2 Aug 2017

The Mother Jones website from the USA has reported this week, that plans to expand President Trump’s controversial Aberdeen golf resort have hit both regulatory and environmental hurdles. Trump International Golf Links Scotland was initially conceived, prior to the 2008 Global Financial Crisis, as a 36-hole facility with hundreds of hotel rooms and more than 1,000 home sites. The total investment potential flagged by the Trump Organization was in excess of $1 billion, but five years after opening Trump has spent less than $100 million on the property and failed to deliver the jobs, infrastructure and tourism components previously promised.

According to the website article, the two Trump golf properties in Scotland – Turnberry and Trump International – are losing millions of dollars every year. Plans to resurrect the profitability of the Aberdeen project hinge on delivering the housing component of the development, which was apparently consented on the grounds that it followed construction of the hotel and the second golf course. Last year the local planning board prevented the Trump Organization from restructuring its approval, and starting the residential development prior to the building of the second golf course.

In a further blow to the Trump group’s expansion plans, both the Scottish Environment Protection Agency and Scottish Natural Heritage are now objecting to the second golf course on environmental grounds. Unless that golf course is approved, there can be no housing estate. The objections are primarily based upon concerns over the duneland to be developed. Like the first course, plans for the second 18 holes include dunes that are both fragile and mobile. The existing course has apparently experienced significant sandstorm damage on numerous occasions.

Without housing and additional hotel rooms, it is difficult to see Trump International Golf Links as a viable and profitable business, unless tee times are far more popular than suggested in the Mother Jones article. Standard green fees to play the golf course are £235.00. Read our course review.

From the Mother Jones website:

Two Scottish government agencies—the Scottish Environment Protection Agency and Scottish Natural Heritage, a conservation agency–say they will object to the Trump Organization’s plans to build a second 18-hole golf course at Aberdeen, known as the Trump International Golf Links. If they succeed in killing this expansion, it will be a major setback for Trump and raise doubts about the future profitability of the whole venture.

In 2008, when Trump announced plans to build the course, locals were welcoming but skeptical. Trump had purchased the property, an 1,800-acre estate overlooking the North Sea that is surrounded by towering (and environmentally sensitive) sand dunes, in 2006. The location is beautiful but relatively undeveloped. Many wondered whether he would really be able to attract enough golfers to justify the investment. But Trump made big promises: He would build two world-class golf courses, a luxury hotel with hundreds of rooms, and 1,450 homes on the property. In total, he said, he would invest more than $1.5 billion. 

But the Trump Organization delayed its plans following the financial crisis of 2007 and 2008, only restarting the expansion more recently. Currently, the resort has just one golf course, which is regarded as impressive and beautifully designed, but by many accounts it’s rarely busy. Instead of hundreds of hotel rooms and pricey homes for sale, there are only several dozen rooms for rent. Instead of thousands of jobs, just 150 permanent positions have been created.

And the course is a money-loser. While Trump listed the course as having $3.8 million in revenue on disclosure documents filed in the United States, corporate filings made in the United Kingdom by the Trump Organization show that the course actually lost $1.8 million in 2015, the most recent year that it reported earnings. Previous years have shown similar losses.

Industry experts say the value of many of Trump’s golf resorts is not in the daily management of the course itself but rather in the development and sale of housing. And according to the 2008 master plan that Trump convinced local planning officials to accept, he needs to build two courses before he is allowed to break ground on the profitable housing development. 

Last year, before handing the reins of the company to his kids, Trump attempted to escape the earlier plan, with a pitch to build 850 homes and 1,900 timeshare units before building the second course—which the local planning board shot down, ordering him to stick to the original plan. The local authorities also made it clear that they wanted Trump to build hundreds of affordable housing units and a school, as well as pay for infrastructure improvement costs.

 

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