Mark Chalmers

The jet flew a tightening arc over the Bar of the Tay, throttling back as it broke through a bank of haar.  The shape of the city resolved itself: twelve miles strung out along the river, from the Buddon to Kingoodie.  “Cabin Crew: Doors to Automatic.” We were buckled in for landing, and the aircraft overflew drilling rigs moored at Caledon Wharf, passed a cluster of high rises off the Hilltown, and lined up on the runway.  There was a whine and thunk while the landing gear locking down, then as we were within touching distance of the rail bridge, we overhauled a cleared site on Riverside Drive, a few acres of graded hardcore.

No ordinary rubble: this little patch of Dundee was the downfall of Mark Wilson, an architect-developer whose company, Duncarse Developments, bought it for £10m in 2007.  Before that, a Texas DIY store sat here, but it was reduced to rubble before redevelopment was due to begin, helping to clear what Enric Miralles described in 1999 as one of the most the most dramatic urban settings in Europe.  Wilson’s company was on the brink of starting work on a scheme of 200 luxury apartments, which would have seen Duncarse spend upwards of £40m, when the economic crash interjected.  Duncarse went bust in 2008, and 25 potential purchasers lost their deposits.  Mark Wilson got lots of bad press, but he lived to fight another day and eventually bounced back, as most developers do.

Wilson trained as an architect, and his first big success as a developer was the redevelopment of the Bastille in Aberdeen, formerly part of Richards’ textile mill at Broadford Works.  He progressed through other housing developments, eventually converting parts of Royal Dundee Liff, the former insane asylum that lies to the west of the city.  Riverside Apartments, the scheme which brought down Duncarse, would have been his largest development, and one of the biggest in the city at the time.  Wilson’s upward trajectory is similar to that of his contemporaries, although they specialised in different sectors, and the wisest among them pre-let their developments before work began on site.

Dundee’s developers have a reputation which extends far beyond the confines of their industry.  Michael Johnston, Angus Cook, Kenny Harper, the Marr brothers, Bruce Linton and many others have made their mark on the city in the past quarter of a century.  Most of them made their money in retail and commercial development, particularly in pubs and clubs, in the case of Kenny Harper and the Marrs.  However, the first-mentioned had widely-reported trouble with the tax man; three had their their fingers burned through involvement with Dundee FC; and most have experienced failure as well as success in business.  Yet it all made interesting copy, so their milieu reached the wider world through the film Jute City, and Andrew Murray Scott’s novel Estuary Blue, which feature the thinly-disguised exploits of the city’s worthies in recent years.  In fact, property development has a long pedigree in the city. 

A previous generation of Dundee developers made themselves rich men in the 1960’s, ripping down the city which Joseph McKenzie captured in his famous “City in Transition” series of photos.  It was McKenzie, incidentally, rather than Oscar Marzaroli who most completely captured the squalid final years of the old Gorbals in Glasgow, complete with snottery urchins and the last of the city’s horse lorries.  McKenzie’s photos also show us the old Hawkhill in Dundee, before it was bought up by developers, sold in parcels for clearance, and the ‘dozers moved in.  The current generation of property developers started out in the same way as every other does: by owning a pub or nightclub, buying up an old jute mill, spotting unregarded worth in a street of tenements and factories.  Years ago, a Dundee developer – a quiet, unassuming man with none of the trappings traditionally associated with his ilk – told me that during the 1980’s and early ‘90’s, you couldn’t go wrong in buying commercial property in the city.  Values were as low as they would ever reach, and could only go up.  That proved to be true – and if you bought at the bottom of the market as he did, it worked in your favour.  Arguably, Duncarse bought their site right at the top. 

However, the point of this piece is not only to provide an insight into the forces which shape Dundee, but also to highlight the sancitmonious attitude which folk reserve for property developers.  The recent news that Mark Wilson has bought part of the former Seaview Primary School and plans to convert it into flats, provoked a piece in the Courier which revealed more than just facts.  Mixed through with a hint of schadenfreude at the developer’s downfall, is a righteous moralising at his rebirth.  Never blatant, it comes across instead as silent censure, as when the reporter writes about a developer who “could not be contacted at his home yesterday” despite the fact that “a Porsche four wheel drive was parked outside the property”.

You can infer a good deal from the article’s clichés.  The depositors “did not see a penny of their money back”. The scheme “folded … before one brick was laid”. All this meets public’s preconceptions about property development, but it offers a simplistic view of a complex set of issues.  The people who lost money may nurse a sense of betrayal, but how many of those who placed their deposits to secure flats “off plan”, hoped that their new properties would rise in value before they were complete – so they could be sold on for a profit without even occupying them?  It certainly happened in other schemes, such as City Quay three years ago, the conversion of Camperdown works in the late 1990’s, and the remaking of the Thomson Shepherd carpet factory a few years before that.

The Courier reporter is hung up on the figure of £6000, but the article doesn’t explain that a £6000 deposit is worth different amounts to different people.  After all, cash is swapped for equity when you buy property, and equity can be leveraged.  It’s worth far more than its face value to a development firm on the brink of insolvency, as it provides vital cashflow and may convince a fat banker in his pinstripes not to strangle your company.  The fat banker is, of course, another media bogeyman.  £6000 is also worth more than its face value to a carpetbagging flat speculator, since it is the necessary toehold which a mortgage enables you to leverage.  However, £6000 is worth less than £6000 once it’s been handed over – and just like Mark Wilson, the deposit-placers at Riverside Apartments were speculators, who also felt risk’s downside.  They have first hand experience of what economists call the marginal value of utility. 

I’ll explain by using a maxim from Richard Whatley, a 19th century economist, who said – “it is not that pearls fetch a high price because men dive for them; but on the contrary, men dive for them because they fetch a high price.”  In other words, the value of something depends on its utility, and that is reflected in the price.  The general theory of marginal utility is that price declines at the margins – so as extra supply appears, the price of goods or services will fall.  By contrast, a shortage of land in prime locations leads to spiralling cost inflation, and increased profit margins.  Scarcity is an integral part of the utility which pushes up value, so a unique piece of land on the riverfront is worth paying more for – hence the reported site value of £10m.  Yet when the economy crashes, the prime location loses its utility as an object to speculate upon.  But the Courier doesn’t look into this.

Neither does the journalist explore the forces which impelled folk to lay down money speculatively on “paper” architecture.  For example, he could have explained that the motors which propel Dundee’s economy today are the universities, the computer games industry, biotechnology, financials, and to a lesser extent, high-tech engineering.  Plus property, of course.  If you recall the canny developer who told me that he couldn’t lose when he bought property?  That’s no longer true, certainly not of residential schemes.  Prime site values in Dundee increased by a factor of three, and that increased development risk.  Values went up hand in hand with demand, and demand is driven by … folk placing deposits on flats before they’re complete.  You could argue that some of the wronged depositors were, in fact, agents of their own downfall.  However, that would be to allow the same moral relativism that the Courier applies.  Anyhow, the article implies that someone who took money and gave nothing in return, has no business coming back to look for more.

So we leave the airport terminal and cross the windswept apron.  The jet is waiting.  After it takes off, Courier-readers and non-deposit-placers alike look out through their oval windows.  The site on Riverside Drive is still graded hardcore, but that hardcore now belongs to H&H Properties – run by Hassan al Saffar, another of Dundee’s cadre of developers.  He hopes he can do what Mark Wilson couldn’t.