Old Town Partnership 08 04 09

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Old Town Partnership 08 04 09

  1. 1. An Old Town Partnership? People-centred Development Chris Cook 8 April 2009
  2. 2. There are two ways of raising finance...... 09/06/09
  3. 3. ....Credit and Investment 09/06/09
  4. 4. There’s no shortage of credit -money can be printed ‘til the cows come home.. 09/06/09
  5. 5. We have a shortage of the credit-worthy ... 09/06/09
  6. 6. Perhaps we should cut taxes on people and tax privilege instead? 09/06/09
  7. 7. ...and invest massively in public assets.. to get the economy moving 09/06/09
  8. 8. Investment is either through a Limited Company.... 09/06/09
  9. 9. ....a 19 th Century legal dinosaur 09/06/09
  10. 10. ...or loans secured by legal claims eg mortgages 09/06/09
  11. 11. But there’s a new furry animal out there.... 09/06/09
  12. 12. ...the 21 st Century Limited Liability Partnership (LLP) 09/06/09
  13. 13. An LLP is a corporate body with limited liability.... 09/06/09
  14. 14. ...and...errrr...that’s it!... 09/06/09
  15. 15. As far as the Tax Man is concerned it is a Partnership 09/06/09
  16. 16. It’s an “Open” Corporate where we can work with each other 09/06/09
  17. 17. ... even without a written agreement 09/06/09
  18. 18. Hilton Deal 2002 Capital Partnership LLP 10 UK Hotels Gross Revenues Hilton Group Capital User Consortium LLP Capital Provider Bank Property Developer Hotel Specialist % % % % %
  19. 19. Capital Partnership Capital Partnership Investors Customers Custodian % % £ 09/06/09 Managers
  20. 20. “ Equity Shares” - % age shares in revenues or production... 09/06/09
  21. 21. ...or Units - redeemable in production 09/06/09
  22. 22. Example: “The Art of Flirting” – a film incorporated as an LLP 09/06/09
  23. 23. The actors received “nth’s” of the gross revenues... 09/06/09
  24. 24. ...I got 5%...and the producer the rest... 09/06/09
  25. 25. ...except that we needed lights, cameras, pizza, coffee...... 09/06/09
  26. 26. Two Capital Partners invested £10k for 20% of revenues.... 09/06/09
  27. 27. ...if there are any 09/06/09
  28. 28. Art of Flirting LLP Art of Flirting Partnership Financial Capital (Investors) Viewers Custodian % % £ 09/06/09 Human Capital (Actors, Producer, Me)
  29. 29. Everyone was on the same side 09/06/09
  30. 30. Example: Albion Trust...a charity 09/06/09
  31. 31. ..who provides affordable office space for social enterprises 09/06/09
  32. 32. ...due to demand they bought a disused church next door 09/06/09
  33. 33. ...and plan a £4m development 09/06/09
  34. 34. But if they borrow, the rents will be unaffordable 09/06/09
  35. 35. Solution? An Albion Partnership? Albion Partnership Investors Tenants Custodian % % £ 09/06/09 Managers
  36. 36. Let’s see how a Community Partnership might work... 09/06/09
  37. 37. Conventional development is based on transactions – the “Four B’s”..... 09/06/09
  38. 38. Borrow, Buy, Build and B...er Off... 09/06/09
  39. 39. A Community Land Partnership Community Project Investors Occupiers Custodian % % Rental 09/06/09 Managers
  40. 40. First, the land is transferred to a Custodian Land Custodian 09/06/09
  41. 41. ...and the Land Owners become Investors Land Land Owner Custodian Land Value 09/06/09
  42. 42. ...the Council invests the value of planning permission (as well as land)... Land Council Custodian Value of Planning permission 09/06/09
  43. 43. ...the Contractors invest at least their profit margin... Land Contractors Custodian Profit Margin 09/06/09
  44. 44. ...and Risk-Takers provide £ to pay Contractors’ agreed costs... Land Risk-Takers Custodian € 09/06/09
  45. 45. ....while the Developer invests “Intellectual Capital” of concept and services... Land Investors Land-owner, Council, Contractors, Risk Takers Developer Community plus help Custodian Value Value 09/06/09
  46. 46. When the development is occupied... Community Project Investors Occupiers Custodian % % Rental 09/06/09 Managers
  47. 47. Investors may keep Units for their own pension... 09/06/09
  48. 48. ...or sell them to Investors or Occupiers who wish to invest in their own homes 09/06/09
  49. 49. Occupiers maintaining the property themselves may receive “Sweat Equity” 09/06/09
  50. 50. For Investors it’s an index-linked, property-based investment... 09/06/09
  51. 51. Everyone has a stake in the outcome.... 09/06/09
  52. 52. ....with an interest in high quality, energy efficient housing .... 09/06/09
  53. 53. ....because this lowers the cost of occupation over time .... 09/06/09
  54. 54. ....which makes the Rental value higher and makes Equity Shares more valuable 09/06/09
  55. 55. So we go from a transaction model... Developer Property Buyer £ £ Property Buyer £ 09/06/09 Land Owner
  56. 56. ...to a service provider model where land stays in community ownership... 09/06/09
  57. 57. ...and service providers provide services the community needs 09/06/09
  58. 58. Community partnerships are not a magic bullet 09/06/09
  59. 59. Conventional finance requires binding contracts.... 09/06/09
  60. 60. ....partnership finance requires consensual agreement... 09/06/09
  61. 61. ...but there may be no magnetism.. 09/06/09
  62. 62. Communities may find they have the wrong partner... 09/06/09
  63. 63. ...and partners fall out... 09/06/09
  64. 64. ...so things can still go Pear-shaped 09/06/09
  65. 65. A Community Partnership is not an Organisation ... 09/06/09
  66. 66. ...it does not own anything, do anything, employ anyone, or contract with anyone... 09/06/09
  67. 67. ...it is simply a framework within which the stakeholders self organise ... 09/06/09
  68. 68. ...with a mutual interest in developing land sustainably and affordably. 09/06/09
  69. 69. A new class of Edinburgh Equity created by the community for the community 09/06/09
  70. 70. Thank You 09/06/09

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