1. A Ballater Land Partnership
Chris Cook
2 November 2010
Sustainable Development through Co-ownership

2. Two conventional ways of financing
productive assets: Credit and Investment
16/06/10 2

3. Investment is typically shares in Limited
Companies or units in Trusts
16/06/10 3

4. Legal Dinosaurs
16/06/10 4

5. Credit consists of bank loans secured by
legal claims eg mortgages
16/06/10 5

6. Two conflicting financial claims over the
same productive assets
16/06/10 6

7. 21st
Century problems cannot be solved
with 20th
century solutions
16/06/10 7

8. In 2001 the 21st
Century Limited Liability
Partnership (LLP) came to the rescue
16/06/10 8

9. An LLP is a corporate body with limited
liability....
16/06/10 9

10. ...and...errrr...that’s it!
16/06/10 10

11. As far as the Tax Man is concerned it is a
Partnership
16/06/10 11

12. It’s an Open Corporate where we can
work with each other
16/06/10 12

13. ... even without a written agreement
16/06/10 13

14. Hilton Deal 2002
Capital Partnership LLP
10 UK Hotels
Gross Revenues
Hilton Group
Capital User
Consortium LLP
Capital Provider
Bank
Property
Developer
Hotel
Specialist
%%
%%%

15. Capital Partnership
Capital PartnershipCapital Partnership
InvestorsInvestors
CustomersCustomers
Managers
CustodianCustodian
% %
£
16/06/10 15

16. Equity Shares - % age shares in
revenues or production
16/06/10 16

17. Units - redeemable in payment for rental
or production
16/06/10 17

18. Example: 'The Art of Flirting' – a film
incorporated as an LLP
16/06/10 18

19. The actors received 'nth’s' of the gross
revenues
16/06/10 19

20. I got 5%...and the producer the rest
16/06/10 20

21. Except that we needed lights, cameras,
pizza, coffee
16/06/10 21

22. Capital Partners invested £ for 20% of
revenues
16/06/10 22

23. If there are any....
16/06/10 23

24. Art of Flirting LLP
Art of Flirting
Partnership
Art of Flirting
Partnership
Financial Capital
(Investors)
Financial Capital
(Investors)
ViewersViewers
Human Capital
(Actors, Producer, Me)
CustodianCustodian
% %
£
16/06/10 24

25. Everyone was on the same side
16/06/10 25

26. Example: Albion Trust...a charity
16/06/10 26

27. ..which provides affordable office space
for social enterprises and charities
16/06/10 27

28. ...due to demand they bought a disused
church next door
16/06/10 28

29. ...and plan a £4m development
16/06/10 29

30. Intractable problem! If they borrow, the
rents will be unaffordable
16/06/10 30

31. Solution...an Albion Partnership?
Albion PartnershipAlbion Partnership
InvestorsInvestors
OccupiersOccupiers
Managers
CustodianCustodian
% %
£
16/06/10 31

32. How might a Ballater Land Partnership work?
16/06/10 32

33. Conventional development is transaction-
based: Buy, Borrow, Build, and B....r Off
16/06/10 33

34. Ballater Land Partnership
Rental PoolRental Pool
InvestorInvestor
OccupierOccupier
Manager
CustodianCustodian
% %
Rental
16/06/10 34

35. Land remains with, or is transferred to, a
Custodian
LandLand CustodianCustodian
16/06/10 35

36. Land Owner invests the value of the land
LandLand
Land OwnerLand Owner
CustodianCustodian
Land
Value
16/06/10 36

37. Council invests the value of planning
permission
LandLand
CouncilCouncil
CustodianCustodian
Value of Planning permission
16/06/10 37

38. Contractors agree costs and invest at least
their profit margin
LandLand
ContractorsContractors
CustodianCustodian
Profit
Margin
16/06/10 38

39. Self builders may invest 'sweat equity' -
subject to valuation & quality control
LandLand
Self BuildersSelf Builders
CustodianCustodian
Sweat
Equity
16/06/10 39

40. Risk-Taker Capital Partners invest £ to
pay remaining financing costs
LandLand
Risk-TakersRisk-Takers
CustodianCustodian
£
16/06/10 40

41. Developer invests 'Intellectual Capital' of
concept and services
LandLand
Investor
Land-owner, Council,
Contractors, Risk Takers
Investor
Land-owner, Council,
Contractors, Risk Takers
Developer
Community plus help
Developer
Community plus help
CustodianCustodian
Value Value
16/06/10 41

42. Result: Co-ownership of a Rental Pool
CustodianCustodian
InvestorInvestor
OccupierOccupier
Manager
% %
Rental
16/06/10 42

43. An affordable index-linked Capital Rental
is set
16/06/10 43

44. Units redeemable in payment for rentals
are issued from the Rental Pool
16/06/10 44

45. Investors may keep Units eg for their pension
16/06/10 45

46. Or sell Units to Investors or to Occupiers
who wish to invest in their own homes
16/06/10 46

47. Occupiers maintaining the property
themselves receive 'Sweat Equity' Units
16/06/10 47

48. For Investors it’s an index-linked,
property-based investment
16/06/10 48

49. Everyone has a stake in the outcome....
16/06/10 49

50. ....with an interest in high quality,
energy efficient housing ....
16/06/10 50

51. ....because this lowers the cost of
occupation over time ....
16/06/10 51

52. ....which increases the rental value and
therefore the value of Units
16/06/10 52

53. So we go from the '4 B's' transaction model..
DeveloperDeveloper
Land
Owner
Property
Buyer
Property
Buyer
£ £
Property
Buyer
Property
Buyer
£
16/06/10 53

54. ...to a partnership-based co-ownership
model
16/06/10 54

55. Ballater Land Partnership is not an Organisation
16/06/10 55

56. It does not own anything, do anything,
employ anyone, or contract with anyone
16/06/10 56

57. It is simply an LLP framework within
which the stakeholders self organise
16/06/10 57

58. ...with a mutual interest in developing
land sustainably and affordably.
16/06/10 58

59. A new class of Ballater Equity created by
the community for the community
16/06/10 59

60. Thank You
16/06/10 60