Patrick Gallagher (8 May 1951 - 15 March 2006) was an Irish property developer and businessperson.
Early life and family
Patrick Gallagher was born in
Holles Street hospital
The National Maternity Hospital ( ga, An tOspidéal Náisiúnta Máithreachais), popularly known as Holles Street Hospital, is a large maternity hospital in Ireland. The hospital is located at the eastern corner of Merrion Square, at its junction ...
, Dublin on 8 May 1951. His parents were
Matt and Helena Patricia Gallagher (née Sheeran). He had 4 sisters and 2 brothers, Danny, Delia, Maureen, Helen, Paul and Kathryn. As a child, he lived at the family home, Hollywood Rath,
Mulhuddart
Mulhuddart () is an outer suburb situated 12 km (7.456 miles) north-west of Dublin, Republic of Ireland, Ireland. The River Tolka passes near the village.
Mulhuddart is also a Civil parishes in Ireland, civil parish in the Barony (Irelan ...
, County Dublin. His father was one of the largest property developers in the country, and as Gallagher's older brother had
Down Syndrome
Down syndrome or Down's syndrome, also known as trisomy 21, is a genetic disorder caused by the presence of all or part of a third copy of chromosome 21. It is usually associated with physical growth delays, mild to moderate intellectual dis ...
,
he was in line to succeed his father as the head of his business, the Gallagher Group. Gallagher attended a number of secondary schools including St Gerard's in
Bray, County Wicklow
Bray ( ) is a coastal town in north County Wicklow, Ireland. It is situated about south of Dublin city centre on the east coast. It has a population of 32,600 making it the ninth largest urban area within Ireland (at the 2016 census). Bray is ...
,
Clongowes Wood College
Clongowes Wood College SJ is a voluntary boarding school for boys near Clane, County Kildare, Ireland, founded by the Jesuits in 1814, which features prominently in James Joyce's semi-autobiographical novel ''A Portrait of the Artist as a Yo ...
in County Kildare, and
Blackrock College
Blackrock College ( ga, Coláiste na Carraige Duibhe) is a voluntary day and boarding Catholic secondary school for boys aged 13–18, in Williamstown, Blackrock, County Dublin, Ireland. It was founded by French missionary Jules Leman in 186 ...
in County Dublin.
He married Sue Craigie in 1970,
and they had two sons, Matthew and Patrick.
They lived in Ballymacarney House on the Mulhuddart estate from 1973.
Early career
At age 17 Gallagher joined the Gallagher Group, starting as a tea boy, before working as a plasterer, plumber and bricklayer. By 1971, he was head of house sales during the wider Irish housing boom. After the sudden death of his father in January 1974, Gallagher became the head of the Gallagher Group at age 22. Along with the main business, he also inherited a stud farm, a shopping centre, a building society, a builder's providers company, and two small banks. He also inherited his father's network of political and business allies, in particular
Charles Haughey
Charles James Haughey (; 16 September 1925 – 13 June 2006) was an Irish Fianna Fáil politician who served as Taoiseach on three occasions – 1979 to 1981, March to December 1982 and 1987 to 1992. He was also Minister for the Gaeltacht from ...
and
John Byrne, who both mentored him in those years immediately after his father's death. As his inheritance was held in trusts on the
Cayman Islands it was exempt from estate tax, but the Gallagher Group was not protected. The failure of Gallagher and the business was anticipated, but he saved the business by laying off staff and selling off a large portion of the land his father had accrued. He reconstituted the Gallagher Group board in March 1975, with new, younger board members. Gallagher became known for his high-flying lifestyle in the most exclusive restaurants, bars and nightclubs of Dublin, being driven around by a chauffeur in a
Rolls-Royce
Rolls-Royce (always hyphenated) may refer to:
* Rolls-Royce Limited, a British manufacturer of cars and later aero engines, founded in 1906, now defunct
Automobiles
* Rolls-Royce Motor Cars, the current car manufacturing company incorporated in ...
. He mixed business with leisure, often conducting meetings in hotel bars. In 1977 Gallagher had a cancer scare, but this appeared to fuel his excessive lifestyle.
He came under pressure from the
Central Bank
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a central b ...
to divest his two banks, Merchant Banking Ltd and Merchant Banking (Northern Ireland) Ltd, of all their almost exclusive investments in the Gallagher Group. In 1977 he reduced Merchant Banking's activities significantly. While it continued to lend to the Gallagher Group, it also operated from an office in his shopping centre in
Donaghmede
Donaghmede () is a residential suburb on the northern side of Dublin, Ireland, formed from parts of Baldoyle, Coolock and Raheny in the 1970s. It contains a mid-size shopping centre and a ruined chapel, and lies within the jurisdiction of Du ...
where it received small deposits from local shoppers. Between 1977 and 1978 Merchant Banking (Northern Ireland) doubled its deposit base to £1.19 million, and it was transferred to the ownership of another Gallagher company in April 1978, removing it from the regulatory oversight of the Central Bank. This allowed it to lend freely to the Gallagher Group. Gallagher's building society, the O'Connell Benefit, was also growing fast, with the Gallagher family having 4 of the 7 board seats. When the funds of Merchant Banking waned, the O'Connell Benefit was directed by Gallagher to deposit amounts of £250,000 to £500,000 in the bank.
While Ireland experienced a recession from 1974 to 1976, Gallagher built homes for the higher end of the market, selling off large greenfield sites outside of Dublin which were earmarked for low-cost building, whilst then buying smaller sites near to more up-market and established suburbs. Unlike the semi-detached homes in large estates his father built, Gallagher built bungalows with large gardens in small estates where the houses had a less uniform appearance. His developments were bolstered by very positive coverage in the property pages of both ''
The Irish Times
''The Irish Times'' is an Irish daily broadsheet newspaper and online digital publication. It launched on 29 March 1859. The editor is Ruadhán Mac Cormaic. It is published every day except Sundays. ''The Irish Times'' is considered a newspaper ...
'' and ''
Irish Independent'', with the editor of the property section of the latter later admitting that Gallagher paid them for the coverage. To further maximise his profits, Gallagher would buy up large sites, secure planning permission for development, and then sell them on as smaller parcels to smaller builders and developers. He would then offer them finance from Merchant Banking with a phased payment scheme, only requiring repayment on completion. Alongside this, he also had marketing and architectural services, and would take on the development of housing estate amenities including parks and roads. This resulted in the Gallagher Group moving away from construction almost exclusively to property speculation by 1977.
Gallagher continued the relationship his father had cultivated with the leading planner in Dublin, George Redmond, giving him regular large payments and paying for family holidays. The Gallaghers were both
Fianna Fáil
Fianna Fáil (, ; meaning 'Soldiers of Destiny' or 'Warriors of Fál'), officially Fianna Fáil – The Republican Party ( ga, audio=ga-Fianna Fáil.ogg, Fianna Fáil – An Páirtí Poblachtánach), is a conservative and Christia ...
supporters and donors, but Gallagher had allies in other political parties. In March 1977, Gallagher had lost the right to final appeal on a permission to build 500 houses in
Malahide
Malahide ( ; ) is an affluent coastal settlement in Fingal, County Dublin, Ireland, situated north of Dublin city. It has a village centre surrounded by suburban housing estates, with a population of over 17,000.
Malahide Castle dates from th ...
, it was
James Tully, the
Labour Party minister for local government, who granted him permission despite strong local opposition. Gallagher would often disregard the planning process entirely, instructing his contractors to build before planning permission was approved. His developments often ignored conditions laid down by planners, and Gallagher would also fail to provide amenities such as footpaths and green spaces in his housing estates while still charging ground rent to the new homeowners. The Gallagher Group became notorious for proceeding against and seeking jail sentences for homeowners who did not pay the ground rent due.
His new business model of residential development allowed him to free up large amounts of capital, which he directed towards office developments. When Rohan Ltd invested £500,000 in the Gallagher Group in 1976, these funds were directed towards purchasing land in Dublin city. Spurred on by the election of a Fianna Fáil government in 1977, and the expansion of the public sector brought in a new surge in demand for office space in Dublin. The government chose not to build its own offices, instead suspended the capital levy on office developments and encouraged certain developers to build the office facilities that the government would then lease long-term. Gallagher concentrated on sites in
Dublin 2
Dublin 2, also rendered as D2 and D02, is a historic postal district on the southside of Dublin, Ireland. In the 1960s, this central district became a focus for office development. More recently, it became a focus for urban residential developme ...
, focusing on the
St Stephen's Green
St Stephen's Green () is a garden square and public park located in the city centre of Dublin, Ireland. The current landscape of the park was designed by William Sheppard. It was officially re-opened to the public on Tuesday, 27 July 1880 by ...
area. The Gallagher Group was instrumental in the demolition of a number of historic buildings in the area's
Georgian
Georgian may refer to:
Common meanings
* Anything related to, or originating from Georgia (country)
** Georgians, an indigenous Caucasian ethnic group
** Georgian language, a Kartvelian language spoken by Georgians
**Georgian scripts, three scrip ...
and Victorian core, and replaced them with unsympathetic, modern office blocks in which he was fiercely opposed by preservationists. Like his father, Gallagher worked with
Desmond Fitzgerald on these developments. Older buildings that Gallagher owned were often left open to the weather, and there were a number of suspicious accidents that damaged them beyond repair.
One of his most notorious developments was on
Molesworth and
Dawson Streets, when in 1978 he demolished a series of Georgian and Victorian buildings. Two of the most notable buildings razed were St Ann's School and Molesworth Hall which were designed by
Thomas Newenham Deane
Sir Thomas Newenham Deane (1828 – 8 November 1899) was an Irish architect, the son of Sir Thomas Deane and Eliza Newenham, and the father of Sir Thomas Manly Deane. His father and son were also architects.
Works attributed to Thomas Newen ...
and
Benjamin Woodward
Benjamin Woodward (16 November 1816 – 15 May 1861) was an Irish architect who, in partnership with Sir Thomas Newenham Deane, designed a number of buildings in Dublin, Cork and Oxford.
Life
Woodward was born in Tullamore, County Offaly, Ire ...
. Architectural students occupied St Ann's School in an attempt to delay its demolition, and Gallagher responded with a press conference announcing that he would lay off 300 workers across the city if the occupation was not ended. This led to counter demonstration from the construction workers, and ultimately a high court injunction ordering the squatters to be evicted, which Gallagher did forcibly. The injunction was obtained on the grounds that the school could collapse at any moment, but the building had to be demolished by hand when the bulldozers failed to demolish it. He built an office block designed by Fitzgerald, which he later sold at a profit of £2-3 million to a pension fund. Through rapid turnover, Gallagher spent an estimated £45 million between 1976 and 1982. He would occasionally appear to have over reached, but would save himself by closing a large sale when most in need of cash. One such occasion was when he had purchased Sean Lemass House (formerly St Vincent's Hospital) on St Stephen's Green for £5 million, he sold it 7 months later to the Irish Permanent Building Society for £7.5 million in December 1979. He had only paid a £500,000 deposit. Gallagher was a friend of the Irish Permanent's chief executive, but he later denied he had been bribed to pay more than it was worth.
Given his track record, a number of large banks backed Gallagher, including the Northern Bank Finance Corporation (NBFC). An executive of NBFC sat on the board of the Gallagher Group and flagrantly broke Central Bank rules by lending over 5% of its total advances to Gallagher. It was this support that allowed Gallagher to outbid all his competitors in purchasing sites, paying more than market value. It also allowed him to offer very generous payment schedules to the builders who bought land off him for residential development, and flipping commercial sites before purchase payments were due, allowed Gallagher to hold a large debt burden with a relatively small cash flow in comparison.
His success was attributed, in part, to the rise of Haughey's political prominence. He continued to donate to Fianna Fáil, while giving Haughey annual payments of £2,000 to £3,000 and free use of his company cars. He facilitated the purchase of a house by Haughey's daughter with loans from Merchant Banking to companies controlled by Haughey in 1976. These loans from Merchant Banking were often used as gifts, with no expectation of repayment. In December 1979, when Haughey was elected
taoiseach
The Taoiseach is the head of government, or prime minister, of Ireland. The office is appointed by the president of Ireland upon the nomination of Dáil Éireann (the lower house of the Oireachtas, Ireland's national legislature) and the o ...
, Gallagher was the only non-politician beside Haughey during his first press conference. The following day, Gallagher was informed by Haughey that he owed over £1 million to
Allied Irish Banks
Allied Irish Banks, p.l.c. is one of the so-called Big Four commercial banks in Ireland. AIB offers a full range of personal, business and corporate banking services. The bank also offers a range of general insurance products such as home, trav ...
and he requested £750,000 be paid towards the debt. Agreeing to pay £300,000, this transaction was concealing the fact that this was a non-refundable deposit for land which Haughey would later sell to the Gallagher Group in 1984. However, there was no intention that this sale would ever take place.
Gallagher invested in racehorses, including £4 million in the bloodstock market, and participating in the racing and breeding syndicate at
Coolmore. This led to a loss of £200,000 with the loss of ''Try My Best'' at the
English 2,000 Guineas, leading to Gallagher selling all but £50,000 of his interests. In a partnership with 2 others, Gallagher bought
Phoenix Park racecourse
Phoenix Park Racecourse is a former horse racing venue in Ireland. It was located in the townlands of Ashtown and Castleknock in the civil parish of Castleknock on the northern edge of the Phoenix Park in Dublin. The course was founded by JHH ...
in 1980, and started a redevelopment. Gallagher continued to spend large amount of money personally, including £200,000 on improving Ballymacarney House before he purchased
Straffan House on its 300-acre estate in 1979 for £1 million. He then spent another £1 million renovating it over 3 years. During this time he ignored the gallery that his father had promised to the
Royal Hibernian Academy
The Royal Hibernian Academy (RHA) is an artist-based and artist-oriented institution in Ireland, founded in Dublin in 1823. Like many other Irish institutions, such as the RIA, the academy retained the word "Royal" after most of Ireland became in ...
, which had come to a halt in 1975. Instead, he used the site on
Ely Place as a storage yard for his other building sites.
In 1981, he paid the £1.5 million ransom for his friend
Ben Dunne
Bernard Dunne (19 May 1908 – 14 April 1983) was an Irish businessman who was the founder and chairman of Dunnes Stores.
Early life
Ben Dunne was born as Bernard Dunn in the village of Rostrevor in County Down, Ireland in 1908. He a was the el ...
after his kidnapping by the
IRA
Ira or IRA may refer to:
*Ira (name), a Hebrew, Sanskrit, Russian or Finnish language personal name
*Ira (surname), a rare Estonian and some other language family name
*Iran, UNDP code IRA
Law
*Indian Reorganization Act of 1934, US, on status of ...
, which was later repaid.
Gallagher Group collapse
The Irish economy began to falter under high interest rates from 1980, and for the first time Gallagher's properties were not rising in value to compensate for the interest on his debts. Gallagher responded by taking on a number of ill-advised and ambitious projects, despite warnings from other including Haughey. He bought a 330-acre site at
Fortunestown for low-cost residential development, but could not find any builders to develop it. In an attempt to stimulate cash flow, he built a high-end shopping centre on St Stephen's Green, the Galleria and started on the redevelopment of Phoenix Park racecourse, against the advice of his bankers. The Galleria struggled to find tenants, and the racecourse ran over budget, costing £2 million over the year from 1981 to 1982. As his debts mounted, Gallagher relied on the O'Connell Benefit, taking out large sums and taking longer to repay. When his demand of £1 million was denied by the society's board of directors in 1981, Gallagher lost control of O'Connell Benefit. Merchant Banking (Northern Ireland), now called Merbro, had been transferring such large amounts to Merchant Banking in Dublin that in March 1972, the
Bank of England revoked its licence. Undeterred, Gallagher bought the 4.5-acre Slazenger site on St Stephen's Green, the largest commercial property site in Dublin that would later become
Stephen's Green Shopping Centre, acquiring the site for £50,000 in cash with the agreement that he would take on the Slazenger's debts of £10 million.
Irish Life Assurance company had indicated it would pay £16 million for the site in 1981 if the outstanding planning and lease problems could be resolved by Gallagher. Gallagher wrongly assumed he had a legal agreement with Irish Life, and proceeded to by a 4-acre
Earlsfort Terrace site in January 1982 for £9.5 million with plans of selling it to a British institution.
Gallagher struggled to resolve leasing issues with the Slazenger site, making some progress before he was stymied by one tenant with a strong legal case. In face of this, Irish Life backed out of the purchase, and later the British institution also reneged on the purchase of the site at Earlsfort Terrace after issues with planning permission. With the Irish recession beginning to take hold, and public opinion against the government, on minister conceded that many of the regulations and taxes on property development had been designed to benefit developers such as Gallagher. In an attempt to save his business, Gallagher made a bid to buy the successful supermarket chain, H. Williams, but delays resulted in the sellers realising Gallagher's perilous financial situation. Gallagher sold off many personal assets, and proposed the sale of the Phoenix Park racecourse to his partners, but the banks did not agree to restructure Gallagher's debts. This resulted in him accumulating £100,000 in interest charges alone every week.
The Gallagher Group was placed in receivership on 29 April 1982, owing £30 million to banks such as
Bank of Ireland and AIB, and £20 million to other creditors. Gallagher blamed the bankers for acting too swiftly, and he maintained that his assets were worth £60 million, double their real £26 million. Straffan House was repossessed by the banks just 3 weeks after Gallagher had moved in, along with his stud farm, horses worth £2 million, and his Rolls-Royce. Gallagher's brother, Paul, had to vacate Castle Howard, and his mother forfeited his home, Dolanstown House. Gallagher assisted the receiver for a year. The Dublin property market faltered under the burden of the fallout from Gallagher's bankruptcy, including all of the smaller creditors that went under following the Gallagher Group collapse. O'Connell Benefit survived, but both Merchant Banking and Merbro were liquidated, having lent 80% of their assets to the Gallagher Group, leading to many savers losing their money as the Irish government did not cover the losses of Merchant Banking. The liquidator's report, released in 1984, showed that the Gallagher family, as well as associates, had accrued more than £250,000 in fictitious loans, and a wider fraud investigation was instigated.
Later life and death
In partnership with his brother Paul, Gallagher attempted to restart his career in property development in 1983, securing finances from small banks. This was owing to a group of friends,
Tony O'Reilly
Sir Anthony Joseph Francis O'Reilly (born 7 May 1936) is an Irish former businessman and international rugby union player. He is known for his involvement in the Independent News & Media Group, which he led from 1973 to 2009,Dublin, Ireland, ...
,
P. V. Doyle, Byrne, and his uncle
Charles, paying Gallagher's living expenses and guaranteeing his loans. He moved to
London
London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
in 1984, where he bought flats which he refurbished and sold on, and by 1987 he could afford Balsoon House on 31 acres at
Bective, County Meath, where he lived at the weekends. Gallagher was arrested in March 1988 by the
British police following a fraud investigation into the management of Merbro Ltd, he was later bailed. He pleaded guilty in Belfast crown court in November 1989. His sentencing was postponed if he agreed to compensate the depositors, and while he made an initial payment of £500,000 but was unable to pay the further £500,000 with the agreed 11 months. He was imprisoned from October 1990 to October 1991. In June 1990, the Irish director of public prosecutions received a report recommending the Gallagher be charged with fraud in relation to the management of Merchant Banking Ltd, but it was decided not to pursue the charges. The depositors of the bank took a high court civil action against Gallagher, resulting in a settlement in 1996 of an undisclosed sum.
When he was released from prison, Gallagher separated from his wife, and immigrated to
Zimbabwe
Zimbabwe (), officially the Republic of Zimbabwe, is a landlocked country located in Southeast Africa, between the Zambezi and Limpopo Rivers, bordered by South Africa to the south, Botswana to the south-west, Zambia to the north, and ...
. There he bought a farm and was involved in a scheme to settle
Afrikaner farmers which was abandoned. He then moved to
South Africa
South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. It is bounded to the south by of coastline that stretch along the Atlantic Ocean, South Atlantic and Indian Oceans; to the ...
, and was involved in a number of failed investment schemes across Africa. In 1998, he confirmed that he paid Haughey money, and gave evidence to the
Moriarty tribunal in 1999 on the matter. He denied he received any favours in return, and remained friendly with Haughey. He suffered with poor health, and his friends paid for his medical expenses. He divided his time between Dublin and
Cape Town
Cape Town ( af, Kaapstad; , xh, iKapa) is one of South Africa's three capital cities, serving as the seat of the Parliament of South Africa. It is the legislative capital of the country, the oldest city in the country, and the second largest ...
.
Gallagher died on 15 March 2006 in Dublin,
and is buried at Three-Mile-Water cemetery, County Wicklow. He was survived by his partner, Yvonne D'Arcy.
References
Notes
Sources
*
{{DEFAULTSORT:Gallagher, Patrick
1951 births
2006 deaths
20th-century Irish businesspeople
Irish businesspeople in construction
People educated at Blackrock College
Businesspeople from County Dublin