Franchulates

[Beathan]

I understand that Sleazy Writer is making one or more Franchulate proposals, which I support. To add spice to the consideration of Franchulates -- and to provide additional room for expansion -- I am joining him by making the following proposal. I have transmitted this to the Chancellor, but I post it here for community discussion as well.

Chancellor,
I want to support Sleazy Writer’s Franchulate proposal and join him by making one of my own.
Sincerely,
Beathan Vale

I offer my partly built Portage Bay Houseboat community as a CDS franchulate. The community is located in the Yeeowler and Sibernicius sims (with a small additional piece in the Lipshen sim). The total area is 75616 meters.

I have located the docks, but have not yet built final docks because the docks I was using contained too many prims for efficient use. I have also had multiple houseboat designs constructed (several by Mizou Vavoom) for placement on the docks as residential buildings.

The current design of the community includes both residential space (the houseboats) and commercial space (an as yet unbuilt boardwalk shop front). I have consulted with Mizou Vavoom with regard to the entire project. No public buildings are planned.

The houseboat community is modeled on the Portage Bay community in Seattle, Washington (where I grew up). It is the community featured in the move “Sleepless in Seattle” – and the CDS could advertise the space (and recruit citizens) by featuring it as a place for the “Sleepless in Secondlife” lifestyle.

My conception of commercial space is based on pictures of the boardwalk in Atlantic City circa 1920. This conception is essential an outdoor arcade seaside boardwalk. However, because the commercial part of the project is entirely unbuilt, there is no need to preserve this concept.

I would like CDS help finishing this project. In return, the CDS could get a foothold (and hopefully traffic) on the mainland – increasing our publicity – and would also receive many more residential units to allow for expansion of our community.

Beathan Vale

[Sleazy_Writer]

I don't know why the great opportunity that Beathan's proposal is, is met by this silence
But here's some info about my own application for three small franchulates:

Application for 'Rapids' franchulates

Some hours ago I mailed Dnate my application for three small franchulates with a total area of 1024 square meter. The parcels are located in the Tethys sim, alongside the ‘River Rapids’: a protected Linden river that ends in a waterfall. Some well-behaving neighbors and the river make this mountainous sim a quiet, litter-free neighborhood to live. Noteworthy places in the sim include: Ben Linden’s Tubes of Saturn, where you can ride the rapids with a tire's inner tube. There are also three SL Public Land Preserves including a retreat up in the clouds and a Greek spa. (Ironically that group is run by someone who's associated with Prokofy! But since Public Land is quite popular, I don't expect trouble)

The builds on the parcels are two bungalows and a cabin, with many natural elements.
You can visit the place with the SLurl: http://slurl.com/secondlife/Tethys/64/158/72/
I've kept the application very minimalistic with no extra conditions built in.

Why a franchulate?
- My favorite mainland spot was up for sale in Tethys. I bought it and would now like to combine it with my favorite SL project, the CDS
- The franchulate option deserves to be explored with a test case: franchulates could play a significant role serving as democratic CDS territories (see Beathan's large proposal) And additionally:
- My application might open doors for mainlanders who want to join the CDS
- A mainland foothold could give the CDS much more exposure than our isolated islands (see Beathan's large proposal)
- The franchulate would add some small but high quality land to the CDS
- A franchulate could explore autonomy and local representation
- The precedent that the test case will hopefully set, will be very interesting and lots of fun

Some challenges for the Chancellor:
- Can group settings be found that give the right powers to both resident and Exec. Branch?
- Does the CDS expect land owners to simply ‘hand over’ the land? or
- Does the CDS buy it from the land owner? And how much is the CDS willing to pay?
- If someone wants to join the CDS but his land was bought above market price,
can he only join when he accepts a loss? Is a democratic minded potential citizen only ‘worth’ the average land price?
Or can he join ('hand over land') with the option to sell his land afterwards within the CDS system?
These questions were addressed in an old thread about franchulates, here.

I believe the Franch. act chooses to let the Chancellor sort out much of the business, so the RA won't be tied up for small franchulates, such as this one. But I do expect that when financing is addressed, especially for larger franchulates, that it might be discussed at the RA.

This possibility is simply too interesting not to explore -- Sleazy.

- - -
Definition of a franchulate CDS law NL 5-4: 1. Franchulates are parcels of mainland land held by an individual that become territories administered by the codes, constitution and TOS of the CDS.

A sunset reflecting on the water.

TethysSunset.jpg (50.5 KiB) Viewed 2550 times

http://slurl.com/secondlife/Tethys/64/158/72/

TethysNight.jpg (33.89 KiB) Viewed 2549 times

[Salzie Sachertorte]

(Ironically that group is run by someone who's associated with Prokofy! But since Public Land is quite popular, I don't expect trouble)

FYI - It's a group run by Prokofy - via an alt. Disclaimer, I am a member of the group.

As to the rest of your proposal, I'm not quite sure if this is a good thing or not. I suppose I will have to think this through as I watch the debate about the issues. But it will be very interesting, no doubt about that.

[Sleazy_Writer]

I will have to think this through as I watch the debate about the issues.

It would be more useful for the CDS to give the two proposals a fair chance instead of re-doing the debate. Two good reasons:
- the law says franchulates should be possible
- existing franchulates will give everyone some real data to talk about, instead of 10 pages of forum discussion about something hypothetical
If my 'franch.' gets accepted, I'd like to use the forum as a log book to write down what does and doesn't work and about how the Exec. branch is involved (negotiations, maintainance).

SL Public Land ... FYI - It's a group run by Prokofy - via an alt.

heheh I'm glad you support the group, they preserve some great places in SL.

[Tanoujin Milestone]

Franchulates! Great... thanks, Beathan & Sleazy. Expansion! Yay! I do not want to disrupt - Sleazy, I have the impression most of your questions have to be sorted out by negotiations as you said, if you can publish them here, this would be very useful for others who want to flagg their parcels blue and white too...

[Salzie Sachertorte]

I would hope that there is a debate. Yes, franchulates are allowed under the law, but you raise many questions as to how the law should be implemented. I hope that these questions are fully debated so as to arise at a concensus as to on how to proceed. An example, my first thought is that I personally don't want to fund, via my fees, the purchase of franchulate land by the CDS, yet I'm willing to listen to the arguments pro and con for this before I decide and voice my opinion.

[Sleazy_Writer]

I would hope that there is a debate. (...) I hope that these questions are fully debated so as to arise at a concensus as to on how to proceed.

I think letting the Executive branch doing the implementation (that's what it's for) is way more productive than individuals questioning a law over and over again. Money decisions will undoubtedly be taken by our own elected representatives. The Franchulate Act itself is a consensus product of months of debating, let's not do that again but move into a new phase: some action.

(/me grumbles: but if you have to start a debate, I won't stop you)

PS. the parcels are at walking distance from Port Neualtenburg (5 sims)

[Salzie Sachertorte]

Okay - I concede that the word "debate" is the wrong term to use in the CDS. How about public commentary?

I am not questioning the law at all, rather the implementation of it. The legislature branch passes the law, the executive branch implements it through the administrative process. Administrative process should always include a public comment procedure, to ensure that the administration is listening to those the procedures will impact. I have no problems with franchulates, rather I wish to ensure that much thought is given to implementing the law and procedures, as this will set precedence for future applications.

[Sudane Erato]

Some challenges for the Chancellor:
- Can group settings be found that give the right powers to both resident and Exec. Branch?
- Does the CDS expect land owners to simply ‘hand over’ the land? or
- Does the CDS buy it from the land owner? And how much is the CDS willing to pay?
- If someone wants to join the CDS but his land was bought above market price,
can he only join when he accepts a loss? Is a democratic minded potential citizen only ‘worth’ the average land price?
Or can he join ('hand over land') with the option to sell his land afterwards within the CDS system?
These questions were addressed in an old thread about franchulates, here.

But... Sleazy... neither you nor anyone else has provided simple, clear and satisfactory answers to the questions raised in the thread to which you direct our attention. And if there is one thing that experience has surely taught us.... *Make It Simple* !

I think there is a fundamental flaw in the law.

Definition of a franchulate CDS law NL 5-4: 17. The Estate Owner of the CDS, by request of the Executive branch, will proceed to buy the franchulate parcel from its holders and manage it according to current CDS rules.

Here's why:

If you study the Balance Sheet for the CDS (the list of everything we own, followed by everything we owe) (http://neufreistadt.info/id13.html), you'll see several entries there for Land. They total to zero. Why?

When we bought each sim, we took our Asset "money" and exchanged it for our Asset "land". At that time, immediately after each purchase, you could have seen that total amount equalling the amount of money we had just spent... we simply transferred a certain number of dollars from cash to land. Then in the ensuing weeks, we slowly transferred that money back again by selling the land to our citizen-members. We have now actually "sold it back" several times over, as land was abandoned or given back to the CDS by departing citizens. Thats why there is a negative line item there, the "Net Gain From Land Sales"... this is the money beyond what we've paid for land, which is called Income.

The point of all this is that we currently operate as an organization with effectively zero land value... that value is entirely held by the individual citizens. The citizens have decided from time to time that they will invest the funds of the CDS in new land, and that they will return that investment to themselves by selling that land back to "themselves", i.e. to more citizens who each hold the land as owners. Yes, there is public land on each of our sims, and in theory that land has value. But its been entirely paid for by the purchases of our citizens.

So... what's the problem with NL 5-4 ? The problem is (in addition to the many issues that the thread referenced by Sleazy points out) that by purchasing the land from the very citizens who intend to live on that land (thus assuming that those citizens have no plan to buy it back from the CDS), we effectively prevent what is our normal way of re-couping the community's investment in that land.

What happens next is that our financial model changes. Rather than being a community of owner/citizens, those people who live on the franchulates become tenant/citizens. If the community *purchases* land and then holds that land as a continuing value on its Balance Sheet, then income generating from that land is rent, not taxes. The citizen is a tenant, not an owner. The community then re-coups their investment from the monthly payments, which, in this case must go to pay *both* the payback of the initial investment *and* the LL tier.

I firmly believe that this result was not intended by Pelanor nor by any of the advocates of the franchulate system. It is simply a flaw in the bill caused by the considerable confusion of this subject.

I repeat that I remain intrigued by the concept of franchulates, and I share others enthusiasms that somehow there is an important idea here for for our future growth. Perhaps we can best get on track with this by returning to the source of the idea. Neil Stephenson, in his novel "Snowcrash", conceived of a "franchulate" as a "franchise" of virtual reality. A "franchise" in RL is an entity (a business) owned by the person who operates it... it's realtionship to the umbrella company is one of licensee. The owner pays a regular fee, or makes other regular commitments of money, to the umbrella organization in exchange for benefits received from that relationship. We have altered the "ownership" provision in pursuit of the authority that the CDS Estate Owner (EO) provides to our system of government. That may be a mistake... we may wish to explore other ways to convey the authority of our system.

Sudane......................

[Sleazy_Writer]

So what's the problem with NL 5-4, article 17? (...) What happens next is that our financial model changes. Rather than being a community of owner/citizens, those people who live on the franchulates become tenant/citizens. If the community *purchases* land and then holds that land as a continuing value on its Balance Sheet, then income generating from that land is rent, not taxes.

Please point me to the text, applicable in franchulates, that prevents you from implementing this rent-and-tenants model
I think there's nothing holding you back.

9. The covenants valid on the private islands of the CDS do not apply to the franchulate parcels (...)

17. The Estate Owner of the CDS, by request of the Executive branch, will proceed to buy the franchulate parcel from its holders and manage it according to current CDS rules.

[Beathan]

Sudane --

I disagree with you. As I see it, the way we pay for land in the CDS (fee for land -- with an effective reservation to the CDS allowing the land to revert to CDS ownership) and rental land on the mainland (the same -- but with a landlord) are functionally identical. Therefore, your distinction between "taxes" and "rent", in our context, is a distinction without a difference.

In other words, if the CDS is to have land on the Mainland (which I think it should) and if it is to retain a right to take that land back if the citizen departs (which I think it should), it will hae to own the land and then give a full right of use to the citizen. In SL terms, this this functionally a rental. (In RL terms, RL title works like this as well -- and private title is always inferior to the underlying public title -- just as tenant title is inferior to deed title. Inverse possession relies on this hierarchy of title.)

The bottom line is that from the perspective of the CDS government, the CDS is a landlord (both on the islands and, if we expand ot the Mainland, on the Mainland). Citiznes are tenants 00 but the tenancy has a difference -- it entitles the tenant to be a citizen and therefore participate in the governance of the organization that is the landlord. In other words, we are a coop, commune, kibutz, or somesuch -- but the important point is that stripped from its democratic project, the CDS is a landlord and the citizens are tenants.

Beathan

[Dnate Mars]

The biggest problem is in the way that land is "owned" on an island and on the mainland. On an island you can deed the land to a different group and they will have full control over the land. For the mainland, you need to keep it in a land holding group and then just assign roles for the land. Then the mainland becomes more of a rental model and the islands are the owner model.

In order for this to work the right way, we need to make the people on the mainland "buy" their land and still pay the monthly fee. Then people will "own" the land, and they should be no different then anyone else within the CDS.

[Beathan]

Danate --

I see things very differently. I believe that is it impossible to own island land unless you are the ultimate owner of the island. I see all island land as rented.

Some mainland land is owned, subject to the control of it by the Lindens (which is a lesser control than that exercised by island owners), and some mainland land is rented. (This is why, apart from my land in CN, I have no interest in "owning" island property (and paying monthly "rent" to the island owner in exchange for the dubious privilege of "owning" island land with use and covenant restrictions preventing me from using it as I could use land on the mainland)).

In other words, I see the CDS owning mainland land and renting it to citizens as completely indistinguishable from the CDS owning islands and renting (selling) lots on the islands to citizens.

Beathan.

[Sudane Erato]

Sudane --

I disagree with you. As I see it, the way we pay for land in the CDS (fee for land -- with an effective reservation to the CDS allowing the land to revert to CDS ownership) and rental land on the mainland (the same -- but with a landlord) are functionally identical. Therefore, your distinction between "taxes" and "rent", in our context, is a distinction without a difference.

In other words, if the CDS is to have land on the Mainland (which I think it should) and if it is to retain a right to take that land back if the citizen departs (which I think it should), it will hae to own the land and then give a full right of use to the citizen. In SL terms, this this functionally a rental. (In RL terms, RL title works like this as well -- and private title is always inferior to the underlying public title -- just as tenant title is inferior to deed title. Inverse possession relies on this hierarchy of title.)

The bottom line is that from the perspective of the CDS government, the CDS is a landlord (both on the islands and, if we expand ot the Mainland, on the Mainland). Citiznes are tenants 00 but the tenancy has a difference -- it entitles the tenant to be a citizen and therefore participate in the governance of the organization that is the landlord. In other words, we are a coop, commune, kibutz, or somesuch -- but the important point is that stripped from its democratic project, the CDS is a landlord and the citizens are tenants.

Beathan

I understand your point, and it is conceptually perfectly reasonable. But I think that in order to make it, you ignore two things:

1) No matter how we structure it, it is indeed quite different in the SL universe to "own" land and to "rent" land. Any administrative system established to implement franchulates as the existing law proposes must deal with this difference, and in effect, create a second "class" of land-holding citizen.

Let me take a very simple example. On an island, I own a parcel of land, and as "owner" I have complete access to the "About Land" tabs for that parcel. I can set my own music stream, or I can ban or allow visitors as I wish (subject to covenant). I can manage objects on my land. On the mainland, where I rent, I have none of those priviledges. Assuming that I rent a defined parcel (which is not necessarily the case), I must appeal to the owner to make any such changes. The only way to allow me access to such controls is for the owner to form a group, deed the land to that group, and invite me as a member with sufficient "roles" to allow me the same rights over my land. If the owner forms such a group for a given area of land, and that area of land comprises a number of separately rented parcels, then all the tenants have control over all the parcels... in effect, any of my neighbors can control my land. The only way out of *that* is to form a separate group for each parcel.

The unwieldiness of such administration, I would submit, stretches to the breaking point the idea that somehow "ownership" = "tenancy".

2) A significant impact of the flaw of the existing law is the financial issue. As I explained in my post, the franchulate as presently structured would create a new and basically permanent asset on the Balance Sheet for "Land". There is no reasonably fast way to offset this. The money of the community gets sunk into land, for the goals of this admirable concept. This makes owning land in a franchulate much more expensive than owning land on a private island, since not only must rental fees go towards tier; they must also go eventually towards paying off the cost of the land.

If that is still not making sense, let the community consider this. To this point, we as a community have built a solid and conservative financial institution (IMHO). We have ventured into debt with a clear idea of how it would be repaid, and we have taxed ourselves reasonably, and carefully confined our spending (some might well say too carefully!). We have cash, and cash represents potential for the future... new programs, new ventures.... projects which enable us to be flexible and take opportunities.

As much as you might claim that the acquisition of franchulates is such an opportunity, it more or less permanently removes cash from our institution, and thus our flexibility and ability to respond and initiate new projects... buy new (private island) sims, engage in new promotions, etc. Indeed, it also prevents one of the key motivations which Pelanor used to justify the concept in the first place: the idea that prices could be lower because our tier rate would be lower by owning more land as a group than we could as an individual.

I certainly do applaud the concepts, as well as the idea of expanding our system of organization and rights. But I am hard pressed to understand how the system as presently configured is a benefit to our community.

Sudane........

[Sleazy_Writer]

Please point me to the (legal) text, applicable in franchulates, that prevents you from implementing this rent-and-tenants model.
I think there's nothing holding you back.

Sudane,

Since you haven't answered this question, I take it there is indeed no legal reason that hold you back,
but only the practical problems you see and posted about in your last post.

--Sleazy.