This is not a column about immigration.

Nor is it a column about the unabashed hubris of the Celtic Tiger, with its buccaneering lending and its gung-ho brouhaha.

It is also not about the subsequent collapse of the Irish economy, and what that meant for this country’s rank and file taxpayers.

It is not the piece on the banks or how they lent with a whimsical indifference before seizing asset after asset with the same indifference while simultaneously attempting to seize the moral high ground, repossession by repossession. 

It is not a column about the influx of foreign capital into post-crash Ireland, or the fact that in the aftermath of the economic calamity, we witnessed the greatest transfer of property ownership since the Land League.  

It is not a column about a pandemic that changed how we look at things, and how we view society and health.

Instead, it is a column about a hotel – and what that hotel says about Ireland. 

It is a column about Citywest.

Because Citywest, that sprawling hotel on the outskirts of the capital, a place that once aspired to be the largest hotel in Europe, is, in fact, the story of Ireland – and the evolution of the Irish economic – and societal – story over the past two decades. 

The State last week agreed to purchase the Citywest Hotel in Dublin for more than €148 million. The intention is to make it a permanent processing centre for International Protection applicants.

The property was previously used as a Covid-19 testing and vaccination centre before being converted to an accommodation and processing facility for asylum seekers and Ukrainian refugees in 2022.

So, just how has the country’s largest hotel been repurposed into this area, particularly at a time when there is a rising demand for hotel rooms in Dublin? And how has the Irish State had to pay such a price to acquire such a prize?

The answer lies in the dizzying rise and fall of the economy, the influx of capital into a busted nation, followed by the influx of people. And it is all wrapped up in the nature of capitalism.

But to begin, you have to go back to the beginning. And to go back to the beginning, you have to go back to Jim Mansfield. 

Different people have different views on Mansfield, but few have ever doubted he had vision and foresight. 

He started out driving a truck in a quarry, gradually moving into plant and machinery. His big break, however, came when he got involved in buying and selling barely used equipment in the aftermath of the Falklands War.  

In the late 1980s, he used that money to acquire Tassagart Stud in Saggart, west Dublin. He then built a small hotel with 40 bedrooms. It was called Citywest.

Mansfield got the idea from a visit to the Augusta National in Georgia.

“Straight away, he was mesmerised with the place,” his son, Jimmy Mansfield, later told Tom.  “The economy picked up here, and there was money to be made here, so Jim spent more time in Ireland.”

Mansfield kept growing the property, adding golf courses, more and more rooms and acquiring vast tracts of nearby land. There were conference rooms, a convention centre, and even a second hotel on the site – many of its rooms were sold to tax break investors. 

At the height of the property boom, his primary lender, Bank of Scotland (Ireland) (BoSI), valued Mansfield’s hotel and leisure centre at around €300 million.

Citywest was essentially a monument to unfettered ambition, financed by a vast amount of debt. 

However, when boom turned to bust, Mansfield was suddenly in difficulty in financing the borrowing costs of the €180 million the hotel owed to BoSI. 

Based on the bank’s new projections, Citywest Hotel was in negative equity – in other words, it was worth less than the outstanding loans. In 2010, it seized the property, appointing a receiver. Shortly after, the lender packed up its ATM machines, shut down its Irish branches, and moved home. 

It is difficult to overstate just how bad the hotel market was at that time – one in six Irish hotel rooms were under the direct control of a bank, and there was no investor aptitude to acquire most of the properties, even at knockdown prices.

But, the market recovered in time – first a small number of contrarians started to invest, quickly followed by so-called vulture funds. For cash-rich investors, Ireland was easy pickings. 

Tetrarch, a fund led by Michael McElligott, was among the first to open the cheque book, acquiring several hotels, including the five-star Marker. It acquired Citywest in 2013 for around €29 million.

Hedge fund Pimco backed the play. A year later, the hotel turned a profit of €1.55 million. And it bounced between profit and loss over the following years, although the value of the asset was rising. Pimco stepped out, and Starwood stepped in. 

The pandemic changed everything, particularly the fortunes for the hotel.

The 764-bed hotel and conference centre was quickly leased by the State in 2020 for use as a Covid-19 testing and vaccination centre. The HSE agreed to pay Tetrarch €21 million for use of the property for an initial seven months, paying an extra €1.9 million for use of the convention centre, which was prepared as a 300-bed field hospital (In the end, the field hospital was not used).

Accounts filed in 2021 by Alva Glen Investments, a company associated with Tetrarch, show that Citywest Hotel Group returned to profit in 2020 after its deal with the HSE and the reduction of costs associated with operating the hotel.

The anticipation was that it would return to a functioning hotel when the pandemic ended. Instead, it was transformed into a huge centre for International Protection applicants.

Figures released last week show that Cape Wrath Hotel Unlimited, which runs the hotel, received more than €18 million from the State in the first three months of the year to provide accommodation for asylum seekers and refugees from Ukraine.

Last year, it received more than €70 million.

Despite the hefty €148 million price tag, Minister for Justice Jim O’Callaghan said last week that the deal represents value for money for the State, adding that over 25 years, the State will save €1.25 billion. 

“Over a period of four years, we believe we’ll be in the position where we will have got our money back in terms of the investment,” he said.

He is right, to a point. The property is only worth so much because the State is paying so much to rent it in the first place. As a hotel, it would not be worth nearly as much.

As an IPAS centre, it has the scale and land that the State requires. 

Undoubtedly, some of its land will be sold off to developers to build houses – I have heard Cairn mentioned in dispatches.  

Meanwhile, many members of the local community have held protests, annoyed that a hotel that was once the centrepiece of the area is no more.

The transformation of Citywest over the years reflects the transformation of Ireland – boom, bust, foreign capital, a pandemic and a surge in asylum applications. 

And in that, perhaps, is the real story of Ireland: a nation forever building, borrowing, collapsing, recovering, and adapting — often in that order.

Elsewhere last week…

Ardagh, the packaging multinational assembled by Paul Coulson, has one year left before it hits a wall of debt. Thomas last week told the full story of its $12.5 billion bond pile, and how this gives clues about the options left on the table.

Exergyn is pioneering a heat pump that it believes can eliminate harmful refrigerant gases from heating and cooling systems. Kevin O’Toole and Mark Connolly explained to Tom how the company is building one of Europe’s most ambitious climate-tech businesses.

Once a novelty, general counsels are now a stalwart feature of Irish business. In a deep dive, Francesca explored the value they bring to decision-making at the top table with ESB’s group legal director Alan Daly and OpenAI’s head of Ireland Emma Redmond. She also had a follow-up story on a new EY study that shows general counsel in Ireland are balancing soaring expectations with limited bandwidth, navigating more risks with fewer resources.

The overhaul of Rent Pressure Zones marks a break from policies that stifled investment in rental housing. It may revive development in Dublin, but, according to Ronan in his analysis of the new rules, systemic issues still threaten delivery across the rest of the country.