Ireland's Uber-Entrepreneur Sean Dunne: A Celtic Casualty?

Call me cynical; damn-it, call me insensitive. Irish businessman Sean Dunne's New York Times article today left me cold and embarrassed.

At first glance I thought I was in for a look at one of the survivors of the Irish economy; a powerhouse perhaps, someone who had broken the mold; someone who had finally demonstrated that we, as Irish businessmen, had evolved from our stereotypical existence as marginal bit players onto the main stage of the international business scene. I was wrong. This article was not about Tony O'Reilly or Michael Smurfit.

After a thorough reading of a review of the Irish economic melt-down (The Irish Economy's Rise Was Steep, and the Fall Was Fast)* and of Sean Dunne (which also appeared in the Int'l Herald Tribune), I'm pretty sure that if I was a banker I wouldn't lend 'Ireland's best known building developer" Dunne another Euro. I might refer him to a good rehab however.

The Times article opens describing Dunne's weeknight evening out in a Dublin bar which comprised of a 'rollicking night of Champagne cocktails, followed by a wine-soaked dinner' and Dunne now at 3am on "perhaps his fifth pint of Guinness "(just under a 12 pack for our American readers). He has a meeting before first light.... Not being one to shy away from the fun of a night out myself, I feel however, that it is fair to say that if this reflects a typical "night out" Dunne would qualify in medical circles as an alcoholic, even by Irish standards. That he wears this badge proudly while being interviewed by an International newspaper of some repute begs a momentary cringe.

At one time not too long ago, Dunne epitomized a rare breed in Ireland; a success. His reported bluster and impeccable timing saw him rise with the tide of Ireland's soaring economy during the glory days. He obviously has - or had - some good banking contacts who liked his deals. That was before the banks all but collapsed and left him holding the baby. Rumor around Dublin has it he's flamed out; broke; bankrupt. Note to Times; to compare Dunne to Donald Trump in any way - however insignificant - is akin to comparing Bray Head to the Mount Everest; not even close.

In the article - an opportunity for Sean to shine bright in a once-in-a-lifetime coverage by the Gray Lady - Dunne emanates, not a winning streak but that of an embittered Irish loser. Instead of grabbing this golden opportunity to highlight what a go-getter he his; to pitch his current project, however pressured; to show the class of a bloodied prize-fighter punching his way to center-ring even with the threat of defeat, he instead plainly acknowledges that he could be considered insolvent should the banking crisis continue; which it will. Money is lent many times as much on the pitchman, as on the deal. Something he seems to have forgotten; or perhaps never learned.

Capping it all he says that "one thing that I have is my wife and children - that they can't take away from me' (whoever 'they' are). Jesus; drag out the fiddler's lads. I feel a rainstorm of sorrow and self-pity coming on. I have news for Mr. Dunne; he may not even have that, as a 34 year old pretty wife may well find living with a 54 year old so fond of the odd pint or two, not-so-attractive without the cash.

Can you image Trump speaking in such diminutive terms? Not in a million years. Did Dunne learn nothing during the good times? Didn't he read the Donald's "Art of the Deal' when he was pulling pints in New York?

Like many high risk-businessmen Dunne is a gambler who, by the description in the New York Times, over-played his hand in the by now familiar game of speculative property musical chairs - he was left standing when the music stopped. He dropped a large bundle of cash on an excellent property in Dublin's classiest neighborhood at 54 million Euros an acre. The land is worth a fraction of that amount now given the economic graveyard that is Ireland. The site is constricted by planning issues that took the wind out of the sails of the original plans which were probably needed to make the whole scheme work. How to pay for the construction if he, by some miracle, gets planning approval? Dunne admits the banks aren't lining up to help him and refers to foreign investment for the up to 600 billion Euro price tag to build out the property. "Asian and Sovereign funds" and so forth he refers to coyly...whatever that means.

A number of issues spring to mind to someone who didn't do terribly well in economics in college (me).

Ireland is not New York, Miami nor is it Chicago where buildings with similar price tags are on hold indefinitely awaiting financing that may takes years to parcel together. Even the aforementioned Mr. Trump is reported to be having some difficulty.

Further, whoever lent Dunne the money to pay for his mammoth speculation - an estimated 250 million Euros - will want that money back; soon; with interest. Given the location and inherent value of the property, Dunne is not an essential part of any future development plan and would, I would hazard to guess, be financially expendable after his collateral is collected.

No foreign investor will invest in a market that is sinking faster than the Titanic; no, they'll hold out and show their interest as vulture capitals, appearing at the bottom of the market and make a deal directly with the lending banks.

Finally, if indeed a fairy does appear and gives Sean the funding all wrapped up in a pretty bow and he builds his grand shining building, there is the annoying matter of occupancy. Moneyed tenants are few and far between that can afford to inhabit such potentially beautiful but costly digs. Even the rich are watching their pennies (as closely as Sean does in the bar) these days.

According to legend, Dunne believes that the best defense is a strong offense and as such he is fast to sue his detractors and critics. The warning signs of a narcissist perhaps? Or a bully? The saying that "one needs to be nice to the people we pass on the way up as we'll met them again on the way down" springs to mind. He may regret stomping on certain toes in the not to distant future.

Dunne's is a Celtic Tiger tale of rags to riches to possibly rags again; of picking up pennies and a fondness of living the high life. He might do well to learn a few tricks from the Donald however, one in particular; that of not counting chickens prior to hatching.

The Donald parties after the deals are done; not before.

Reference

Read the NY Times article here:* The Irish Economy's Rise Was Steep, and the Fall Was Fast (010508)

[http://www.nytimes.com/2009/01/04/business/worldbusiness/04ireland.html?pagewanted=1&_r=1&em]