The Friedsee region has been downgraded from a full sim to a homestead, and has been grandfathered. There have been a few small issues to sort out with regards to citizens who own land on the region, but by and large it went quite smoothly.
Shep, who was the person to initially talk with a Linden representative about if there would be a fee to change the sim, saved us $100 US by this! Their policy (nowhere written down where you could find it), was that downgrading a full sim to just one homestead sim would cost $100 US, but since she had a conversation with the rep who told Shep that there would be no fee, Linden Labs have graciously honoured the quote. Thanks Shep!
We now await the LUC to meet and discuss the region for ideas on how to best change the terrascaping/landscaping and covenant to reflect this downgrade. In the meantime, all citizens owning land on Friedsee will see nothing change their parcels, and all considerations will be given them when the LUC recommendations are made.