Chapter 14: Chapter 14
rom the very outset, Jack Reagan had recognised Jameson for what he was:
a conman. Both men were Londoners, both came from working class
backgrounds and both had made their money in property. The former with
his own money, the latter with that of others. It was on Robert Moreau’s boat he
first met Jameson, an outing to San Sebastian, taking an almost instant dislike to
his style and glib investment spiel.
Jameson had tried to sell the idea of investing in Hendaye, when, as Reagan
suspected, the boom was building up to a dangerous glut. A lot of local home
buyers were Spaniards with one hundred percent mortgages, which meant trouble
down the line when the crunch came, as it always did.
Jack Reagan was a successful man; there was little he did not know about
property investment, at least in his particular end of the market. He had secured his
future by selling part his energy related business to a Finnish engineering group in
the mid-nineties. Reagan then put his gains to work, investing in several central
London residential properties; the timing was good as property prices were about
to take off.
The agreement with the Finn’s required he remain on the board of directors to
ensure the continuity and profitability of the business. Then in 2003, with the rise
of energy prices, he sold his remaining shares for a substantially higher price.
Reagan held Irish citizenship, something that offered certain fiscal advantages. To
consolidate his capital and the income earned from his properties he establish a tax
domiciliation outside of the UK, since income not remitted to Ireland by Irish
citizens, not domiciled in either Ireland or the UK, escaped taxation.
He had naturally thought of Switzerland or Monaco, but neither appealed to him;
foreign languages were not his strong point, he then checked out Cyprus and
Malta, but they were too Oriental for his taste. Finally he chose the Caribbean
where English was spoken on many of its island nations, and to boot year-round
good weather was guaranteed.
The Commonwealth of Dominica was made to measure, tucked in between the
French islands of Martinique and Guadeloupe. It seemed ideal, though there were
no direct flights from London. The island’s two airports being too small to take
large aircraft, meant he had to travel via Guadeloupe, a short hop away by plane or
by an Express sea-cat service. After buying a villa near Roseau, he invested a few
thousand pounds more acquiring a second passport like a certain number of other
well-heeled expatriates resident in Dominica.
After his initial enchantment, the island he discovered, in spite of its beauty and
convenience, was a backwater. That perception changed almost instantaneously
when he met Marie-Helene on a flight from Guadeloupe and offered to show her
the island.
F
The value of his property portfolio grew substantially, pumped up by the real
estate boom, but Reagan knowing the vagaries of the market prudently refused to
increase the book value to lever loans, as many had done to boost their assets. He
did however take advantage of the favourable market conditions to increase his
rents.
To manage his properties he set up a firm in London. In practice it was nothing
more a small office on Rochester Row in Pimlico, where an accountant, a secretary
and a maintenance engineer managed the day to day running of the business. It was
highly lucrative affair and debt free. One of his first rental investments had been a
large town house in Saint George’s Square, which he divided into luxury short
term lease flats for visiting businessmen. He then repeated the operation in and
around Westminster and Pimlico, ideal locations for political and business
commuters, within easy reach of the City and the capital’s administrative
institutions.
Reagan settled into an easy life, travelling between the Caribbean, London and
the south-west of France whenever it suited his needs. Amongst his best
investments was his own London home in Morpeth Mansions, facing Westminster
Cathedral, a spacious duplex of two hundred and fifty square metres, its rooftop
terrace overlooking the Cathedral gardens, with Big Ben and the Thames beyond.
History had left its imprint on his Westminster home. Winston Churchill had
lived there between the two world wars. The great man had bought the apartment
from Lloyd George, moving in after he had quit Downing Street in 1930. Living
there during his wilderness years, fighting his anti-appeasement campaign, backed
by his faithful stalwarts: Robert Boothby and Anthony Eden.
Reagan’s Irish parents arrived in London, to run a small hotel in Pimlico owned
by an uncle, in the early sixties. Jack grew up and went to school in the same
district, which was not yet as desirable or privileged as it was to become, though it
was already in the process of metamorphose.
After leaving school he studied engineering and then started work with an old
established firm, specialised in building distilleries, with its offices on Chancery
Lane. Later he formed a partnership with a more senior colleague to set-up a small
independent engineering firm to develop non-conventional distillery technology,
later branching out into biofuels. On his partner’s retirement, Reagan acquired his
share of the business. Then as part of a plan to expand into broader overseas
markets, he met the Finns, concluding a joint agreement to undertake more
ambitious projects. The cooperation was a success, with Reagan finally ceding his
remaining shares at a substantial profit.
Marie-Helene taught him there was more to life than work and business. She
opened the door to a different world, with Jack spending more time in Paris and
buying a comfortable pied-à-terre in the fifth arrondissement of the French capital.
He also discovered the Basque Country, where Marie-Helene owned Etchea
Mendi, a large neo-Basque villa. It had been designed with an Art Deco flavour. Its
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wide entrance door fashioned in wrought iron and stained-glass, designed and
crafted by Jacques Gruber, symbolizing a flock of wild geese in flight, a fine
example of the master glass maker’s work. Etchea Mendi, stood on a small wooded
hill, Uruxti, overlooking the Baie de Chingudy in Hendaye. The villa had been
designed by her maternal grandfather and architect, who had worked with Joseph
Hiriart, the builder of the celebrated Villa Leïhorra in nearby Ciboure. Etchea
Mendi had been built between the wars and Marie-Helene’s family had holidayed
there for as far back as she could remember.
The couple modernised the villa, adding a swimming pool, and transforming it
into their summer home, spending three months or so there each year, avoiding the
worst of the Caribbean hurricane season and Dominica’s sweltering heat. Jack soon
settled into the easy going summer lifestyle of the small town, getting to know
Marie-Helene’s friends, enjoying their small diner parties where champagne corks
popped and foie gras was served on toast.
After years of work dedicated to developing his business the transformation was
complete. He learned to enjoy a life that was totally different from the long hours
he had put in building his business in London ― few holidays, and few interests
outside of his work. In certain ways Hendaye reminded him of the life he had
known in Ireland, where as a child he had spent many long summers with his
grandparents. Times had changed and the Basque country had become more
material and more ordered than the Ireland of his childhood. The Basque coast was
transformed into a surfer’s paradise, attracting, even in the off-season, glisse
enthusiasts from as far away as Sweden, Poland and Hungary, watched by an ever
growing number of retirees.
Each year the small seaside town of Hendaye underwent a ritual change as the
summer season approached and holiday makers started to arrive, from both France
and Spain, reaching a climax around the fifteenth of August with the Fête Basque
and the national bank-holiday. Ten days later the crowds were already on the road
home. Those who remained during the latter part of the season, often blessed by an
Indian Summer, savoured the douce pleasures of the Basque Country without the
urgent bustle of vacationers.
On fine summer days Jack joined Marie-Helene’s many friends sunning
themselves at Les Alcyons, a beach club, one of those traditional French
institutions, where as a teenager she had played beach volley. She was also a keen
tennis player, as were many of her friends, and a member of the Hendaye Tennis
Club, a ten minute walk down the hill from Etchea Mendi.
With the property boom, Jack had been tempted to invest in Hendaye, but he had
made himself a promise when he sold his business: no more risks. He could enjoy
all the pleasures of life with the solid income from his London properties. He kept
his promise, and as far as Hendaye was concerned, Etchea-Mendi more than
satisfied his needs. He contented himself to look on as others piled into the
property market, in full swing, as more and more new projects sprouted out of the
ground almost overnight with developers building at an almost lunatic pace.
Reagan besides being engineer had the added talent of being a natural salesman; a
gift that had enabled him to profitably promote the services of his highly
competent engineering team, selling his firm to the Finns at the right moment and
at the right price. In retrospective he realized life was a series of gambles and the
probabilities of winning them all were low. He had been lucky and knew when it
was time to walk away, leaving the fray to another ambitious generation.
He had observed that many business managers lived in a world of fantasy, more often than not based on wishful thinking, a substitute for the hard slog of reality.
Naïve or inexperienced businessmen imagined markets, customers and competitors
could be manipulated. They invented business plans that were often as unrealistic
as pipe dreams, just as certain bankers and investors had put their faith in a future
built on flawed mathematical models and faulty risk-management systems.