MY BIG MISTAKE was deciding in 1988 to create the world's largest pub. I bought an entire island site in Camden Town that already included one of our most successful pubs, the World's End.
The existing pub was small and could only hold about 200 customers. My plan was to use the rest of the site, comfortably increasing the capacity to 1,000, and adding a music venue for 500 more by excavating the basement. The rest would consist of 30 flats and a retail element.
Whether it was over-enthusiasm or greed, I am still not sure, but I was persuaded by a project management company that what I needed for a low-budget and a fast-track development of this nature was, surprisingly, project management. I was given to believe that all this could be done for pounds 1.2m and completed within 12 months. Worse, I accepted that professional indemnity would not be available, and that the contingent risks were minimal. Those actions assured me of a place in this column.
The way that things went wrong was almost farcical, such as excavations that narrowly missed underground tube lines and a mysterious government nuclear shelter.
By the time we ran out of cash, two years after the start of the project, we had spent more than pounds 4.5m - which left a shortfall of pounds 700,000 to pay the various contractors outstanding and finish the development. Of the overspend, pounds 3.5m had been funded by our main supplier, Watneys.
I did manage to open the world's biggest pub with a music venue, and by July 1991 operating profits were running at more than pounds 900,000 a year. Our creditors had been very patient; most of them had waited a year or more for their money because they were convinced Watneys would come up with the last injection of needed cash.
Sure enough, in the autumn Watneys agreed to lend us the pounds 700,000 it would take to get us out of the mire. Unfortunately, that very same week, Watneys was taken over by Courage, which decided it would be throwing good money after bad. It cut us off and wrote off its pounds 3.5m without a blush. On 10 October 1991, I invited our bank to appoint receivers.
It was the first time I had used a project manager. Normally, I would have brought in an architectural company on a fixed price contract. They no doubt would have told me it was going to cost pounds 3m-plus in the first place, and I would have borrowed the money to do it properly or just walked away.
In retrospect, I find it interesting that professional indemnity wasn't part of the funding requirement from the bank, considering they knew that it was our biggest and most complicated project to date. But I was able to borrow vast amounts without the subject being mentioned. Were those the days?
Four months after my crash I borrowed the money to buy another pub and start over again. A year later I sold it for enough to be able to buy the old BBC-TV theatre at Shepherd's Bush, which we have just restored to its former glory for use as a concert venue - with TV facilities.
Today, by varying the fee scale with the appointed architects on new developments, we are able to receive priced tenders for work prior to committing to a project. Strangely, I don't trust budget costings any more.
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