Category Archives: Wicked Solutions

A $120 Million Win-Win for the Arbutus Corridor?

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workers-destroyObservers to a negotiation must sometimes think the parties go back-and-forth like hamsters in a Ferris wheel–running without moving; going round-and-round; ink never stopping. Thus it is with the Arbutus Corridor railway line property fight. But there are good business reasons for the Railway to get good return.

The property covers approximately 20 hectares.

Canadian Pacific Railway (CPR) wants $100M for it. The City of Vancouver (COV) has offered $20M. CPR has reactivated the line so it can earn its keep. And the City has conceded it may want to profit from future sales.

$80M is a hard gap to bridge.

Rare Stamp Discovered 20130810But there may be a neat twist; a relatively simple way to resolve the impasse, so both parties win.

The original statute setting out the CPR assigns lands to carry out the  “…perpetual and efficient operation…” of the railway: Clause 3: 44 Victoria, Chapter I, An Act Respecting the Canadian Pacific Railway (Assented Feb 15, 1881).

1st) Would this suggest that CPR can also lease lands in perpetuity (in practical terms, forever)? Making a lease-in-perpetuity to COV for $20M functionally equivalent to a sale?

2nd) It appears that Air Estate values cannot be transferred or sold by government. If this is correct, the AE value is lost if the COV buys the property.  By retaining ownership, CPR is able to sell &/or leverage the Air Estate.

Could we combine these two ideas to create a mechanism that works? Could the parties split the air rights (20 hectares of Air Estate: AE) from the real property (20 hectares of Real Estate: RE)? Could this produce a reasonable solution to the impasse, or a spark to bring the parties to the table? Could this create a win-win for everyone?

  • * CPR leases RE to COV in perpetuity for $20M
  • * CPR obtains the right to recover unneeded parcels for future sale
  • * CPR sells or leases AE for $100M to Bondholders (Ledcor, OMERS, CPPIB)
  • * Bondholders tranche the AE Bond and everyone takes a % of Leveraged Net
  • * Net Pre-Leveraged Sale: $120M

3rd) Could this mechanism be used across Canada, for every disused railway line with continuing property asset value but under-performing operations’ asset values?  Could it be used globally, in every jurisdiction where property rights include air rights?

dhuer-arbutus-solution-aug2014-2

 

abandoned urban railway lineWill this spark a run on disused urban railway lines, I wonder?

By Dave Huer

Images:

Backhoe: the Province here

Queen Victoria stamp here

Diagram – personal artwork, using Board of Innovation business model tool. [PDF version here]

Abandoned railway line here by Elliott Brown (CC BY 2.0)

 

Harvesting Invasive Species – a business growth opportunity?

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Can the Carp Rendering business model be used for Burmese Pythons?

It works if States pay a bounty

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Pythons have killed as much as 99% of mammal species in the Florida Everglades

I’ve been looking at scaled skin products for a friend, and noticed an opportunity to harvest Burmese Pythons. Being a US issue, US citizens would have to run the venture. Attached here is a quick opportunity spreadsheet.

New! visual business model

Source Idea – Invasive Carp Rendering:

American Heartland Fish Products (AHFP) is turning invasive carp into dehydrated meal and fish oil. “The government wants this fish removed in large volumes, and this is the way to do it” (Gray Magee, CEO):

  • Article 01, Article 02
  • AHFP’s Rendering Tech partner is Auburn University: Link 01, Link 02, Link 03, Link 04

 

Question: Can we do the same with invasive Burmese Pythons?

The BBC reports: “The snake-skin business is extremely lucrative according to this report, which estimates that half a million python skins are exported annually from South East Asia in a trade worth $1bn (£625m) a year. The nature of the trade is such that there is a strong financial incentive all along the supply chain to use illegal snakes. A skin that a villager in Indonesia might sell for $30 (£19) will end up as a bag in fashion boutiques in France or Italy selling for $15,000 (£9,300). The highest demand is for skins between three and four metres long.”

Can we reduce the harm of their spread?

Pythons in America

US climate regions that could support invasive Burmese Pythons: “By 2100 the yellow “maybe” area is expected to extend north substantially, due to projected climate change” (Science Daily).

US Market Opportunity:

  • * Invasive species NOT protected
  • * Skins sold into high value luxury market
  • * Entrails sold for rendering
  • * Components used for Chinese traditional medicine market

Python Pits (Farms) & State Govt Bounty is probably the way to go:

  • * Enclosed holding pits at factories
  • * Wild Pythons delivered at Bounty Rate
  • * Wild Pythons = zero breeding cost to factory
  • * Factory assumes processing costs

Markets & Local Industry Incentive:

  • * Protects human lives and property
  • * Acts to protect loss of biodiversity across Southern USA
  • * Increases competitive pressure on illegal trade of native Asian species
  • * Cuts into illegal trade because of Asian demand for high-quality US goods
  • * Uses ban on illegal wildlife imports to NAFTA market to develop US industry
  • * Basic product line and a Premium (mystique-laden) Wild product line
  • * Develops sewn goods industry in southern US states
  • * Entrails rendered for other uses

Note for Spreadsheet Model:

  • * Government Bounty Rate = per Pound
  • * Retail Trade Rate = per Metre

Background Data:

  • * Article 01 – BBC article on Invasive Species
  • * Article 02 – Illegal Python trade value
  • * Article 03 – International Trade Centre report on SE Asian Python Skins

Product Needs Estimate:

  • * Estimated size for handbag: 4 handbags from 1 x 4 metre skin
  • * Fabric for 1 large handbag: 3/4 yard = for ease of calculation, 1 metre wide:
  • * Estimated girth of python in image in BBC article = 20 inches 
  • * Data Source: http://buyandcreate.com/blog/fabric-measurement-guide

Author: Dave Huer

Anticipated Future Value of Public Resources (AFVPR) – a shared resources’ framework

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The common ground for Oil Sands Float Rights and Hydrological Spread water tax credits . . .is a public resource conservation framework: calculating the AFVPR of a limited resource, so that we can plan for recovery and return of the value of those resources back to their original value, the intrinsic state we all enjoy.  

  • – Using the AFVPR framework, we obtain market incentive to maximize self-interested conservation of the common resources we all depend on as a species and a civilization.
  • – Using AFVPR with Hydrological Spreads . . . we can manage limited supply, drought-induced shortages and over-pumping shortages, and minimize contamination of surface supplies, the water table, and local aquifers.  See the AFVPR water discussion here. 
  • – We can use AFVPR for . . . liquid water and water vapour for drinking, irrigation, and industrial use; energy supplies (hydroelectric, oil, gas, oil sands, solar), public forests, and topsoil).
  • – We can use AFVPR to . . .  create market incentive to cut industrial waste and contamination to zero (100% Zero Waste),
  • – Using AFVPR, governments offer incentive to create new technologies, such as vapour loss monitoring tools, to incentivize zero waste.
  • – Using AFVPR, entrepreneurs obtain incentive to create that new technologies, and the jobs that go with it.

 

The countries, states, and provinces that put AFVPR in place get market advantage first.

Are there ways that AFVPR could be used in your country?

 

Creative Commons Credit: – Video by Mr. Rain and Thunder