Saturday, November 08, 2008

There May Not Be Trumptown Ahead

Reading the papers this week and watching the BBC news you'd be forgiven in thinking that The Donald had already begun building his homes and his golf course. You'd be forgiven in thinking that the Donald had dug deep in his big pockets and pledged millions of his billions to start the project - possibly tomorrow week. Now we know he's said that he's own his way to start "securing the dunes" and to begin work on the "greatest golf course in the world", but is he? Check around the world to see how some of Trump's other projects are going and it's not all going to plan. Think again about just how much of his money is going to be invested versus how much is going to be invested from others? Is it going to be so easy to kick start this project with free flowing investment into Billionaire Trump's company?

This is what the Trump website says about his Scottish development.

"A dramatic golf destination will soon grace the North Coast of Scotland. Welcome to Trump International Golf Links. Resting on 1,400 acres of sand dunes and rolling bluffs, the property will surely become one of the finest golf destinations in Europe. Two championship golf courses will boast Martin Hawtree Signature designs, backed by a state-of-the-art golf academy and a distinctive five-star hotel. The 1,400-acre property also offers three miles of sparkling, white sand beaches, a mixed-use residential community and the unmistakable beauty of Aberdeen, Scotland.'

Fascinating. . .

Also don't lose sight of the fact that yesterday casino operator Trump Entertainment Resorts reported quarterly losses as the economic slowdown continued to hit the gambling industry. The company, chaired by The Donald, reported a net loss of $139.1 million, compared with a profit of $6.6 million in the third quarter last year. Its 21 highest-paid employees have agreed to a voluntary 5 per cent pay cut.

Never forget Trump is a brand, thank God the BBC have stopped referring to ‘his people’ as 'Team Trump'. Nevertheless every time his name is mentioned it’s preceded by the word – billionaire, in order to make us all believe that here is a man who can do no wrong. Of course that’s not quite true. Back in the early 1990s he almost went to the wall when his Atlantic City casino, it too cost a billion (do all his developments cost a billion?) and was built with money from high-interest junk bonds ran into trouble. Such was the level of debt servicing that was required that it ate through most of his companies cash and almost finished him. Trump had to file for bankruptcy protection.

Since then it’s true that his building projects, many of which are called ‘The Trump International Hotel and Tower’, followed by the name of the place where they’ve been built, seem to be successful. However, that too is not entirely true. Several in the USA are struggling and may not make money. On another there are a number of lawsuits pending. Now of course these are the everyday occurrences in the world of mega business where it’s not all about profit, there’s always a cost line and not everything the Donald does is a certainty.


Scott @ loveandgarbage said...


I'm very glad you're keeping on this. I would have posted somehting on my own blog to similar effect - but have a family arrangement (following a recent addition to the family) that I'm keeping blogging free until the New Year. But my interest remains piqued by this (I have a few posts over the past year and a bit) and thought the following might be of interest.

The grant of permission by the ministers can still be challenged. The RSPB or SNH or any other objector could raise an action of judicial review. Such an actoion could be based on a couple of grounds: the initial decision to call in subsequent to a decision of refusal by the planning authority; or the failure to take adequate account of material considerations in the decision of ministers (and report by the planning reporter).

The former is still open, my understanding being that the position of objectors was reserved during the PLI. There has never been a case where an application was called in between refusal and the issue of the decision letter. The equiavlent English cases involve delays of years between refusal and issue of decision letter and involve the authority attempting to prevent the developer exercising a right of appeal. There is no suggestion that that would have happened here, and the decision to call in was clearly based on the threat by the TRump team not to appeal (which they made publicly and in the background documents - released in the FoI requests relating to the application). IN planning the developer always has all the cards. The developer can appeal a refusal and have the issue re-examined. In any ordinary application that's what would have happened. Not doing it here was bizarre. If the developer didn't want to appeal they oviously didn't want to go ahead except on their own terms.

The second element (failure to consider relevant considerations) is based on the inadequate treatment of the SSSI. This site is protected by EU law as well as the UK SSSI legislation. The development will damage the site - and effectively whoilly remove the rationale for it being an SSSI. A development without infrining on that site could be proposed (and was indeed considered in Aberdeenshire Council as one of the proposed planning conditions).

I'm not anti-development, not an environmentalist, but a lawyer that dislikes the rules of the game being ignored when someone claims to have big enough pockets to ride roughshod over the system. The material you identify, the current economic climate (and its impact on his funding for this project), the empty promises (who is going to take the Open miles and miles north of Carnoustie to a new course as seems to be promised?, the nature of the jobs that will apparently be created, the viability of a rich man's tourist resort north of ABerdeen, and the way in which politicans were in thrall to Trump, as well as the legal stuff all suggest this is probelmatic.

Would the chief planner have called in any other application after 2 5 minute phone calls with the relevant minister? Why did it only become a matter in the national interest once Aberdeenshire Council refused it - when given their own planning guidelines central government should have been notified of the application, and could have called it in from the very time the application was initially made?

Legally, it looks odd - and reviewable (and a legal academic article has appeared suggesting as much earlier this year). Economically it looks unsustainable.

But, what do we know?

Very best wishes


Richard Havers said...

Hi Scott

Fascinating comments. Like you I'm not a tree hugger or ant development but I am anti hypocrisy and most everything about this case from day one has had hypocrisy not far from its core.

The SSSI argument has always been one that seems pivotal in al this; although it’s not the first time that permission will have been given on a SSSI. Recently Aikengal wind farm in East Lothian was granted permission despite some of the site being a SSSI. There seems little point in granting such status if it is to be ignored.

There seems to have been a good deal of naivety on the part of the Government, perhaps new into their positions they all got a little Trump-struck. It seems to me that they should have acted a god deal more dispassionately from the outset. Mind you as soon as government ministers started to say things like it was important for Scotland to be seen to be acting positively towards inward investment then writing was on the wall.

I remain convinced that the economics will over rule the politics, although it has set a potentially damaging precedent.

Congrats on the recent addition to the family!

p.s. I’ve passed yours to a learned friend of mine to see what he has to say…

Richard Havers said...

The SNP's intervention came after the First Minister held a private meeting with the Trump's team in Aberdeen's Marcliffe Hotel in the aftermath of the council's rejection of the scheme. Salmond said it was his duty as the local constituency MSP. His timing was unfortunate

The following day the government's chief planner, Jim Mackinnon, who was meeting Trump's camp, rang Alan Campbell, chief executive of Aberdeenshire Council. Campbell asked the Trump team to leave the room while the two officials spoke together.

A few hours later, Mackinnon called again to inform Campbell that the planning application was being called in by Swinney, the Finance Minister. Swinney had attended a function at the Trump-owned Westchester Country Club in New York State just two days before he made his decision.

Politics is a dirty game...

James Higham said...

Does he drive a Trumpmobile, Richard?

Ellee Seymour said...

Yes, all that glistens is not gold. If something looks too good to be true, the chances are it is.

Anonymous said...

Tom English writes a very good piece in Scotland on Sunday

He questions The Donald's ability to create the world's greatest golf course here, when none of the ones he owns in America make it into the Golf Digest Top 100 rankings for 2007.

Scott @ loveandgarbage said...

THought you'd be interested in TOm HArris's somewhat ill-informed comments at .

If I have time tomorrow I might reply to him in some detail.