Kingswells Community Council

The private consortium which was planning a major upgrade of
Hazlehead Golf Course has decided not to go ahead with its proposals.

The MacKenzie Club Ltd has informed Aberdeen City Council that it
has opted not to proceed because it has been unable to attract external
investors to provide the financial backing for the proposed
redevelopment.

TMC has told the council that the global economic downturn has
deterred potential investors from financing the proposed hotel and
golfing lodge developments, which were essential to make the scheme
financially viable.

A report on the matter will be presented to a full meeting of
Aberdeen City Council on 20 May. The report recommends that councillors
instead transfer the Hazlehead course to the planned arm's-length
sports trust, Aberdeen Sport.

City council leader Councillor Kate Dean said: "It is regrettable
that The MacKenzie Club has been forced to take this decision after so
much hard work on their part and by our own officers, who have put
enormous energy into trying to make this ambitious scheme work.

"We always said we would only go ahead with the redevelopment after
the closest possible scrutiny by the council and by our external
advisors to make sure it offered the best value for the council and a
good deal for citizens and local golfers. We gave it every chance to
succeed - so long as The MacKenzie Club was able to come up with the
financial assurances we needed. Sadly, and through no fault of their
own, that proved to be impossible.

"We will now have to take stock collectively as councillors to
decide what is best for the tremendous asset we have at Hazlehead.
People can rest assured that this is not the end of our golf
development aspirations, although clearly an investment on the scale
planned by TMC is no longer possible."

Hazlehead Advisory and Monitoring Board chairman Councillor Kevin
Stewart said: "The city council and TMC tried as hard as they possibly
could to make this project work but unfortunately it was not to be. The
scheme was ultimately undermined by the credit crunch, which has meant
that investors were simply not prepared at this time to put their money
into the project.

"The Hazlehead project was not the first to be scuppered by the
current economic difficulties. Earlier this year, investors pulled out
of the proposals to create a world-class golf course at Stonehaven.

"Councillors will decide next month on the best way to proceed in
order to make the most of what is a great course, for the benefit of
the people of Aberdeen, golfers and the city council as its custodian."

The report to next month's full council meeting outlines alternative
proposals from TMC. The consortium has suggested that it be given the
go-ahead to take control over the No1 course and close it to allow a
three-year upgrade go ahead at its own expense. TMC proposes that a
long-term lease is then negotiated.

Council officers, however, say they and the council's external legal
advisers believe that the new proposal falls outside the scope of the
original invitation to tender. They add that it would require a new
competitive tendering process to be launched - which would involve a
considerable period of time and a significant level of commitment on
the part of the council and its advisers.

The report to the full council also states that re-tendering for
Hazlehead Golf Course improvements would be unlikely to win a
favourable response among potential investors the current economic
climate.

TMC had intended to secure a 99-year lease on the course to turn
Hazlehead into a global attraction. The consortium planned to invest in
the No1, No2 and nine-hole courses, establish a Professional Golf
Association academy to promote the game to young people and other
potential players, create a new clubhouse and a five-star hotel, and
build time-share accommodation.

The city council stated consistently that the interests of local
golfers had to be protected through preferential pricing, and that a
deal could only be struck with the preferred bidder TMC if it could
come up with a fully funded proposal with financial backing clearly in
place.

If you have any queries regarding this, or any other news story, please contact Aberdeen City Council on: 01224 522000.
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