It took Jim Mansfield Sr 19 years to fulfil his vision for Citywest, which was, at its peak, not only Ireland’s biggest conference centre but also Europe’s biggest hotel. It was an enormous project that ultimately saw the businessman build 764 rooms, several golf courses, and a cavernous convention centre on the edge of Dublin.
Mansfield Sr built the business all those years ago along with his wife and sons. His sons could be seen mowing the lawns in Citywest’s early years, before in its latter years, one of them would fly their father to business meetings, or VIPs in-and-out, by helicopter.
However, in 2010, when the business entered its twentieth year, Mansfield Sr lost control of it, as well as the rest of his business interests, including a private airport and a five-star hotel.
Citywest, however, was the project he became famous for, as he poured tens of millions of euro into it. Initially, it was funded using millions he made from selling equipment and machinery in the aftermath of the Falklands War, and later using profits made from property deals and his machinery business.
Citywest was however the first to go. It was put into receivership by its banks and then put on the market. In September 2014 the business was sold to Pimpco, an international buyer, and Tetrarch, an Irish property investor.
The family maintains that they were treated unfairly by their banks, principally the Irish subsidiary of Lloyds Bank Group (LBG) called Bank of Scotland (Ireland). They feel the bank had promised to lend more money to them, but then reneged.
The hotel was sold for €30 million, a fraction of what it cost Mansfield over the years. But that was the market at that time. Then in 2018, Citywest was taken over outright by Tetrarch.
Rapidly the Mansfield family saw the rest of their father’s legacy taken from them. Assets valued at €1.7 billion in the boom were almost all lost.
Since then the family has been confined to owning just one hotel, Finnstown House, in Lucan. There’s been controversies too, but despite everything the family has kept going. It is now trying to open up a new front in its attempt to explain how they lost everything.
Tetrarch is a fascinating company that bet big during the bust on distressed assets and ended up making a fortune. It has been chaired by Paul Connolly, a former director of Independent News & Media and an ex-board member of Denis O’Brien’s Digicel, since July 2013.
Tetrarch was co-founded by Michael McElligott, who formerly worked for Connolly in his corporate finance firm Connolly Capital. McElligott is a solicitor who has advised Denis O’Brien’s Communicorp on buying radio stations in Eastern Europe and advised his mobile phone business Digicel on acquiring mobile licences in the Caribbean.
In a 2015 Irish Times interview McElligott said he was always “one step removed” from O’Brien during that time, but that he feels “lucky” to have been involved in his past deals. McElligott has lots of experience in property too and was for many years a director of a dentistry business once owned by O’Brien’s nephew Emmett O’Neill.
McElligott co-founded Tetrarch with James Byrne, who he had previously worked with in real estate investor Mere Capital. McElligott’s sister Ciara worked in Lloyds Banking Group in Britain from 2008 until 2013 in capital markets sales, before becoming a principal in Tetrarch in May 2013.
Tetrarch has now been involved in some way or other in Citywest for six years.
Jim Mansfield Sr died in January 2014 after an illness. He died distraught that he risked losing almost everything, after believing at one point he was on the point of saving his empire by bringing in a Middle East investor who planned to build an education campus on his land.
The then-minister for education Batt O’Keeffe told The Irish Independent in 2011 that he met Independent TD Michael Lowry at Citywest in October 2009 to discuss a €250 million investment from the Middle East there. O’Keeffe was not convinced by the project, he said, and ultimately the Middle East money fell away.
I spoke to Jim Mansfield in 2011 about Lowry and Citywest. Mansfield said Lowry had met Sean Whelan, a former chief executive of Citywest who was working on the Middle East project, several times in his hotel. Mansfield said he had greeted Lowry, but that Whelan conducted the meetings. He told me Lowry “did not get a shilling from me”.
I was working for The Sunday Times in 2011, and I asked Lowry at the time for his side of events. He said: “I don’t have any comment to make at all. You need to ask Jim Mansfield not me.”
Whatever happened to the Middle East investors, once they were gone, the jig was up. The banks moved hard and took everything they could. Mansfield watched – in the end from his sickbed, his empire torn apart. He did not see Citywest sold to Tetrarch, but he must have suspected it was certain to go on the block.
Evidence is relevant
The Mansfield family has never fully given up on winning back Citywest, or at the very least revealing their side of why they believe their father lost his empire.
The fact is the various companies in the Mansfield Group borrowed hundreds of millions of euro, so when the crash arrived, they were always going to come under huge pressure.
Conferences dried up, and hotel room bookings fell, so cash flow became an issue. So, one way of looking at it is, it is no wonder the banks moved. Another is that lots of people owed vast sums in Ireland, but some were supported, while others were not.
The Mansfield family sees things from its perspective. The family maintains that they were treated unfairly by their banks, principally the Irish subsidiary of Lloyds Bank Group (LBG) called Bank of Scotland (Ireland). They feel the bank had promised to lend more money to them, but then reneged.
There are also other allegations made in the letter. It also refers to various tape recordings made of interactions with various parties. It is up to Dodds to review and decide on whether they are relevant.
The bank, for its part, has always maintained it acted in a manner intended to minimise any losses to its shareholders, which was partly the British state, in the worst of the last crash.
Sometime ago the former directors of a Mansfield company called HSS appointed a financial advisory company called Lansdowne Francs to advise them. Lansdowne Francs is led by an accountant called James Sutcliffe. Earlier this year, Lansdowne Francs contacted Dame Linda Dobbs, a former High Court judge in England and Wales.
Sutcliffe told Dobbs that the former directors of HSS, who are members of the Mansfield family, wanted to tell her their story.
In 2017 Dobbs was appointed by Lloyds Banking Group to “consider whether the issues relating to HBOS Reading were investigated and appropriately reported to authorities at the time by LBG, following its acquisition of HBOS.”
What happened in HBOS Reading led to former employees of the bank being jailed in 2017 over a £245 million loan scam that occurred in its Reading branch.
The employees were found guilty of pushing business customers in distress into failing between 2003 and 2007 by referring clients to a turnaround consultancy which saddled them with debts and fees.
Among those caught up in the scam was television presenter Noel Edmonds. Edmonds sued Lloyds for £60 million claiming its Reading branch had caused him to lose his business and caused him to contemplate suicide. The bank later settled with him and issued an apology. It has paid out many millions to dozens of other victims too.
The convicted banker fraudsters would it emerged, use the money they made on prostitutes, superyachts and holidays.
What happened in Reading was extraordinary. There is no evidence or suggestion of anything similar involving the bank in Ireland.
However, Dobbs has nonetheless now called the Mansfield’s to give evidence. On March 18 2020, Dobbs wrote to Lansdowne Francs telling them this.
“In order to ensure that the Review is as comprehensive as possible, I believe it will be helpful to speak to you as you will have information which is relevant to the Review,” she said, in a letter seen by The Currency.
“It is possible that the FCA (Financial Conduct Authority) may then also wish to speak to you about any relevant findings from the Review, to the extent that they relate to the information you provide to the Review.”
Dobbs asked for these interviews to take place on March 24, but they have since been pushed out due to Covid-19.
With the interviews delayed, Lansdowne Francs sent an eight-page letter setting out the sequence of events from their point of view. Various allegations are made, which it will be for Dobbs to consider and determine whether this falls within her remit. Some of these allegations are well known, and have been made publicly before by the Mansfields.
The letter states for example that HSS came under significant financial strain in 2010 as Lloyds Banking Group refused to release significant pre-agreed sums to HSS to complete the latter’s involvement with the continued expansion of Citywest Convention Centre. As the Mansfield’s waited for this money to arrive, they ploughed in millions of their own money to keep building going in Citywest.
It was for the receiver, the bank said, to consider restructuring proposals and obtain the best price possible from the sale of the business.
As a result they were drained of resources when the money never came. Similar complaints have been made by other developers in both Ireland and the UK against many different banks. The question for Dodds to consider is, whether this is something worth investigating or can this be explained by the times the bank faced, when capital dried up.
There are also other allegations made in the letter. It refers to various tape recordings made of interactions with various parties. It is up to Dodds to review all this information and decide on whether they are relevant.
Interestingly, Lansdowne Francs states in its correspondence that at one stage Citywest was in talks with the Hard Rock Hotel Group to take over the entire resort. At least one meeting even took place in Ibiza between Jim Mansfield Jr, a son of the family, and the hotel group. The prospect of a giant rock-themed hotel, strewn with glittery memorabilia in south-west Dublin never happened.
The Mansfield family has considered suing Lloyds previously. Such a case would cost millions. Getting Dodds to investigate, however, would be another way for their allegations to be confirmed, or disproven.
Disputed legal costs
Last Monday The Daily Telegraph picked up on the HSS / Citywest story. It said that Lloyds Banking Group had “clashed” with the Dobbs independent review into the HBOS Reading scandal by refusing to pay the legal costs of the former HSS directors. It reported on the central claim of HSS that the bank, by refusing to lend €30 million more to Citywest, led to it becoming insolvent. It also reported on claims about title in relation to some land on the Citywest resort made by a former director of HSS. This claim has been denied.
A Lloyds spokesman told The Telegraph: “HSS was not a victim of the HBOS Reading fraud. While we appreciate that HSS may feel unhappy with certain matters relating to its receivership, as its experiences are unrelated to HBOS Reading we do not believe it is reasonable to meet its legal costs in this instance.”
It was for the receiver, the bank said, to consider restructuring proposals and obtain the best price possible from the sale of the business. The receiver has previously said he was satisfied that the best outcome was achieved. Dobbs did not comment when contacted by The Telegraph.
Contacted by The Currency to respond to Lloyds, a spokesperson for the Mansfield family said: “HSS and its advisor Lansdowne Francs, consider its oral evidence presentation to the Justice Dame Linda Dobbs Review in the United Kingdom as a vital and continuing part in unravelling the appointment of receivers over certain assets of HSS…” including Citywest. She said this would include evidence in relation to the sale of Citywest to new owners.
They remain determined to try and get Dobbs to examine their claims, and are planning to press ahead. Dobbs has the power to investigate their allegations fully, proving or disproving them once and for all. It will be up to her to determine, if what happened to their business, falls within her remit.
Citywest meanwhile has moved on. A spokesperson for Tetrarch, the current owner of Citywest, did not wish to comment on the past. “We are not a subject of this inquiry, and it is a matter for the parties involved to comment on,” he said.
The investment in Citywest has turned out well for Tetrarch despite Covid-19 devastating the hospitality industry in Ireland.
As The Currency first revealed on March 20, Tetrarch did a deal with the Health Service Executive to rent it the entirety of Citywest as a field hospital, at a time when the state feared its hospitals would be overrun by Covid-19.
On June 19 2020, RTE Investigates reported that the cost of this deal was likely to reach €21 million under the terms of a contract signed on March 26.
The HSE is obliged to rent the hotel until October 22, and will then have to decide whether or not to end its lease. The new owners of Citywest, like everyone else, could never have anticipated the impact Covid-19 has had on it. Politicians have given out about the deal since, but this is with the wisdom of hindsight.
While other hotels struggled, Citywest managed because of its unique scale and location to secure a deal with the state.
Thankfully for us all Citywest was not needed as a field hospital so far, and hopefully it never will be.