Hole in One: How AJ Capital Revamped a St. Andrews Hotel in Time for the 150th Open
The Nashville-based firm fell in love with the historic Rusacks hotel, and it ended up inspiring a brand-new brand
It was mid-afternoon on July 15 when Tiger Woods made his steady approach toward the 18th hole on the Old Course in St. Andrews, Scotland. Above his path, the balcony at Rusacks hotel was bustling with energy, the excitement around his final play at the British Open building throughout the day.
As the golfer crossed the Swilcan Bridge and took his final few steps, cheers and applause erupted from the stands around him, reverberating through the balcony above. Woods waved his hat in appreciation, wiping away tears. Rory McIlroy, preparing to tee off at the first hole just across the green, tipped his cap to Woods.
The Rusacks crowd was standing, entirely rapt, in a prime viewing spot —and in a building steeped in St. Andrews history. The hotel was built in the late 1800s, but — perhaps unbeknownst to some spectators that day— revamped dramatically during the COVID pandemic by a Nashville-based firm, breathing new life into it just in time for the 150th Open.
Adventurous Journeys (AJ) Capital Partners acquired the then-Macdonald Rusacks Hotel in November 2019. The acquisition price wasn’t disclosed, but officials at its previous owner, Macdonald Hotels & Resorts, told The Courier newspaper that proceeds from sales within Macdonald’s broader portfolio would leave its remaining business debt-free (and that debt amounted to £190 million in 2019, or $230 million today).
AJ Capital announced plans to add 44 keys, a rooftop bar —the first one in St. Andrews —and a new restaurant. Rusacks sits in the very heart of the Home of Golf, with 600 years of golf history surrounding it, overlooking the first and 18th fairways on the world’s oldest golf course as well as the North Sea. It also sits close to St. Andrews University, now in its seventh century of existence.
The first time Ben Weprin, the CEO of AJ Capital, set foot in the hotel, he looked out across the 18th hole, set against the backdrop of the sprawling West Sands Beach. “Someone said to me, over my shoulder, ‘That’s where they filmed “Chariots of Fire,” ’ and I said to myself, ‘OK, I cannot believe the opportunity here.’ ”
After all, AJ Capital’s company tagline is “Everything we do tells a story,” and Rusacks provided the opportunity for a brand-new chapter in the firm’s $4.5 billion investment portfolio.
“We try to submerge people in the story of the community, the town, the history, the heritage,” he said. “With Rusacks, I felt like I’d uncovered gold or sunken treasure, and we now had the opportunity to build something and be a steward of it for the next generation.”
I’m Gonna Be (500 Miles)
No treasure is uncovered without a hunt.
Phillip Allen joined AJ Capital in the summer of 2018 with the purpose of expanding the firm’s Graduate Hotels brand outside of the U.S. That fall, he flew to London and started traveling around the U.K. looking for potential properties.
With a focus on university towns, he started the search in two of the U.K.’s most prominent ones, Cambridge and Oxford, coming across a perfect fit in the latter: The Randolph Hotel. He asked around and was told, “That’s owned by the Macdonald group — there’s no way you’ll ever pry it from them,” Allen said. “But then, subsequent to that, I learned that they were in fact looking to sell some of their hotel portfolio.”
Macdonald Hotels & Resorts, led by executive chairman Donald Macdonald, was established in 1990. It has since expanded to become the U.K.’s largest privately owned hotel group, with 35 hotels in the U.K. alone as well as additional resorts in the U.K. and Spain.
The hotelier was reluctant to part with The Randolph at first, but suggested AJ Capital take a look at his broader portfolio.
So the firm got to work, undertaking extensive due diligence on the portfolio and ultimately circling back to not one but two crown jewels: The Randolph, and Rusacks in St. Andrews.
During his recon, Allen had visited 25 Macdonald hotels in five days — putting in significantly more than the 500 miles that Scottish crooners The Proclaimers claimed they’d walk to prove their devotion — and Rusacks was the final hotel he viewed.
A weary but invigorated Allen called Weprin. “You will not believe this hotel in St. Andrews,” he told him. “It’s the most tailor-made, Adventurous Journeys hotel I’ve ever seen, and, if you come here and see it, you’re going to fall in love with it.”
A Changing of the Guard
Weprin flew to Scotland and wound up spending significant time with Macdonald, 75, who hails from the island of Harris in Scotland’s Outer Hebrides. He quizzed Weprin about his intentions for his hotels.
“Donald’s very committed to his assets and his business,” Weprin said. “He wanted to understand our mission, and how we think about real estate. He also asked about our history, which is a very solid story, because whether it’s been Graduate Hotels or independently, privately owned assets that have been in families for generations, we feel like we’re really good stewards.”
Although from two very different backgrounds, the two soon bonded, and a deal for the two hotels was made.
For his part, Macdonald had been struggling to find the right company to sell his assets to, not because of a lack of offers but rather because several of the interested parties seemed “purely mercenary,” Donald Macdonald said, adding: “That’s not what we wanted for our portfolio.
“Ben struck me as somebody who would do what he said he would do, and that’s exactly what he’s done,” he continued. “So, we’re very pleased and thankful that he’s taken over our hotel, and we honestly believe it’s the No. 1 golf hotel in the world today.”
Prior to the Rusacks sale, Macdonald had spent significant time securing the necessary entitlements to add a 44-key addition, expanding the hotel onto the surface parking lot — no mean feat in the historic town. AJ Capital inherited those entitlements, and also bought some real estate on the backside of the property, eventually adding 50 rooms to bring the room count to 120.
“It was a huge responsibility, because we had to get this right, but at the same time we seek out the chance to do exactly this,” Weprin said.
Photo: AJ Capital
Thistle Do Nicely
The acquisition and redevelopment was financed some 4,300 miles away by Starwood Property Trust in Miami, which provided a £42 million loan , or roughly $51 million, in the deal.
“Starwood and AJ Capital have been partners in the past, and I’m a big fan of Ben and his organization,” Barry Sternlicht, chairman and CEO of Starwood Capital Group, said. “As a golfer myself and a many-time participant in the Dunhill Links Pro-Am — which is played at the Old Course — I’ve walked by Rusacks for years, wondering what might become of this tired grande dame.”
So, when Weprin approached the Starwood team about the financing, it wasn’t exactly a hard sell for Sternlicht, either. “The location overlooking the historic 18th fairway and greens where many a dream have come true —or ended in disappointment and agony— was simply fantastic and not replicable,” Sternlicht said. “We had total confidence in Ben and his team’s ability to create a great property with modern accommodations— which was much needed in the market.”
Rusacks has outperformed Starwood’s expectations, both on average nightly rate and occupancy, Sternlicht said. (In early August, daily room rates range from $485 for a double room to $1,087 for a suite with a balcony overlooking the Old Course.) “It’s a fresh but respectful renovation and expansion and the team did a tremendous job, far from Nashville.”
“We finance a lot of buyers of hotels, but very few visionaries,” Jeff DiModica, president of Starwood Property Trust, added. “From the minute you step into AJ Capital’s offices or properties, you know Ben and his design team are unique. They are storytellers, and understand the importance of experiential real estate. Every detail of every property weaves you through the history of its location. From the ‘Grandma Chic’ Graduate Nashville that tells the story of a small town girl who comes to Nashville and sleeps on a couch until she gets her big break, to the old world charm of Rusacks, with rooms named years ago after the legends of golf, and tributes to the quirky game we love at every turn. From Pebble Beach to Turnberry, there simply isn’t a more thoughtfully executed destination golf hotel in the world.”
Lang May Yer Lum Reek
With two Scottish hotels now under AJ Capital’s control, some decisions had to be made.
“It was clear from the beginning that The Randolph was a perfect candidate for Graduate, but we weren’t quite sure what we were going to do with Rusacks,” Allen said. “We decided that it would be dilutive to the property to try to shoehorn it into Graduate, as it was too perfect of a golf property. And, credit to Ben, we had the flexibility to pivot away from the original plan and to do something new and original that we really didn’t set out to do.”
Going all out on the golf component that Rusacks inspired, they began looking at golf tourism markets in the U.K. and realized how connected they were, particularly in Scotland and Ireland where golfers regularly go for a week or two and travel around to numerous courses. They also realized there are plenty of iconic golf courses in the U.K. that don’t have hotels of the same caliber attached to them.
So, they began putting together a portfolio of golf hotels that would provide an elevated hospitality experience, connected between those beloved golf markets, and the Marine & Lawn hotel brand was born. The name was inspired by old postcards of the hotels, which touted the marine (close proximity to water) and lawn (golf course) elements.
Macdonald owned a golf hotel in North Berwick, also in Scotland, which fit the new brand nicely — one that he was also willing to sell. So, with Rusacks and Berwick done deals, Allen started looking around for more potential acquisitions to add to the newborn brand. “I got to know the Golf Digest Top 100 golf courses in the world list very well,” he laughed.
His pursuit of hotels with history and character that were also adjacent to world-class golf courses led him to cold-calling the owners of The Marine Hotel in Troon on the Ayrshire coast, and working out a handshake deal on March 1, 2020, for what is now Marine Troon.
“I remember flying back to the U.S. and thinking ‘I might not be able to get back for a month or two with this COVID thing’ and it ended up being 14 months until I could come back,” he said. The deal was briefly put on hold before being revived in the summer of 2021. “To get it done, in the midst of COVID, I think shows that the whole organization was really behind the Marine & Lawn concept.”
Photo: AJ Capital
‘Now’s The Day, and Now’s The Hour’
Indeed, the entire Marine & Lawn portfolio was built during the pandemic, and also included the purchase of Slieve Donard hotel in Royal County Down, Northern Ireland, for £40 million in October 2021 ($48.3 million at the current exchange rate).
Rusacks’ revamp began in early 2020, but AJ Capital already had a team in place in Scotland, including the hotel’s general manager, Seamus Coen, and several other longstanding Rusacks staffers.
“That made it easier, because we had people who were committed from the beginning — although nothing about the period was easy,” Weprin said. “There were issues with supply chain, materials, labor, travel bans. Just a series of events that felt like they were working against us, but we didn’t come that far to only come that far.”
Or, in golf terms, “It was like, we may hit a ball out of bounds, but we’re gonna play the second shot and try to make par,” Weprin said.
The original architecture, stone and brick were kept intact to preserve the building’s history, but myriad new and fresh elements were added, including a renovated lobby and three new bars and restaurants: The Bridge, One Under Bar, and 18, all overseen by renowned U.K. chef Derek Johnstone. The richly furnished rooms feature bespoke interior design, with plenty of nods to the building’s storied past —and, of course, to the game.
While much is new, “we tried to really maintain the ethos of the original design architecture of Rusacks. We’re not from [St. Andrews] so it was a huge obligation to make sure we really understood the fabric of the culture,” Weprin said. “This holds true whether we’re doing a hotel in St. Andrews; Cambridge; Ann Arbor; Knoxville, Tennessee; Palo Alto or New Orleans.”
As such, preserving the hotel’s treasured history was top of mind every step of the way. “We wanted Rusacks to feel like [legendary St. Andrews golfer] Old Tom Morris’ home, “steeped in that same tradition,” he said.
Marc Eubanks, AJ Capital’s vice president of hospitality, got to work assimilating the new Rusacks into its ancient surroundings, and with the locals.
“I started communicating with the R&A [the Royal & Ancient, one of the governing authorities of the game and organizer of tournaments such as The Open Championship] in 2020,” Eubanks said. “There was concern in the town around whether we were going to be able to get this done prior to the 150th Open, two years out. We wanted to be good stewards, we wanted to be accepted as a neighbor, and we wanted to fit in.”
In September 2021, as the first guests were staying at Rusack, a local couple in particular stands out in Eubanks’s memory.
“They said ‘We were concerned about the extension, but this is brilliant. We’ve never seen West Sands Beach from this [rooftop] perspective.’ ”
From DiModica’s perspective, “Marine & Lawn is to experiential golf travel what the Graduate brand is to university travel. In a world where new hotel knockoff concepts are born daily, Ben had the vision and perseverance to find and fill massive gaps no one else saw. As a golf historian, he knew the cultural importance of the project to the town and game we love, and executed it as seamlessly as Seve’s [Ballesteros] birdie putt to win the ’84 Open on the green below.”
“Rusacks has held on to everything that was good about it since it was first built, but it’s been brought into the 21st century, and I think it’s fantastic,” Macdonald said. “It’s good for the golf world, and it’s good for Scotland.”
Hole in One
During the time of this interview, Weprin was installing a sizeable putting green in his office. “St. Andrews has made me far more obsessed with golf,” he said.
In summation, “I live in Nashville, so I’ll give you a songwriter reference,” Weprin said. “In my eyes Rusacks was like if you’re working on a record, and you just know you’ve got something special. That’s what happened here.”