Sunday Business Post:
It is only when Paul Monahan wheels out one of his three helicopters to take you on a spin around his new golf-course development that you begin to see the world through the eyes of a multimillionaire property developer. Once you are flying over this part of west Dublin, it's not hard to see how Monahan expects to recoup the €46 million he and his partners have spent developing the Castleknock Golf Club and hotel. The bird's eye view over the Liffey Valley demonstrates clearly the point Monahan has been making all morning, namely that his 160-acre golf course is strategically placed in the heart of a green oasis, surrounded by the suburban sprawl from which he hopes to draw his customers.

Monahan isn't the only savvy businessman who owns land in this area. From the cockpit of the helicopter, he points out a number of large estates and helipads owned by leading business figures - some of them also property millionaires.It is now more than ten years since Monarch Properties bought the land on which Monahan is just completing his latest development.

Until recently, the large site was leased out to potato farmers. But, as the number of chimney pots in the area began to soar and waiting lists lengthened for membership of golf courses at the Hermitage and Luttrellstown, Monahan reckoned the time was right to develop the land.

The sod was turned on the project in October 2003 and already the hotel is open for business. The golf course will open to members in August.The development comprises a €26 million hotel, a €10 million golf course and a €10 million housing development.

The hotel is a joint venture with the Tower Hotel Group, now owned by insurance company FBD. FBD owns 80 per cent of the hotel, while Monahan retains 20 per cent.

Funds for the hotel were raised from investors eager to take advantage of tax breaks.“We were over-subscribed by 300 to 400 per cent. We only took five or six of them [investors]. They put up €4 million or €5 million each,” said Monahan, speaking before the publication of his late father's €26 million will.

Monahan agreed that there were now probably too many hotel beds in the Dublin area, but he was confident there would be a market for a four-star hotel and golf club in the Castleknock area. He said there was a worry that, by extending the hotel tax breaks until July 2006, the government was in danger of adding to the oversupply of hotel rooms.

“There are going to be too many beds. Some smaller hotels may close or turn into apartment blocks,” he predicted.

But it is the golf course that really gets Monahan excited. It was designed by British golf course architects Gaunt & Marnoch, while the project was managed by Clare expert  James Healy. Monahan has invested in ten acres of man-made lakes and a state-of-the-art drainage and computerised irrigation system.

This means that, even after a bout of heavy rain, the course remains dry. He spent a fortune on new buggies and tractors to maintain the course in good condition.

The golf equipment is housed in a huge garage adjoining his period home overlooking the estate.The garage is also home to a classic car collection started by his late father, property developer Phil Monahan, who started out as a mechanic. The collection of 70 cars includes several Mercedes, a 1958 Corvette and a Ferrari.

Generally, promoters fund golf course developments by selling shares to prospective customers before construction begins. But Monahan decided to fund the project himself, using a combination of bank debt and his own resources.

“I know a guy who said I was very ballsy to do it that way,” he grinned.

“Normally it takes three years to do a golf course. We'll have done it in a year and a quarter. I reckon I saved €500,000 by being organised.”

He is now selling 200 shares in the golf course at €30,000 each to the first 200 members, whereas he could only have charged less than half that if he had demanded the money before completing the course.

It doesn't take a genius to work out that membership fees will raise €6 million, or 60 per cent of his initial investment. In addition, members will pay an annual fee of €1,500 (plus Vat), generating revenues of about €300,000 a year. Factor in savings of €40,000 a year on the hotel's water bill (because Monahan will supply the hotel from three wells he installed on the course), and it is not hard to see why he is so chirpy.

The third prong of the project is a proposed housing development, for which Monahan has just received planning permission. The development comprises 16 homes targeted at wealthy executive types who fancy living close to a golf course. The homes are expected to cost about €2.5 million each.

Monarch Properties is probably best known as the company that built many of the country's big shopping centres. It built The Square in Tallaght, west Dublin, in the late 1980s at a time when few could have predicted the property boom.

Phil - Paul's dad - managed to persuade former environment minister Padraig Flynn to designate the site for tax breaks under the urban renewal programme. Flynn granted the designation against the advice of some senior officials at the time.

The company built shopping centres in Dundalk, Drogheda, Navan and Athlone. It also developed the Janelle Shopping Centre in Finglas, the Nutgrove shopping centre in Rathfarnham and Bloomfield in Dun Laoghaire, Co Dublin.

Monarch Properties used to employ in-house architects and engineers, but these days Monahan prefers to subcontract all the main work, retaining a permanent staff of only about 20.

Monahan has a number of other projects in the pipeline, including a proposed housing development, shopping centre and golf course and equestrian centre in Dundalk.

Other projects include a housing development in Kilkenny. Further afield, Monahan is also looking at building houses in the South of France marketed at Irish people.

He is also looking at opportunities in Argentina, a country which he has come to know through his passion for polo.Monahan said he would like to see “a bit more stability'‘ in the price of land, and suggested that “more clarity on planning'‘ would help bring stability to the market.

In relation to the massive profits made by builders over the last decade, Monahan said that, when his company originally submitted plans to develop housing at a site in Cherrywood, Co Dublin, the planners told the company there would be no need for homes there.

“If the planners had been up to speed, there would just have been normal enough profits,” he suggested.He insisted that “you have to work at it'‘ to do well in property.He pointed out that many who did well in property put their hands in their pocket to buy land in the first place. “To the people that take the risk - hats off.”

For details of Castleknock Golf Club membership, call Mark Lynch @ 01-6408736