The Italian Job: interview with Byrne Murphy of Palazzo Tornabuoni
The concept of the private residence club was born in the USA, and is rapidly gaining a foothold here in Europe. Byrne Murphy is a man used to introducing American property concepts to the old continent, and it hasn’t always been easy. His book Le Deal is the tale of his trials and tribulations in (ultimately successfully) introducing fashion sales outlets in France.
And it is the private residence club which is Murphy’s focus now. He, along with his business partners the Fratini family's FINGEN Group, is the driving force behind Palazzo Tornabuoni, a 15th century Medici palace in Florence which was once home to a renaissance pope and hosted the world’s first documented opera performance. Now managed by Four Seasons Hotels and Resorts, it is now one of the world’s most luxurious PRCs, revitalising an important building while providing the highest level of service and accommodation to members.
Murphy’s career spans commercial, retail and residential property, but it is the latter which gets his blood pumping. “Mixed-use in general, but especially residential combined with retail gives me the biggest buzz of any of the uses. You are combining the state of the economy and international flows with real people, real concerns, real desires and satisfactions, and with the way we run our business, real friendships.”
As his book documents, Murphy has found that American business methods can fall on stony ground in Europe. So why did he get involved in Palazzo Tornabuoni?
“Well I initially saw the building and the location, and immediately thought ‘retail’. It is located in the heart of the ‘Bond Street’ of Florence – the key luxury retail street. It had been a bank for 100 years and much of the ground floor spaces had been dedicated to banking uses, not to retail uses. Once we got into it, it was clear that the floors up above, which were being used as offices should have a different use, and the obvious one was residential. From there, after thinking it through, I decided on the private residence club.”
And after his experiences in France, how did he find dealing with the authorities in Italy? “In Europe today, revitalising existing old structures in the heart of an urban core is what the politicians want to see, so the intentions of the city and the developer are aligned, making it significantly easier to get the initial buy-in. However, getting from buy-in to implementation and execution is still very complex in the older cities of Europe. At Palazzo Tornabuoni, from my first viewing until we opened the doors was around six years, and that was with the best intentions of all parties. It’s complex, even though I had support from the outset,” says Murphy.
“Do I find Italian bureaucracy difficult and multi-layered? The answer is yes but I have somebody else that helps with that – local partnering is vitally important. In France I did not have a local partner for the outlet centres – nobody wanted to be my partner because they didn’t think it would work. In Italy, I had a partner for my first project, and they are my partner today at Palazzo Tornabuoni. They are managing the day-to-day relationships with city hall and so on. I can assure you that is a vital link in the chain.”
What does Murphy think are the keys to his success? “Huge reserves of patience and relationships. I have four daughters and they often ask me ‘Tell me again Daddy, what is it you do for a living?’ To oversimplify I have spent 17 years taking great concepts from America to Europe. The first one was the outlet centre concept, the second one was the data centre concept and the third one is the private residence club concept. Each has involved introducing a new concept in, what was to me, a foreign culture with a foreign language.”
And has he noticed that the European attitude to doing business with American and other international companies has softened over the years? “In a macro sense, it mirrors the ups and downs of the economic cycle. In a difficult period there is more concern about new concepts than during a gung-ho period. There is more political pressure on politicians to keep out anything that appears to be threatening. The basic conclusion I have drawn after 17 years is that in Europe the emphasis is on job preservation, not on job creation.”
As for Palazzo Tornabuoni, which had its rebirth at a tumultuous moment in the world’s economic history, things are looking good. “Sales are going phenomenally well,” says Murphy. “In the pre-opening phase things were going well, then Lehman Brothers collapsed just before we opened, so we had some people walking away from deposits. All of a sudden this summer the quote unquote green shoots have appeared in the international economy, and we are quite surprised at the upsurge in interest and in signed sales documents. We have delivered phase one, which is over 80 per cent sold out, and we are bringing on phase two this autumn, which we are already pre-selling. I am very encouraged by our sales.”
“Palazzo Tornabuoni is succeeding so well because it is iconic – there are no other private sector Medici palazzos available, and there are very few that have ever been built. The location it has just can’t be surpassed. That combination of elements and being located in Florence, which has been voted the number one city destination by readers of Travel and Leisure for the last five years – that combination adds up to a unique project. The challenge will be to make the next one unique too,” he adds.
Murphy’s customers are a mixed bunch: “In terms of who is buying, the American and British markets are the two largest, and account for around 65 per cent of total sales, but we have buyers from 12 other countries including Holland, Hong Kong and Russia.”
He is optimistic about the future of the private residence club. “I think the concept lends itself to the top end of the market and I think it will grow. I would not want to have a mid range or low range project on the market today, and I would not want to have one for the next two or three years. When you get to that level there are many, many more options available for second home or vacation solutions. But at the top end, those who were traditionally in the market for second and third homes are now more interested in the PRC concept than whole ownership, based on the time that a second or third home is actually used, combined with the expense and the hassle factor. This is causing people to seriously consider the PRC model. There will be strong growth for high quality projects in America and Europe.
Murphy is playing his cards close to his chest about the future but you can guarantee he’s not about to start taking it easy.
“There will be more projects in Italy. We’ve been looking outside of Italy also, but there are no announcements yet – we won’t make an announcement until all the ducks are in a row and all the authorisations have been given, so the prospective membership knows that the project will become reality.”