THE fate of one of Scotland's most prestigious tourist resort developments hangs in the balance today as a financial crisis has struck the company.
Aviemore Highland Resort, at the heart of the Cairngorms National Park, is facing the spectre of closure unless agreement can be reached in the next few days.
The agreement could take the form of a "pre-pack" administration that would keep the r
esort in business and save more than 300 jobs.
I understand intensive talks have been held throughout the week and will continue this morning to find a settlement ahead of a 30 June deadline.
AHR, with its restaurants, bars and leisure facilities, has proved a popular venue for business and political party conferences as well as attracting thousands of golfers, walking parties and families are looking for a holiday surrounded by some of the most beautiful scenery in Scotland.
The trigger for the crisis has been the slump in commercial property values which has blighted this and similar developments across the UK.
The resort overall had been valued at £130 million, with the second development phase reckoned at £80m, though the collapse in values will have reduced these figures substantially.
The loan exposure of the project's bankers, Lloyds Banking Group, which took over Bank of Scotland, is understood to be around £45m.
Lloyds is also a consortium shareholder in the project, with Macdonald Hotels and Tulloch. Each has a one-third share. Lloyds, which is a 50 per cent shareholder in Macdonald Hotels, has an overall effective equity stake of about 63 per cent.
Both the bank and the consortium partners are anxious to avoid a receivership which would have brought immediate closure and sent shock waves across a wide area. The alternative of administration avoids the worst and offers the prospect of the core business continuing, with staff retained and forward bookings honoured.
AHR has been hit by a range of problems spanning long and protracted planning delays which have bedeviled the site for years, steep rises in fuel costs, a housebuilding slump which has struck a key part of the planned project development and a fall in overseas bookings due to the recession. However, recent bookings may have turned firmer as UK customers have opted to holiday at home.
The site now has planning consents and potential for growth through a housebuilding development – when the market turns. AHR teetered on the brink of crisis in late 2007, before the full force of the global banking crisis hit home. BoS, frustrated by planning delays, warned that the project was in danger of collapse unless there was progress on the development plan.
Macdonald Hotels Group founder and chairman Donald Macdonald has stepped down from the board of AHR along with Ian Robertson. Jerry McGee has been appointed a director.
Planning delay like this is due to having too many cooksCRASHING property values, high fuel costs, weak bookings: how easy to write off this crisis as another recession story. Easy, but wrong.
The fact that a tourist development as prestigious as this has been brought to the brink should serve as a wake-up call on how vulnerable our major projects are to protracted planning delays.
This development should have been up and running years ago. That it isn't – and that the project is in its current state – should compel attention all the way up to the First Minister.
Redevelopment work began eight years go with BoS as the main fundraiser. The bank, Macdonald and Tulloch put in £2.5 million each and Highlands and Islands Enterprise injected £6.7m in grants: big commitments all.
What followed was an extraordinary story of crisis and delay as planning applications were complicated by issues of land access and road siting.
ARH had to wrestle with quangos and agencies, all with different agendas and procedures. Delays wore on without regard to cost – the project's interest bill at one point was £10,000 a day. "Not our problem" was the official attitude.
Earlier this year, I was shown the final conditional planning consent document: 128 paragraphs over 65 pages of permits and requirements involving five government agencies and quangos, each with different planning remits. It detailed 41 restrictions, provisions and conditions down to the minutiae of otter shelves, house martin nests, bat perches and roosts.
We're long overdue one-stop planning. With a system like this, the batties are the winners – and the bats the losers.
The full article contains 750 words and appears in The Scotsman newspaper.
