Keith Community Partnership

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Keith Community Partnership

  1. 1. Community Asset Partnerships Simply does it Chris Cook Keith 29 June 2011
  2. 2. Financing - development of new assets Short/medium term, high risk 16/06/10
  3. 3. Funding - use of completed assets Long term, low risk 16/06/10
  4. 4. Conventional funding is either through a Limited Company 16/06/10
  5. 5. A 19 th Century legal dinosaur 16/06/10
  6. 6. Or loans secured by legal claims eg mortgages 16/06/10
  7. 7. Two conflicting claims over the same assets 16/06/10
  8. 8. But there’s a new creature out there 16/06/10
  9. 9. The 21 st Century Limited Liability Partnership (LLP) 16/06/10
  10. 10. An LLP is a corporate body with limited liability 16/06/10
  11. 11. ...and...errrr...that’s it! 16/06/10
  12. 12. Over 70,000 LLPs are now in pervasive use for purposes never intended... 09/03/10
  13. 13. ...even in the Public Sector, where Glasgow has five municipal LLPs 09/03/10
  14. 14. Hilton Deal 2002 Capital Partnership LLP 10 UK Hotels Gross Revenues Hilton Group Capital User Consortium LLP Capital Provider Bank Property Developer Hotel Specialist % % % % %
  15. 15. Capital Partnership Custodian Investors Users % % £ 16/06/10 Managers
  16. 16. Equity Shares - % age shares in revenues or production... 16/06/10
  17. 17. Units - redeemable in production 16/06/10
  18. 18. Example: “The Art of Flirting” – a film incorporated as an LLP 16/06/10
  19. 19. The actors received “nth’s” of the gross revenues 16/06/10
  20. 20. I got 5%...and the producer the rest 16/06/10
  21. 21. But we needed lights, cameras, pizza, coffee 16/06/10
  22. 22. Two Capital Partners invested £ for 20% of revenues 16/06/10
  23. 23. If there are any 16/06/10
  24. 24. Art of Flirting LLP Custodian Financial Capital (Investors) Viewers % % £ 16/06/10 Human Capital (Actors, Producer, Me)
  25. 25. Everyone was on the same side 16/06/10
  26. 26. Example: Albion Trust...a charity 16/06/10
  27. 27. They provide affordable office space for social enterprises 16/06/10
  28. 28. Due to demand they bought a disused church next door 16/06/10
  29. 29. ...and planned a £4m development 16/06/10
  30. 30. But if they borrow, the rents will be unaffordable 16/06/10
  31. 31. Solution - an Albion Partnership? Custodian Investors Tenants % % £ 16/06/10 Managers
  32. 32. Conventional Development Finance Borrow, Buy, Build and B...er Off 16/06/10
  33. 33. Developer as middleman: a transaction chain Developer Property Buyer £ £ Property Buyer £ 16/06/10 Land Owner
  34. 34. Community Land Partnership 16/06/10
  35. 35. Land held by or transferred to a Custodian Land Custodian 16/06/10
  36. 36. Land Owner becomes an Investor Custodian Land Owner Land Value 16/06/10
  37. 37. Council invests the value of planning permission Community Council Value of Planning permission 16/06/10
  38. 38. Contractors invest at least the profit margin Custodian Contractors Profit Margin 16/06/10
  39. 39. Risk-Takers provide £ to pay Contractors’ agreed costs Community Risk-Takers £ 16/06/10
  40. 40. Developer invests 'Intellectual Capital' of concept and services Community Investors Land-owner, Council, Contractors, Risk Takers Developer Community plus help Value Value 16/06/10
  41. 41. Result – 'Co-ownership' of a Rental Pool Custodian Investors Occupiers % % Rental 16/06/10 Managers
  42. 42. Units – undated credits redeemable in payment for property occupation 16/06/10
  43. 43. Units are sold to Investors at a discount to the rental value 16/06/10
  44. 44. eg a £1.00 Rental Unit sold for 80p gives a 25% return 16/06/10
  45. 45. But the rate of the return depends on whether the property yet exists.... 16/06/10
  46. 46. ...if so, whether rent is being paid.... 16/06/10
  47. 47. ...and how many Units have been issued 16/06/10
  48. 48. Investors may keep Units eg for pension or for care 16/06/10
  49. 49. ...or sell them to Investors or Occupiers 16/06/10
  50. 50. Occupiers maintaining the property themselves may receive 'Sweat Equity' 16/06/10
  51. 51. Everyone has a stake in the outcome.... 16/06/10
  52. 52. ....with an interest in high quality, and energy efficiency.... 16/06/10
  53. 53. ....because both lower the cost of occupation over time .... 16/06/10
  54. 54. ....which makes the Rental value higher and makes Units more valuable 16/06/10
  55. 55. So we go from a transaction model... Developer Property Buyer £ £ Property Buyer £ 16/06/10 Land Owner
  56. 56. ...to a service provider model where land is owned by a custodian or steward 16/06/10
  57. 57. A loan to the land – not to the owner 16/06/10
  58. 58. Community Energy Partnership
  59. 59. Energy Pool – Mega Watts Custodian Investor Community Energy Energy Energy Manager
  60. 60. Manager receives %age of production
  61. 61. Supplier may invest equipment & materials: must invest agreed % profit
  62. 62. Investors provide development finance by purchasing Units at a discount
  63. 63. Outcome: turbine funded by selling part of Energy Pool of future production 05/04/10
  64. 64. An Energy Loan to the turbine – not the Community
  65. 65. Nega Watts - energy savings - cheapest energy of all 09/03/10
  66. 66. Energy loans – to the property, not the owner 09/03/10
  67. 67. Repaid out of energy saved 09/03/10
  68. 68. Sell 100 Units of 1 Mega Watt Hour @ £50/MWh Result: £5k interest-free energy loan 09/03/10
  69. 69. Or sell 10,000 Units of 10 Kilo Watt Hours @ 50p per Unit 09/03/10
  70. 70. Reduced energy bill paid to power supplier for energy consumed 09/03/10
  71. 71. Energy loan repaid through buying Units from the Pool at the market price 09/03/10
  72. 72. Energy Pool is a new approach to direct investment in energy financing and funding
  73. 73. “ If you want to keep a cow healthy, you don’t regulate what comes out of it……”
  74. 74. “…… you regulate what goes in….”
  75. 75. Energy pooling enables a Carbon currency based upon the intrinsic value of energy…
  76. 76. ..rather than a market in value-less Units of CO2 emissions, imposed by governments …
  77. 77. Problems: taxation, regulation 16/06/10
  78. 78. Solution: a Company Limited by Guarantee as Custodian..... 16/06/10
  79. 79. .....and a little imagination 16/06/10
  80. 80. Community partnerships are not a magic bullet 16/06/10
  81. 81. Conventional finance requires binding contracts 16/06/10
  82. 82. Partnership finance requires consensual agreement 16/06/10
  83. 83. But there may be no magnetism 16/06/10
  84. 84. Communities may find they have the wrong partner 16/06/10
  85. 85. Sometimes partners fall out 16/06/10
  86. 86. A Community Partnership is not an Organisation 16/06/10
  87. 87. It does not own anything, do anything, employ anyone, or contract with anyone 16/06/10
  88. 88. It is simply a framework agreement enabling communities to self organise 16/06/10
  89. 89. There may be a shortage of Money 16/06/10
  90. 90. But there's plenty of money's worth : land, energy and intellect 16/06/10
  91. 91. We lack only the mutual agreement to deploy these resources 16/06/10
  92. 92. It's not Rocket Science 16/06/10
  93. 93. Thank You 16/06/10

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