Ireland – Where did the money go? Part 2

Updown Court

Where did the money go? Well that is the big €85bn question for this is the amount Ireland has had to borrow to finance the “bailout” of the Irish economy from the IMF / ECB. This is before we factor in the asset stripping Ireland’s “fund” for Public Sector pensions which is to be filleted as part of the IMF / ECB conditions. No doubt many in Ireland will find this question relevant as they stare into the abyss of default, repossession and plummeting living standards. No doubt this will become a more pressing question for the future as Irish Taxpayers did not engage in reckless lending creating a property bubble whilst paying themselves huge bonuses as a reward for business genius.



Another surprising fruit to fall out of the Great Irish Bankruptcy Basket is “Britain’s Most Expensive House” which has been on the market at £70 million for the past five years; the well named Updown Court in leafy Surrey. However we cannot be sure of this claim to be the most expensive new build in Britain for the small detail that nobody has ever bought it! The most expensive country house ever put on the UK market, and backed by Michael Fingleton's Irish Nationwide, is facing receivership action from NAMA within days, it is understood. The 103-room Updown Court in Surrey, which has five swimming pools, was an Irish Nationwide joint venture and the building society lent £63m (€71m) to the project over several years.


The ever upbeat Leslie Allen-Vercoe

The developer Leslie Allen-Vercoe said he had heard nothing from NAMA about the estate being put into receivership. He said Mr Fingleton was very familiar with the project and had talked on several occasions with Mr Allen-Vercoe about its progress. He added that the issue now was what was the best way for Irish taxpayers to get value from its sale. He said NAMA's move could jeopardise this.


Michael 'Fingers' Fingleton

For those of you unacquainted with Michael 'Fingers' Fingleton, he was the former CEO of the Irish Nationwide Building Society, which made a pre tax loss of €280m in 2009 when he retired with a €1m bonus and a pension pot of €27.6m (£24m). Michael Fingleton all but abandoned the society's role as small-time mortgage provider in favour of massive commercial property speculation. Some eighty percent of the group's €10.47bn loan book at the end of 2008 was related to commercial property. A third of that was classified as 'impaired' or was being closely managed. This amount has increased since and the Irish Nationwide has been nationalised so the burden now falls on the subject of the €85 Billion bailout, that long suffering minority, The Irish Taxpayer.

Green Party spokesman Senator Dan Boyle said in 2009:

'Mr Fingleton has run the Irish Nationwide Building Society like his own personal fiefdom. His conduct shows little care for savers and home-owners who have placed considerable faith - and in some cases placed their life’s chances and the fortunes of their families - in the care of that institution.'

Apart from the five swimming pools, the property also has a bowling alley, a cinema and an indoor squash court. It failed to sell in 2005 for a price tag of £70m - at the time the most expensive UK residence ever. Indeed a buyer has been just around the corner for years but nobody has bitten. It is understood NAMA may only need to sell Updown Court for £20m (e22.5m) to make a return, after it imposed a severe discount on the original loan.


The two lane bowling alley "Strike!"

The developer, Leslie Allen-Vercoe of Surrey based Rhymer Investments Limited purchased the burnt-out shell of the property, for the approximate 2009 equivalent of £20 million (38.4 million USD) in early 2001/02, through receivership. Allen-Vercoe invested a further £38.5 million (60 million USD), of which £10 million was his own money; to re-build and re-design the property as it stands today.



The new development was designed by John B. Scholz Inc, an Arizona architectural practice specialising in custom luxury home designs and luxury house plans. Construction began in 2002 and the building was completed in 2006/07, therefore taking around five years in total. Notable aspects of the architecture, which has been described, with considerable aesthetic kindness, as "neo-classic Californian", include it's double staircase that is modelled on the one that fashion designer Gianni Versace had in his mansion in Miami, Florida. Other similarities are its Grey-slated rooftops, and one bathroom that has honey-coloured granite Guatemalan marble. In fact John Scholz is the son of an Arizona house builder and his firm specialises in books of “catalogue” home designs of the type beloved of apirational blue collars with pillared entrances, double height halls, cathedral ceilings, luxurious appointments, walk-in closets, etc; etc; and other tributes to the vacuous world of Conspicuous Consumption. Maybe the architect should be called Schmaltz not Scholz?

Updown Court stays entirely true to these low expectations, a vulgar and incoherent display of grandiosity totally out of context in leafy Surrey which used to advertise its charms with the slogan “Live in Surrey free from worry.” Well this white elephant of a house has been far from worry free and what you see is what you get; A McMansion on steroids with a vulgar grand entrance hall with all the ambience (but not the charm) of a Mississippi paddle steamer and the type of “luxurious” overstuffed interior that evokes a mythical Turkish Brothel during the Ottoman Empire’s decline. Expensive materials are used throughout to prove the proposition that money and good taste are not synonomous, think of an unhappy hybrid of Dubai Hotel with Carnival Cruise Liner.


One of the five swimming pools

Mr Allen-Vercoe said he was not personally liable for any of the debts and his only role in the project in the last year was to find a buyer. He said one British, one Russian and one Far East buyer had come forward. He added that if NAMA decided to appoint a receiver, it would be against the interests of irish taxpayers as stamp-duty tax advantages could be lost. Whilst the developer's PR firm and website claims, wrongly, that Updown Court is bigger than Hampton Court and Buckingham Palace there are a couple of reality checks missing. For one, who are the buyers for to spend £70 million on a house such as this? You would need to have a net worth of £700 M + to buy and run Updown Court, meaning that the worldwide market is around 600 individuals. But the one thing this group of Super Rich value is privacy and would they want to buy a house so ostentatiously advertised knowing the Press have been crawling over it and taking interior photos for over 5 years? Mr Allen-Vercoe said if the property market had not taken a downturn, the joint venture would have seen himself and Irish Nationwide taking a 50:50 share of the proceeds, once the loan had been discharged.



Indeed, and I believe in fairies at the end of the garden. Although there are actually no fairies at the end of Updown Court’s garden, merely the busy M3 Motorway adding to the overall charm of the setting. When the irish taxpayer stops weeping they should closely interrogate the Directors and Managers of Irish Nationwide on location in Updown Court on what exactly they were taking when they convinced themselves that this boil on the architectural arse of Surrey would sell for more than £70 million? Then in the spirit of reconciliation and forgiveness they should take them out into the garden, into that beautiful fabled sylvan setting and shoot them.



For the question still remains, even if you had £70 million would you really want to own this load of tat?

For the true horror awaiting the Oligarski who buys Updown Court see;

http://www.updowncourt.com/

For a further insight into the investment geniuses who are Irish Bankers see – Where did the money go Part 1;

http://daithaic.blogspot.com/2011/03/ireland-where-did-money-go.html