This re-caps my monthly report to the CDS RA for November.
Events:
** Recent successful CDS events included:
* the Kirche speaking series Gwyneth has been running on the weekends, and
* two stops yesterday in the Grand Tour of 16 sims, still ongoing this weekend as a 48-hour progressive party. We did a Greek theme in CN and an Alpine theme in NFS, oddly enough :) and we were pleased that both worked, stood out as unique, and were popular musically. Thank you to Rose, Arria, Sonja, Rudo, Moon, Sudane and others for hosting and helping with these events.
** For future events: There will be several fun events during the next 6 weeks' holiday season. Please watch the CDS Web Portal: http://www.slcds.info
* and our Google Calendar (http://www.google.com/calendar/embed?sr ... 0gmail.com)
* as well as the various in-world info devices we have posted in our sims.
** See Gwyneth's film of our CDS Owl Tour at http://GwynethLlewelyn.blip.tv/#1473898
** We will hold a holiday statue-decorating contest in early December, by giving away copies of our Mascot owl Minerva ... who you will recognize both from our flag ... and from that CDS Tour vehicle ... for a prize to be awarded at our December event.
** Particularly, I want to thank Arria, here, who along with Brian, Rose, Sudane and Sonja are helpfully reliable attendees from our government at our CDS events. It matters; we get good new citizen leads from EVERY event, and it helps to have our citizens and leaders around to reflect well on us.
Commerce:
** This is a general report on the long-running issues of CDS commercial land and our land vacancy rate. An update on CDS expansion issues will be the topic of a future monthly report. Those matters, which include a proposed fifth sim and proposed combination with the AL Andalus estate, are ongoing as discussions, and may carry on for now as threads here in the Forums.
** First, a report on each point of the recent amended Commerce Bill, and then, conclusions and recommendations.
* [From Justice S.'s posted summary of the amended Commerce Bill:] [point one] >> Requests the Chancellor to develop a promotional plan for commercial activity within CDS with the help of a experienced business
consultant and provides authority to spend up to L$25,000 for consulting services. <<
I consulted with half a dozen experts -- chamber of commerce and business broker types -- and identified 3 candidates as possible consultants, each of which I interviewed but, frankly, none of whom seemed to have significant experience, and all of whom seemed more interested in learning from us than teaching us. Several also were very bad about returning calls/messages and the like. Rose S. assisted in some of these contacts, by the way, and I'm grateful for that, but the responsibility's mine.
Of course, this initiative also came at a time when the RL economy has been reeling from adverse change that affects discretionary purchases (like SL activity), AND a general down market in SL real estate, made worse by the somewhat erratic market effects of Linden Lab's open space sim price changes.
I was not left with a strong feeling that we would do well, or gain something of significant value .. at this time .. by spending hundreds of US dollars on uncredentialed expertise. So I regretfully declined to implement the RA's suggestion, having no way to implement it in a fiscally sound way, after some diligent effort.
Of course, we still are left with the need to take appropriate steps. I am proposing several here, at the end of this presentation today, based on the assumptions stated there. I was at least able to have a number of very productive discussions with sim, mall and estate owners to identify some positive directions for us. I must report that most commercial people and most sim owners I have met do NOT wish to be quoted or talk about these issues publicly -- it's a scary, down economy, and no one wants to make attributable statements about their own sales drops or vacancy rates. So mostly I am sharing only anecdotal and anonymized viewpoints. But I have put considerable time into that this last month, and of course, any of you also is free to go out and have those discussions to verify or challenge the conclusions that I am presenting for your further thought, below.
* [Justice's summary:] [point two] >> Sets aside not less than 15% of all commercial plots owned by CDS (either through abandonment or new development) for new business development by CDS citizens, with a 50% reduction in rents; this provision is in effect until the RA meeting following the receipt of the above consultative report. <<
We have had very few commercial slots owned *by CDS* that are available. Please note that this is due to four things. One part is chance. (plots that happen to open up are more residential.) One is our rather low percentage of land considered commercial. (I propose to change that. See my proposals, at the end.) One is that our foreclosure methods only allow us to take back land 3 full months after it's been unpaid. (Ditto, I will ask you to change this.) And finally, in one case I've actually been at fault, for declining to place the Altstadt land on the market yet. (Arguably that could be "commercial land" too. See my proposal on that topic, also at the end.)
Of course, we also could choose to lower rents on CURRENT commercial land. The RA's amended commerce bill only authorized a change to rent on NEW land OWNED BY CDS .. so has only narrow application. Only the RA can change rents. I suggest we do so, a bit more broadly, as noted below.
However, within about two weeks we will have several appropriate commercial plots *owned by CDS* open up. More on this below.
* [Justice's summary:] [point three] >> Repealed the 8th RA's Commerce bill providing for rent surcharges on commercial property, and indicated that re-examination of legal and other incentives for substantial commercial activity is expected after the earlier of 15 November 2008 or receipt of the above consultative report. <<
No action needed at this time unless you wish to change rents. I will propose that you do, as noted shortly, but only after taking public feedback.
* [Point four] >> Provides that no CDS Chamber of Commerce or similar merchants group may exercise any designated advisory powers in CDS matters until it is operating under an NGO charter approved by the RA. <<
Requires no action -- but I do want to inquire whether the RA has a view about the Chamber of Commerce. I do: in my view, it's not a priority to re-vivify this, until and unless we get better commercial concentration in CDS first. So it's not on my December to-do list.
** Conclusions:
A. Commercial retail activity all over SL is down significantly, and that's only now after about two months or more starting to show in the "official numbers". Which, of course, lag real time transactional experience.. Store owners and vendors are scared, and cautious, and few are expanding.
B. SL retail requires someone to take risk. Either a seller as land owner must pay for land and try to recover it in profit ... or a seller gives a vendor to a nonseller land owner, who as "vendor host" or "mall owner" takes the risk, hoping to cover land cost with a percentage of the vendors' shared revenue. Both those strategies depend on sales. Sales depend on sim traffic. Our sim traffic has been lower lately so, except for event-based exceptions, which bring traffic, we do NOT present a good case for incoming investment to retailers. I do not expect that to change in the short range future.
C. Some models seem to continue to work. One of them is when the land investment that's required is SMALL. I encourage you to go look at the Souk at Al-Andalus, where little stalls are thriving. But they are largely occupied by SUB-tenants, which we outlaw in CDS.
D. We rarely know enough about our land being available. Sales happen without much notice even to Sudane E. as Estate Owner. You will see in NFS and CN that Brian L. has taken some steps to promote land listings. But we need to do more: the prices and availability of our land simply is not widely available ... in places that are attractive to buyers .. and the "yellow map" direct sale feature which the RA enacted a year or so ago is rather obviously not moving the land.
** Recommendations: [to be augmented by links]
1. Several good commercial sites including on the Platz and the CN Forum, will open up shortly. I will place them, on a list of commercial sites, at the 50% reduced rate, by about 2 December. [LINK TO LIST to come] I do not plan to include Altstadt, because that will necessarily be the residential gateway to more residential fachwerk land in a sim behind the Schloss ... if we do so, as I suspect we will eventually ... and we have unsatisfied demand for fachwerken already. So I expect to open that as residential land on about 2 December.
2. I also will post a list of CURRENT commercial spaces, as we understand them to be designated, along with a spreadsheet showing the cost to CDS of giving those occupied spaces a 25% rent discount. [LINK TO LIST to come] Not the 50% mandated for the new, CDS owned land .. but enough to provide some fairness to current commercial uses. The RA and the community should see the cost of doing so - thus the posting :) In doing so, I will propose that we distinguish between activity on commercial zones space that does, and does not, sell anything :) because, as a policy matter, I see no reason for CDS to offer rent discount to political meeting places and the like. [LINK TO DRAFT to come] But that is a proposal that the RA will need to evaluate, which I will recommend that it does.
3. I am unsatisfied that most of the land we ought to repurpose does not come into our hands for months. It's bad business. People can refuse to pay us for three months (lost revenue, empty stores) and THEN we have to try to salvage the space. So it hurts CDS financially as well. I will ask the RA to change the law to permit commercial space to be repossessed four weeks after rent default, and residential space six weeks.
UPDATE: I offered a bill, the RA debated and improved it, and it has been enacted: http://portal.slcds.info/index.php?id=240
4. We need new land software that tells us what's open .. and displays it .. and lets us webify it .. and keeps records. It's ridiculous to expect Sudane as a volunteer to do all that, and this is an automatable task. It's also less expensive than that consultant idea we were talking about. So I will bring a revised budget to the RA that includes that expense. Under our laws the RA does not need to approve this, but I'd rather have the feedback. Given the economic state of SL at present we also should re-visit our reserves: I think our official approved budget should prepare us for worse financial circumstances, and we should look as a substantial part of our cash reserves as untouchable, as a hedge against erratic future price increases or a worse land downturn. [LINK TO BUDGET amendment plans to come]
5. Direct map sale: I want to turn it off. That's the feature that makes a land parcel appear on the Linden SL map as yellow. RA turned it on by law about a year ago. It robs from us to chance to meet and greet new citizens .. often we (our treasurer & estate owner included) do not even know when a sale occurs or we have a new potential citizen, sometimes for a month or more. .Also, it makes us look more empty ... as opposed to other more market-savvy estates who keep it turned off .. even if they full of vacancies ... several much worse than us. If we have efficient listings for real estate, which software lets us do, the yellow-map thing is, I submit, unnecessary, and it's better for CDS if we stop using it, once we have better land sale marketing arrangements that we like.
UPDATE: I offered a bill, the RA debated and improved it, and it has been enacted: http://portal.slcds.info/index.php?id=241
6. Subtenants. We outlaw them - mostly because our Blessed Founders were worried about absentee landlords and citizenship. I submit that's silly for commercial property. So I will suggest we repeal that prohibition FOR commercial property, or alternatively for small parcels of same ... leaving it clear that the OWNER is a citizen and thus typically eligible to vote. Again, go look at the AA Souk and see for yourself. [LINK TO DRAFT to come]
7. Groups & citizenship. In my view our land vacancies are in part caused by our poor policies on land concentration and groups. In other words, too many people get what they want (CDS citizenship) without getting us what CDS wants (their rent), So I propose that the " I-can-be-a-citizen-forever-and-vote- even-if- I'm-long-gone-or- have-a-friend-with-a-group " loophole be closed, on FISCAL grounds. Certainly we can create whatever sort of affinity groups give nonresident CDS friends and ex-pats a strong relationship to us. But not voters who don't have a stake. Please also see Sudane's description of roster problems here: http://forums.slcds.info/viewtopic.php?f=7&t=1395#p8982
8. Finally, on the CDS General Master Plan (GMP) ... We need some more planning :D Several of our Guild people have offered to pick back up and update/reevaluate the GMP ... Sudane and the Guild are studying some specific metrics ... Arria P. recently posted some great analysis of rent-by-the-prim harmonization. These are good developments and great contributions, and I hope those threads will lead us to some additional rent changes within a month or two. See the GMP/vacant land thread started by Timo G. here:
http://forums.slcds.info/viewtopic.php?f=8&t=2194
and Arria's thread about prim-based rent normalization across CDS sims here:
http://forums.slcds.info/viewtopic.php?f=8&t=2210
Respectfully, JP