I came across this article which wondered about the possibility of a purchase of a 10% stake in Whistler Blackcomb Holdings by the community at the time of its initial public share offering in October 2010. It opens up a discussion around community ownership and stewardship of businesses and assets, possibly even community buy-outs for businesses smaller than the $450 million market capitalisation of Whistler Blackcomb, and community infrastructure.
It’s not the first time I have thought about community buy-outs, but it is the first time I’ve thought about it for a ski resort and certainly the first time I’ve read about it for a business of that size.
I think it would have been interesting for the community to share in the economic and social wealth created through tourism, sport, and leisure, beyond simply employment opportunities at and use value of the resort. However a 10% interest in a mature business would have been challenging to say the least. Issues around the values and objectives of the community, which would hopefully include social and environmental factors, potentially in conflict with profit-seeking motives of other public shareholders could have been rife (although quickliy dealt with given the marginal 10% ownership). Decisions amongst community owners themselves could have been contentious without the right structures and methods for dealing with collaboration and democratic governance.
But on a smaller scale, with the right attention paid to how collective community ownership and stewardship can be managed and executed, could be very interesting for enterprises and sustainable community development. The issue of finance to support a community buy-out arises, but addressed by working with a values-based like minded credit union, financial institution, or social investor.
For mature assets such as Whistler Blackcomb and to ensure that communities are not burdened with an unreasonable task of driving revenue growth and brutally enforcing cost efficiency measures, buy-out targets that do take the form of community infrastructure might be better acquired with the help of a community infrastructure fund that is not driven by growth and high financial returns.
The community buy-out model is an interesting idea to entertain, for a revenue-generating asset or business. Once proved out, perhaps it could be a model that could be rolled out for other community infrastructure assets such as libraries and community centres, alongside an income generation strategy.
I wrote the following on 1 May 2011 as a comment to an article on OpenFile about a property developer whose plans involved evicting tenants as a trade off to preserving a heritage home of historic character in the East Vancouver neighbourhood called Grandview-Woodland (near Commercial Drive).
Rising housing density will feature in an attractive city, with a rising population and limitations on urban sprawl… Older homes likely don’t serve people’s needs or desires these days (due to layout, insulation, energy efficiency, different family dynamics), but their preservation/ conservation is important – it tracks a city’s history, tells a story about how we lived in previous times. However community conservation is a different story and one that is often missed when we speak about real estate development. Development and heritage revitalisation that only pays attention to the number of units and the financial cost and rewards fails to recognise what makes a neighbourhood attractive (and one of the reasons why density might be rising there). If community values are not kept in mind, neighbourhoods run the risk of trading community cohesion, shared values, relationships and connections for money – this can happen by current property owners selling their homes for the “profit” and moving elsewhere or local councils accepting tradeoffs and property taxes. These are immediate term gains with long term consequences.
I believe “community-oriented neighbourhood” means knowing who your neighbours are, connecting with them, sharing values, sharing resources – if you’re in a bind, you know you can count on your neighbours (which is far more important and valuable than any money in the world.) Many communities have lost this sense in the pursuit of personal gain and wealth, but really – what’s the point of having a big house, big car, and big TV if you are a stranger in your own neighbourhood?
Here, I believe, are some of the solutions – take rising property values out of the equation. Property and real estate are no longer (some could argue not ever) a commodity – you cannot sell it and replace it with something identical. You can’t take it with you. So market supply and demand forces on real estate do not work the same way as they might for other portable, replaceable, tradeable goods like a car or computer for example. If your property value rises and you want to cash-out – you must move to another neighbourhood with different features. If you want to stay in the same neighbourhood, all your profit goes back into the new house. This requires a major behavioural shift…
Co-op structures and principles are a good start and I am keen to see co-op housing brought in the mainstream and not seen just as an affordable option – but that living co-operatively with your neighbourhoods is a regular thing (I am working on developing these concepts further). So where does the capital come from to acquire properties? Community equity (community share issues) or working with a like-minded partner who has patient capital. But the key piece of the puzzle is not the money nor the legal structure – it is around values, behaviours, and a change in perception of how land economics works.