Doubt over £60 million leisure project

Oct 12 2012 by Colin Rutherford, Kilmarnock Standard

The future of the showpiece £60 million Rowallan golf club and hotel project looked bleak this week after councillors rejected a planning application aimed at saving it.

Golf club owners Duffield Morgan Ltd hoped to pay off some of the scheme’s ballooning bank debt by selling plots for a further 66 houses at Rowallan.

But members of East Ayrshire’s planning committee – at a “predetermination hearing” – rejected the move after hearing that an independent financial assessment of the proposal indicated that it had no guarantee of success.

The application itself was “significantly” contrary to planning policies, but the committee heard that council officials had been striving to find a way to support it, given the high profile and prestige of the Rowallan development.

The deal on offer at Friday’s meeting would have involved the Royal Bank of Scotland agreeing to continue to support the golf club for 18 months.

And some of the money raised from the sale would be “ring fenced” for the completion of the conversion of the Lorimer Castle into a hotel.

Accounts obtained by the Standard for Duffield Morgan which were submitted to Companies House in March this year for the tax year ending 31 March 2011, show that the company had just over £7.9 million of debt.

When put against stated assets of just over £7.1 million, the accounts show a liability of £797,670.

The council hired an independent forensic accountant to look at the company’s development proposals.

Councillors were told the examination concluded that “no assurance could be given to the council that the applicant could continue to operate as envisaged by its financial projections and that funds will be available to implement the proposals”.

As an alternative, planning officials indicated that they would be willing to back the application subject to stringent conditions – including the bank agreeing to back the development for a further three years.

This, however, was rejected by the applicants as unviable.

Alan Neish, the council’s head of planning and economic development, told members of the committee: “We have been working to try and see if there is a way we can support this application for several months. It has not been possible.”

Mr Neish said that the whole basis of the application was that the sale of the land would secure the golf course and achieve the completion of the hotel.

“The independent assessment does not support this,” he said.

In those circumstances it was considered that the economic benefits of the application “could be given minimal weight”.

Set against that, said Mr Neish, the move would be “significantly contrary” to planning policies on residential development in the countryside.

Mr Neish’s comments brought a testy response from Niall Campbell, the man behind the Rowallan development.

He said: “I am completely disappointed in the planning department’s predetermination report.”

He argued for the economic benefits of the scheme, pointing to jobs created by the development and £450,000 in council tax and rates that it raised.

The golf course, he said, was a world-class facility and the more recently-open Glasshouse restaurant was “fast becoming a must-go venue in Ayrshire”.

Mr Campbell said that in the past he had been “hugely heartened” by the support of East Ayrshire Council.

“That makes the negative tone of the predetermination report very difficult to understand,” he said.

Mr Campbell’s financial consultant David Higgins accused council officials of seeking assurances amounting to “virtual certainty”.

“In the climate we are in today, there can be no guarantees,” he said.

And he defended the deal being offered by Duffield Morgan.

“We firmly believe what is being asked for provides the development with a really good chance of success,” he told the meeting.

He said that in the last three years the bank had provided £3 million in support for the development.

The application attracted a number of objections, including one from the Scottish Environment Protection Agency who were concerned about flood risk.

Among the individual objectors was Lord Rowallan who sold the land for the golf course development to Mr Campbell in the early 1990s.

He described the proposal as “a massive intrusion into the designed landscape” of Rowallan.

Committee members asked detailed questions of the developer and his agents, but the outcome of the meeting seemed in little doubt.

Council leader Douglas Reid suggested further examination of the issues raised during the meeting.

But Mr Neish said that the committee would have to make a decision that day.

And he said: “We have sought over nine months to bring to this committee an application which could be recommended favourably.”

The situation faced by the committee was summed up by Councillor Bobby McDill, who moved the refusal of the application.

He said: “We are in a dilemma. We all supported the original application, but it has hit the buffers.”

The committee’s decision will be up for review at the next full meeting of East Ayrshire Council, likely to be held on November 1.

As for the future of Rowallan, Mr Higgins told the meeting that the refusal of the application would meant: “The principal funder would have to consider what options would be open to it.”