Archive for October, 2007

Meet Steve Morgan - entrepreneur, housebuilder, football club owner and… muck clearer? Rupert Bates finds out more.
Steve Morgan the entrepreneur started early. Very early. As a boy he had not one, but two paper rounds in the morning. It meant being 15 minutes late for school, but as Colwyn Bay High was Protestant, young Morgan argued, as a Catholic, he should be excused assembly, which lasted 15 minutes. Problem solved.
Morgan has come an awful long way since and a colourful biography was burnished still further just before the start of the Championship football season when he completed the purchase of Wolves from Sir Jack Hayward for a nominal £10, with the commitment of a £30 million investment in the club.

With a fortune estimated at £450 million Morgan merits the title property tycoon, but the conversation starts and finishes with football. Land boosts his bank balance; football feeds his soul.

Morgan, Liverpool born and bred, tried and failed to buy his beloved Liverpool three years ago, with his last bid tabled at £70 million for a controlling interest. Morgan, undeterred, went after “my second-favourite team Wolves”. Growing up in Liverpool in the 1950s when Liverpool was a then second division outfit, young Morgan needed a top flight team to cheer too and chose the Wolves of Billy Wright and Stan Cullis.

“The name, the brand, the black and gold, it captured the imagination and still fires it now. This sleeping giant has the potential to be a top Premiership side,” says Morgan.

He made his initial fortune in housebuilding, starting Redrow Homes in 1974 and floating it in 1994. Morgan still holds a substantial stake in Redrow.

Tycoons’ tales of rags to riches are legion and often apocryphal, but Morgan can legitimately claim to have started his business life in the sewer. His first job, having borrowed £5,000 from his father to set up as a civil engineering sub-contractor, was upgrading a sewerage near Wrexham. He made a £5,000 profit and never looked back.

A love affair with muck might be stretching it, but it continues to deliver Morgan plenty of brass. One of his companies Harrow Estates, part of the Bridgemere Group, specialises in buying contaminated land, cleaning it up and then selling the sites on to developers or doing joint ventures.

“Crucially we take on all the environmental liabilities, with the clean up and the risk going forward. We have had some shocking sites where a JCB bucket fills with oil in minutes.”

Such remedial work should earn Morgan a green gong, for developing derelict brownfield land is what the government and environmental pressure groups continue to lobby for. But you get Nimbys even if their backyards are dripping in petro-chemicals.

“You clean up a contaminated site that has been derelict for 20 years, only to be refused planning for houses because of the ‘loss of valuable employment land’,” says Morgan.

“I miss the creative process of building houses and the pride in looking back and saying we built that. I do not miss the red tape.”

Gordon Brown has talked of little else but housing since he became prime minister.

“Rhetoric is one thing. Action another. The government can announce all the initiatives they want, but when it comes to planning - the crucial trigger - the government is still not listening.”

In the mid-1980s, to build Redrow houses the land cost around 15 per cent of the net sales price and you got planning in six weeks. Now it starts at 35 per cent and can take 18 months.

“It is a huge barrier to entry for any new housebuilder, which is why we are seeing so much consolidation because even the big boys cannot find the land. Within five years there will only be four or five players in the housing game.”

Morgan scoffs at suggestions that builders land bank to keep prices artificially high and holds the current planning system accountable for producing “some of the ugliest houses built since the war.”

“PPG3 forced developers into high-density housing on three or four storeys and no gardens for the kids. Rather like the 1960s estates now being demolished, we will look back at PPG3 and wonder why it was ever allowed to happen. We still build fewer houses per capita than anywhere else in the western world, doing a rubbish job with replacing housing stock.”

Morgan does give government credit for regenerating the inner cities and applauds Brown for at least putting housing high on the agenda.

“This industry has nothing to hide or fear from the OFT investigation. The sooner the better and it will become clear that planning is the problem.”

Planning was originally introduced to speed up development but, says Morgan, a lot of planners and committees have decided their role is to prevent and slow down. He welcomes the Housing Green Paper proposal to penalise councils who fail to identify sufficient development land.

“If we win on appeal, we only get professional costs but that is just the tip of the iceberg. The real economic benefit is already lost through the cost of appeal, the time it takes and the cost of having your land just standing there with interest accruing.”

The Bridgemere Group also includes Carden Leisure, owners of Carden Park hotel near Chester. Frustrated by bureaucracy in his prime development patch of Cheshire and north Wales, Morgan has gone abroad with a site in Istanbul, Turkey for 1,200 apartments and half a million square feet of retail.

“I believe it is the biggest residential site in Europe, yet, planning wise, it is easier than building 12 houses here. The properties are purely for the domestic Istanbul market. It is a huge city with sub-standard housing but a rapidly growing economy and a huge demand for new homes that qualify for mortgages and insurance.”

Morgan does joint ventures with local partners providing mezzanine finance and development advice and is also behind the largest retail centre in Croatia in Zagreb, and a site for 1,100 units in Bucharest, Romania and three mixed-use schemes in Poland. No wonder he gets plenty of use out of his private plane,

“I have a chimney pot philosophy, building for the local market providing a bread-and-butter product in appreciating markets. I am not interested in the high-end foreign investor market. Although UK investors might like to take a look at what we are doing.”

Morgan is more likely to switch his allegiance to Everton than shout about his philanthropy. The Morgan Foundation makes its donation to local north-west and north Wales charities, funding projects for families and children. He has also set up some regional entrepreneurial awards to unearth the Morgans of tomorrow, and, yes, despite land now being controlled by giants, he would encourage a young entrepreneur to try his hand at housebuilding.

“You have to commit blood, sweat and tears and you will only get out what you put in.” Two paper rounds, for instance.

Back to sport. But this time it is rugby and his time playing on the flank for Ruthin Vets. “I enjoyed doing things on a rugby field that would get me booked or sent off in football. I was not the cleanest player on a football pitch - more Tommy Smith than Kenny Dalglish. Playing rugby I loved being head to toe in mud.”

There he is again, wallowing in the muck that sent him on the path to become one of Britain’s richest men. You suspect now he has a football club to provide a fresh commercial challenge as well as fuel his football passion, he is as happy as the proverbial pig in sh..

First published in Show House Magazine October 2007.
The greatest care has been taken to ensure accuracy but some information contained within this article may have changed since it was first published.

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