For a street in the middle of Dublin city centre, Capel Street has a rare attribute, character. Heaving with small independent businesses from the jewellery pawnshop to the Louis Copeland menswear store, the narrow, sometimes pedestrianised street has retained the pokey appearance of an earlier Dublin from before the Celtic tiger. “You can buy a lightbulb, sexual lubricant, Brazilian rice, get a pint and go to a trad session,” drag queen Panti told the Irish Independent in an interview in 2016, capturing its diversity and vitality. Of course Panti, aka Rory O’Neill, has a stake in the street, running two well-known gay bars in its environs, Pantibar and the more recent addition Penny Lane.

Success breeds success. Vibrancy draws capital. Last June, after a protracted planning process, Dublin City Council granted Northern Irish firm Cathedral Leisure permission to construct a €30 million eight-storey hotel on the site of the former Boland’s Bakery on Capel Street and Little Mary Street. The owners, also behind the five star Merchant Hotel in Belfast, say the development “will significantly improve and add to the amenities in this area of Dublin city”.

Perhaps unsurprisingly, the plan to build a mid-rise 98-bedroom hotel with three restaurants and bars, and a large function space, has not been without controversy in an old part of the city. Planning objectors included nearby arts space The Complex, which raised concerns regarding noise, pollution and access “grossly” affecting rehearsals, workshops, live performance, filming and live streaming. 

City councillor Mannix Flynn, who recently won a High Court case blocking the installation of a cycle lane on the coastal road in Sandymount, also opposed the development. He complained of hotel saturation in the city centre and said the plans were at odds with attempts to make Dublin a living sustainable city. He called the build insensitive and described the height, in particular, as an “act of vandalism” given the historic fabric and nature of the area. 

“If one was to fall in this location you would hit your head off another hotel development as at present there is already a number of them under construction,” Flynn observed in his planning submission, noting that many hotels in the city had empty rooms due to Covid-19. Since 2017, planning permissions have been sought and granted for two other hotel/aparthotel developments within 200 metres of the Boland’s Bakery site, on Arran Street and Little Mary Street.

But a more serious obstacle potentially stands in the way of the new Cathedral Leisure development – a row with the owners of neighbouring 27 Little Mary Street over an asserted right of way in a laneway between the proposed hotel and a Chinese restaurant called Bullet Duck and Dumplings. Trespass proceedings have been brought by the hoteliers against landlords Fergus McCabe and Brian Stynes of Ballyroan Crescent, Rathfarnham along with restaurant operators Sisu Entertainment and Fainne Entertainment and one of its directors Xiao Hua Wen.

Waste, maggots and a disputed fire exit in the laneway have all featured at some point as claims in the dispute. But the core concern, from Cathedral’s perspective, is that the row may delay the start of construction works early next year and jeopardise the bank’s continued financing of the €30 million project.

While of a different order of magnitude, the owners of the small 20 seater restaurant next to the proposed hotel seemingly face no less of an existential threat. They have accused Cathedral of using the High Court and the massive costs associated with it “to close a small business and put several employees out of work”.

The case was fast-tracked into the Commercial division of the High Court late last month to assist a speedy, if not cheap, resolution of the row. The order was made in the face of objections by the restaurant’s landlords who are alleged by Cathedral’s lawyers to be asserting a right of way that is not contained in any title documents. The developer also claims that fumes from the dumpling restaurant could affect the proposed cafe bar area of the hotel lobby. Cathedral’s senior counsel Michael Howard said his clients had been put in an “impossible position”.

Leman solicitors are representing Cathedral Leisure; Hanlon & Co are acting for the landlords while the businesses running the restaurant are without representation. Fainne director Ian Keegan says in an affidavit that while the restaurant owners received legal advice they cannot afford to pay for litigation lawyers.

The Little Mary Street laneway has effectively become a frontier between big and small business interests in Dublin city centre.

A Bullitt on Capel Street

Belfast businessman Bill Wolsey OBE is the driving force behind Cathedral Leisure. His hospitality empire, the Beannchor group, extends to more than 40 pubs, hotels and restaurants. In Belfast, it includes the five-star Merchant Hotel in the Cathedral quarter, the minimalist Bullitt hotel, the Dirty Onion bar and the Little Wings pizza chain which is also in Dublin. It is the largest hospitality group in Northern Ireland. Turnover at the group was £17.1 million for the year that ended on June 30, 2020, a 16 per cent drop on the 2019 return before Covid, while pre-tax profits for its operations fell from £4.6million in 2019 to £2 million for the following 12 month period.

Born to staunch socialist parents in the 1950s, Wolsey was scouted for Arsenal as a teenager but did not make the grade in professional football. Instead, he wound up working in hospitality in London before buying his first pub in Northern Ireland in the 1970s for around £10,000 with help from his parents. “Then followed the toughest period in my life because what I had inherited and what I was too stupid to ask about was that let’s just call them the boys had taken over the bar and driven the other owner out,” he said in an interview with HR training company Legal Island. They decided to let everyone in, even if they belonged to organisations, and treat them with respect.

“I have employed ex-paramilitaries throughout my career. I would be honest in my approach. Quite often, they come from disadvantaged areas where they’ve never had a chance themselves. And they’re indoctrinated either through politics or the weight of history or they fuck you up, your mom and dad. They may not mean to. There’s a bit of that,” he said.

His dream had been to work for himself. Having achieved that, Wolsey took the next step and went about building a pub portfolio before realising, around the time of the smoking ban in 2004, that a cultural shift on the health effects of drinking would be next. He decided to diversify and set about delivering hotels like the Merchant and later Bullitt that would speak to a modern Belfast, with a young and educated population.

Now, after the launch of the first Bullitt in Belfast in 2016, the urban hotel brand is coming to Capel Street, an area of the city that to date has been largely devoid of big businesses and chain operators.

The Dublin site was formerly the offices of stage phenomenon Riverdance whose creators John McColgan and Moya Doherty sold up for €4.4 million in May 2017.

The .212 hectare space is made up of a number of buildings, most of which are protected structures. Expect exposed brickwork, dark leather furnishings, contemporary chandeliers and lush green vegetation from multi-award-winning ODOS architects, when the hotel is complete. The plans, exhibited in court, include a library bar, a drawing room, an indoor garden, a private dining area called the Vaults and a cocktail bar called the Orangerie. It is a plush affair that suggests Bullitt Dublin is aiming for a less stripped-back aesthetic than its Belfast counterpart.

The plan is to begin enabling works for construction in September and open the doors in autumn 2023. If all goes to schedule.

Blocked up

According to Cathedral, the laneway problem first arose in June 2018. Whereas on previous site visits there was said to be only a boarded-up opening visible from the rear of 27 Little Mary Street, on this occasion, the hoteliers noticed this “niche” had been opened up and that a closed door was now visible.

Group finance director James Sinton said in an affidavit that this was immediately raised with the former owners of the building, McColgan and Doherty, who were still using the office space at the time under a tenancy arrangement. They are alleged to have told Cathedral that no authority had been given for removing the boarding from the laneway. It was reinstated on behalf of the hotelier.

The issue arose for the second time in August 2019 when Sinton and Wolsey attended on-site and noticed the boarding had been removed, revealing a black painted door with what appeared to be a ventilation panel attached opening to the kitchen of the neighbouring Chinese restaurant. On a follow-up visit, one of the hotel’s contractors spotted chairs outside in the lane and cigarette butts on the ground suggesting the area was being used by restaurant staff on their breaks. Sinton alleges that rubbish subsequently removed from the laneway by the contractor included packaging waste and animal parts crawling with maggots. The court heard attempts to speak to the restaurant staff were constrained by their difficulty understanding English.

But when asked, the restaurant staff did agree to remove their stuff from the lane. The court heard the door was blocked up again, this time with concrete breeze blocks.

The laneway will also accommodate local community artisan stalls, “all forming part of the craft and community ethos of the hotel scheme”.

That remained the status quo until April 2021, when Wolsey is said to have found the blockwork demolished and left strewn around the laneway. Two panels from the protected glazed arcade structure that covers the lane appeared to have been removed. The black doorway allegedly had new fire safety stickers attached, marking it as an exit.

Responding to legal correspondence, the landlords of 27 Little Mary Street asserted that the premises had operated as a restaurant for years and that the door in question was a fire door that had been unlawfully bricked up by the hotelier. Claims of unlawful interference and trespass were made against Cathedral Leisure. The landlords also claimed that restrictions on the use of the door could result in “serious loss or damage to persons and/or property had the said door (which is also a fire door) been required for an immediate evacuation of the restaurant building”.

The door’s use as a fire exit was utterly rejected by Cathedral. Last spring, it began to tee up a legal battle in the chancery division of the High Court. The hotelier wanted injunctive relief aimed at stopping the restaurant from accessing the laneway. But the dispute fizzled out when Fainne, the operators of the dumpling restaurant, confirmed the back door was not required by them as a fire exit and that they were okay with it being blocked up again.

But the restaurant’s landlords continued to assert that a right of way existed in the laneway. “It remains entirely unclear what the factual or legal basis for those claims are,” Sinton, the Cathedral director, said in legal filings. He noted that the two owners of the freehold, McCabe and Stynes, only acquired the property in 2018.

If such rights do exist, the finance director added, then the design of the neighbouring hotel might have to be revisited. And that would cause delay and significant additional costs.

A question of money

According to Cathedral Leisure, the impact on the hotel would be twofold. First, security would be compromised as the laneway would allow entry to the hotel complex any time day or night. Increased monitoring of the laneway would come at an estimated cost of €30,000 a year. Secondly, the design of the hotel would need revision. Under the current scheme, one side of the laneway will be redesigned to open onto a private glazed walkway which is to form part of the hotel lobby and cafe/cocktail bar, the Orangerie.

The laneway will also accommodate local community artisan stalls, “all forming part of the craft and community ethos of the hotel scheme”. Any changes would require revised planning approval, the court heard. That takes time.

Projected pre-tax earnings for the bar and market scheme is €190,000 per annum with the bar alone expected to trade approximately €780,000 per annum and deliver pre-tax revenue of €150,000. The alleged right of way, it is claimed, would “severely jeopardise” the current plans.

When the sums are totted up, the financial repercussions are alleged to be significant. “On the basis of EBIT multiples in Dublin hotel assets, the Plaintiff would consider this to impact on the value of the asset, reflecting a €2.66m value,” Sinton stated in his affidavit. As the development is being funded in part by bank loans, any delay in determining the court case would further result in Cathedral Leisure having to make repayments on the development funding at a time when the business is not pulling in money, the company submitted. This would result in a loss.

In an affidavit grounding Cathedral’s application for the case to be entered into the Commercial Court, Sinton noted that the bank has security on the asset and further funding for the project is required. “Any new uncertainty over title will raise issues on our existing funding structure and this coupled with protracted litigation will most definitely severely impact on the Plaintiff’s ability to gain appropriate levels of development finance,” he said.

But the court first has to get to the bottom of the dispute. The next court date has been pencilled in for November.

Lawyers for the landlords McCabe and Stynes claim the doorway in the laneway has been in existence for more than 30 years and that their occupation of the premises predates Cathedral’s acquisition of the hotel site. In correspondence, last June, (around the time Cathedral was threatening injunctive relief in the High Court over the alleged fire exit) Hanlon & Company solicitors asserted that blocking up the back doorway of No 27 was not acceptable to the landlords and that earlier attempts at same amounted to a trespass that would result in a claim for damages.

For the tenants, it’s more a case of piggy in the middle. Bullet Chinese restaurant owners Ian Keegan and Xiaohua Wen say they have become embroiled in a row over a rear door they “have no use for”. Opened in 2019, the business owners maintain they had nothing to do with either blocking or unblocking the exit over the past few years. Keegan said they had not responded to correspondence from Cathedral on the issue as they had been assured by their landlords that the matter was being dealt with.

In an affidavit, Keegan agreed with Sinton that his staff were using the laneway to take their breaks but he said they stopped when it was explained to them that it was out of bounds. However, he utterly rejected a claim by Cathedral that, when approached, his employees “feigned an inability to understand what was being said to them”. Because his staff have limited English, they did not understand the conversation and there was no attempt by Cathedral’s side to use a translation app to communicate more effectively, he told the court.

Nor did the restaurant’s directors take ownership of any rubbish or maggots said to have been found in the laneway by Cathedral’s contractor. Keegan points out that the restaurant has a daily waste collection and is subject to HSE kitchen compliance inspections. The fan in the door, he says, was simply a ventilation fan to circulate air into the kitchen and there was no issue with removing it.

And yet neutrality may come at a high price. According to Keegan, that price could be the very existence of the restaurant business. Bullet has cast itself as the “meat in the sandwich” in the dispute between its landlord and the neighbouring hotel. While Sisu, Fainne and Wen remain as parties to the action taken by Cathedral, their interests are, for now, legally unrepresented in the proceedings. When the case was called in the Commercial Court late last month, the registrar read out their names to see if they were in attendance. There was no response, only a brief silence. While the future of their business may depend on the outcome of the court case, Bullet’s owners will have close to zero influence on the outcome of the proceedings.