St Andrews resort changes hands for undisclosed sum

Gordon Berry, The Courier, 8 June 2006

The St Andrews Bay resort complex has been sold to one of the most active and prominent real estate investors in the USA.

The deal will end the involvement of founder Don Panoz, the man whose dream controversially led to the £50 million creation of a 209-bedroom hotel and spa, and two golf courses.

The news came yesterday at a time when debate is again surrounding the resort and its plans for expansion at the coastal site overlooking St Andrews.

It was announced that St Andrews Bay has been bought by Apollo European Real Estate Fund II, L.P. and that Canadian-based Fairmont Hotels & Resorts will take over management in a long-term contract starting on July 1.

While the purchase price has not been disclosed, it has been revealed that Apollo has committed to a £10 million refurbishment programme which will include guestrooms, public areas, meeting rooms and technology upgrades.

It has also been made clear that the new owners intend to pursue the current application for £20 million worth of new accommodation in the form of 37 lodges.

The application will be overseen by outgoing co-owner Henk Evers, who bought into the resort in a major refinancing deal in 2004. If approved, the development would be integrated with the transformation of a derelict steading into a high quality mix of leisure facilities and accommodation. This, it is said, would create a further 80 jobs.

Yesterday Mr Panoz said that Apollo had a proposition that “posed a very difficult decision” for himself and the rest of the senior management team at Chateau Elan Hotels & Resorts.

“Having developed this internationally renowned facility we have a very strong emotional attachment to the business, its employees and the town of St Andrews.

“Senior management had, however, to evaluate what was in the best interests of the resort’s long-term future and we came to the conclusion that there would be major benefits from the financial strength, international links, global marketing capability and excellent reputation that the partnership of Apollo and Fairmont offers.

Mr Panoz added, “I am convinced that they can build on the work to date and take the resort forward at a pace far faster than might otherwise be the case.

This will include helping to further build visitor numbers, continuing to deliver the highest levels of customer service, providing international career opportunities for staff and supporting the resort’s proposed second stage development.”

Mr Panoz said that the resort had opened shortly before 9/11, and had experienced a number of other major impacts on international travel.

It was amazing, he said, what had been achieved by Chateau Elan Hotels & Resorts, a relatively small company, in making St Andrews Bay the success it is.”

Since opening in 2001 the resort had attracted over 500,000 visitors and contributed more than £290 million to the Scottish economy.

Johnny Robertson, director of Apollo Real Estate Advisors in Europe, said yesterday, “This is the first time we have worked with Fairmont in Europe and we look forward to developing a long-term successful relationship with them on this and other opportunities.”

For Fairmont, chief executive officer William R. Fatt said, “We are pleased to not only expand our presence in Europe, but also increase our truly distinctive golf offerings through the addition of this resort.

“We recognise the current owners’ commitment to the property, and look forward to working with Apollo in enhancing the resort and building upon its success.”

St Andrews Bay joins Fairmont’s elite group of luxury hotels worldwide which includes The Savoy, London, and the Fairmont Monte Carlo.

Last night Joe Noble, chief executive of Scottish Enterprise Fife, said that Fairmont brought a strong brand and wider international network.

This, he said, would be positive for the continued success of the resort and would bring further benefits to both the local and wider Scottish economies.