Drumoig fails to recover from bad lie

Mike Aitken, The Scotsman, 4 October 2003

In the film Field of Dreams, the character played by Kevin Costner considers creating a baseball diamond on his farm. "If you build it," a voice whispers, "they will come". It’s unrecorded whether past office bearers at the Scottish Golf Union also heard voices telling them to build the Scottish National Golf Centre at Drumoig, near St Andrews. But they did construct a spectacular £4.3 million facility at a remote location. Only no-one came, or at least not enough people to prevent it falling into the hands of the receivers last week.

Yet, according to the receiver, Blair Nimmo of KPMG, the much-vaunted academy deserves a second chance. The terms of the lease stipulate any interested buyer must be a golfing organisation willing to run the practice facility as it stands. Whether a serious purchaser will come forward to revive this remarkable facility in the long run is anyone’s guess.

In conversation with The Scotsman yesterday, Nimmo acknowledged the SGU hadn’t done their sums properly. "It’s easy for guys like me to look back now with the benefit of hindsight," he said, "but clearly there wasn’t a proper business plan prepared which related to this particular site. Apart from that aspect, the fundamental problem was the focus lay on the quality of the facility rather than its viability.

"If we’re being honest, although they looked impressive, the centre didn’t really need all those indoor facilities. A much smaller building would have sufficed. The original focus should have been on what was needed for Scottish golf, what was needed to make money and how that equation would add up. Instead they just went for a facility which had everything and lost sight of something which could wash its face."

Nimmo was unable to put a sale price on Drumoig but reckons the cost will be much higher than the notional value of £100,000 in the SGU’s accounts. "Just the equipment, from the golf buggies to the gym, is worth much more than that," he said. "It’s a great facility and the big question is what happens next. We haven’t got a magic wand and we’re coming to the time of year when a facility like this has more losses. And we’re not going to pretend the location hasn’t been a problem.

"By the same token, perhaps someone will come along who has other ideas and can see an opportunity there. So that’s why we’ve kept the people, continued to trade and kept everything open in the short term.

"Because the centre was funded by the SGU and sportscotland, there aren’t a lot of creditors. So far, a fair number of people have expressed an interest in buying. Anyone who used Drumoig is sure to have been impressed. We can only sell it on as a golf range, mainly because that’s where the value lies, and also because the terms of the lease stipulate the buyer must be some sort of golf organisation. What are the prospects of a successful sale? I have absolutely no idea. But it would be a helluva shame if no-one came in."

There was never any argument about the quality of the facility and those of us who attended the opening of the centre in 1999 were united in praise. If it was built in the wrong place, there was no denying the spectacular impact of the project, notably the "wow" factor inspired by the artificial indoor putting green flanked by bunkers and a stream.

All of this came at a price, of course. Funding assistance for the facility was provided by £1.2m in lottery money, £150,000 from the R&A and £2.2m from an increased levy on Scottish club golfers.

Given the initial estimated cost of £2.6 million increased to £4.3m, it’s worth remembering one of the main reasons the SGU chose Drumoig was the low cost of leasing the land.

There was no shortage of applications from other sites in the central belt with venues as prestigious as Dalmahoy and Loch Lomond among the 38 interested parties. But the SGU plumped for Drumoig when the developers offered to rent them 45 acres for the sum of 50p a week for the next 99 years.

Yet in spite of earning a tribute from Butch Harmon that it was one of the best teaching facilities in the world, Drumoig lost money from the day it opened. In an effort to stem the losses, the SGU took over the running of the centre two years ago after three past presidents of the union agreed not to seek re-election to the board.

It must be said that, even before Drumoig hit the skids, not all of the areas which make up the SGU were sold on the concept of a national golf centre, while others expressed reservations about locating it near St Andrews rather than in central Scotland.

It didn’t help when the estimated cost all but doubled. Part of the reason for such a significant rise, ironically, was the success of an application for lottery funding. In order to obtain seven-figure backing, the project needed to deliver more than a glorified driving range. Because of the strict terms of the lease, though, the SGU could never make money on the extra facilities.

Now sportscotland are unlikely to get any money back. According to Nimmo, the SGU have a first ranking floating charge over the assets. This means any cash raised from a sale goes to the Union.

Before the decision was eventually taken to call in the receivers, further cuts were imposed when non-golfing facilities such as the gym and a sports hall were closed and 14 redundancies made among full-time staff. Neil Simpson, who was managing director of the SNGC from its opening, resigned and wasn’t replaced.

In 2002 a £10 levy was placed on Scotland’s club golfers and £1m of that money used to clear losses incurred by the centre. Thereafter, the directors knocked down the value of the SNGC to just £100,000.

Running at a loss of £400,000, a change in emphasis to additional coaching brought the annual shortfall down, but only to £300,000. Hopes of breaking even proved a pipedream and last week the SGU called a halt.

When the centre opened, I hit a chip at the indoor facility with a full shoulder turn which could only be described as unwise. The ball soared high over the green, hit a wall and ricocheted among the light fittings. As it turned out, no lasting damage was done. The lack of a proper business plan, however, meant the lights would go out at Drumoig sooner than anyone expected.

Now the SGU has to re-focus on its core task of running events and training golfers rather than managing a driving range. Talks are taking place with the St Andrews Links Trust about using their range for national coaching. As yet, it’s unclear whether the organisation will remain at Drumoig with the Scottish Ladies Golf Association or seek headquarters elsewhere, probably in St Andrews.

In the opinion of Alistair Low, the chairman of Scottish Golf Ltd, the fact that over £3m was handed over by Scottish club golfers to support this failed project is a matter of deep regret.

"Now we’ve taken this decision I believe our future is more secure than it was before," he said yesterday. "We no longer have to finance the centre and believe we can get back to doing what we should be doing - running championships and helping the clubs.

"Of course we regret the sums that went into financing Drumoig. You wish you could turn the clock back and do something different, but you can’t. The decision to pull the plug was only made in the last couple of weeks. In the end it wasn’t a difficult decision in the sense that the alternative was to go back to the clubs and tell them the levy wasn’t going to be £6.50, it was going to be more. I just didn’t think that was a practical proposition. I could fully understand why people would say they didn’t want to finance the centre to the tune of £300,000 a year."

Just four years after it opened, Drumoig had become Scottish golf’s field of broken dreams.