Village of Prosperous Belies Irish Recovery Investors Chase

For Ger Boland, the Irish village of Prosperous is still a long way from living up to its name.

The 25-year-old has watched demand for his services filming birthday celebrations and local sports events in the region west of Dublin dry up as Ireland’s economy emerges from the worst recession in its modern history.

“Business this year has been horrific,” said Boland, a Prosperous native who is now preparing his application for a U.S. visa. “A lot of my friends have gone. For me, there are question marks about how long you keep going. I don’t have much patience left to keep doing it.”

Founded in the 1780s on a failed ambition to become a cotton manufacturing center, the neat, two-street village of Prosperous today is a microcosm of the economic malaise still gripping communities all over Ireland.

While yields on Irish government bonds suggest the worst is over for the nation and point to recovery, it doesn’t feel much like that in Prosperous. Buoyed by an influx of Dubliners during the Celtic Tiger boom, the village of 2,200 people is now grappling with the three hallmarks of the Irish economic collapse: Plunging home prices, debt and emigration.

“It’s a mirror image of everywhere else in Ireland; people are drowning and under pressure,” said Sean Reilly, 66, whose family runs an auctioneering and undertaking firm with an adjacent antiques store in the village. “If you walk into a pub and ask them, eight of 10 people would tell you they are more worried than they ever have been in their lives.”

Better Numbers

Investors are more sanguine about the country, the second after Greece to turn to the European Union and International Monetary Fund for a package of bailout loans. While the economy has contracted 15 percent in four years, the government is planning to wean itself off the rescue money by 2014.

Irish bonds are the second-best performing in the euro region over the past year as the nation’s austerity efforts were lauded by figures such as European Central Bank President Mario Draghi as an example for other indebted countries. Based on the bond yields, Ireland now pays less than Spain to borrow.

Ireland’s economy grew 1.4 percent last year, expanding for the first time since 2007. That was driven almost entirely by exports and companies such as Google Inc. and Intel Corp. with offices in or around Dublin, meaning the trickle-down for the local economy in places like Prosperous has been limited.

Disconnected

“That disconnect between the headline numbers, how the world views Ireland and what it feels like on ground is going to persist for some time,” said Juliet Tennent, an economist at Goodbody Stockbrokers in Dublin. “Consumers continue to be faced with austerity, tight credit conditions, a weak labour market and high household debt.”

Located on the main street in Prosperous close to the Roman Catholic church of Our Lady and St. Joseph, Reilly’s business employed about 30 people across North Kildare at the height of the boom. Now, it’s down to about 12, and his store, which sells Victorian and Georgian era antiques, is advertising its biggest- ever sale, with many items at half price.

“I don’t count myself as I’m not taking any salary anymore,” he said. “The days of someone dropping into buy a 9,000 or 10,000 euro grandfather clock are gone.”

Surrounded by bogs and fields, the village flourished during the early 2000s as Ireland’s economy notched up the fastest growth of anywhere in Western Europe between 1997 and 2007. An influx of commuters to Dublin, 40 kilometers (25 miles) to the east, pushed up property prices to about 320,000 euros ($402,000) for a three-bedroom home in the town.

Growing Prosperous

The population grew 27 percent between 2002 and 2006, and the number of homes rose 30 percent to 845 as Prosperous enjoyed the building boom, according to municipal authority figures. About 553,000 houses were built in the 10 years through 2005 in the country of about 4.5 million people, the government said.

Now, the same houses are selling for about 60 percent less, according to Reilly, whose red-and-blue “For Sale” signs are dotted on homes and empty stores in Prosperous and nearby towns of Clane and Celbridge.

Nationwide, residential property prices fell 13.6 percent in July from a year earlier, according to a report from the statistics office today. Prices are now 50 percent down from their peak in 2007, the agency said.

“People were queuing for homes, suckered into believing they had to get onto the ladder,” Reilly said. “A lot of people bought to rent. There was a period where people felt they weren’t part of the gang if they didn’t buy. People were playing pass the parcel and hoping to God they didn’t caught.”

Unfinished Homes

With unemployment in Prosperous tripling to about 12 percent in the five years to 2011, about one in 12 homes are empty, according to the census for that year. In all, about 1,850 unfinished housing developments pockmark the Irish landscape, based on government figures.

The bust is apparent at the Brooke’s Mill estate, named after the failed entrepreneur who tried to turn the town into a manufacturing center more than 200 years ago.

Built around a tranquil green, much of the estate is fenced off, blocking off access to about six empty homes. Through the fencing, overgrown and weed-filled back gardens are visible, along with signs apologizing for the inconvenience to residents elsewhere on the estate.

‘Pile of Ruins’

This isn’t the first time the town has been caught in an economic storm after a boom collapsed. Lying close to the Grand Canal, the town was founded on Brooke’s dream. About 200 homes were built as well as manufacturing facilities.

“From the flattering prospect of success which grew with the attempt, the town rather prematurely derived its name,” according to an account from the mid-1800s in Lewis’s Topographical Dictionary. In 1786, Brooke was turned down for a grant from the U.K. Parliament and the business folded.

The town was described as “little more than a pile of ruins” by 1836, before reviving as a residential center for people working elsewhere in Kildare.

Now the town is adapting to post-boom life in the modern era. Local take-away fast food store Frank’s is offering a half- price second meal with every order, and offers to feed a family for 20 euros, with hamburgers, chicken and fries. At the edge of the town, McCormack’s garage is urging shoppers to give heating- oil vouchers as a gift for Christmas.

Michael Nolan, the mayor of Kildare and a member of the Fine Gael party that won elections last year and formed a government, said the troubles in Prosperous are echoed throughout the region and country.

People Pay

“No-one is escaping the frustration out there,” said Nolan. “People bought into the economy, thinking it was built on solid foundations and who is paying? The ordinary person.”

Since 2008, the Irish have made about 25 billion euros, equal to 16 percent of gross domestic product, of combined spending cuts and revenue increases, with another 8.6 billion euros to come, Standard & Poor’s said. In Kildare, the local municipal authority has cut spending on street-cleaning, roads and housing, Nolan said.

“It’s going to be 10 years or maybe longer before we to get back where we would be comfortable, to live without worry of mortgages, bills, schools uniforms,” he said.

For Ger Boland, the videographer, much of his business used to involve taping games for local Gaelic Athletic Association clubs. That has disappeared, along with his work at 21st and 50th birthday celebrations.

“In the boom, the work was immense,” said Boland, who this month helped organize a three-day music festival in Prosperous aimed at restoring the village as a venue and giving a fillip to local businesses. “Now, with the recession, I have so much time on my hands.”

To contact the reporters on this story: Dara Doyle in Prosperous, Ireland, at ddoyle1@bloomberg.net

To contact the editor responsible for this story: Tim Quinson at tquinson@bloomberg.net

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