The devil’s in the detail: the trials and tribulations of a property sage
THERE comes a time in your life when you can draw a line and say: ‘I’ve done a lot of things in my life’, barks Gerald Ronson, thumping a gnarled fist on the table for emphasis.
He’s not wrong. Now the undisputed Sage of Property, Ronson, 70, has spent the past half a century constructing 159 commercial buildings and 1,500 residential homes for his privately-owned empire, Heron International.
He’s been to the brink and back with Heron after some of the firm’s more ill-judged US investments pushed it to the verge of bankruptcy in the early 1990s.
He’s been happily married for over 40 years to the beautiful Dame Gail, with whom he has four equally glamourous daughters. The couple still live in the same house in Hampstead. One of Britain’s top philanthropists, he’s put tens of millions into his own foundation, which is committed to building schools for poor children in the UK, Israel and the world over, and has built nearly 1,000 petrol stations as a business venture on the side (he still directly owns 84 in Britain).
And all this, of course, is entirely aside from the incident back in the 1980s which first catapulted him into the spotlight: the infamous “Guinness Four” share manipulation scandal, for which he subsequently spent six months behind bars, yet always maintained that he had been misled by associates he wrongly trusted.
We’re sitting in the wood-panelled boardroom on the fourth floor of the Heron building on Marylebone road. Portraits of a considerably younger-looking Ronson and his beloved father Henry – after whom Heron is named – hang on the wall, while the great man himself reclines in the deep leather chair opposite, sipping a coffee and periodically leaning forward to underline a point about which he feels strongly with more table-thumping.
Today, Ronson launches his autobiography, “Gerald Ronson: Leading From The Front”, which he says he has written to remind his grandchildren and great-grandchildren of their roots.
“I think it’s important for them to know that their ancestors came to the East End from Russia and couldn’t read or write,” he says. “They came here with zero and still became good citizens and made something of themselves, achieved things. That’s what is important.”
Of course, it’s all too easy to focus on just two episodes out of the 18 chapters in the book, but Ronson is keen to show his life has been about more than just a misguided decision that landed him in prison.
“I did half of that book 15 years ago, but I was still feeling raw after moving on from Guinness and the re-construction of Heron,” he muses. “I don’t have to set the record straight; back in 2000, the European court declared it was an unfair trial. But I don’t have any bitterness about it. Would I wish what happened to me on anybody else? No. But you’ve got to dust yourself down and get back in the ring. When I went to Ford prison, I prepared myself: I told myself, if I can be a lion in the jungle, I can certainly manage a local zoo down in Sussex.” Inmates soon dubbed him “The Guv’ner”.
That kind of talk has stood Ronson in good stead over the years. In 1989, Heron turned over £1.6bn a year and owned 300 companies in nine countries. Just two years later, he found himself fighting to save the company from bankruptcy.
Ronson is the first to admit he’s made plenty of mistakes during his career, but, as he says, “if you don’t make mistakes, you don’t learn from them”.
“We never actually went bust, but if we hadn’t restructured, we would have run out of money. We learnt from those mistakes, we restructured the shape of the business and didn’t make the fundamental error of cross-collateralising assets thereafter. If something went down in this firm today, it wouldn’t bring us down.”
It’s a brave assertion. Yet despite the acres of new space still standing empty in the City, Ronson is confident the worst of the commercial property squeeze is over.
In April, at his annual property lunch at the Dorchester – the highlight of the social calendar for bigwigs from property, business and politics, and the symbol of Ronson’s spectacular return to prominence – he told guests that the time had come for “positive thinking”. Two months down the line, he hasn’t changed his tune.
“There is life coming back to the City. I think we will see smaller tenants moving out of Canary Wharf and moving back to the City because of the availability of quality new buildings whose owners are prepared to do exceptionally cheap deals. And there is activity around. If you look at a mile radius of Bishopsgate, there are around 500 tenants renting between 10,000 and 50,000 sq ft whose leases come up for review in the next few years.”
These tenants, of course, are prime targets for Ronson’s most ambitious project yet: the 46-storey, 663ft Heron Tower skyscraper on Bishopsgate itself, which is due for completion in 2011. He becomes visibly animated when I broach the subject, chattering excitedly about state-of-the-art technology, “six star service” – black-coated concierges who’ll book tables at the Ivy, buy theatre tickets or get shirts cleaned – and “customers” (tenant, in the Ronson vocabulary, is something of a dirty word).
“The devil’s in the detail,” he roars, citing the Gherkin tower – to which he refers simply as “the one that looks like a cucumber” – as a bad example.
“It is a great iconic building to look at from the outside but as a commercial building it is a disaster. The entrance hall doesn’t have any ‘wow’ factor, you’ve got plaster finish on the walls in the lobbies; there’s nobody who has loved or cared…”
It’s clear that in Ronson’s book, inadequacy doesn’t cut the mustard. He is a workaholic, spending five days a week in the office at Heron and being driven 500 miles around the country on a Saturday visiting his beloved petrol stations, which he describes as his if-all-else-fails “fuck you business”. Test him, and he replies without hesitation. “Blackheath? Yes, on the corner. That’s a good well-run site. There’s a good manager there, been there seven or eight years, little fella…” His obsession with the nitty-gritty applies to all his ventures: in a recent visit to New York, he popped by a building he built 20 years ago, to be greeted by the concierge, who grinned and said: “You haven’t come to do one of your inspections, have you, Mr Ronson?”
He opposes but is unfazed by the government’s decision to raise the top income tax band to 50 per cent. “Would I have done it? No. Am I going to have to live with it? Of course I am. But it doesn’t disincentivise me: I’m a charity worker and charities don’t pay any tax.”
In fact, the only subject at which Ronson bristles is the thorny issue of succession. “I think you’ll gather from talking to me that I’m not lacking in focus – I’ve got the energy of two 35-year-olds,” he growls, with another thump of the fist. “We’ve got a development programme at Heron that goes to 2015, when I’ll be 75 and I’ll have to have another think. But as long as my health is good and I still love what I’m doing, I’m not going anywhere.”
POWERFUL FRIENDS
Gerald Ronson himself owns around 25 per cent of Heron, bequeathed to his foundation. His other investors include the Milken Family Trust, which owns around a third of the company; Larry Ellison, the chief executive of US enterprise software company Oracle, who has a 12 per cent stake; News Corporation media mogul Rupert Murdoch, who owns 4 per cent; and former Yahoo boss Terry Semel and Las Vegas hotel and casino developer Steve Wynn, both with small holdings.
CV GERALD RONSON
Age: 70
Marital status: Married Gail in 1967. The couple have four daughters: Lisa, Amanda, Hayley and Nicole
Career: Left school at 14 to work in his father’s furniture factory. Later moved into property and, in 1966, opened Britain’s first self-service petrol station.
By 1972, he had turned the family business, Heron, into the second largest private company in the UK.
In 1990, he was jailed for six months for his involvement in the Guinness share manipulation scandal.
The next year, he was forced to restructure Heron to avoid bankruptcy, but has since rebuilt an empire controlling an investment portfolio of around £1.5bn.