4th Sim Plans

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Moon Adamant
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Re: 4th Sim Plans

Post by Moon Adamant »

Hi all,

To reply to some of Jamie's questions:

1. Traditionally, that's for the RA to decide what rate provides the safety it feels needed for investment.
2. I agree with you there, since double prim corresponds to a real benefit to the owners.
3. The definition of commercial/residential zones will come later, when we are discussing the covenants. In CN, for example, except for the stalls that only have a residential function, all insulae inside the city walls have a double residential/commercial zone. IN AM, the covenants are slightly different - all plots can have a commercial function - exterior if in theme with the sim (think skis, plants, etc), or inside a space if not in theme.
4. As for void sims, and since the policy has changed - now it's possible to buy ONE void instead of 4 - we plan to use them as needed, either strategically, for landscaping reasons, or to accomodate NGOs and other entities. The Private Sim Development Act also extends to voids, obviously, and it will be interesting to see what uses they will be put to by future owners.

Hoping i answered you questions :)

Eudaimonia now!
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Sudane Erato
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Re: 4th Sim Plans

Post by Sudane Erato »

The New Guild meeting today requested that I take my "new sim financial analysis" one step further and actually make a proposal for the sale prices and tier prices for the new "4th Sim". I'll make a few notes first.

1. My role as Estate Owner and Treasurer is to manage the sim and money of the community in accordance with the wishes of the community. Determination of what the sale price and the tier rate should be for our next sim are only partially issues of "what's responsible financially". My analysis above in this thread tried to show the "playing field" for these decisions. In the proposals I make below, I insist on the same understanding, that these proposals address *only* one or more possibilities for what is feasible and prudent, among the range of possibilities shown by the analysis. Other considerations may well help determine what the community finally decides, and my proposals are intended *only* to help the community make those decisions. There are other good options besides what I propose.

2. I understand from news of the RA meetings that there is a very urgent push on now to buy the "4th Sim" as soon as possible. This is admirable, but I will make some cautionary notes about this.

Thirty days after the sim is bought, US$295 must be paid to LL, and of course each month after that. This 295 comes from the tier paid by residents of the new sim; any shortfall means that the CDS loses money that month, which is not a desireable situation. Therefore, it's urgent that the period of time between the purchase of the new sim and the sale of its land to tier-paying residents be as short as possible.

With Alpine Meadow we had great success pre-selling many of the parcels, and if that's feasible this time, I'd strongly urge that we do it. In addition, with both CN and AM we had detailed plans in place for the fast conversion of the new, raw sim into a sim full of sellable parcels. I feel that it's imperative that we have such a plan in place before we actually purchase the new sim.

I too am excited by the prospect of expansion... new things are always delightful. But please let's be responsible about the money implications of adding new land and arrive at a strategy thats as financially conservative as possible.

OK, enough of my hectoring. Here are some thoughts for prices to charge for land sale and monthly tier. I repeat, these are *only* suggestions, and I surely respect other population strategies, so long as they make financial sense. Please feel free to comment, and, if you wish, email me at [email protected]. I understand that a work group was established at the meeting, but since i'm unclear who is in it, I invite you to email me, and I'll be happy to circulate comments among those who respond.

The Sim plan calls for the sale of 29,184 square meters, with the land set for double prims, making each square meter twice as valuable as land which is set only for single prims. The cost to the CDS to buy its new sim is US$1000. Therefore, in order to break even, we must sell each square meter for US$0.0342.

Because the sim will not sell out all at once, so that we may have a month or so of tier to pay, in effect raising the purchase price, I suggest that we sell the land for US$0.05/square meter... 5 cents. This makes 512 parcels cost L$7552 and 1024 parcels L$15,104. Folks, this is very inexpensive in the general scheme of land in a quality environment, which the CDS *surely* is! Land in SLNE, with which I have some familiarity, which is all set for single prims, costs considerably more. I see no problem selling our new parcels at this price.

As for tier, this is a more significant issue, since it affects us month by month for the rest of our existence, while land sale, from the point of view of the city, is one time. Here is a survey of what we charge on our other sims:

Neufreistadt (IF we were double primmed... these numbers are twice what they actually are) L$ 3.422 - 6.018 per square meter
Colonia Nova ( IF we were double primmed) L$ 4.130 - 5.782
Alpine Meadows (AM IS double primmed) L$ 4.956

I propose that we charge L$ 4.35 per square meter for land in the new sim. If the sim is fully occuppied, this will result in monthly revenues of US$442, which is a margin of $157 over the required LL tier. While some might say that $157 is too high a margin, and that we should charge less; I'd suggest that that is very short sighted, for these reasons:

1. We already charge the range of numbers that I've indicated. L$4.35 is very reasonably within them.

2. L$4.35 is a VERY reasonable price. Back to SLNE, our monthly tier is L$5.90, and will probably rise soon. AND, again, SLNE is single primmed. The rates in the CDS are a bargain.... very much a "peoples' rate".

3. We are in a phase of our history now in which our needs as a community are very primitive, and by far our largest expense is LL tier. That will not stay that way. In future months and years the community will insist on services which cost real money, so that some day not too far off our tier may become the "standard" 25% of our budget, or even less. We are in a phase now where we are building our reserves... our financial strength; the CDS now has over US$5000 in its "bank". As we go into the future, that capital strength will be invaluable for us, and we will also want to be ready for a higher proportion of our resources going to services.

So.. this is my very tentative proposal. There may well be a very reasonable effort to zone the new sim in such a way that some areas pay more and some less. May I only propose that the sum total come out some wheres in the area that I have described?

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

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symokurka
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Re: 4th Sim Plans

Post by symokurka »

Well Sudane's financial analysis looks perfect to me. Coherent with SL's main business model, which is real estate business model. The key point to reduce risk seems to be "pre sales" so why don't we start as soon as possible?

and I surely respect other population strategies, so long as they make financial sense

I perfectly agree. We have to look forward, if we want to diversify our risk in the future.
I'd like to start provoking and sharing opinions on alternative/complementary business models for the future. As far as i know:

1) "commercial", shops, etc, we all roughly know how this works, and which are possibly the success key points
2) "tip jar economy" - well I HATE this, it brings us back to middleage
3) "subscriptions" to access group owned lands with strong added value

I'd love that you citizens add more to this list and start a debate (maybe this is not the proper thread, but let's START discussing it somewhere).

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