days. Spare a thought on their behalf.

No matter what we choose on Tuesday, we cannot win. Neither way is going to be easy. But we still have to choose a way. Such is the human condition. I have looked in detail at both sides of the argument over the past month or so. There is a lot more meat to the story than I first thought. I hope that has become obvious to any who have studied my scripts. I still don’t know the right choice for the courts to make. I never will perhaps. But I will live by whichever choice it has to make. That is all that one can do now. That is what is has come down to in essence. I hope my few words have been of some help to some people.

Regards,

Brian O’ Hanlon

From RTE’s website.

The Chief Justice said not one creditor had expressed the view that the companies had a reasonable prospect of survival.

http://www.rte.ie/news/2009/0811/carrolll.html

Dearbhail McDonald wrote,

But neither the High Court nor the Supreme Court were provided with a detailed breakdown of the December 2008 valuations.

http://www.independent.ie/business/irish/valuation-of-carrollrsquos-property-central-to-court-protection-ruling-1856268.html

Brian O’ Hanlon

Lyndon McCann SC, who was acting on behalf of ACC Bank:

He said the fact that there was a large level of support from the banks for the application did not mean the companies had a reasonable prospect of survival.

http://www.rte.ie/business/2009/0811/carroll.html

Here is a crunch point also for ACC bank:

Mr McCann also said his clients were concerned that their security over the companies’ assets could be diluted if the companies drew down further borrowings from other banks during an examinership period.

You could say the same thing about any number of subcontractors out there, who will find themselves being put back a number of places in the long queue waiting for payments, rather than the opposite, by injection of further credit into the Zoe group during an examinership period.

Brian O’ Hanlon

Latest breaking news from the Irish Times newspaper web site.

Mr Justice Fennelly remarked it was “extraordinary” there was “great reliance” on a pre-agreed business plan which was not exhibited to the court and neither were the property valuations.

http://www.irishtimes.com/newspaper/breaking/2009/0811/breaking6.htm

It is about time that the court requested some details in relation to Liam’s relationship to banking institutions. I think that both parties have really shown the extent they are willing to go to in terms of hiding away from truth and hiding away from reality more to the point, in this supreme court case.

Mr Cush said the plan had been seen by the banks. He agreed the companies regarded projects at North Wall quay and Sheriff Street in Dublin as key to their projections and there was no evidence beforre the court concerning competing developments.

I guess we will need a rope to drag it out of both the bankers and Zoe developments?

The reason that no plan is before the courts today, in relation to NWQ or Sheriff St, is because no plan ever existed. That was Zoe’s strong point or weak point, depending on how you look at it. They were not very good ‘big picture’ people. They were excellent small players, but found them selves trust into a role they were never comfortable playing – Big. Zoe were the ones who raked in the profits during the Celtic Tiger because they were a small player.

But Zoe aren’t interested in making plans. That was the right attitude to have when you are a small, nimble, low cost builder. Zoe were like the Vikings, they had developed a basic form of navigation to guide them. Look for the sight of land etc. It was often joked within the industry, that Danninger worked the plan out on the back of a cigarette box. I guess Zoe couldn’t find the cigarette box to produce in court today. The trouble is, that somewhere along the way, Zoe decided they would become a large player, but still didn’t see fit to make any kind of plan. It simply was not part of their DNA. I see nothing wrong with that, at a certain scale within the construction industry. It works.

In fairness to Liam he did attempt to turn that corner towards the end. But even there he got it wrong. He dis-conncted his masterplan architects from his construction architects. The master plan architects could not see the ‘big picture’ of the company they were working with. They were simply a few very talented guys working together in a small room with great design skills. Most never even saw or walked the 400 acre sites they were designing for. Liam wouldn’t pay for them to visit a site even.

It is typical of Liam to tear away and start building before anything else is sorted out. His word was always good enough for the bankers. I know that. Indeed his word is about as good as it comes in the building industry. Or else why would sub contractors reduce their margins and go out on such a limb to facilitate Zoe? If you can cut those kinds of corners, it is a great way to run a construction company. There is no doubt it, Zoe were economical and didn’t employ consultants where it was possible. Things like masterplans for places such as Sherriff St can do an awful lot to muddy waters, and distract attention away from the real objective, to re-build an area within a specified overall budget.

Sorting out the finance afterwards rather than up front, along with all of the other short cuts, saved huge costs in the bouyant construction market. But going into a future era of scarce global capital flows, the model is completely inappropriate. But the plan with Zoe always, is not to have a plan. Stay nimble and agile, and leave your options wide open for as long as possible. Don’t design yourselve into a corner by building expensive buildings, which may end up being in the wrong place. Build so cheaply to the extent where it makes sense almost to demolish parts of buildings and re-invent the plan. I see nothing at all wrong with that and Liam did it again and again.

The plan is always a work in progress. The plan is what you do on the fly. The plan is never finished. The plan is never written down, it is only communicated like a virus throughout the organisation over a web of phone mobile conversations between hard working men who know one another. It sounds a bit like the rules of ‘Fight Club’ doesn’t it? Maybe it was a cult and I am not the person who I thought I was. It is time to realize that Zoe cannot do that and be ‘big’ at the same time. When you get to a certain size in the construction industry, the rule book changes and the above strategy will murder even the best. In this case, giants did not learn how to dance.

Brian O’ Hanlon

The parkway valley site is case and point there Brian, first it was and i use this word loosely “designed” for one particular anchor next thing we have Tinnelly’s in with two 60 ton demolition excavators with munchers and shears knocking large concrete walls,stair cores,elevator shafts and hundreds of tons of structural steel taken back down with the cranes that put it up a few weeks previously this was all to satisfy a new anchor, next we hear that particular client backs out so now we’re left with a big heap of concrete and steel, last i heard frogs and wildlife have moved back into the service yard which is under several feet of water and algea…….

@wolffkran wrote:

The parkway valley site is case and point there Brian, first it was and i use this word loosely “designed” for one particular anchor next thing we have Tinnelly’s in with two 60 ton demolition excavators with munchers and shears knocking large concrete walls,stair cores,elevator shafts and hundreds of tons of structural steel taken back down with the cranes that put it up a few weeks previously this was all to satisfy a new anchor, next we hear that particular client backs out so now we’re left with a big heap of concrete and steel, last i heard frogs and wildlife have moved back into the service yard which is under several feet of water and algea…….

and Mr liam is now under several feet of shit

http://www.irishtimes.com/newspaper/breaking/2009/0811/breaking6.htm

The plan is always a work in progress. The plan is what you do on the fly. The plan is never finished. The plan is never written down, it is only communicated like a virus throughout the organisation over a web of phone mobile conversations between hard working men who know one another. It sounds a bit like the rules of ‘Fight Club’ doesn’t it? Maybe it was a cult and I am not the person who I thought I was. It is time to realize that Zoe cannot do that and be ‘big’ at the same time. When you get to a certain size in the construction industry, the rule book changes and the above strategy will murder even the best. In this case, giants did not learn how to dance.

No wonder it all went pear shaped and will get even worse for Zoe.

What is the point in hiring professionals if you are going to keep changing the rules.

I know plenty of small builders who would’nt dream of working like that.

Its 2009 not pre-1963.

Wolff kran,

Have your say, have your say. Everyone please have your say. It is the least we can treat ourselves to now. When I received a letter in the post at the end of last May to say that my position in the company had been extinguished, I was quiet at first and then I fumed, and fumed and have worn myself out in the process. I am glad it is all wound up, I can take a break. (and give all of you fine folk a break) I am a guy who likes to get stuck into some work and attack it ferociously, like most people who worked in Danninger. When I saw my letter in the post, I knew there was something seriously wrong. Now I can at least get back to work, in the knowledge that some of the rotten-ness has been purged out of the system.

Thanks for the comment and I think the Parkway in Liam’s mind was a mechanoo set. Because Liam wasn’t well enough to travel in the later years, he was distant from the structure he was building down at Limerick. He was a man who didn’t have the best of judgement, if he didn’t have his projects within arm’s reach. That is why he stuck to building in Dublin whenever possible. He was caught badly when all his eggs were contained in the one Irish basket. There are lessons for companies in all industries from the decision tonight. I hope they can be learned by everyone. Some outstanding criticism and analysis was offered by folks here at Archiseek throughout the last months, and that is valuable too.

Brian O’ Hanlon

correct Brain, once he called to the parkway with his son, he gave a spin down the site in his infamous toyota camry while it was still in the piling stage an hour later he was gone, never seen him since, and while his hotel in kerry was under construction he was only seen once also, at least that is open still and to the best of my knowledge is base for the roses this year.

Chances are now, the assets of Liam Carroll will be held amongst the six main lenders. I know that Liam is still in the picture, just about, but he is no longer calling any shots. Hopefully contractors, consultants etc will eventually get something out of it, in an orderly manner. That was one theory put forward on the news tonight. The main feature of tonight’s decision though, is that it removes the obstacle of Liam Carroll himself from the equation. That will set up the playing field properly now, so that a new light of reality can shine on all of this.

Our best bet now is with the professionals and hopefully they can impose some kind of rigour of logic on it all. The day of the cigarette box is over. I don’t know, people knock it. But Liam would wouldn’t have built 10,000 shoe boxes on every street in Dublin had he not cut some corners. What impressed some hardened architectural professionals I know, is how well the cigarette box worked as an approach. It turned on it’s head a lot of pre-conceptions we have about building contracts and what an architect should do. Certainly it did in my mind. The Zoe model was a very bad fit though for building a shopping centre. We have managed to prove that point by now. Given that Limerick Parkway was a shopping centre project with everything else going for it.

Lets put this in perspective for people who aren’t familiar with building shopping centres. A single steel column, which the cranes were moving around the site at Limerick Parkway for ‘fun’ cost in the region of €80,000 to buy each. It must have cost the same again in terms of wages to pay the crane driver(s) who were moving around the steel columns. Yet that didn’t bother Liam Carroll. What did bother Liam was the fact that someone nicked a load of limestone hardcore for their driveway off site. That stuck in his throat. At the same time as that was going on, Liam was busy blowing away a fortune of €800 million of hard earned company capital on the Irish Stock exchange. The ISE has lost €44 billion of its own value in the last year. Now one can see, why I want to forget about this and bury my head in the sand for a couple of years.

I always thought the Zoe notion of themselves as the ‘Ryan Air’ of the construction industry had gone a bit to their brains. The Zoe model was a very poor fit for most everything else, except building of shoe boxes. It was completely 100% optimised in that regard. But it wasn’t multi-functional. I do blame Zoe’s directors in that sense, who intended to use the same model to bust into the commercial and office markets. It is a pity they didn’t realize the folly of their ways. The most obvious department missing at Chapel house in Parnell St was a project management department. They would have opposed Liam often and with capability, so they were never hired.

The thing that will always baffle me though, is how Liam’s directors were in such fear of the man they allowed Limerick Parkway project to tank the way it did. Without so much as a muffled word of protest. Though very talented builders and engineers in their own right, they were no better than crash test dummies as [large] company directors. They were fine as small company directors, where they could do the simple math and understand the smaller figures. It took six banks, and in particular one Dutch owned bank to finally jostle in there and contest Liam Carroll. They were doing for the Irish boys, what the Irish boys could not do for themselves. €2.3 billion is a whole lot of slack to offer any one man, and does raise a lot of questions about Ireland’s confidence in itself as a nation.

Brian O’ Hanlon

80 grand for a column, not the columns that went in there, the largest were in the region of 9 te the majority were in 4to6 te mark, i don’t think duggans were getting 80 g’s for those totsy little things. anyway i get what you mean, all i will say about the hardcore incident is that the heads that rolled, it couldn’t have happened to two nicer so and so’s

What about the 4 storey height steel columns?

Brian O’ Hanlon

3 floors over ground/basement floor so when you say the cranes were swinging the columns around for fun i automatically assumed you meant 1 part of the 3 seperate pieces that make up the complete column as your dealing with tower cranes that have a max capacity of 8te so lifting a complete column for fun would be out of the question even with a crane of adequate capacity (i.e. his 220te mobile) it would be bad practice and not very safe to assemble a complete column and try to erect it on to its stauncheons.

You see, that is where it looks un-real on the computer screen compared with the real life situation. But one of the many benefits of working within Zoe was that you got to understand some of both. It is getting harder and harder to do that in the kinds of companies we are creating today, in any industry. People are becoming more and more disconnected from the reality of what they are producing or designing. I grew up on a farm where we reared livestock, but even there you have a complete supply chain outside of that. With supermarkets having access to produce from all over the globe if they choose to change supplier.

I noticed one of the lads at head office moving the steel components around his computer screen, which is a different matter entirely I guess, and a lot safer. There were all kinds of options being played around with, of how to re-use columns and make whatever final, final plan LC would settle upon work. As always, the main directors simply got on with it. They were used to it, and considered it almost a matter of course. One of them said, change is the only constant here. But I know a couple of hardened engineers who were new to the company, and reckoned they had ‘seen it all’ were quite shook when they had to moving those large steel components around their screens, to accomodate some sort of new plan. I think it was to do with putting the ice rink or basket ball court on the roof. That was a last minute brain wave Liam apparently got when he was in Smithfield one evening before xmas 07.

No one really believes that Liam was capable of adjusting or changing the plan at the very last moment, until they work on his projects and it happens to them. Then they tend to believe it. Everyday contracts tend to have a sum they call a contingency sum, in case you burst a utility main or whatever. So that the whole contract will not have to be re-drawn in the middle of construction, it can keep going smoothly. Having the contingency sum in the contract is a good practice I think, but there will always be debate over what amount it should be. Architects will want to keep it as small as possible and free up more of the budget for the things that they like.

In the case of Danninger, we didn’t worry because there wasn’t any formal ‘contract’ between designer, contractor and client. Liam rubbed all of that out, and decided to treat the contract as one very large contingency sum instead. Not one single Zoe project escaped without at least one major change in mid-construction, that involved demolish of some kind. There was no blame thrown about as in normal construction projects, it was simply a normal part of doing business. Liam did make one visit to Tralee hotel, and boy, did the plan really change there. Liam took one step inside what was intended to be the hotel foyer and went, no, this is all wrong, we have to change it all. The hotel was practically complete. Of course, the revised scheme did work better too. But it is kind of hard for people down the line to accept.

There was a scene in Beverley Hill’s cop where Axel Foley drives up to a construction project and tells a group of contractors the plan has changed. That everyone needs to stop working, give yourself a good round of applause and take the rest of the day off. That might help people visualize what I mean. But as I commented elsewhere, the guys who worked with Zoe for a decade or more had factored all of this into how they approach design. They were extremely careful not to pour anything into concrete which could be a future pain in the backside, where changes were concerned. Lateral thinking was always exercised to the full, and it was believed inside the company that nothing was insurmountable. There is always an answer if one is willing to look hard enough to find it. I have never met people in my live so positive as to their ability to solve problems of all kinds. That was the refreshing part about the culture.

It is the polar opposite to the typical architect approach who arrives on site and has a contempt for construction and builders. For instance, the architect who makes a contractor re-tile a bathroom 3 no. times, because the lines of the grouting joints are not perfectly millimeter perfect or something like that. Architects who do not understand real world building tolerances, design difficulties and therefore add enormous expense into their designs. With Zoe, they were sometimes quite clever. They understood the parameters on site of real men working with bits of lazer sights or whatever, trying to plumb something up, and tried as much as possible not to design situations where dead accuracy in X, Y and Z was required.

For instance, in certain bathroom tiling situations, where the architect wants three planes of tilework to meet perfectly at a corner. It is very difficult to do that, as the slightest bit out on any of the planes and you have to start again. Why not avoid that and not design in the problem to begin with. We had an external consultant architect at Tallaght Cross who came up with an idea of a cladding system, that all had to work with pin point accuracy and tolerance over 5-6 floors, and meet at all kinds of corners etc, where everything in all 3 no. X, Y, Z planes had to match perfectly.

Not that the particular architect understood remotely even, the difficulty and extra expense they had designed into the project. He or she still doesn’t know, even though he or she has stood in front of the finished project and taken photographs. I have a few photos myself somewhere of the extra ordinary detail and trouble Danninger had to go to at Tallaght in order to make it work at all. They basically had to ‘loose hang’ the entire facade, before bolting everything firmly into place. It is like when you are screwing back the four bolts of a lid on something. If you don’t loosely screw the bolts initially it never quite fits right.

Try doing that in a situation where scaffolding and the Lord knows what interupts your line of sight. It looks fine in the computer generated visualisation. But the trouble is, and where the costs spiral out of this world, is where the design looking at and approving the computer generated visualisation has never even tiled his own bathroom. Therefore he or she doesn’t understand the difficulty they are designing into the construction (in addition to all kinds of health and safety obstacles to surmount also). One of the architects at Zoe, the best I ever worked with said that to me: Try to tile your own bathroom some time, and then come back and talk to me. This should be a mandatory exercise for all architects going through architecture school. They could be asked to conceive of a design on their computers or drawing board and do the tile work themselves using real materials. I am sorry I never went through the exercise myself.

I guess, money can buy you that kind of perfection. But one shouldn’t have to, that is the point. One shouldn’t have to. Builders for too long, have been attempting courageously to make architect’s designs work. It needs to work the other way for a while. Architects need to think and re-evaluate this carefully today. We could divert away more money into energy conservation and on-site renewable energy generation, if the budget wasn’t consumed by poorly thought out construction and cladding designs. That is how you get to a low carbon city. I mean, if you are having to spend this much bother trying to make the cladding system work at all, then there is no way there will time available during the build for added extras like good insulation and air tightness quality control.

You are fighting a losing battle to make the whole thing work to begin with. Architects need to back away from the edge of what is technologically feasible, in order to leave some slack which can be taken up by eco-friendly construction performance. Until architects know their construction somewhat better, we will not be contributing anything to combat climate change. When you go to architecture school, you are usually told by your professors that anything you design, someone out there can build it. Which is basically true, but it doesn’t say anything about expense to one’s client. Remember, the architect is never spending their own money, but someone elses. In the case of Liam Carroll he made a lot of changes, but it was his own money he was spending. Which is fine for the most part, but he took that away too far at Limerick Parkway.

Brian O’ Hanlon

http://www.irishtimes.com/newspaper/ireland/2009/0812/1224252421072.html

I actually have the opportunity to tile a bathroom “all the tilers are busy”
And I’m considering it…
The issue I have is the wall tiles weigh a massive 20 kg m sq. existing walls that are not straight and large tiles tricky joints ect… ( I didn’t select the tiles )

A side point having a clerk of works doesn’t seem to help with clean construction either…
Builders have enough trouble putting two insulation panels together in a cavity wall and not dropping mortar on top…
architects are also far from perfect…

The thing at Zoe, was we always liked brick layers, even when there was trouble with unions. The thing with brick layers, is they show up with their bag of tools on day one of the construction project and start working. By the time you reach the top of the building, your cladding is in place also, or pretty much. That is the great thing about having brickwork, you know how long it is going to take.

You can start sealing up your building, removing scaffolding and moving into the inside of the building. These other ‘clip on’ systems for cladding are fine in principle. But in reality you are extending the period where people are working at heights, moving large heavy objects around. There is no guarantee that the large custom made heavy facade objects will fit, having waited months for them to arrive. The odd one may have to be returned to the maker and re-done.

On one project I know, someone forgot to insert the bolts that held in the concrete cladding panel. Because they changed the bolt hold system for the cladding in the middle of the job. So the bolts were left out in one large concrete panel and work proceeded above that particular panel. No one remember to go back and fix the lower panel correctly and it subsequently fell out when the scaffolding was taken down. Fortunately, no one was standing around. I once heard of a housing project in Clare where the bricklayers left out the wall ties for some reason. The same thing, the panel of brickwork fell to the ground when the scaffoling was removed.

Building sites always have been dangerous places. Everyone involved, including designers need to take this on board. Even if we think we are incredibly clever with our computer visualisation techniques. I liked the way that Zoe developments was able to retain a link, or an intelligent conversation backwards and forwards between designer and builder. The regular building contract sometimes encourages the opposite to happen.

When I told the RIAI president I was doing brickwork drawings for Zoe developments, and he responded, ‘Oh boring stuff like that’, I was disappointed to say the least. Many other consultant architects would ask, what are you doing work for them. Or you have ‘no protection’ there from the builder. Some architects I know even accuse Zoe architects of being lazy and over paid. I don’t know. Architects in Ireland simply have to grow up and understand that a more healthy conversation between construction and architecture needs to be facilitated somewhere. If not in the usual building contract. Too many young professional architects have grown up learning from their elders to despise the contractor and his job.

This is not good practice, for the health, safety and well being of the whole industry as we move forward and aim for higher thermal performance of the built envelope in order to combat climate change. I do like the approach taken though in Construct Ireland magazine, where the architect appears to have a better relationship with their contractor. From the articles I have read, they appear to work together to understand the best sequence of operations to take to achieve higher build quality. That is on small house extensions. But on large capital construction projects, that relationship becomes more difficult with the normal building contract.

http://www.constructireland.ie/

Brian O’ Hanlon

@missarchi wrote:

http://www.irishtimes.com/newspaper/ireland/2009/0812/1224252421072.html

I actually have the opportunity to tile a bathroom “all the tilers are busy”
And I’m considering it…
The issue I have is the wall tiles weigh a massive 20 kg m sq. existing walls that are not straight and large tiles tricky joints ect… ( I didn’t select the tiles )

A side point having a clerk of works doesn’t seem to help with clean construction either…
Builders have enough trouble putting two insulation panels together in a cavity wall and not dropping mortar on top…
architects are also far from perfect…

Yeah, I know. Both parties have to work together in order to figure out a proper sequence with which to carry out the work. In your bathroom tile project, you will certainly be short of some tricks and knowledge that a contractor would know about. The wonderful thing about Zoe was that it enabled a conversation to take place. I remember once, we ran a cast iron dry riser pipe up a stair core. It involved drilling of holes through the concrete to run the cast iron pipe up through the multi-storey building. We envisaged in our own architect’s brain this nice cast iron pipe being painted and left exposed in the staircore, with the plastered wall running around the back of the pipe.

But when we went to site, we noticed the plastering contractor had boxed out around this pipe. We enquired why did they go to all of this trouble? Of course, the answer was simple except we didn’t see it. In order to achieve the exposed cast iron pipe effect, the sequence of construction would have to be carefully organised that the plastering contractor went in before the plumbing contractor. Which isn’t the way it normally happens. We felt fairly stupid as two architects standing there and finally understanding why our concept couldn’t have worked, unless we had intervened from the beginning and over-ruled the normal trades sequence. But at least, there was a finishing foreman ‘on our side’ having that conversation, so we could progress in our understanding. In the normal course of effects that conversation is not exposed to the architect. He is removed from it, by several other intermediates. This is what Zoe over came.

Brian O’ Hanlon

Yeah, this is certainly as true as I am sitting here. Liam Carroll’s property portfolio is the juiciest one in the entire country. The fire sale of the century has already happened as far as I am concerned. Adding another one on top of that, will not make one blind bit of difference as far as I am concerned.

Karl Whelan, professor of Economics at UCD wrote the following fine paragraph today.

Of course, it could be argued Carroll’s property empire might be in worse shape than those of other developers. It seems perfectly possible, however, the opposite is the case. His properties mainly consist of Dublin projects likely to get developed in years ahead. Consider, in contrast, the position of those developers who have pinned hopes on developing the proverbial field outside Mullingar.

http://www.irishtimes.com/newspaper/opinion/2009/0813/1224252497177.html?via=mr

This is why the whole Liam Carroll saga defies belief to be honest. Certainly, for those of us still moderately stuck in our own little Celtic Tiger time warp.

Liam had to be some kind of genius to screw it all up. To be honest, we had tenants bending over backways to rent commercial space from us. But Zoe were different, Zoe didn’t cave in to the brief the tenant wanted to give to us. Zoe would make everyone else live according to their own terms. Why did two, not one, but two consecutive anchor tenants walk away from the Limerick Parkway shopping centre project?

Granted, I will submit that supermarket chains are a little bit too big for their own boots, but still.

Now the entire farm is lost, all of that is purely academic.

Brian O’ Hanlon

Liam is in hospital it appears. He is not the only one who has found the last couple of months tough going. What a desperate saga this has all turned out to be.

http://www.rte.ie/news/2009/0814/carrolll.html

I couldn’t help but feel a number of the main people in his company had given up. But instead of admitting it, they were still hanging on for the sake of it. That is what happens when the person at the top gets too tired. That was a big part of the problem. It is a funny thing, how companies can turn sour in such a short space of time. When the leader isn’t quite what he or she used to be.

I know there was enough manure thrown by most everyone in the end. It was indeed, a sorry situation I walked into back in 2006. It really required a new boss to help straighten out a couple of characters. Someone who didn’t owe it to anyone, for years of service etc. Liam simply wasn’t the man he was ten years ago, or he would have done it himself.

I am glad KPMG are finally involved though. That is the best bit of news I have heard in a long time. At least they will ensure an orderly and civilised approach to the disposal of whatever is left.

Brian O’ Hanlon

http://www.irishtimes.com/newspaper/breaking/2009/0815/breaking81.htm

Robin Williams sketch re Gadaffi:

you cross this line you die

(steps back)

you cross this line you die

(steps back)

you cross this line you die

(steps back)

you cross this line you die

(steps back)

you knock on my door I not coming out

I am delighted to see the guys coming out and getting their photo took. Especially with the guys there from KPMG. That is a wonderful sign in my view. With Liam fronting the organisation there for so long, they never received credit. You wouldn’t believe how much Dave Torpey and John Pope are respected and liked in the Irish construction industry. I know if you are an architect, that is a different matter. You might have many arguments against their business model. But in terms of the construction industry, those two men have everything in the world to be proud of.

John looks like he would rather be in the pup at that hour though.

Brian O’ Hanlon

Written by Emmet Oliver of the Sunday Tribune yesterday.

Risk concentration is one of the most obvious systemic threats that risk officers and, in an ideal world, lending officers, are supposed to guard against. Put simply, no bank should ever have a customer on its books that could imperil the whole institution. Alternatively, the banks together should never allow any customer grow to such a size that he or she has the potential to pull down the entire system.

http://www.tribune.ie/business/article/2009/aug/16/too-much-money-too-few-developers-bank-meltdown/

Brian O’ Hanlon

@garethace wrote:

Written by Emmet Oliver of the Sunday Tribune yesterday.

http://www.tribune.ie/business/article/2009/aug/16/too-much-money-too-few-developers-bank-meltdown/

Brian O’ Hanlon

shoulda, woulda, coulda…

@garethace wrote:

I am delighted to see the guys coming out and getting their photo took. Especially with the guys there from KPMG. That is a wonderful sign in my view.

I doubt they were willing participants as such Brian. Torpey hasn’t been in court much but both of them were hanging around the courts after hearings in order to avoid the photo being taken, this time they were nabbed going in though. That photo looked likei t was taken on the Luas tracks so I suspect they thought they wouldn’t be seen by going in the backway.

–

Comparison with Silicon Graphics.

The thing to remember about Zoe, it is a real ‘engineers versus the world’ kind of story. That is the heroic side to it. That is why money only served as a ‘proof of concept’ rather than anything else. Zoe never knew how to handle money, and had very little desire to learn how. Beyond what was needed in the strict present tense to get by in terms of construction management. It may be helpful to compare the Liam Carroll story to that of another billionaire across the water, Jim Clark, the founder of Netscape. What motivated Jim Clark was a desire to have more money than Larry Ellison. I wonder who the Larry Ellison figure in Liam’s imagination was. Maybe it was Larry Ellison himself. To be honest, I have no idea what kind of ‘role model’ it could be.

Jim Clark started as a very talented though poor engineering student at Stanford in California. He invented a new microchip for processing computer graphics while still at university. Jim decided to set up a company based around his intellectual property known as Silicon Graphics. That company was valued at a billion dollars at its peak. (Due to government provided stimulus into large scale computing projects) No mean achievement for a first company startup.

The problem was, as Jim struggled to keep the company going, he had to look for fresh rounds of finance from the Valley venture capitalists. Eventually, Jim had gone back to the VC’s so many times for additional finance, that Jim ended up working in a company he founded and built, but did not own anymore. He had a few thousand share options he received as company CEO. That was all. Jim Clark next got into something new and adventurous. Jim wanted to start a new company and hold onto more of it, than he had done at Silicon Graphics. Jim noticed a pattern in the Valley whereby, engineers would start up companies and eventually lose them to financiers.

Jim embarked on something to do with TV set top boxes. It was some early concoction of internet commerce, buying stuff using your TV set. Everyone was watching Jim Clark to see what he would do next. Everyone thought, well if Jim Clark thinks that TV set top boxes are the future then why not do that? The set top box idea was meant to be a decoy and it served its purpose. VC money poured in from every angle into TV set top box development and fortunes were wasted in the process. Unknown to everyone in the industry, Jim was a million miles away from that and working with a small group of engineers on his own ‘stealth project’ which would become Netscape.

Jim Clark never managed to hire the top of the class engineers at Netscape. He was contented to work with something less than the best. The best engineers back at Silicon Graphics were reluctant to take a chance on something as risky as a startup company like Netscape. So Jim Clark made do and eventually they shipped a working product. The rest of it and the inital public offering of shares is well known history by now. But Jim Clark always knew he had limited time to exploit the web browser market. At some stage, the behemoth in the personal computer market, at Redmond, Seattle would wake up and smell the coffee.

While Jim Clark was still at Netscape he was holding conversations with his old engineering buddies at Silicon Graphics. Things had gone from bad to worse at his first company and his old buddies were disappointed they had not taken a leap of faith and joined Netscape from the beginning. Jim began to devise a new plan for his third company. The concept was to provide a web of interconnected services between all hospitals in the United States. When Jim’s third company floated on the stock market it achieved a valuation of a billion dollars. Some of the original engineers from Silicon Graphics were on board and delighted to be worth so much money.

I suppose the Jim Clark story is characteristic of the dot.com madness in a lot of ways. But it still contains many aspects which can shine a light on the story of Zoe developments. At a certain stage Zoe became too ‘visible’ in the tiny market that is Irish property. Eventually, Liam Carroll couldn’t sneeze without it alerting half of the construction world on this tiny island of ours. We can criticise a lot of business people who take the money and run away from Ireland to startup abroad in larger markets. But when you look at the Zoe developments story, could you blame them?

My guess is the Dalymount ‘buy an option’ deal is doing a nice job to provide a decoy, for another development not far from Phibsboro. A development which hasn’t been mentioned in any news articles I have seen recently. These are the lengths one is driven to, in order to do any kind of business in Ireland. You have to play a game of ‘hide and seek’ with everyone else. Nothing is what it seems to be. Nothing is transparent and open, or ever will be. One wonders has Ireland paid the ultimate price for too much smoke and mirror playing?

Even though venture capitalists are not the ones who supply finance to the property business in Ireland. There was no shortage of vultures willing to consume what little wealth a group of engineers had managed to gather together within their company. Like the Netscape affair, there was only a limited amount of time that Zoe was ever going to last in the Irish context. Eventually, people were going to wake up, smell the coffee and come in hot pursuit. But Zoe was nonetheless an ambitious and daring undertaking for a group of non-descript engineering types.

Brian O’ Hanlon

Has everyone got their Zoe flags and buntings ready for tomorrow? Did you hear? We are going for another lap around the track in the clapped out banger we still call a company.

As Junk Bond King Mike Milken in the United States once correctly observed, even badly run companies with the worst Feng Shui, Karma and whatever else are incredibly difficult to eliminate.

http://www.mikemilken.com/articles.taf?page=37

Brian O’ Hanlon

I take the point Patrick Coveney makes in today’s Irish Times newspaper.

http://www.irishtimes.com/newspaper/finance/2009/0820/1224252951982.html

That sound and stable Irish companies such as Greencore who are not drowning in debts at the moment, will end up being direct competitors to NAMA. But what Coveney doesn’t appreciate fully, because it is nice to be sitting in the position he is in today, is how different his reality could be. Especially on a day when Zoe are hoping to win one last desperate gasp for air. At Zoe, we couldn’t wait to get our claws on the ‘Mallow West’ project. Our consultant architects were lining up around the block, in order to work at discount fees, because they knew projects such as this were coming down the tracks. As far as Architects were concerned, receiving a phonecall from Liam Carroll was like talking to God. That is why the experts never dared to question anything.

Coveney if he is amongst the group of clever young and upcoming Irish business people I believe he is, should look at this from a different angle. As an opportunity to study and question the whole paradigm of how Ireland Inc. operated for the past decade or more. Only then will Greencore understand the real wealth underneath its feet. For too long, Ireland has been struggling to find a way out of the ‘reality distortion field’ which was created by Bertie Ahern, Liam Carroll and other prominent Irish figures. What Coveney doesn’t understand is how close he came to being another ‘historical archive’ chapter in a Frank McDonald book. Greencore can justifiably breath a sigh of relief today. They managed to dodge a bullet. But how they make use of this breathing space is up to them.

Brian O’ Hanlon

@garethace wrote:

As far as Architects were concerned, receiving a phonecall from Liam Carroll was like talking to God. That is why the experts never dared to question anything.

I can’t say I see the hand of God in any of Carroll’s developments from an architectural viewpoint. Maybe he never found a capable professional to match his divine vision.

@Rusty Cogs wrote:

I can’t say I see the hand of God in any of Carroll’s developments from an architectural viewpoint. Maybe he never found a capable professional to match his divine vision.

You could be very right on that score Rusty Cogs. Thanks for the comment.

I borrowed the phrase from a biography about Robert Noyce, one of the original founders of Intel Corp. Robert Noyce started out in the microchip business working for a fellow named William Shockley. Shockley shared the Nobel prize with two others from Bell laboratories for having inventing the transistor. Which later became the building block for the semi-conductor industry we see today. When Noyce received a phone call (a job offer) from Shockley, he said it was like picking up the receiver and talking to God.

Later on however, Noyce and his other brilliant colleagues who worked to set up a company for Shockley began to understand him more and realize that Shockley was useless at running a business. Shockley was obsessed with his own ego. It is an interesting story, that of Intel. Bob Noyce and Gordon Moore went through a considerable amount of learning to get to their eventual success. I hope that some of the architects who worked for Liam Carroll can see into a brighter future. One with a lot more promise and prospects.

Brian O’ Hanlon

You know, this side of the story had to come out some time. It might be late, but it is better than never at all.

http://www.irishtimes.com/newspaper/breaking/2009/0820/breaking41.htm

A legal representative of employees of Royceton said they also support the application.

That is good news.

We have to make a firm legal distinction between Liam Carroll and those employees. (In terms of where peoples’ basic rights do stand) It is good that the guys at Royceton will have their day in court. It is the least they deserve for many long years of service. It was their hard work which was behind everything at the Zoe group. Even though in the end, Liam Carroll didn’t appreciate their efforts. Royceton was the central ‘nerve centre’ of operations. It was ‘mission control’ for Zoe developments and required an intense amount of social interaction and cross disciplinary team working. Socializing was never one of Liam Carroll’s strongest attributes.

Towards the end, I was disappointed to listen to professionals who work for Liam Carroll making small of the contribution of Royceton down through the years. I told someone that Royceton had gained a human resources staff and a full functioning health and safety department. That and much more was achieved by David Torpey and John Pope who received a modest annual budget from Liam Carroll. I was told by professionals who had become very close (much too close) to Liam Carroll and his development business, that anything Royceton would attempt could not amount to much. They were lazy and inefficient I was told.

Having worked for Royceton myself, I could never accept that was the case. I received messages not so long ago from individuals working closely with Liam Carroll instructing me to shut my gob. Which only gave me more reason to get to the bottom of this mess. I knew that a ‘false history’ of Royceton was being constructed for a man who could not distinguish between fact and fiction. Liam Carroll was a man, we know was under huge stress. Liam had stopped visiting Royceton, was keeping very private and to himself. For a while I did my best to act as go-between. That never worked out, but I did get a view of the situation from both sides.

I think it was the unique innovations that Royceton brought into construction, and their efforts at forging a relationship with Danninger, the building side of operations and a whole network of sub-contractors, that was the real value of Zoe. Everything else, the ego massaging done with bank credit and adventures on the stock market, was secondary. Everyone wanted to get in on the action and be at the centre of Liam’s enterprise somehow. I even met Seanie Fitzpatrick once in a draughty Danninger portacabin. But it is the achievements of Royceton, in terms of one human being helping out another, that will stay in my memory for a very long time.

Good luck to the guys in Royceton on their day in court.

Brian O’ Hanlon

An old guy I know for a number of years, who is always complaining about everything came out with a sensible point to me, not too long ago. He reckons that Ireland should have been taxing itself more when it had the money during the boom, in order to give itself more relief now that things are against us. In fairness, the Dermot Desmonds of this world aught to be contributing in the right way to the country in which they do their business. But we need our leadership in the country to step up to the mark also.

The Fianna Fail policy during the Celtic Tiger does show us, how wrong you can get government economic policy, even during good times. Ireland’s downturn has been so severe, that it is struggling to come out of it now, the way the rest of the world is. Valuable time and resources that could be used in re-building will not be available to Ireland as a result. Still we are talking about making Bertie Ahern president? It is time we did get some sense.

Elsewhere, Mr Kenny also told the summer school that Ireland failed to prepare for the future during the good years of the economic boom.

http://www.independent.ie/breaking-news/national-news/politics/kenny-says-fg-will-vote-against-nama-bill-1866615.html

I read somewhere in yesterday’s newspaper that Ireland is still in ‘rescue mode’ when it should be planning to go into ‘recovery mode’ instead. The security of oil supply issue is only one example of where Ireland has to get a debate going, on how to cater for the prospect of global energy shocks in the future. I read earlier in the week, that oil trading is climbing again on foot of a possible global recovery. I hope that my summary of Minister Eamon Ryan’s February 2009 report, that I issued to Zoe developments this morning, will find its way into consideration by the courts in the appeal case.

The Zoe interests in Dublin Port lands will be of crucial importance in fast forwarding the solution for oil importation and storage on the island. The Irish government will look to spend up to €300 million on new national oil reserve facilities. A collaboration with Zoe in terms of acquiring the land would be a major benefit. At present Ireland’s oil dependence is only 0.2% of the EU total and much less of the total global dependence. But in proportion, Ireland is a lot more vulnerable to shortages in global oil supply than many other places in the world. For instance, before Christmas 2008, one of Ireland’s leading petrol retailers ran out of supplies altogether!

Brian O’ Hanlon

The old banger completes another lap! Who would have guessed that it had the minerals! Get the fire extinguishers out.

The High Court has granted permission for the hearing of a petition for court protection for seven companies in the Zoe development group while it puts a rescue plan in place.

http://www.irishtimes.com/newspaper/breaking/2009/0821/breaking35.htm

Brian O’ Hanlon

I think that ACC bank have done the Irish nation a profound service in their legal advances thus far. Without them, the Irish people would never have gotten a true picture of the inside track about NAMA and property developers. However, I think there is a bit more to the story that people do not see.

Most of the Irish news commentators had it wrong about Liam Carroll. Carroll wasn’t buying Irish Ferries shares for the land resources. Carroll had done enough building to satisfy anyone for several lifetimes. Carroll was in seek of an easier way to make millions. Something with a lot less trouble and a lot more profit. Something that could generate millions of Euro of rental income per year. Maybe it would involve a ‘public-private partnership’ deal with the Irish government.

Liam Carroll had borrowed an idea from his old friends in the Jurys Doyle family. The same family who managed to fleece the Irish taxpayer for a fortune. This is not like the M50 motorway though. This is the main pipeline for oil supplying Ireland. The rental income from such a deal would make everything else in the Zoe court case look like the peanuts.

The fact is Ireland has no security against global oil supply shock events. The recent Buncefield accident in Great Britain was calculated to be a once in four hundred year event. But it happened and it happened in our lifetime. It took a full year for chemical experts to figure out how to go in and clean up the mess, to deal with the contamination from the explosion and fire. That was a full year during which the Buncefield plant was out of commission.

Imagine that was to happen to the oil supply for Ireland? Now you get some idea of the importance of those Irish Ferry shares that Liam Carroll purchased. Britain was lucky, it had alternative ways to bring oil and petroleum products into the country. Ireland does not. If Dublin port goes out of commission, the country is up the creek without a paddle. There would be no coming back from that economic disaster. Now you can see why Liam Carroll held such a precious ace up his sleeve with those Irish Ferry shares.

Everyone has had their own speculation about the ‘strategy’ of Dutch owned ACC bank, in pursuit so vigorously of Liam Carroll’s €130 million debt. Why worry about such a small sum of money? But my guess is that ACC bank would have bee-lined for the Irish Ferries shares owned by Liam Carroll. ACC bank had figured out a way to convert €130 million into a lot more. Ireland will be sourcing its oil from as far afield as Rotterdam in the future. Rabobank would have no shortage of Dutch companies willing to buy its stake in the Irish shipping gateway.

The Green Party minister Eamon Ryan has published the 180 page experts report last February. To deal with the issue of security of oil supply. Now that minister Ryan has got the report, has he got what it takes to make the deal on behalf of Ireland and buy out Liam Carroll’s shares? I believe David Torpey has had more than enough by this stage. Judging by his body language on the way to court these past couple of days. Myself included, as a past employee of Zoe developments. I have lost all patience with things. We want to get back to doing what we know best. It is as uncomplicated as that.

All attention has focussed in recent months about €90 billion the government is willing to pay for bad bank loans. How about €130 million for the Irish Ferries shares that will give Zoe the money to deal with ACC bank? It is time Zoe got done and dusted with ACC bank. I don’t want my grand children’s grand children having to buy out some bad public-private partnership agreement with some Dutch oil and gas company. Lets try to pass on something useful to those unborn children besides the €90 billion bill we are already loading them with.

Brian O’ Hanlon

€130 million was lent by ACC bank to Liam Carroll. That much is known. They want it back. That much is also established. I suspect Liam Carroll was ‘handling’ the Irish Ferries shares on behalf of someone else. Someone like a Dutch oil and gas company who didn’t want their presence known.

The fact that Liam Carroll had gone on such a buying spree on so many other land-related investments provided a good smoke screen to the whole plot. At the opportune moment ACC bank would have flooded more capital into Liam Carroll’s companies which would have enabled Carroll to buy the Irish Ferries company outright. Obviously, it had to appear to the newspapers as if it was a struggle. But Liam Carroll was the hot tipped favourite. We know that much also. The fact that Carroll has a history of conducting ‘hostile takeovers’ in the past, made him the perfect collaborator. The plot was even easier to hide under our noises. Liam Carroll was the perfect camouflage for a Dutch oil and gas company.

The events on the Mayo coast served like an effective diversionary tactic. To draw peoples’ attention from the eastern side of the country where the deal was really happening. The Mayo events served to tie up whatever resources the ‘concern groups’ in Ireland could muster. Lets face it, there were a lot of hot flasks and ham sandwiches made to support troops on the west coast. All the time, Dublin port was wide open to attack. That is where the attack was to take place. What strategic importance has Mayo in anything? Its only real value is to distract attention from our real vulnerable point. An international Dutch oil and gas company would have known that. The peasant Irish obviously did not.

There is a Napoleonic kind of genius to the ‘battle plan’ when you look at it. The Dutch multi-national has been doing this all over the world. Why not in Ireland too? They practically invented the game. They know the sequence backwards. But when the Irish property bubble collapsed, the Zoe group threatened to fall over and collapse. Liam Carroll’s days were numbered. He would be taken out of the picture. Something had to be done fast in order to preserve the plan. The deal was off as far as ACC bank were concerned. They moved in for the kill.

It wasn’t the miserable €130 million they were worried about. It was the much larger and more strategic picture, which has eluded most of us until now. ACC bank’s main priority was to secure a receiver to ‘receive’ the Irish Ferries shares so that the plan could continue in some shape or form. The necessary business was all transacted under the watchful eyes of judges, politicians, news media and the public citizenry of Ireland. It is important to note, in all of the above, a pretty basic and hard working construction group were drafted into service by a foreign owned multi-national. The honest and straightforward chaps at Royceton, whose day jobs had always been their priority, found themselves wrapped up in something much larger and more complicated than they could understand.

But Liam Carroll understands it. He is one of the most brilliant men I have ever come across. But with Liam Carroll, his own financial wealth and prominence seems to have come first. We have to make that legal distinction now between the honest, hard working men and women at Zoe developments and the game playing that playing above their heads. To say that some were involved, or in-the-loop or knew something is very debate-able. I sometimes wonder why we bother with a government in Ireland. Perhaps the country should run on auto pilot. If and when the An Taisce group get to the bottom of the Liam Carroll case, all hell will certainly break loose. I respectfully suggest that the government moves to manage the situation before then.

Brian O’ Hanlon

I’m sure what you’re saying is insightful, garethace, it’s just not very condensed.

Frankly the sight of the length of your comments puts me off reading them, which has the knock-on effect of putting me off reading anything that has your name beside it.

Is it that you just like the sound of your own keyboard?

Apologies for the personal nature of the comments, it’s just that seeing a forum like this with so many encyclopedic comments from the one person gives it the appearance of a blog rather than the forum that it is intended to be.

Maybe you should just start a blog, see how that goes for you?

Foremanjoe,

You will find the blog entries at Designcomment. It was linked in the first post of this thread. I take all of your points above. I wouldn’t expect most people to read through most of what is above. I also appreciate that my thread is taking up too much prominence on the message board here. I apologise for taking up the space. But there is sort of an emergency happening. When hurricane Catriona hit New Orleans, a couple of quick and dirty solutions were set up online.

The most worrying thing in Ireland’s case, is the lack of clear information. The Irish journalists do read what is written above – the only people with the time and career description to do that. I think I am about done now. I am not a journalist and have no desire to make it my career. There isn’t much left to comment on from my point of view. Once the issue of the Irish Ferries shares has been taken into account. The court case should run its course now. Whatever will be, will be. I am fed up with the whole thing.

Thanks for posting your comments. I do appreciate them.

Brian O’ Hanlon

Good man, that’s fair enough.

Do carry on then, I’d hate to see what would happen if we had too many idle journalists on our hands!

Well, you see blogging is a form of journalism. That is my understanding of the weird and wonderful world of blogging. A guy with a dictaphone and a camera phone can be on the spot faster than a real journalist could. We exist in a world, where the cost of publishing has fallen to zero almost.

The other side to it, something un-earthed by Chris Anderson, a Wired magazine editor in his book called ‘The Long Tail’ is that bloggers might know a great amount, about something very detailed. In other words, journalists have to cover a huge territory. But bloggers can focus in on the micro-scale.

With the result that you get a synergy of efforts these days, between bloggers and journalists. There isn’t any journalist out there, in Ireland who could justify the expense and work involved in knowing as much about the Zoe company as I would. He or she would literally have to work on the inside and know the industry. On the other hand, I don’t understand or follow much outside of what I know. Which is quite limited.

From my point of view, I would rather that Zoe had continued doing what it did. I never posted or blogged an iota while I worked for Zoe as I recall. I was far too busy doing what I do, project management and architectural design work.

Brian O’ Hanlon

Still, I suppose it’s always good to have a driven whistleblower working with the journalists.

You could be our Cú NAMA, mythical folk hero of the post-boom era.

Yeah, it is too much hard work though. I wanted to finish off my night classes these last couple of months and that went on hold. Now, ordinary life has to get back into priority.

But the thing is, as newspaper sales drop and journalists can make more cash writing reviews of new digital cameras and expose’s about soccer players . . . they struggle a lot to find wherewithal to do any serious journalism. That is what bothers me a bit quite frankly. The noble profession of journalism has taken quite a beating in recent years. How is anything going to enter the public domain which might inform us in our decision making?

It appears we live in an information age, but we know less than ever. If there is any information deficit I have managed to fill, it has been worth something. I do look forward to an era when real journalists can do what they do best. Joining up the dots properly, so the rest of us can see the big picture.

Brian O’ Hanlon

For your interest.

We have heard about journalism working in a symbiotic relationship with blogging.

But what about blogging morphing into journalism ? ? ?

http://www.tribune.ie/article/2009/aug/23/developing-on-the-back-of-a-cigarette-box/

Brian O’ Hanlon

Barry O’ Halloran wrote an excellent article in today’s Irish Times newspaper.

Goodman was a big employer in an economy where one worker in five was out of a job, and the failure of his business would have had far-reaching ramifications for an entire industry. Back then, the government actually worried about unemployment and it responded quickly. The Oireachtas was recalled from its extended summer holiday to pass the law which created examinerships which, in turn, paved the way out of trouble for Goodman and the beef industry.

http://www.irishtimes.com/newspaper/finance/2009/0824/1224253136147.html

Brian O’ Hanlon

Doomed, doomed, doomed . . . one gets comfortable with the idea after a while, it becomes so familiar.

He said the court did not agree with the claim made by counsel for ACC that the new petition is obviously doomed.

http://www.rte.ie/news/2009/0824/carrolll.html

Brian O’ Hanlon

What a bloody nosed scrap this is turning out to be.

Lyndon MacCann, senior counsel for ACC, which opposed both the hearing of the petition and the attempt to appoint an examiner, said that the bank would be submitting affidavits from a bank official, a property valuer, an economist and an insolvency practitioner to respond to the companies’ claims that they have a reasonable prospect of survival.

http://www.irishtimes.com/newspaper/breaking/2009/0824/breaking45.htm

Brian O’ Hanlon

Well, it is either pay up for some legal and financial services now, or face a lengthy dole queue in a month’s time when all of the dust is settled. These fellows don’t know much else, except what they do.

I can see shades of the ‘Full Monty’ to this already I am sad to say.

Legal sources said that David Torpey and John Pope, directors of the companies, may personally be exposed to the costs of the second petition, if it fails, as they passed resolutions as directors to make the second application.

http://www.irishtimes.com/newspaper/finance/2009/0825/1224253193430.html

I have already spoken to directors of Liam Carroll’s companies who have never been unemployed in their entire careers, and wouldn’t even know where to find a dole office.

Brian O’ Hanlon

Of course, what Eamon Gilmore suggested is going to be a crucial step of the whole complex and messy political, social and economic process facing Ireland in the coming months.

It is important that up to date information from the Carroll case be fed out to the PAC investigation of the banks. Without linking up those two investigations properly, it doesn’t make any sense.

It would be like have too suspects in a case, and not bothering to use ‘The prisoner’s dilemma’ to set one off against the other.

Mr Gilmore said the Attorney General should apply to the court for the right to nominate lawyers to ensure that the public interest is protected in the proceedings.

http://www.irishtimes.com/newspaper/breaking/2009/0825/breaking57.htm

In fact, in this instance, it would help to keep the Zoe valuations a secret, in terms of the banking investigation case. Because then, that information would not be exposed to those giving evidence to the banking investigation. At least, until the investigations were over and done with.

Speed will be of the essence now as senior banking officials begin to retire or jump ship.

Brian O’ Hanlon

–

Blood Diamonds

I have taken a stand on the side of Irish developers for long enough now. That was mostly tactical on my behalf. Because with a lot of the emotional protest out there, to do with property prices and the big developers, a lot of useful and constructive arguments were lost. That of course, is to those property developers’ advantage, not to their disadvantage. It is the first stage in their ‘recovery plan’ and to date, it has gone quite well for them. People are more confused now about property and that business, than they were six months ago.

It is okay for minister Eamon Ryan to say, that Irish speculators, bankers and property developers will pay the price. But the truth is, we all know they won’t pay any price. Because our government doesn’t know the property game well enough to go after anybody. The Irish government doesn’t have the teeth in that regard. The Irish proeprty developer is banking on that strongly in their recovery plan. Expect normal procedures and rules to apply very shortly, as the Irish government has to form an orderly retreat in the face of a battle it doesn’t quite understand.

A prisoner in one’s own land

For a lot of the time during the Celtic Tiger, I felt a bit like Solomon Vandy, the character from the movie Blood Diamond. I felt like a prisoner in my own country, to property developers. I am satisfied to say that Zoe developments were the best masters I ever had. I learned a lot from Zoe developments and they put a lot of effort into me. For that, I am very greatful. But having argued the case in favour of the Irish property developer for quite a while now, I am almost ready to say what I didn’t like about them. I was gathering some thoughts today, with regard to the Liam Carroll and Zoe developments court case.

I was thinking of how economical that Zoe developments were in their approach to building. I don’t agree with other commentators that being economical meant producing worse offerings than what else was on the market. But that is not the relevant point at all. The relevant point is that Zoe were economical in how they built their buildings.

Having the best land

The other point I began to think about was their land bank. Their land was situated in some very good locations indeed. It was good development land. Zoe were a company who had done themselves a lot of favours in how they approached land acquisition over the years. They had become skilled in that area, if nothing else. Everyone would agree on that fact today.

That led me to a third point. If Zoe developments were good at building cheap buildings and were well catered for in terms of the land they owned in Dublin, then why were they so agressively geared up with credit? One would imagine, that Zoe developments as a company, having worked so hard all through the years to perfect a system of cheaper building, having worked to put together a portfolio of land resources, that Zoe might be able to use those advantages better.

Stepping down a gear or two

One would think Zoe would be able to ease back from the frontier of what was possible, with regard to obtaining loans from banks at low rates of interest. Why was Zoe developments like a bicycle in top gear? Where its loan book was like the large front cog, while its liquidity was like the tiny cog at the rear of a bicycle. It made me wonder. Are Zoe developments like other building developers? Or are they different?

Are other developers out there agressively leveraged or not? If so, by how much?

Consider the facts above. Zoe developments were leaders in terms of building cheaply and fast. That is a non-trivial advantage in terms of a development business. Zoe developments owned land that other developers could only dream about. I believe strongly that other developers are equally as extended in terms of non-performing loans or worse. That is quite frightening to be honest.

Borrower of last resort

The minister for Finance, Brian Lenehan has made it clear today in the Irish Times newspaper that Ireland needs to get the best rate possible in terms of borrowing. The only way to do that, is to establish the Irish government as the borrower of last resort in this country. Only the government of Ireland can obtain the finance at the rates that can make a full economic recovery possible. If we depend private investors in Ireland to turn around our fortunes, things could get very bad indeed. Ireland needs the government to become a player in the market today. It is not the situation that everyone would like. But it is a much more sustainable solution than any other at the moment.

During the Celtic Tiger I would argue that private investment companies such as Zoe development over-extended themselves to the degree that they did, simply in order to keep the Irish government out of the property market as a player. I don’t know what Karl Whelan would do with that thesis. He might rubbish it, I don’t know. But if it has any merit at all, then it bears a relationship to his own thesis. It adds another wrinkle to things, that Karl Whelan must incorporate into his analysis.

Too much for bottles

We saw at the Ringsend bottle factory site what it eventually took the DDDA to do, in order to grab a small piece of the action. The DDDA were worried that too much was happening in the Poolbeg area, too fast, for them not to have a stake. Rightly so I believe. Irish developers were beginning to scoffing at local authorities by that stage. But it cost too much to get in the game by then. The piles of chips in the middle of the table had climbed too high. Everyone had consumed too much wiskey and inhaled the same bad, smoke filled air. It was hardly the kind of table a local authority should have sat down to.

The DDDA had watched helplessly as the entire length of Mayor Street upper and lower got developed without their involvement. It was often joked at Zoe developments (and I presume at other major development companies) that the local authorities had very little to say about the docklands, because they didn’t own any stake in the lands.

Turning it on it’s head

NAMA will turn things as we know it in Ireland, on its head. In fact, I am worried in their haste to gather all of the chips in one motion, the Irish government will over-correct too much. I believe it would be a good thing, if some of the land was released from NAMA back into the open market at today’s prices or slightly above. Yes the project would take a hit, but I don’t like the idea of NAMA holding on to the land resources for too long.

That is what Zoe developments tried to do. What eventually happens, when you are strapped for cash you mortgage something, you place additional charges on what you have. In other words, you buy yourself breathing space, but the result ends up the same. The NAMA body is in a worse situation, because it can buy itself un-limited breathing space and a self-destructive cycle could set in, like it did at Zoe.

Property cycles

Alan Ahearne thinks that NAMA could hold onto the land much longer than 5-7 years. I don’t agree at all. If the property cycle hasn’t returned again in those 5-7 years, I don’t believe that Ireland is gaining any advantage. I believe that a stake should be put in the ground, regarding the release of assets into the market. Allow every other player out there, to plan their operations around something firm. Holding on to the assets for longer than 5-7 years will create a bureaucracy, whose has every incentive not to do anything with the assets. Because the minute it does, it is doing itself out of a job. That is basically what happened at Zoe developments, and that is why they failed so miserably in the end. That is the game of land development, but economists without experience in the field wouldn’t have an intuitive grasp of it.

Holding all of the Diamonds

There is one final aspect to all of this, I would like to consider. The Irish banks have done everything in their power, including paying €30 million worth of trade creditor debt for Zoe developments in order to keep product from reaching the market. It reminds me of that movie ‘Blood Diamond’ in which a London based diamond trader buys blood diamonds, but regulates supply to the market so that young ladies have to pay top prices for their precious stones. The fact that Irish banks are willing to do this now, confirms a suspicion I had, they have known about the game for some time.

Indeed, this was one of the primary reasons, that Zoe developments over extended themselves to obtain a property portfolio, which was grossly out of proportion with it as a building company. It was acting as one of the storage facilities for the diamonds. Zoe probably did not realise that was the case themselves. They were so consumed with their own ego.

As much as Zoe developments was geared up for speed of construction, they couldn’t use a quarter of what they owned. There were other reasons for acquiring property. Those had to do mainly with the regulation of supply of product onto the Irish market. One of the most cynical moves of all, was the buying up of Greencore shares. There was a company trying to turn itself around and why should someone with such a large Dublin based portfolio worry about Mallow, Carlow or Tuam?

Alternative solutions

I believe, it would be a good thing if some of the NAMA land was released back onto the market as soon as possible. So that there would be an equal balance between state and private owned development land. That would ensure a healthier competitive market going forward, between private and public interests. That is what should have been the case all along. The property market had been grossly distorted by vested interests who did everything in their power to prevent alternative solutions, to the ones they provided, reaching the market. It was companies such as Zoe developments working with the Irish banks and other developers who sought to keep the government out of the picture altogether.

Holding no cards or no chips

I would not like to see a situation where private interests in Ireland held no cards or chips at all. What we need is a decent play-off between private interests and public. We need to play one model against the other. Neither are very good on their own. Both are prone to mad excesses of waste and squander. But have both in competition with each other should prove interesting. Irish developers foolishly believed that by keeping the government out of the picture entirely, they would be holding all of the cards. We know now, how poor a conception of economics those development companies had. Otherwise, they wouldn’t be left in a situation where they hold no cards at all.

The development companies felt that by holding all of the cards with regards to land, that they could enforce a situation, where the tired, out-of-date business models could continue, long past their shelf life. That was the plan all along. It was a very unsophisticated plan, but it did work for about a decade. The Irish development companies became very profitable and the local authorities were in no rush to pass new legislation regarding standards of development etc. In other words, by owning all of the land, the Irish developers were stopping innovation happening.

The Irish architect

Developers held all of the cards, and the Irish architect could only winge and moan at best. The same boring product was pouring onto an already saturated market. Creativity and imagination was under valued. No constructive, forward-thinking innovation was taking place. Every time an architect moaned about this, the Irish developers liked it even more. The Irish architect was like the small kid in the school yard, everyone liked to pick on.

I can speak from experience there.

Brian O’ Hanlon

I was wondering why UCD economist Morgan Kelly was hiding in the long grass, during all of this NAMA debate. I read several of Kelly’s essays about economics late last year. Now, it makes sense to me. Professor Kelly will get an opportunity to stand on one of the largest podiums that an Irish economist could hope for, in all of this property bust aftermath.

The bank is expected to produce evidence from insolvency specialist Simon Coyle accountancy firm Mazars, property valuer Sean McCormack at estate agent DTZ Sherry FitzGerald, and from UCD economist Prof Morgan Kelly.

http://www.irishtimes.com/newspaper/breaking/2009/0901/breaking25.htm

Kelly will prove a very reputable and convincing witness for ACC bank in today’s High court case.

Brian O’ Hanlon

Latest breaking news.

Anglo Irish Bank, in a letter, said it had no objection to an examiner being appointed in a bid to save the Zoe Group and is willing to finance the companies further to the tune of over €60 million.

http://www.independent.ie/breaking-news/national-news/banks-agree-to-lend-carroll-companies-more-money-1874846.html

Anglo Irish, a bank described in yesterday’s joint Oireachtas committee on finance briefing, as not having earned a ‘red cent’ for the Irish taxpayer. I could seem that the Anglo Irish head quarters at North Wall Quay may have a chance of completion after all.

That will set a cat amongst the pigeons I am sure.

Brian O’ Hanlon

I notice how the issue of valuation methods has become a battleground for the Zoe High court case today also. Exactly how it has raised huge questions in relation to NAMA also. The question is, who will carry out the valuations. The same parties who tried to hype up the Celtic Tiger property bubble for so long?

This is what makes Morgan Kelly such a credible witness I believe. The High Court judge has to factor this in. The credibility of Irish valuers is being openly debated and questioned in other parallel discussions. Not to mention the fact that a new form of valuation method is being tested with NAMA: the long term value model. Which no chartered surveyor in Ireland has used ever, in 40 years of practice.

While ACC had questioned the methodology by which those valuations were reached, it had not disputed the actual figures provided. John McCann of BNP Paribas had provided an affidavot for his side to the effect the methodology was valid, counsel added.

http://www.irishtimes.com/newspaper/breaking/2009/0901/breaking25.htm

I assume that Zoe is hoping to build a credible case around the notion of the ‘long term valuation’ method, rather than the mark-to-market method. The fact alone, that a little more information exists now in the public domain, about this new valuation method, can only help Zoe in it’s case. We had the credible witness of Mr. Mulcahy, a ex. chairman of Jones Lang LaSalle speaking in support of minister Brian Lenehan only yesterday.

For those of you who tuned into the joint Oireachtas committee on Finance meeting yesterday, and reading these reports from the Zoe case, one cannot help but see the strong parallels. An article on the subject of valuation techniques appeared in today’s Irish Times by the chartered surveyor, Eoin McDermott.

Another important factor in this process will be the categorisation of property assets including undeveloped unzoned land, undeveloped zoned land (greenfield, brownfield, prime urban), undeveloped property with planning refusal, undeveloped property with planning permission, partially completed buildings, completed unoccupied buildings, completed partially occupied buildings, etc.

It is imperative that an overall strategy and action plan is put in place for the macro management of these distressed loan assets.

http://www.irishtimes.com/newspaper/opinion/2009/0901/1224253586371.html

It is good to hear from the Chartered Surveyors perspective in the newspaper. Interviewed on RTE radio news at one today, Eoin McDermott offered a suggestion, there were potential buyers out there in the Irish property market. However, availability of finance was a key issue for those potential buyers.

Maybe I am paranoid here to an extreme degree. But does that sound a little like the Celtic Tiger chicken and egg situation all over again? I remember Liz O’Kane suggested towards the end of the Celtic Tiger, that finance for buyers was becoming an issue. Liz seemed to indicate in my opinion, in some media interviews, that had the credit kept flowing that prices of property were fundamentally sound and could continue close to 2006 levels perhaps.

As deputy Alan Shatter, I think it was, said in yesterdays joint Oireachtas committee on Finance meeting – there is a lot of ‘circularity’ involved in all of these issues to do with property, valuations, loans and NAMA legislation.

Brian O’ Hanlon

5 year mortgages and if you don’t own a zone 1 home by the time your 26 you get one for free…In the interest of the families:D

Long term architecture value might make an appearance…
Fixed fee then an annual fee or architectural rates:p
bonuses of 10% of the value of property for any award received…

blah blah

Long term value and long term mortgages… some one is going to have to pay them…

I would agree with ACC bank’s council in this instance.

Counsel said that “hostility” had been shown to Danninger between August 2008 and April 2009 when nine winding-up petitions were filed against the company by unpaid creditors. “Presumably they were paid off,” he said.

This was an example of the risk facing the company but that the court was not being told about this, he said.

http://www.irishtimes.com/newspaper/breaking/2009/0902/breaking26.htm

It and other key parts of the story have been purposefully shielded from the court’s view. In terms of mounting a second petition, the Zoe team should have done a lot better on this count I think.

I believe that the Greencore and ICG share holdings have only been referred to in terms of their producing dividends in the Zoe defense case. But an awful lot about those shares, has indeed been concealed from the court proceedings.

In a way, that I don’t care for very much. I am sure the Attorney General’s office and many others are watching however.

Zoe is a company which could learn a lot better how to report on its status, in a lot of ways. It has improved a lot over the course of these court proceedings, but it still has some ways to go. Trying to conduct business, while at the same time remaining such an opaque institution has not been good in the end for Zoe, I do fear.

I hope that NAMA can learn to do better, in this regard. A very good article was published by Constantin Gurdgiev in last Friday’s Irish Independent newspaper.

There is, however, another option — an option of fixing Nama legislation to minimise the expected losses to taxpayers and bringing about transparency and accountability to its operations. Let’s call it Nama Trust.

http://www.independent.ie/opinion/analysis/nama-needs-tweaking-or-it-could-destroy-us-1871834.html

Brian O’ Hanlon

A couple of black eyes given out today, there is no doubt about that.

Judge Frank Clarke adjourned the hearing until Monday and said a ruling could take seven days after that to deliver.

That would mean a ruling just before the Dáil is due to debate the NAMA legislation.

http://www.rte.ie/news/2009/0902/carroll.html

I mean, could you write a script for this really? It might as well be a soap opera like Dallas. I don’t know what sort of ‘impression’ that Ireland is making abroad, but I know it must be an impression at least.

Brian O’ Hanlon

Not to mention the ‘Irish Davos’ on the 18th September.

Three years ago, at the World Economic Forum in Davos high up in the Swiss Alps, it struck me again just how many people of Irish decent – not just from the US, but also from Britain, Australia and even Argentina – were movers and shakers in the world of business.

http://www.davidmcwilliams.ie/2009/08/31/diaspora-can-foster-future-success

What an ‘action packed’ week that is turning into.

The Liam Carroll High court decision, the NAMA debate and an Irish Davos all in one week.

Brian O’ Hanlon

–

Ghost Towns

I think NAMA might be going off course. I think NAMA might be missing the point. Mixing up what is ‘good’ or sustainable development and what is ‘bad’ or un-sustainable development. The ugly, we can live with, as long as it is built in a sustainable location.

There is a lot of talk in the newspapers today about Liam Carroll’s property loans going into NAMA. I think there is absolutely nothing wrong with the Zoe developments property portfolio. It is one of the healthiest in the country from many points of view. Even if you were to exclude the ‘hope value’ as Fine Gael’s Richard Bruton described it. The Zoe portfolio is eventually going to come out on top. There should be no real rush for NAMA to deal with Liam Carroll’s loans, other than the fact that he made a royal mess out of his company.

Liam Carroll engaged in a very un-orthodox method of development, as I described briefly in a Sunday Tribune article.

http://www.tribune.ie/article/2009/aug/23/developing-on-the-back-of-a-cigarette-box/

But that is an entirely separate issue. It does not say there is something ‘bad’ or otherwise with Liam Carroll’s property portfolio. The distinction needs to be made. To an extent, the NAMA plan and the Liam Carroll case are totally separate issues.

The first loans I would move into NAMA, if it was up to me, are those really un-sustainable ghost towns and so-called ‘development lands’ speculatively purchased in the upper Shannon region. Which may take decades and decades to work through the system and be worth anything, if at all. If there was some way we could get them moved in the NAMA vehicle first and simply bull doze the construction, which is never going to pay for itself, I would be all for it. I don’t know how you do that in legal or financial terms though. Buying something simply to bull doze it down.

A problem with NAMA is, the big boys will be the first to be taken care of. The smallest of the 1500 lenders in the NAMA portfolio, hold those bad developments in the upper Shannon ghost towns. Unfortunately, it is the ghost towns of the upper Shannon region, and in places like the ‘Ring of Kerry’ that are causing the worst fears and doubts in terms of the bank loans. But those will be last in the queue to go into NAMA.

I don’t think there is any real risk with Liam Carroll’s property. We all know it is going to recover, be developed, leased or sold at some stage. I don’t think there need be any doubt about that. It is only a discussion over whether a private interest or a public one, gathers the most benefit from that transaction. But it is not a transaction we should worry about, it is going to happen one way or another.

The side of the portfolio that really worries me, is where a transaction may never take place. The ghost towns which were built way out in the sticks of NAMA land. The only purpose of the ghost town was to fool the droves of settlers coming out of Dublin, who were searching for the ‘good life’. They were moving into the western wilderness with bags of money having sold their home in Dublin. They were being ambushed by speculative developers in the upper Shannon region and elsewhere in the hinterland. A failure to use ‘mark to market’ methodology with that sort of rubbish, both on the buyer and builder side of things, will upset everything in property market.

I know one enterprising hair dresser in Dublin city, who purchased 10 acres of bogland in County Laois. The man still believes it is worth building a house there. Despite the fact, the site is land locked with no road into it. (Unless the occupier buys a helicopter, they are snookered) That man is not a stupid guy. He has run his own sucessful and viable business all his life in Dublin. But he is a player in the ‘property market’ who needs to be given a firm signal, of what the real value of his property is. So that he can absorb the write down immediately and move on with his life. Chalk it down to experience, or whatever way you like to put it.

Brian O’ Hanlon

Do you think Liam would do well with major infrastructure?

@missarchi wrote:

Do you think Liam would do well with major infrastructure?

There is a difference between civil and structural engineering. No I don’t think LC would do well with major infrastructure at all. There are only a couple of things, his kind of operation works for. He would do a good job of completing a project such as North Wall Quay. He is fine at doing that sort of thing.

What I don’t really like about the Zoe group, is that they wish to ‘add value’ to land, which they will sell later as part of their business plan, but having obtained planning permission for schemes on the land first. That is okay if they mean land in Dublin City Centre. But if they mean land which has never been touched or serviced, then of course they are going the wrong way about it. A lot of the Zoe group’s land, or more specifically the Dunloe land is un-serviced land.

An Adamstown kind of approach would be required in their of advance civil infrastructure. I think that Zoe are playing catch up to others like Castlethorn construction, in that regard. You need a strong culture of project management to achieve was Castlethorn did at Adamstown. I don’t believe the project management culture exists in its full extent within Zoe at all. They are short personnel in that regard.

Brian O’ Hanlon

In today’s Irish Times newspaper, Simon Carswell reports on new developments in the Zoe High court case.

http://www.irishtimes.com/newspaper/finance/2009/0904/1224253823351.html

Simon Coyle, an accountant with Mazars, raised queries about the group’s management “capacity” in a submission on behalf of ACC rejecting KPMG’s findings that Zoe had a reasonable prospect of survival.

I too agree with this assessment. I knew this the first day I walked into the company as an employee in late 2006, early 2007.

Though I do believe Zoe were a lot better than most other Irish property development outfits, who operated worst than many sole traders would. I wrote about this today, at the Designcomment blog, entitled ‘Angel Investors’.

But because the general standard across the construction sector business in Ireland was so low, does not an excuse make. Zoe, and Dunloe was a multi-billion dollar business venture run by a couple of blokes who started out as sole traders, and will go back to that eventually.

It is a pity that construction industry is crippled by those limitations.

Mr Coyle also questioned if Anglo Irish Bank and Bank of Scotland (Ireland) (BoSI) would honour lease agreements on two buildings to be completed by Zoe.

They will not honour their lease agreements. Both projects were only intended to ‘carry the fool further down the garden path’ in my opinion.

It took most of us in Zoe, until the very, very bitter and final end to admit to that. Including the man himself, Liam Carroll, who knows he is effectively cornered.

Brian O’ Hanlon

Here it comes, Fingers Fingleton.

http://www.rte.ie/news/2009/0904/irishnationwide.html

RTÉ News has learned that Irish Nationwide directly received a cut of profits from successful developments that it had financed.

My question is simple, and it relates very much to the concerns of Simon Coyle, an accountant with Mazars. Why the heck weren’t Zoe management able to shout up and command a ‘piece of the action’, if the suits over beside the Grand Canal in Ranelagh were able to demand their’s?

On that point alone, I would question the ‘capacity’ of Zoe’s management. There is nobody really left in Zoe with a stake in the operation, now that the man in charge is out of the picture. This was the entire problem all along. Everyone was contented to be polite with Mr. Carroll as long as he wrote them pay cheques at the end of the month. There was no one at Zoe with a large enough stake to put into the pot themselves, in order to take charge in the company’s operation and direction. There still isn’t.

With Finger’s Fingleton, and the other Irish banking institutions filling the role of the ‘Liam Carroll’s partner’ in Zoe developments, there was no way that any of Liam Carroll’s directors could even mount a challenge. This is what is bad about Irish banks being so involved in Irish property development, to the extent to which boundaries lines were rubbed out for good. We are now left with a complete ‘vacuum’ in the terms of management in the biggest property development liability in the entire state.

I drank pints with John Pope. I put up with dirty tackles from David Torpey playing five aside soccer on Astro turf. I took no crap whatsoever from Liam Carroll. But the fact remains, all three of those people, whom I knew, were hardly running anything in their company for a finish up. It was all the banks direction. I said this from the start. Bankers have to go back to being bankers, and architects should be the architects. Otherwise, why do we even bother to train architects in Ireland?

I have been linking to Ruairi Quinn’s blog entry for quite some time. Deputy Quinn raised an important point not too long ago.

We need a fresh start and a new framework of regulation, transparancy and accountability. Banks must return to being service providers to our economy and not speculative players in their own right.

http://www.ruairiquinn.ie/?p=18

Brian O’ Hanlon

Brian, in fairness, I Nationwide’s annual report lists its interest in property developments. The company owns a number of property development companies, and at one stage it actually received a mortgage from Gerry Gannon to buy land in north Dublin. If the story’s about completion fees, it’s been extensively discussed already. There’s nothing new in the RTE story. However, if you do want to be shocked have a look at the scale of Lloyds property interests. We are by no means alone

I know the Fingleton stuff is old news for anyone ‘in the loop’ of Irish property for heaven knows how long. I learned about Fingleton relatively lately myself. Only last January to be exact, from a life time civil servant.

But you have to put on your ‘politician’s hat’ to look at this. This is the ‘political dynamite’ that Steven Collins in the Irish Times wrote about, not so long ago.

We all looked at Prime Time yesterday evening and witnessed our minister for Finance struggle to deal with an RTE lacky, is all I could describe it.

The latest breaking news on the Irish Times website as we speak is this:

http://www.irishtimes.com/newspaper/breaking/2009/0904/breaking54.htm

You don’t have to be a razor sharp news reporter to join up the dots.

This Fingleton story is breaking. The fact is this Fingleton story might as well be ‘hot off the press’, because it will be breaking news, as far as the Irish public are concerned.

I have been waiting all along for this banana skin. It is the kind of one, that minister Brian Lenehan could finally slip on. In fairness to the minister, he has played an outstanding part for FF all along.

Brian O’ Hanlon

–

Return of the Phantom

I will be delighted if I have helped to contribute one useful piece of vocabulary to the discussion about Irish property. If I did nothing else other than that, it has been worth the effort. The term ‘Phantom Equity’ is now taking root in the public consciousness. I think it is a very useful description and something I scribbled about in late July. By the way, Jones Lang LaSalle were the estate agent advisors to Zoe developments and Dunloe Ewart when this particular attempt was launched in the closing hours of our mad defensive effort to save the company.

If you dropped below 15,000 square meters you were too low. I conducted rough feasibility studies for both Harristown and Cherrywood. North Wall Quay was locked up in litigation and a stop gap needed to be found and fast. Nothing short of rocket propulsion would save the day.

(See Designcomment blog entry entitled ‘Development as Freedom’)

This is why I find it strange, that no less than the ‘rocket engineer’ himself, a former chief executive of Jones Lang LaSalle read out the testimony at the recent Joint Oireachtas Committee on public finance meeting. Even moreso, given the fact a photograph appeared in the Irish Independent today, of ‘mother’ Mulcahy with Sean Dunne. Sean Dunne was the successful legal objector to the North Wall Quay Anglo Irish bank headquarters construction. The project that put Zoe developments into so much trouble in the first place. It is the reason why Liam Carroll’s health is so poor, he will be unable to show in court tomorrow. Zoe developments is the company which threatens to bring ‘the whole house of cards down’, to use justice Kelly’s phrase. Given the proximity of property valuation expert, John Mulcahy to all of this mess, I cannot understand how he is supposed to represent the impartial and objective views of the Irish taxpayer. I am not a property valuation expert, but I would probably do a better job myself.

Fine Gael’s spokesperson for finance, Richard Bruton has used the term ‘Phantom Equity’ on public record. While minister for Finance, Brian Lenehan has publically voiced his distaste for the term. Perhaps in due course, minister Lenehan will find out the real truth. Jones Lang LaSalle do know what ‘Phantom Equity’ is. They have been dealing with the stuff for so long. I think that Neil Callanan in today’s Sunday Tribune got his analysis of the ‘Phantom Equity’ problem for NAMA bang on the nail. Everything in Callanan’s article today, conforms to my own experience working on projects during the Celtic Tiger. Specifically, the tier one larger developments where ‘nine figure’ sums were involved.

http://www.tribune.ie/business/article/2009/sep/06/phantom-equity-could-haunt-nama-for-years/

I also found Callanan’s article about the Zoe developments High Court case very informative. (See more revealing insights by Senator Shane Ross below) The only thing I would have to add, is what ACC Bank’s council mentioned in the High Court. Why are only seven of the Zoe companies represented in court? Why haven’t the Greencore shares been presented as part of the business plan? Callanan raises the point about loans with personal guarantees by the Carrolls which are now worthless, should impact on the Zoe developments business plan. It goes back to Callanan’s argument about the ‘Phantom Equity’ problem that NAMA will face. Callanan also noted that every 0.5% rise in interest rates results in an additional €40 million Zoe have to pay each year. €700 million worth of the €1.2 billion of Zoe’s loans are floating rate, the rest are fixed.

My favourite article of all, was in the Irish independent, the interview between Ronan Quinlan and Michael O’Leary of Ryan Air.

“Liam Carroll owns lots of properties that are being let to Government institutions. These are performing assets. They can be sold tomorrow to international investors at face value. We need to sort this out. There are lots of worthwhile properties there that are saleable, but the only ones who can work that out are the bankers.

http://www.independent.ie/national-news/developers-and-banks-should-take-the-pain-oleary-1879550.html

I assume that Carroll has already sold the future rental income for those properties to Bank of Scotland Ireland as part of the huge re-financing agreement between them. The cash from that deal was pumped into Greencore and Irish Continental Group share holdings. Indeed, why aren’t the ICG shares playing a major part in the Zoe business plan? Already this week, we read in the Irish newspapers of An Taisce’s objection to Dublin Port Authority extending it’s pier infrastructure. The Irish government is urgently trying to solve a problem in relation to security of oil supplies for the country. The ICG shares represent a crucial part of the puzzle, if An Bord Pleannala refuse Dublin Port Authority their application.

Michael O’Leary correctly pointed out the Irish banks ‘know where the bodies are buried’. On the other hand, what McWilliam’s described as a powerful and growing stronghold on Grand Canal Street, the National Treasury Management Agency – all that they can do is hire an auctioneer to go out and do their dirty work for them. The exact ones who made a ‘bollocks’ of the property market in the first place. I raised the same issue myself not too long back. Because Constantin Gurdgiev was demanding to know in his article for the Irish Independent, why the Irish taxpayer didn’t receive any deeds or title with the NAMA bound loan book. In my opinion, there is not a hope in hell, that a government agency or anyone associated with government can be seen to be dealing with the sordid stuff that Irish property developers handled. That is a service the private sector property development business in Ireland, in association with banking institutions provided. We should not send our brighest and best civil servants to be deal with the real bad stuff.

I mean honestly, the Irish state institutions cannot even lease a property where there isn’t 100% assurance on the deeds and title. The fact that Carroll managed to leases so much of his commercial space to the Irish State, ensures that those properties are sound. Why aren’t those assets being presented in the High Court as part of the KPMG business plan? More than likely because of the securitization deal done with Bank of Scotland Ireland to take ownership of all future rental income from the Irish State. Given that as the case, it is no wonder BOSI are now willing to ‘front’ Zoe developments some more money, despite the fact they are pulling out of Ireland. By the way, something else Senator Shane Ross points out in today’s Irish Independent newspaper is that KPMG are auditors of AIB bank. AIB bank has €500 million worth of loans outstanding to the Zoe group.

Carroll’s legal team produced a report from accountants KPMG, maintaining that Zoe could see its assets rise to €1.36bn in less than five years. KPMG also happen to be auditor to AIB, Carroll’s biggest creditor. Presumably the blue- blooded auditors declared this fact. Carroll owes AIB nearly €500m.

An optimistic report from Goodbody Stockbroker’s economist Dermot O’Leary was offered by Carroll’s counsel as a reliable forecast that the general recession would bottom out in 2010, followed by a recovery in 2011. Goodbody is owned by AIB. Presumably this was declared in court?

http://www.independent.ie/opinion/analysis/puffers-paradise-named-nama-1879456.html

Does anyone else get the impression, that the people responsible for the solution to the Irish problem, are nearly all the people responsible for making the mess in the first place? So much for introducing new ideas and fresh perspective into the operation, is all I can say. That was the bones of what David McWilliams argued in his excellent article in the Sunday Business Post article today. Well done, McWilliams. Or to para-phrase what Dail deputy George Lee said on Newstalk radio station, the over-pricing of assets and the under-pricing of risk was the cause of our problem. Now we are being asked to believe that, over-pricing of assets and under-pricing of risk is the solution. As I said, so much for introducing new ideas and fresh perspective. Why are we so convinced that Morgan Kelly, George Lee and David McWilliams are all wrong now? Between the three of them, they were the only voices of reason [heard on media] during the Celtic Tiger. Why are we so convinced that the people who caused our troubles are now going to solve them?

http://www.sbpost.ie/post/pages/p/wholestory.aspx-qqqt=DAVID+McWilliams-qqqs=commentandanalysis-qqqsectionid=3-qqqc=5.2.0.0-qqqn=1-qqqx=1.asp

Brian O’ Hanlon

This is a pile of BS. It is all to do with optical illusion.

Mr Shipsey said the evidence now before the court in this second application has more than adequately addressed the insufficiencies the Supreme Court identified in the first application.

http://www.rte.ie/business/2009/0907/carroll.html

Council for Zoe developments is telling us they are entitled to be ‘economical’ with the truth, they ‘ration’ us with the facts and figures and ‘deny’ us what we are entitled to. A full and and comprehensive overview of the operations of the Zoe group.

Very, very disappointing for myself as an Irish citizen. But given the fact that AIB bank hasn’t been willing to put all of it’s cards on the table in relation to the banking crisis, in the hope they can sell all of their rubbish to the Irish taxpayer, I don’t suppose it should come as any surprise the KPMG plan for the Zoe group only presents half the picture as well. That is why I am supportive of the Fine Gael proposal to establish a good bank, and make both AIB and BOI suck on it, along with Zoe developments.

There is no other way to look at it, other than the fact that NAMA is a bail out for companies like Zoe developments. Furthermore, it is a bail out at a time when the Irish people can least afford it. Having been over-charged for a decade for rubbish property products, we are going to have to face over-charging a second time around, to the same people. To take senior counsel Bill Shipsey’s own remark, that never before have the interests of the wider Irish community been so much to the fore. I do not believe council Shipsey understands himself the full implications of what is in that statement. I feel it is disgraceful how little of the evidence was presented before the High court.

Not to mention the fact, that Liam Carroll himself did not even show his face.

But he said people working for the companies are not in such a fortunate position.

I lost my position working for this company. I cannot see anything wrong with ACC bank’s approach. I’m sorry. Provided that a foreign bank isn’t allowed to run off with the Irish Continental Group share portfolio. Which no Irish government member seems capable of going out and buying today, in order to keep intact a necessary strategy to upgrade the facilities at Dublin Port. The Irish government has no problem spending €100 billion needlessly. But seems to find it very difficult to spend €100 million in the right way. That is going to prove very under-mining of confidence in Ireland as a country, capable of supporting itself and its economy.

What we need right now are leaders – not PR stunt men and women. We need a general election.

He said there were a number of compelling reasons why the court should use the discretion it has allowed in the appointment of an examiner – most particularly that the application for protection enjoys the overwhelming support of most of the companies’ banks.

It was the banks themselves who ensured that the Zoe developments court presentation was as bleak and depressing as they could possibly make it, in order that they can sell all of their worthless sh**e into NAMA. Along with prime real estate which Zoe developments built up over two decades of very hard work.

Mr Shipsey said support could also be found in the detailed independent accountants’ report submitted as part of the application, and it was unlikely such a compendious report has ever been seen by a judge of the High Court before.

An ‘asshole statement’ right there.

Never before has a property empire which owes close to €3.0 billion to the banking system appeared before the courts either. We are not talking about some ‘corner shop’ here, which cannot pay its bills. The Liam Carroll empire is likely to comprise of 10% of the total write down the NAMA plan needs property developers to take, in order for the NAMA plan to work. More has been concealed from the court than has been revealed all through this case.

The whole thrust of the Zoe developments defense is rather like one of those tribes in the African plains, who lined up one behind the other in other to conceal their numbers as they march from a great distance. The purpose of the Zoe defense, was to conceal the true size of one third of the entire Liam Carroll property empire. We are not even being allowed to contemplate even the extent of a third of the entire empire. The purpose of this, is to make us believe that the problems, or potential liabilities and risk, are much smaller than they are.

Much in the same way as we have been told that Irish property developers only took out 75% mortgages during the Irish property bubble. The real figure, is probably somewhere between 100% and 200%, with some more added on. We are being fooled into believing that NAMA is a much smaller risk than it actually is. I would contend, the Irish people may feel a lot better, and the world markets too, if the full extent of things was revealed. Instead of all of this ‘optical’ BS.

He said in the last referendum, voters had sat on the fence, and in the companies’ first application, the banks had sat on the fence.

The first honest statement I have read.

Making his closing comments, counsel for ACC Rossa Fanning, said there was no evidence before the court to suggest the bank opposed the petition for anything other than rational commercial reasons. To suggest otherwise, he said, was unfair.

I would agree, with the one qualification mentioned above in relation to the Irish Continental Group share portfolio. ACC Bank are entitled to the Greencore portfolio, for all I care, if they can spilt it down the middle with Ulster bank. It is the ICG shares I believe either Michael O’Leary himself of Ryan Air, or minister for Energy Eamon Ryan must buy now. I suspect it will be Michael O’Leary given the fact, paying a toll charge to import fuel into Ireland, is not in his best interests.

He also claimed it did not make sense for the companies to argue that NAMA is not relevant to their application. He said the loans in question are prime candidates for transfer to the new agency, and there may be a good reason for the supporting banks to want to see those loans transferred into NAMA.

Yes, because the Zoe portfolio is one of the few potentially good loans in the entire €90 billion’s worth of thrash. If the NAMA project, did not receive the Zoe loans, then the entire NAMA plan is as good as dead now.

But he said that reason was ‘light years away’ from the intention behind legislation allowing companies to enjoy protection of the courts.

Agreed.

Brian O’ Hanlon

Who is going to be included in this effort? Am I going to get a say?

Zoe had prime sites in Dublin’s docklands, “a world away” from agricultural land zoned industrial down the country, counsel said. All it wanted was a chance to try and work out a survival scheme over the next 80 days.

http://www.irishtimes.com/newspaper/breaking/2009/0907/breaking81.htm

Will it be the same captains, who put the ship on the rocks to begin with, are going to draft the new strategy? Including most of the consultants who claim to know what Liam Carroll’s best interests are. That is what pisses me off the most. Everyone who knows the least about Zoe as a company, are also claiming they know the most about Zoe as a company.

How does one get the mix right? If I see Jones Lang LaSalle anywhere near that revised rescue plan, I will run a million miles from Zoe developments. All I have to say, is Zoe was a stable enough company, though a less profitable one, operating at a much smaller scale. These large projects have not been kind to it at all. Mainly because that is a club, in which Zoe were simply not welcome entrants.

Brian O’ Hanlon

Isn’t this a real jem:

Remarking a bank’s interest is to recover as much as possible of its debt and it “would be mad” for a bank not to go along with a scheme to that effect, the judge asked was it reasonable for the court to infer the banks’ did not think this scheme was stupid but not to further infer they believed there would be a company at the end of it? Mr Shipsey said he could not disagree.

http://www.irishtimes.com/newspaper/breaking/2009/0907/breaking81.htm

Read it several times over, it does make sense, in a far out kind of way.

Interesting point here:

Addressing the effect of a possible rise in interest rates, counsel said rates could be fixed and AIB was offering a rate of 2.7 per cent up to 2014.

Brian O’ Hanlon

Well done Brian Lenehan, too right in my opinion. The guys working for Zoe will feel hard done by, I know, but such is life.

Speaking on RTÉ’s Six-One News, Minister for Finance Brian Lenihan said he welcomed today’s clarification from the High Court and said it showed the need why NAMA was needed.

http://www.rte.ie/news/2009/0910/carrolll.html

I am still not in favour of NAMA. It might be the ‘best solution’ for the banking crisis, but I believe the Fine Gael solution fits into a solution, for the entire country better. There are problems in Ireland at government, corporation and at individual level, which I believe the Fine Gael solution would address better in one quick clean shot. But that is only a matter of opinion.

Well done, again, to Brian Lenehan.
Brian O’ Hanlon

@highorlow wrote:

Some other ‘economists’ have stated that we are better to let the banks and developers go under altogether + fire sale of assests = cheap land that the government should buy themselves. Don’t think is a good option though…

Thanks for the comment. I could go on for the night describing the various NAMA in’s and out’s I can assure you. But since, I spent most of my summer free time doing that, I will leave the Autumn free, and hopefully get some ‘fresh air’, and recreation. If you look at Designcomment blog you will find some things I have managed to put up there. I want to comment about the commission on taxation report also, over the weekend.

The selling of assets at the lowest rate, seems to be part of an overall plan. Whereby, Ireland can restore some kind of economic balance and stability, which it would have where you de-value the currency. If you de-value the currency, the loans being valued in the older currency, are paid back quicker. But we don’t have that option available to us anymore. The option to sell assets at the lowest market rate, is the next best thing, if we hope to get on with our lifes again.

The only trouble though, with selling of assets that cheaply, is that it will not be you or me buying them, strangely enough. It will be hedge funds, and other private interests in Ireland itself, who capture the value in such a sale. They will have the resources at their disposal to take advantage of the opportunity. A bit like what you saw happen with Dermot Desmond and his Irish banking shares, except on a much larger scale. Perhaps not as large a scale as when the Russian oligarchs bought up the state assets, but not far off it either.

That is basically what NAMA is trying to avoid. The trouble is, NAMA ensures that a lot of the ‘old regime’ in Ireland remains intact and lives on. That is something that the majority of punters on the island do find replusive at this stage, including those from all political persausions. But it may be in their best interests to bite their lip. Retribution could be satisfying, but it could also be costly.

Brian O’ Hanlon

I posted what is below, somewhere else yesterday evening. It is my definitive statement, which encapsulates most of what I have concluded with, in my thinking on NAMA. I stress, it is simplistic, reflecting only the views of a non-lawyer, non-bond trader, non-economist, etc. But I have found, it gets me by as far as my daily life goes. It is enough to allow me to ‘move forward’.

I deliberately use the term ‘move forward’ in a sarcastic sense. I agree with what Fintan O’Toole wrote in his Irish Times opinion piece.

http://www.irishtimes.com/newspaper/opinion/2009/0908/1224254064758.html

Brian O’ Hanlon

I stand to gain a lot more myself, working in the property area, if NAMA goes ahead. That is, if NAMA is a success and doesn’t break the country completely. Brian Lucey commented yesterday, that he is discussing NAMA in his sleep. Lucey said though, the definition of a ‘lecturer’ is somebody who talks in someone else’s sleep. Lucey might indeed, be talking in other peoples’ sleep at the moment.

But certainly, from my own perspective, I didn’t sleep too well this summer for some reason. Then it finally dawned on me. It does not sit well with me as a person, to think that I could support the NAMA plan. Since I have decided not to support it at all, in my comments and my own mind, I have slept a lot better. That doesn’t mean, if NAMA goes through, I will be disappointed. On the contrary, it could be good for me. However, disagree-ing with it, gives me more peace.

In order to disagree with NAMA, in my conscious brain, the really difficult work, was to find a sufficient number of points against NAMA, to tip that see-saw inside of my brain to either one or other side. I will proceed to describe the three things below. Brian Lucey in his latest Irish Times article, has hit on some additional factors, that I could agree with. They are things about bonds and what not, that economists do find interesting.

But the great thing for me, when I read Lucey’s latest article, was I realized, I don’t need his articles so much as I used to, to make up my mind. That, with the three basic ‘weights’ I have now placed on one end of my see-saw, I am happy that by brain is no longer under the same stress it used to be in, all summer. I don’t need to add additional weight to the see-saw to make a decision. Here they are.

(1) The FF government has commissioned numerous expert reports, none of which tie up together to form a cohesive strategy. NAMA in itself, is a wonderfully clever idea. Not to knock that idea, but it hasn’t been tied up with the rest of the consultant advisory projects. In other words, there is no clear overall architect. Which spells disaster to me.

(2) The banks are making their situation appear a lot worse than it is. They haven’t put their cards on the table. The AIB operations in Poland for instance, could be sold up to improve their position. They have not even gestured a willingness to look at that option as a last resort.

It is the same with the Zoe developments court case, the company I used to work for. They are careful to display only the portions of the company they want people to see, in the courts. I.e. In an attempt to say ’save us’, we deserve corporate wellfare.

(3) The €30 billion hit that ex. Ulsterbank economist Pat McArdle predicted the developers will have to take, in his article in the Irish Times newspaper. Pat called it, having some skin in the game.

I don’t believe the Irish developers ever had their own skin in the game to begin with. They were a miserable, impoverished bunch of guys, who never knew it was to have any real wealth. We won’t hold that against them, you are what you are. But NAMA hinges on the fact, that they were ‘real developers’ instead of developers of convenience the Irish banks needed in order to enlarge their loan books.

The three items above, are all that I really needed to make up my mind for good and glory about NAMA. I have read and listened to Gurdgiev, Lucey, Whelan, Burton, Bruton, Lee, Ryan, Lenehan and all the other excellent commentators to date. The list of people I know now, is far too long to list here. I know more Irish economists, journalists and politicians than I ever knew in my life, simply from following it all.

I don’t think I have purchased this many newspapers or watched the main evening news and studied as many blogs as I have, ever, as I have donevover the last 3 months. For what it is worth Greg, I have become a Fine Gael supporter. Even though, I never had a political opinion in my life. I used to go into ballot boxes and pick out a name basically. It was through listening to Fine Gael in particular over the past 3 months, that I really began to figure out how I felt about NAMA. For real. No more voices in my dreams thankfully.

I agree with everything suggested by Sunday Tribune business journalist Neil Callanan on today’s morning Ireland program.

http://www.rte.ie/news/2009/0911/carrolll.html

The important story this morning is that BOSI want to come into NAMA and become part of a ‘third banking force’ along with Anlgo Irish, Irish Nationwide, ESB and probably a ‘spun off’ Permanent TSB as IL&P focus back on insurance exclusively. Bear in mind, Permanent TSB have a fifth of the country’s residential loan portfolio. A lot of assets.

In my own mind, I believe that BOSI wanted the securization of Liam Carroll’s government rent roll, in advance of going into the British toxic banking asset container. Those ‘guaranteed’ Irish government rented buildings, would go a long ways towards improving the financial robustness of many a package of real estate loans. Similar to what NAMA is doing at the moment, in stress testing the Irish loan book, a government tenant is sure to improve the figures.

On the other hand, Liam Carroll took advantage of the cash earned from securitization of the said rent roll from the Irish government, in order to buy shares on the ISE. That was clever from Carroll’s point of view, because it allowed him to ‘broaden’ the base of his collateral, which had been most land banks, with several charges already placed upon it by different lending institutions. The Irish shares were offered to the banks, in order that their own ‘stress test’ models could benefit from a broadened collateral base, and they could obtain the ‘right figures’ to allow them to extend Carroll additional credit.

What all of the above emphasizes, is the fact, that even though you can make the figures work to remain in whatever compliance in banking terms you require to be in, the plan can see be cock-eyed in the overall sense. Both on the borrower and on the lender end of the equation. This is what both justice Peter Kelly and justice Frank Clarke’s decisions emphasize in my opinion.

Brian O’ Hanlon

–

What of Royceton?

People often ask me, what was the purpose of including the Royceton company in the new petition for examinership in the High Court case involving six other Zoe group companies? I will go a bit further, and make this informed observation. I will tell you, I have looked at all the photos today in the papers. There is definitely something afoot in David Torpey’s mind. The reason I say that, is because I know the following. The master plan in Royceton towards the end of 2008, was to launch out in a new direction. To become an all-in-one provider of construction expertise and services to clients other than Liam Carroll.

A new business plan

The business plan had a lot going for it. Because the construction operation has now become very complex and sophisticated. Much more than an average architectural consultancy practice is able to manage. We will not see advancement in the construction sector until we see the elimination of some the traditional techniques employed in construction. It is important to understand, that such changes are not welcome at all, by the encumbants of the Irish professional construction services sector. But why would that surprise anyone? We all know about Pharmacy, Dentistry and many other vested interests. Why should construction be any different? Especially given the fact, the Irish government is a customer for construction itself. I would certainly welcome the competition that Royceton would bring into the Irish marketplace. Indeed, I view the services of Royceton as a potential export product also. David Torpey has always been a keen follower of football teams such as Manchester United and Real Madrid. He is also a very avid League of Ireland supporter. David would like Ireland to compete in Europe and stake it’s place. Like the inner city, shoe box apartment of the 1990’s, by 2008 Zoe was starting to incubate a new disruptive innovation for the new mellenium. The trouble with the concept for Royceton working for clients other than Liam Carroll, is that Carroll himself disapproved of the plan.

Carroll was in the way

Indeed, as long as the Zoe group remained in one piece, insolvent or otherwise, the position of Royceton grew weaker and weaker. They were stuck being dependent upon a single man, Liam Carroll. That man was not batting on their side anymore. Royceton could have a chance if it was launched on it’s own, but not remaining inside Zoe developments. This is why I believe David Torpey was smiling after yesterday’s High court decision. Liam Carroll is decidedly out of the picture, and Royceton may find a new investor yet. I would not be one bit surprised if deals have already been drafted up. The purpose of including Royceton in the High court petition this time around, is to ensure that Royceton was ejected from the Liam Carroll empire sooner rather than later. In order to give it a chance to execute it’s new business plan with new backing. To be honest, the Royceton guys are much too good to have lying around doing nothing. They are Ireland’s best team and they need to re-take the field.

Being the centre of attention

Liam Carroll developed a great dislike for this plan. He was used to being the sole focus of Royceton’s attention. The fact, he could not command their full attention any longer seemed to hurt him deeply. It wasn’t the profit making side of property development that motivated Carroll. It was the constant attention and interaction he got with his old colleagues. Perhaps owing to the state of his health and enormous stamina, things began to get sour through the later part of 2008 and on into 2009. Liam Carroll had fed the Royceton team with work for a decade or more. He was no longer up to that task. David Torpey had been Carroll’s draughtsman in Zoe from day one. What Carroll should have done, in the final years, was to give David Torpey an opportunity to be the best he could be. That would have been a fitting reward for many years of service.

Carroll and his team

The truth is, without Royceton, Liam might not have got far. Danninger, Carroll’s beloved construction company, were not capable of getting by on their own. They imagined that they were independent and liked to walk all over Royceton, as they felt like it. All they had to do was make a phonecall to Carroll and he would reprimand Royceton. Towards the end however, Royceton directors felt more like adults being beaten with a wooden spoon. That on equal terms with Carroll, in trying to solve problems. There was love lost on both sides of that increasingly growing fence. The truth that Danninger did not appreciate, was that without Royceton they would be out of runway faster than they knew it. It is not easy to combine the construction culture with the desk worker culture in the one company. I was often accused at Royceton of taking too much of the Danninger side on matters. I happen to like the productive exchange between the two cultures. But I understand, that in today’s context, construction really needs to become more professional.

How cheap is cheap?

To qualify all of the above a little bit, I would say the following. Having listened to Neil Callanan’s interview on radio one, Morning Ireland this morning, I would agree – Liam Carroll was savagely under-cutting the market. Carroll would offer rates at 50% of everyone else, making the initial lease of his constructed properties a ‘loss leader’. He then hoped to re-claim his costs and get into profit in the years that followed. That is, in the medium term. Instead, Carroll under-cut too much. He was badly caught out in the short term when credit stopped flowing in his direction. The point I want to make is the following. From the point of view of Royceton directors, they firmly believed in their minds, the reason they could undercut the market is they were so much more efficient than the rest of the construction industry. Certainly, they had innovated ways in which to save costs. I attempted to describe that in a Sunday Tribune article recently. But I think Royceton falsely believed that they could flex their muscles in terms of cost saving, enough to undercut the market by 50%. It is sometimes suggested that Zoe were the Ryanair of the construction industry. To that, all I can say is, you can believe too much of your own marketing waffle.

Pretending to be big

The other point I wish to make is this. Because Liam Carroll appeared to be such a large and powerful participant in the Irish property market, many consultant designers believed that Liam was a good client to have. Some consultants built their hopes entirely around Liam Carroll as their major client. But, it is easy for any player in the property industry to be a ‘big player’, if he can get away somehow with being insolvent. A lot of architectural consultants spent a lot of Carroll’s money on construction over the course of the Celtic Tiger. They so enjoyed themselves, spending Carroll’s money on construction, they convinced themselves they had a very sustainable source of employment in Liam Carroll. Which was a piece of bad judgement on their part. Similar to the way in which Fianna Fail, understood capital gains and stamp duties as a sustainable source of tax revenue. I did observe, Liam Carroll was able to fool people on two fronts. Both his own internal design team and his external design consultants were equally fooled in different ways, by Liam Carroll.

On to the super bowl

I do wish Royceton the best of luck, in anything they can salvage from the mess. It took a lot of guts to present the second petition to the High court for examinership. I believe that Torpey got the outcome he was looking for. His satisfaction did not go un-noticed by me, in the photos in the newspaper today. Whoever buys Royceton, will have bought the next super bowl team of Irish construction.

Brian O’ Hanlon

Latest update from Justice Frank Clarke, by the Irish Times reporter, Mary Carolan.

Mr Justice Clarke said he did not agree with all that was said by counsel and nothing had been said to cause him to change his mind. He believed “a mistake” had been made but was not suggesting it was a deliberate mistake.

http://www.irishtimes.com/newspaper/breaking/2009/0911/breaking4.htm

Brian O’ Hanlon

David Torpey has always been a keen follower of football teams such as Manchester United and Real Madrid.

Sorry for digressing from the main topic of your post but Dave Torpey absolutely hated Man Utd. and happens to be a very keen follower of Arsenal FC., so much so that he owned shares in the club and travels to see them play on a regular basis.
(I wonder how they are going for him).
He was once offered two free tickets for a Uefa champions league tie to see Man Utd play away to Inter Milan by a building supplier. Unfortunately for the genorous building supplier he couldn’t understand why Dave slammed down the phone on him in a rage.

Back to your views of Royceton becomming an independant entity within the construction industry, I would have to agree with you. I think Royceton had a unique insight into the workings of a building site and I would be encouraged if Royceton had to opportunity to go down this road.

@Bricks wrote:

He was once offered two free tickets for a Uefa champions league tie to see Man Utd play away to Inter Milan by a building supplier. Unfortunately for the genorous building supplier he couldn’t understand why Dave slammed down the phone on him in a rage.

I had a feeling it wasn’t Man Utd he supported, but that makes it all the more fun, to spread mis-information doesn’t it? I can’t help taking the piss, I know he takes his soccer quite seriously, even more seriously than Royceton at times perhaps.

Back to your views of Royceton becomming an independant entity within the construction industry, I would have to agree with you. I think Royceton had a unique insight into the workings of a building site and I would be encouraged if Royceton had to opportunity to go down this road.

It is a legal minefield though, because so little control over the company was offered to the directors of the company by Carroll. That and the fact that LC would not allow new management in to challenge him. That is not to say that LC didn’t hire people from time to time, to augment the team. They were very capable people at whatever level they became involved. But there was some element there missing – primarily in judging the ‘capital structure’ of the company, as it faced into uncertain economic times.

I believe that LC’s impression of the financial side of a company was – nothing inside his company was ever going to adapt or change in any way – and likewise, in LC’s brain, nothing in the external environment was ever going to change either to treaten in any way, the fundamentals of his plan. How does someone so big operate like that? This is why I always come back to the same old chestnut – arrogance, with filtered down throughout the lesser ranks, until it became lodged in everything, and how everything was done.

The trouble is, in the building industry, arrogance is one of those things you need to be successful. Without it, the best you could ever hope to be, is one those consultant architects who always take orders from guys such as Carroll. And seem quite content to take orders too. But arrogance, while it drove Zoe developments on to achievements, was at the same time sowing the seeds of destruction. If you get my meaning, one thing hiding behind another.

Brian O’ Hanlon

Once banks stopped lending, as they were forced to do earlier this year, the market collapsed. Developers were left holding properties whose rental incomes were a ruinously small fraction of their interest payments, and banks discovered that their collateral was worthless.

You know reading, an old Irish Times article by economist Morgan Kelly published two days before last Christmas, I could not help but agree with many of his observations.

http://www.irishtimes.com/newspaper/opinion/2008/1223/1229728473144.html

I mean, for heaven’s sake, two days before Christmas. The government must have been relying on the fact, that most sane individuals would be more worried about their shopping. No one, except for the die hards of die hards could possibly raise much protest on a day like December 23rd. But Morgan Kelly sure did add his tupence worth. He did so again, as we know in the Zoe developments case. A well timed contribution it was also.

Indeed, much of what I went to the trouble to do at this particular Archiseek thread, has been to add transparency. That is a tall order, but maybe a little glimmer of light might peek through all of the dirt and scandal. I don’t know. I read a very good comment by some journalist in the Irish newspapers this week – accountability, what is that anyhow? How is ever accountable for anything. We have been talking in Ireland about accountability for the last decade, and I am still not sure what it is supposed to mean.

Brian O’ Hanlon

Here is my Vietnam theory on the Liam Carroll case.

After doing some homework of my own, I have learned ACC bank were actively pursuing Liam Carroll to develop a lender’s relationship with him. Why would they do that? There were obvious signs that a recession was in the pipeline. ACC bank were certainly not suffering from property fever, not by that late stage in the game. I don’t buy it. So what else was on their minds?

Probably, ACC bank could see what was about to happen with property in Ireland. I would call it a kind of short selling – that is, ACC bank knew the defaulted loan could potentially buy a lot more of Carroll’s empire, and that of other property developers within a short space of time. There was excess money in the system anyhow, so pepper around €100 million here and €100 million there, and who knows, out of it all, you might win the lottery.

(Those of you more skilled at trading than me, can inform me whether I should be thinking long or short in this case. Basically, ACC bank lend a nominal amount which in turn produces an asset of a larger potential value)

ACC bank could see distress coming down the tracks for both Irish banks and Irish developers. This isn’t really a war between ACC Bank and LC. It is a war between ACC bank and other banks. LC and the north docklands is the Vietnam, Afganistan, Korea, Cuba or whatever you want to call it. The Prime Time feature is correct, the north docklands is ‘Limbo Land’, rather than NAMA land.

There appears to be a ‘sub-text’ in this Liam Carroll court case, that many of us find difficult to read. There is a lot about the current state of affairs, which we find difficult to grasp. Including the enormity of the problems themselves. Enormous, that is, from Ireland’s domestic point of view. John McManus wrote something of interest in today’s Irish Times.

http://www.irishtimes.com/newspaper/finance/2009/0921/1224254908745.html

It builds on some of the observations of economist Pat McArdle in last Friday’s newspaper.

http://www.irishtimes.com/newspaper/opinion/2009/0917/1224254723373.html

Brian O’ Hanlon

John Downes article in todays Sunday Tribune newspaper was a good read and John has thought carefully about the Zoe legacy to Dublin’s built environment.

http://www.tribune.ie/news/article/2009/nov/01/a-to-zoe-of-liam-carroll-king-of-the-shoeboxes/

All together it was a very fair account written by a journalist with a keen interest in the social cross section of a city. As always I will endeavour to defend the in-defend-able, in keeping with the best traditions in journalism, or blogging, a form of seudo-journalism.

I was watching a documentary about Fleetwood Mac on the television this evening. There was one comment about a period in the bands life, when they fired their band manager and gave over the management duties to their drummer. Accordingly, things got very ‘big’ all of a sudden. They had to hire separate limousines for each member of the band at airports. Each limousine represented a different style of music within the band.

That form of ostentatious over-spending was never present in the Zoe organisation. But the elements of internal frictions, energy and the creative process were present. Like whenever a group of people get together to do something cooperatively.

These property development firms are an awful lot like rock bands in a way. Some music bands do produce really good quality stuff which lasts. Others take advantage of the ‘market’ a little bit. What I do know, is that when you are working on the inside, there are strong personalties. To survive within the group, your personality has to be equally big to withstand criticism etc. There were a lot of big personalities within Zoe. Maybe that constant friction had a negative impact. Maybe it distracts from the needs of the community you mean to serve.

Make no mistake about it, the guys in Zoe had their differences, but no one wanted to leave the band. Fleetwood Mac talked a lot about their ‘bubble’, their world within their world. A lot of them worked really hard. A lot of guys worked themselves to exhaustion. It was an industry. Hopefully now, many will have a chance to reflect. To think about some of the points in this article by John Downes. Hopefully, future participants in the business can get it right for Dublin and for Ireland.

Check out that documentary on the band Fleetwood Mac if you get a chance. They went through a lot of daft experiments in developing the ‘creative process’ also. Sometimes the creative process was exactly the thing that suffered. Many architects who made their reputations through Zoe developments. They needed Zoe a lot more than Zoe needed them. They would jealousy back up the status quo within company, in order to preserve their own option to succeed as designers and have their reputation enhanced.

There is that to think about too. For many architects, the creation of one’s own image and fame is more important than anything else. Like I said, a property firm is not too different from a rock band.

Brian O’ Hanlon

Hi All,
Reading thread, interesting. It seems the Liam Carroll of Zoe Dev I remember has been replaced by an imposter. I also did work for him but stopped as I had standards I would not compromise. The Liam Carroll I knew would not spend Christmas, his own house had not seen any maintenance in possibly twenty years. I cannot be absolutely certain but I understood he carried a big jar of petroleum jelly around so he did not miss an opportunity to screw someone. He had no regard for any health and safety on his sites ( it was this point at which I drew the line ) and people died needlessly. Do not feel sorry for Liam no matter what happens he will have stashed plenty away that the receivers will never see and he will retire on a very nice pension indeed.

Instead feel sorry for all those who have lost everything by his welcome demise.

Solo,

Good to hear your input – you seem to speak from experience indeed. I agree with you. When one person, with a narrow vision of the world gets complete control of an operation carrying billions in debt, it is seriously wrong. I suppose at the time, I wrote much of the above, I was trying see how one could debate things with regard to the construction industry. I watched a very feeble attempt on RTE this evening on Pat Kenny’s The Frontline TV show.

http://www.rte.ie/news/2010/0315/thefrontline.html

A much, much better attempt was offered by Pat in his interview with Thomas Duffy linked below.

Procurement
25 February 2010 12:00
Thomas Duffy, from Duffy Chartered Engineers in Louth.

http://www.rte.ie/radio1/podcast/podcast_patkenny.xml

I mean to say – the brick layers unions had plenty to say when the times were great. Now that brick layers really need suggestions, I don’t hear of any unions making any. Presumably the same unions made a lot of money to pay people to do some thinking also, during the Celtic Tiger. That is what astonishes me quite frankly. Over 200,000 construction workers left without a livelihood, and no attempt at constructive debate whatsoever. Is that what Ireland is really like?

Brian O’ Hanlon

P.S. Solo, one question if I may. Did you work in one of Liam Carroll’s companies, for instance, Zoe developments or as an external consultation/services provider to Liam Carroll? This question is significant. People have very different perceptions of who he was, what he was about etc, etc. I wrote a Designcomment blog entry, Drinking and Property, a while back about the issue.

http://designcomment.blogspot.com/2009/09/drinking-and-property.html

Both

Interesting. Thanks.

Brian O’ Hanlon.