Muirfield Dormy House

Background

 

The purpose of this letter is to inform Members about progress on the Dormy House project. Enclosed with this letter is the notice of an SGM to be held in the Clubhouse on 14th November to seek approval for the capital expenditure involved to convert Muirfield Cottage into a Dormy House which will meet the Club’s requirements and match our quality standards.  Under the HCEG constitution, capital projects that cost more than twice the annual membership fees require Members approval.

 

This paper gives more detail of the vision for the Dormy House, its finances and its operation and hopefully answers many of the questions Members will have about it. Members permission for the Dormy budget is being sought before the Club applies to East Lothian Council (ELC) for planning permission.

 

Muirfield Cottage

 

The provision of accommodation for Members at Muirfield has been a strategic aim of the Club since the renovation of the Clubhouse in 2018-2019 and this objective is confirmed in the HCEG Strategic Plan.  Earlier this year an opportunity arose to purchase a property immediately behind the caddy facility on Duncur Road.  The Board carefully and quickly evaluated the potential of Muirfield Cottage and moved swiftly to acquire it.  The total cost of this acquisition, including professional fees and taxes was £1.5 million.

 

It was fully understood that major refurbishment and remodelling was required to transform the buildings into a Dormy House.  A Dormy Working Group (DWG) under the leadership of Mike Balfour was immediately established.  The full team is: Mike Balfour – Chair, David Smith (also Chair of the Property Committee), Tony Butter (Project manager), Angela Miller, Graham Bucknall, Anthony Goodrich, Nick White, Tom Walker, Stuart McEwen and Mike Reid.

 

Architects

 

Since the acquisition of Muirfield Cottage in April this year, a great deal of work has been undertaken by the DWG to finalise a design and an operating model aimed at maximising the accommodation opportunity within an acceptable budget.  The DWG initially conducted desktop research to find suitably experienced architects. Three firms were chosen, given a brief, and asked to provide draft designs and an estimate of their fees. Two were very close in the quality of their designs and fees, and after a further round of interviews, 56three were chosen, a medium sized partnership based in Edinburgh.

 

Architectural Proposals

 

The property at present is made up of a main house with 4 bedrooms, an attached double garage and an annex with two bedrooms. The principal proposed change to the house, is to convert the garage into accommodation and build an additional floor above it.  External access to the garden will be created as this is presently through the garage.

 

The other major alteration is changing vehicular access from Vardon Road to Duncur Road. The main advantage of this is direct access to Duncur Road giving a short walk to the Clubhouse but also, importantly, a significant reduction in disruption to the close neighbours at 11 Vardon Road.

 

This website has been set up by 56three to review the Dormy plan. This is a private website that should not be shared. In addition, the designs will be on display in the old Muirfield Room.

 

Proposal

 

A principle adopted by the DWG at the outset was that the Dormy should be of the same quality as the Clubhouse refurbishment project which set out ‘to achieve a high level of domestic plainness’. The Club has a great golf course, and a wonderful Clubhouse. The Dormy House should aim to achieve the same standards. It is a long-term project that will be enjoyed by Members for years to come and should aim to enhance the experience of a day or two at Muirfield for Members and their guests.

 

The Dormy will only be for the use of Members and their Guests. In financial terms the operation of the Dormy is to be at least break-even so that it will not be subsidised by Members who don’t use it. Having said that if the Dormy House doesn’t break-even or Members don’t use it to the extent anticipated then letting it out to Visitors would be an option.

 

A survey of all the golf clubs in the UK that operate a Dormy was carried out to learn from their experiences, their successes and difficulties, and to get an insight into operating metrics such as costs and occupancy rates. Based on this and additional work undertaken by the finance team, and using todays cost levels, it is estimated that Members would be charged £100-£120 per night for single occupancy with their guests paying a £15-20 premium. Rates will be lower for shared rooms.

 

There will be 9 en-suite bedrooms made up of 8 double/twins and one single, with the capacity to accommodate 17 people. The double rooms will have zip-beds that can be either double or two singles. There will be a spacious communal area made up of a sitting-room, a kitchen and dining area, along with an outside patio and a significant garden. Access will be from Duncur Road with some parking available, but the parking sheds are close by.

 

Breakfast will be taken in the Clubhouse.  In the evenings it is envisaged that Members and their guests will support the local economy and eat out at local restaurants, but it will be possible to organise outside catering if required.

 

The quality of the refurbishment and the interior décor will be aligned with the feel and quality of the Clubhouse. The Heritage Committee is advising the DWG on how best to display some of our memorabilia in the Dormy House.

 

Planning

 

The Club has sought the views of ELC regarding the prospect of gaining planning permission for the Dormy, including the change of use of a domestic dwelling to a more commercial premises. The indications to date have been positive but there can be no guarantee that it will be granted. The Board, however, are satisfied that sufficient groundwork has been undertaken and plans are sufficiently advanced to ask Members to vote for the Dormy House refurbishment ahead of the submission of a formal planning application.

 

Timetable

 

If Members give approval for the project to proceed, planning permission will be sought shortly thereafter.  As soon as ELC gives consent, building will start.  This could be in late Spring of 2025, with the prospect of the Dormy being in operation for the summer of 2026.

 

Capital Cost

 

The DWG has worked closely with the architect and quantity surveyor to estimate the cost of the project. Initially cost estimates were felt to be too high and after a detailed review the estimate was reduced to £1.5 million. There remain, however, several risks to the project cost estimate, the most important of which will be agreeing a figure with the builder/contractor, building material inflation (an estimate has been included) and of course the unknown unknowns. To take these uncertainties into account and to build in some contingencies the Board believes it appropriate to ask Members to approve a potential project cost of up to £2.0 million.

 

Since COVID the Club’s balance sheet has been strengthened significantly. An important metric for the finance team is ‘net cash’, being the club’s cash balance excluding prepaid green fees and subscriptions.  With the construction costs for the Dormy house being spread over 2025, this ‘net cash’ figure should remain positive throughout. It should be noted that at the end of 2024 the Club’s cash balances, in total, are estimated to be in excess of £4 million.

 

Observations and Questions

 

The DWG and the Board are keen to hear Members views and to answer any questions you have. To facilitate this a dedicated email address has been set up at dormy@muirfield.org.uk  In addition, and attached, is a series of questions and answers.

 

Recommendation

 

The HCEG Board believes the design and operating model of the proposed Dormy House is attractive and will be an exciting addition to Members. The costs of the project have been interrogated thoroughly and represent a reasonable price for the quality Members will expect. Finances are presently in, and are forecast to be in, a healthy position and the Club is in a position to afford to undertake this project.

 

Members are asked to vote in favour of the Dormy Project at the forthcoming SGM.

 

Yours faithfully,

 

Gareth Baird

Captain