Blarney Golf Resort Hotel faces uncertain future

As we go to print up to 80 workers have been left in the dark after Blarney Golf Resort’s owner, developer John McCann, pulled out of a scheduled staff meeting there last Friday just days after he ordered the immediate closure of its pool and leisure centre. Eoin English in Saturday’s Irish Examiner explores what might be happening…

 

“Its rural setting raised eyebrows, but that didn’t stop developers pressing ahead with the €30m investment in Blarney Golf Resort, writes Eoin English. It was a big idea on a big site, based around a big hitter’s course design. But after several visits to the rough over the years, it’s been left to the staff of Blarney Golf Resort north of Cork City to field questions amid fears for their jobs. Up to 80 workers have been left in the dark after the resort’s owner, developer John McCann, pulled out of a scheduled staff meeting there yesterday just days after he ordered the immediate closure of its pool and leisure centre. While the golf course continues to operate as normal, the sudden closure of the leisure centre has sparked fears for the future of the hotel, which was due to reopen next month. Staff say they know as much as anybody else, and are trying desperately to get information from their employer. Speculation locally that the site is being considered for use as a direct provision centre is being played down by local politicians. Fine Gael councillor Damian Boylan said he has been talking directly to equality, immigration and integration minister of state David Stanton, who said that he is not aware of any such proposal. But, as a bitterly cold wind swept across the golf course yesterday, the signs were ominous. The resort was built more than a decade ago as part of a hugely ambitious hospitality venture spearhead by Frank McCarthy, who was then based in Kildare, and local businessman John Kelly, through their company,Kelcar. McCarthy had graduated from University College Galway in 1983 with a degree in Production Engineering and began working with packaging company International Paper. He spent nine years there beforemoving to the Netherlands to manage the European operations of logistics company Banta Global. He returned to Ireland to take up a senior management role with Exel Logistics and was soon promoted to worldwide vice-president of technology,managing an €800m budget and 14,000 people. When Exel took over Walsh Western, McCarthy met fellow mechanical engineer Kelly — a senior manager with that company. Both felt that their business backgrounds would help them move into property development, and they delivered some small social and private housing projects. They had invested in and sold out of a golf course near Rennes in France when the sliding land prices saw a near-170-acre parcel of farmland in the idyllic Shournagh Valley, just a few kilometres outside the world-famous tourist village of Blarney, come on the market at the right price. While neither were golfers, they jumped at the Blarney opportunity. and Kelcar unveiled plans for a reported €30m investment in the development of an 18-hole golf course, a hotel, leisure centre and holiday cottages. The project was driven in part by tax incentives. Eyebrows were raised even at this early stage about its remote rural setting, but it was hoped that its proximity to Blarney, which attracts up to 400,000 tourists annually, and the fact that two-time major winner, US golfing legend John Daly, was designing the course (his first in Europe), would help attract the business. Kelly resigned as a company director in late 2005, to be replaced by McCarthy’s brother Derek, before the 61-bedroom four-star hotel with a bar, restaurant, conference, and banqueting facilities opened in December of that year. It proved popular locally and was achieving a 60% average occupancy in the early months, while its fully-equipped leisure centre with a 20-metre pool, kiddies pool, sauna, steam room, jacuzzi, and gym proved popular too Blond-haired Daly, the flamboyant golfer famous for his long drives and ‘let-it-rip’ attitude, visited the site four times during the course-building phase before he jetted into Blarney in July 2006 to officially open the course. Membership came at a cost — around €15,000 according to some long-serving club members — but the course opening coincided with the maturation of the State-promoted SSIA accounts, and hundreds signed up. But behind the scenes, problems began to mount up. Company records show that by December 2007,Kelcar was in arbitration with the resort’s main construction contractor who was seeking payment of up to €7.9m in settlement of thedevelopment contract, with the company instigating a counter-claim for between €10m and €11.1m. The Kelcar directors said at the time that they believed the overall outcome of the arbitration proceedings would be positive for the company, which was operating as a going concern. The golf course was at the centre of a blockade and legal row in 2008 when a director of Irish Golf Design (IGD), Mel Flanagan, who had worked with Daly on the course project, used a digger to block access to the complex in a row over unpaid fees. It would emerge that a dispute had arisen between Kelcar and IGD towards the end of the near-€3m construction phase, which led to IGD’s involvement beingterminated. The dispute ended up in the High Court, where IGD secured court orders enforcing an arbitrator’s award for a total of €678,268. Kelcar paid €400,000 initially, but IGD had to go to court again in pursuit of the outstanding monies. During these legal proceedings, the High Court was told that Kelcar had debts of €28m. Mr Justice Peter Kelly said McCarthy had adopted an “ostrich-like” approach to Kelcar’s situation and should takeadvice about its position and that of related companies, and then talk to its bankers. The judge also said that it had emerged the enterprise was “a house of cards”, that Kelcar was now insolvent and, if it was, then so were the other companies within the group. The resort continued to operate, as AI Bappointed a receiver to the company in 2009 as it looked to reclaim the vast loans it had made to develop the resort. Trading continued as the receiver placed the property on the market in mid-2012 for around €12m, but no credible offers emerged and as the recession bit, the price was slashed to €3.9m before being cut further. It was 2014 before the property was snapped up for areported €2.4m by veteran Northern Ireland businessman and investor, Tom O’Gorman, who made his fortune in oil exploration and mining. At the time, sources say the property was losing about €250,000 a year — almost €5,000 a week. O’Gorman sold the property about two years ago, making what’s believed to have been a six-figure profit, to a group overseen by McCann. Efforts to contact him have been unsuccessful. Staff have asked people to bepatient while they try to find out what’s going on. In the meantime, they are working on the assumption that the hotel will reopen in February as planned.”

Eoin English writing in the Irish Examiner\

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