Every cloud has a silver lining

Every cloud has a silver lining

It takes more than two floods in a year to knock the smile off John Sanderson’s face. Already the industrialist turned hotel owner is planning new ventures, as Brian Nicholls discovers.

Noah had it bad when the clouds burst. But it happened only once for him. John Sanderson has endured it twice within a year and still smiles. Sanderson, managing director of STR Enterprises, sees life as a journey and thrives on challenges. His latest challenge was overcome when STR’s Best Western Honest Lawyer Hotel recently reopened with a multi-million pound refurbishment - after not lightning but floodwater struck twice.

The three-star hotel at Croxdale on the A167 had to close after the River Browney burst its banks three miles south of Durham, in July 2009. Altogether 19 occupants, 14 guests and five staff, had to be rescued from the building by boat.

It had flooded in September 2008 too. Experts told the hotel’s general manager Chris Bowran the latest episode was a “once-in-a-century” flood event. “It certainly frustrated us,” Sanderson admits.

“Fortunately we were fully insured and have fully and substantially renovated and remodelled the Honest Lawyer Hotel.” By reopening time last April, with 30 staff and more to follow, flood safeguards had been upgraded, full insurances once more taken up.

So the Best Western Honest Lawyer functions once more alongside STR’s other hospitality venues of character: Quayside Exchange, Sunderland, Manor House, Bishop Auckland, the Victoria Hotel, Bamburgh and the Centurion bar and cafe at Newcastle Central Station. In them all, value for money is the aim – “particularly important, that, in these recessionary times,” Sanderson observes. A member of the Entrepreneurs’ Forum, he operates STR Enterprises from Benton in Newcastle. He’s one of a growing clan of seasoned business builders drawn to the hospitality sector after excelling in other livings.

Others include Duncan Bannatyne, Tom Maxfield, Graham Wylie, and Brian Burnie, the latter, a former recruitment specialist, having recently sold the Doxford Hall Hotel near Alnwick which he had just completed, to add to millions he’s already given to charity (see Page 31). STR Enterprises is very much a family business.

“I’m fortunate in having a very close family,” Sanderson says. “My wife Elizabeth and our three sons all work in the business. Jason runs the Centurion and business development. Chris the financial side, Richard internal auditing, and Elizabeth advises on interiors and keeps me right.

“It’s a bonus having our sons in the business. There was no pressure or expectations on our part. They get along really well. There’s no infighting, which is very pleasing to Elizabeth and me.” It must also be reassuring when John slips off to play squash (“not brilliantly”) two or three times a week, or when he’s away ski-ing or strolling the beaches with his two beagles at Tynemouth Long Sands or Bamburgh.

He’s earned his respites. Running hotels is tying. But Sanderson asserts: “Having built a successful contracting business earlier, I always realised that in contracting everything was beyond one’s control. It was hard to create an asset with long-term growth potential.

So I was attracted to hotel and leisure. A successful property-based business usually grows in capital worth.” His dad Alf - a detective sergeant with Durham Constabulary - still has the record for judges’ commendations on successful convictions that were gathered as the family home moved between Hartlepool, Newton Aycliffe and Stockton.

Young John, like his schoolmates, fancied working for ICI. However, he gained a 100-1 chance apprenticeship with Haigh & Ringrose, a Middlesbrough electrical contractor whose workforce grew from six to 800 by the time Sanderson left aged 27 with far more confidence in his own ability. After a spell estimating, Sanderson was sent on student transfer to Power Gas Corporation.

He worked in the drawing office, design and estimating departments and became a junior construction engineer on the Hitchin Gas Reforming Project. On return to Haigh & Ringrose he found estimating dull, and asked for site work on a lossmaking job at Lennig Chemicals in Jarrow. Within three months he had the job making substantial profit.

His bonus was a paid trip to Rhodesia to see his sister for the first time in 10 years. He liked Newcastle, though, his mother’s large family being from Scotswood. He decided to tender for other work thereabouts and, at 21, set up the company’s first branch, at Wallsend – so successfully he was made regional manager for Newcastle and Glasgow.

In Newcastle he met and wed Elizabeth. Not even the offer of a tripled salary to head another engineering firm would lure him to the South. Instead in 1971 he left Haigh & Ringrose and founded Norstead Engineering Services Ltd. There were hundreds of electrical contractors but few he knew providing full electrical, mechanical and plumbing services. Norstead would - for blue-chip clients of high repeat-work potential. He offered also to install plant and machinery process pipework and instrumentation.

When NSK Ball Bearings of Japan was setting up in Peterlee, he wrote (in Japanese) asking : Could he tender for work? Six months later a bus arrived unannounced outside Norstead’s modest office at the foot of Byker Bank, with 12 Japanese engineers wearing NSK jackets waving John’s letter.

They wanted to visit some jobs Norstead had completed. After 30 fruitless minutes trying to fix a visit to various clients, Scottish &Newcastle agreed. Result: Norstead installed NSK’s machinery non-stop through Christmas and New Year. Next, Sanderson set up Norstead Leisure (acquired by Tomorrows Leisure plc in 1986) to develop the George Washington Hotel.

It helped bring Nissan to Washington in 1984. The multinational had agreed with the British government to start a car plant somewhere in the UK. When he learned the Japanese delegation would stay in Washington, Sanderson had his PA visit the Oriental Studies department of Durham University to learn about their customs, superstitions and a bit of the language.

The Japanese stayed at the George Washington, where they were even offered Japanese food, but chose English. Nissan later said their welcome there was partly why they chose the North East over Ireland and Wales. The hotel grew: 18 to 100 bedrooms.

It acquired a squash club, driving range and golf course – the region’s first leisure club, Sanderson believes.

A Queen’s Moat offer, £11.2m, proved too good to decline. With £7.5m profit resulting, Redworth Hall Hotel near Darlington could then be developed from 16 bedrooms to 100.

Sanderson also spotted a potential for low investment and high returns by launching a chain of 12 Supasnooker clubs – at Wallsend, Byker, Ashington, Castletown, Hartlepool, South Bank plus 24 hour clubs in Leeds, Manchester and Liverpool, and acquiring existing clubs in Consett, Stanley and Bradford.

Then came multi-leisure complexes in Redbridge, Greater London, Ascot and Liverpool. Norstead peaked in 1992, its North East workforce tackling multi-service contracts in the North Sea, and electrical contracting multi-packages.

Then, calamity... The engineering got entrapped in Canary Wharf, then Europes biggest construction site. The original developer, Olympia & York, went into administration. Norstead was suddenly £40m down. While the group had been very profitable for over 20 years this level of loss was beyond it. Sanderson valiantly tried for recovery, investing much of his personal money (with Tomorrows Leisure shares collateral). But Norstead Services Ltd went into receivership and was sold to Metnor Industrial Holdings. Sanderson moved on. He’s proud so many exceptional people, once with Norstead, have also developed successful businesses in the region.

In 1996 he sold his major stake in Tomorrows Leisure and set up STR to acquire under-performers in the hospitality business. First, the Victoria Hotel, Bamburgh. Others followed, including dreadfully neglected premises in Newcastle Central Station, now the celebrated Centurion bar and cafe. By refinancing it in 2006 he could refurbish and expand elsewhere.

In 2008 the firm diversified into golf. Through Keeping Inn Ltd (an STR subsidiary) it secured from North Tyneside Council a long lease on the 18-hole Wallsend club, now Centurion Park Golf & Leisure Centre.

With the council as partner, it has a plan submitted to add a hotel, function venue, aerial assault course, five-a-side football facilities, floodlit par 3 golf course and a sports injury clinic. If approved, these will appear over some years.

His group supports Sunderland Heritage Quarter, a regeneration project in the city’s east end, and is looking for a development partner after gaining permission for a 65 bedroom hotel overlooking the Wear beside Quayside Exchange. Sanderson adds: “We hope to build a boutique hotel on this superb site - great standards, competitive prices. In short, a great hotel for Sunderland in the next few years.” STR Enterprises now employs 260 people.

“We try to train and develop from within and are fortunate in having a very low staff turnover,” Sanderson says. “All my business success has been due to developing a good team.” Industrious Chris Bowran at Croxdale has come through the ranks and rain, undampened in enthusiasm and impressing with his motivational skills. Sanderson has no doubt he’ll sustain success for the reborn Honest Lawyer.

Operations director Pam Mooney and other key managers are all long-serving. Angie Thomas, manager of the Manor House Hotel & Country Club also worked for him when he developed Redworth. PA Anne Wade-Tunnah recently retired after nearly 30 years.

“I’ve not replaced her, but she’s still at the end of the phone when required,” he says gratefully. “Since the Honest Lawyer re-opened, business has been very strong,” he adds.

The overhaul has included a refurbishment of six four-poster suites and 46 more bedrooms around the courtyard. A new Baillie’s Bar and Restaurant has opened, plus a modern meeting room. Free high-speed wi-fi serves business guests.

In, too, as head chef has come Harry Baillie, formerly of The Ritz in London, Baillie’s restaurant in Barnard Castle, and Austin’s Bar and Bistro at Durham County’s cricket ground.

Large portholes enabling diners to see into the kitchen are Baillie’s idea, and fresh local produce is preferred. Sanderson says of the future: “We intend to expand STR Enterprises Ltd and Keeping Inn Ltd gradually as suitable opportunities arise.

The recession and airline inconveniences have benefited us. Now we aim to add to our well-balanced portfolio of successes in the North East.” Turnover of STR and its Keeping Inn subsidiary was about £5.2m last year. This year it’s likely to exceed £6m.