Patrick Gallagher (businessman) facts for kids

Patrick Gallagher (born 8 May 1951 – died 15 March 2006) was an Irish property developer and a successful businessperson. He was known for building many homes and offices, especially in Dublin.

Early Life and Family Background

Patrick Gallagher was born in Holles Street hospital in Dublin on 8 May 1951. His parents were Matt and Helena Patricia Gallagher. He had four sisters and two brothers. The family lived in Hollywood Rath, Mulhuddart, County Dublin.

Patrick's father, Matt, was one of the biggest property developers in Ireland. Because Patrick's older brother had Down Syndrome, Patrick was expected to take over the family business, the Gallagher Group, when he grew up. Patrick went to several schools, including St Gerard's in Bray, County Wicklow, Clongowes Wood College in County Kildare, and Blackrock College in County Dublin.

In 1970, he married Sue Craigie, and they had two sons, Matthew and Patrick. From 1973, they lived in Ballymacarney House on the Mulhuddart estate.

Starting His Business Career

At 17, Patrick Gallagher began working for the Gallagher Group. He started with simple jobs like making tea, then learned building skills like plastering and bricklaying. By 1971, he was in charge of selling houses during a time when many new homes were being built in Ireland.

When his father suddenly passed away in January 1974, Patrick became the head of the Gallagher Group at just 22 years old. He took over the main building business, along with a horse farm, a shopping centre, a building society, a company that supplied building materials, and two small banks. He also inherited his father's important connections with politicians and other business leaders, like Charles Haughey and John Byrne, who helped guide him.

Many people thought Patrick and the business would fail because of the large inheritance and the challenges. However, he managed to save the company by reducing staff and selling off a lot of the land his father had bought. In March 1975, he brought in new, younger people to join the Gallagher Group's board of directors.

Patrick became known for his exciting lifestyle. He often held business meetings in fancy hotel bars and was driven around Dublin in a Rolls-Royce. In 1977, he had a health scare, which seemed to make him live even more intensely.

Growing the Gallagher Group

Patrick used his two banks, Merchant Banking Ltd and Merchant Banking (Northern Ireland) Ltd, to help fund his projects. He also used his building society, the O'Connell Benefit, to support his business.

During a tough economic time in Ireland from 1974 to 1976, Patrick focused on building homes for wealthier buyers. He sold large plots of land meant for affordable housing and instead bought smaller sites near more upscale areas. Unlike his father's uniform houses, Patrick built bungalows with big gardens in smaller developments, making each house look unique.

His projects received very positive attention in newspapers like The Irish Times and Irish Independent. Sometimes, he even paid for this good publicity. To make more money, Patrick would buy large pieces of land, get permission to build on them, and then sell smaller parts to other builders. He would also offer them loans from his bank and provide marketing and architectural services. This meant the Gallagher Group started focusing more on buying and selling land rather than just building.

Connections and Controversies

Patrick continued his father's close relationship with George Redmond, a key planner in Dublin. The Gallaghers were supporters of the Fianna Fáil political party and gave them donations. Patrick also had friends in other political parties. For example, in 1977, a Labour Party minister, James Tully, gave him permission to build 500 houses in Malahide, even though many local people were against it.

Sometimes, Patrick would start building before getting full permission. His developments often didn't follow all the rules, and he sometimes failed to provide things like footpaths and green spaces in his housing estates, even though he charged homeowners for ground rent. The Gallagher Group was known for being very strict with homeowners who didn't pay these rents.

Patrick also used his money to develop office buildings. In 1976, another company invested in the Gallagher Group, and these funds were used to buy land in Dublin city. When a Fianna Fáil government was elected in 1977, there was a big demand for office space. The government encouraged developers like Patrick to build offices that the government would then rent for a long time.

Patrick focused on areas like St Stephen's Green in Dublin. The Gallagher Group played a big part in tearing down many old, historic buildings in these areas, replacing them with modern office blocks. Many people who wanted to protect old buildings were very upset by this. Patrick worked with architect Desmond Fitzgerald on these projects. Sometimes, older buildings Patrick owned were left uncared for and became damaged.

One of his most well-known projects was on Molesworth and Dawson Streets in 1978, where he demolished several historic buildings. Students tried to stop the demolition of St Ann's School, but Patrick insisted on continuing the work. He built an office block there, which he later sold for a large profit. Between 1976 and 1982, Patrick spent an estimated £45 million on projects. He sometimes seemed to take on too much, but he would often save himself by making a big sale when he needed money most. For example, he bought Sean Lemass House for £5 million and sold it seven months later for £7.5 million.

Many large banks supported Patrick, allowing him to buy sites for more than anyone else. This also let him offer very flexible payment plans to builders who bought land from him.

Political Connections and Personal Spending

Patrick continued to donate to the Fianna Fáil party and gave its leader, Charles Haughey, regular payments and free use of his company cars. He also helped Haughey's daughter buy a house with loans from his Merchant Banking company. These loans were sometimes given as gifts, with no expectation of being paid back.

In December 1979, when Haughey became the leader of Ireland (Taoiseach), Patrick Gallagher was the only non-politician with Haughey at his first press conference. The next day, Haughey asked Patrick for a large sum of money to help pay off a debt. Patrick agreed to pay a significant amount.

Patrick also invested in racehorses, spending a lot of money on them and joining a racing group at Coolmore. He lost money on some of these investments. In 1980, with two partners, Patrick bought Phoenix Park racecourse and started to redevelop it.

He also spent a lot of money on his personal life. He improved Ballymacarney House and then bought Straffan House and its large estate in 1979 for £1 million, spending another £1 million renovating it. During this time, a gallery his father had promised to the Royal Hibernian Academy was put on hold, and Patrick used the site as a storage yard. In 1981, he paid the £1.5 million ransom for his friend Ben Dunne after he was kidnapped. This money was later repaid.

The Gallagher Group Faces Challenges

From 1980, the Irish economy started to struggle with high interest rates. For the first time, Patrick's properties were not increasing in value enough to cover the interest on his large debts. Despite warnings from others, including Haughey, Patrick took on several risky and ambitious projects.

He bought a large site at Fortunestown for affordable housing but couldn't find any builders to develop it. To get cash flowing, he built a high-end shopping centre on St Stephen's Green, called the Galleria, and continued redeveloping Phoenix Park racecourse, even though his bankers advised against it. The Galleria struggled to find tenants, and the racecourse went over budget.

As his debts grew, Patrick relied heavily on the O'Connell Benefit building society, taking out large sums and taking longer to pay them back. In 1981, when the society's board refused his request for £1 million, Patrick lost control of O'Connell Benefit. His other bank, Merchant Banking (Northern Ireland), which was now called Merbro, had transferred so much money to Merchant Banking in Dublin that the Bank of England took away its license in 1972.

Undeterred, Patrick bought the 4.5-acre Slazenger site on St Stephen's Green, which was the largest commercial property site in Dublin at the time. He bought it for £50,000 in cash, agreeing to take on Slazenger's £10 million debts. The Irish Life Assurance company had shown interest in buying the site for £16 million if Patrick could solve some legal and planning issues. Patrick wrongly believed he had a firm agreement with Irish Life. He then bought another large site at Earlsfort Terrace in January 1982 for £9.5 million, planning to sell it to a British company.

Patrick struggled to resolve the issues with the Slazenger site, and Irish Life pulled out of the purchase. The British company also backed out of buying the Earlsfort Terrace site due to planning problems. With the Irish economy in recession, Patrick tried to save his business by bidding to buy a successful supermarket chain, H. Williams. However, delays made the sellers realize Patrick's difficult financial situation. He sold many personal assets and suggested selling the Phoenix Park racecourse to his partners, but the banks would not agree to change his debt payments. This meant he was accumulating £100,000 in interest charges every week.

The Collapse of the Gallagher Group

The Gallagher Group went into receivership on 29 April 1982. It owed £30 million to banks like Bank of Ireland and AIB, and another £20 million to other creditors. Patrick blamed the bankers for acting too quickly. He claimed his assets were worth £60 million, but their actual value was £26 million.

Straffan House was taken back by the banks just three weeks after Patrick had moved in. His horse farm, horses worth £2 million, and his Rolls-Royce were also repossessed. Patrick's brother, Paul, had to leave Castle Howard, and his mother lost her home, Dolanstown House. Patrick helped the receiver for a year.

The Dublin property market suffered greatly from the collapse of the Gallagher Group, and many smaller businesses that had worked with him also went out of business. The O'Connell Benefit building society survived, but both Merchant Banking and Merbro were closed down. They had lent 80% of their money to the Gallagher Group, causing many savers to lose their money because the Irish government did not cover the losses of Merchant Banking. A report in 1984 showed that the Gallagher family and their friends had received over £250,000 in loans that were not real, leading to a wider investigation into fraud.

Later Life and Passing

In 1983, Patrick tried to restart his property development career with his brother Paul, getting loans from smaller banks. A group of friends, including Tony O'Reilly, P. V. Doyle, John Byrne, and his uncle Charles, helped him by paying his living expenses and guaranteeing his loans.

In 1984, he moved to London, where he bought, renovated, and sold flats. By 1987, he could afford Balsoon House on 31 acres in Bective, County Meath, where he spent his weekends.

In March 1988, Patrick was arrested by the British police as part of an investigation into the management of Merbro Ltd. He later pleaded guilty in Belfast in November 1989. His sentencing was delayed if he agreed to pay back the people who lost money. He made an initial payment but couldn't pay the rest. He was imprisoned from October 1990 to October 1991. In 1996, he reached a settlement in a civil case brought against him by the depositors of Merchant Banking Ltd.

After being released from prison, Patrick separated from his wife and moved to Zimbabwe. He bought a farm there and was involved in a plan to help Afrikaner farmers settle, but this plan was stopped. He then moved to South Africa and was involved in several investment projects across Africa that did not succeed.

In 1998, he confirmed that he had given money to Charles Haughey and gave evidence about this to the Moriarty tribunal in 1999. He said he didn't receive any special favors in return and remained friends with Haughey.

Patrick experienced poor health, and his friends helped pay for his medical care. He divided his time between Dublin and Cape Town. Patrick Gallagher passed away 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.