The Legal Framework

This street was built after a 1956 earthquake levelled the town. It has a million visitors a year, yet "Main Street" is two meters wide. The image was selected to show people that its not age, but intent that produces beauty This street was built after a 1956 earthquake levelled the town. It has a million visitors a year, yet "Main Street" is two meters wide. The image was selected to show people that its not age, but intent that produces beauty

No developer is used. Why not?

Oxford Door

The short answer is that if you are going to introduce change, you need a legal framework that can take on and mitigate the risk of change. Developers are not in that business. By definition, the developer's interest is pecuniary, therefore all decisions are necessarily made with an eye to the return on investment. In contrast, when the people who will live with the results make the decisions, they will make decisions based on beauty, character, authenticity and function and by engaging them from the onset, the risk is diversified. After the prototype is established and proven, the developers will feel comfortable adopting the new model, and the "Social Enterprise" that pioneered it will move on to a new region to create another prototype.

Consider: The buyer who makes the decisions on what front door to select will apply very different criteria that a developer. They will live with that door for years, perhaps their children and grandchildren will come through that door. So that person may decide to spend a lot more money on that front door than a developer would. It may never pay for itself in purely monetised terms, but that is not why it was bought.

The same will hold true with decisions on how the schools are built, how eldercare is designed, how the artist guild halls are conceived and executed.

The longer answer has to do with the purpose of the MarketTown; how money is managed, how wealth is created and preserved and how the citizens take care of their own.

The actual legal form will be decided by the lawyers. The goal is to have a legal structure in which local people can take care of local matters in a formal, structured way, addressing issues of importance to them, and have the means as a community to foster wealth-creation among their citizenry. 

This may take the form of an ordinary New Zealand tax-paying company, a "benefit corporation", trust or some combination thereof. Other legal structures that were considered, included non-profit (charitable trust), incorporated societies, body corporate (Unit Titles Act) and similar, however all tend to be more difficult to administer and come with more limitations.

During establishment authority would be held in trust for the benefit of the future people and communities, but when the settlement is settled, decision-making would pass to the citizens. In this way, the settlement is aligned with the interests of its settlers.

The legal form will function as a hybrid, or it may have subsidiary organisations under it that provides its not-for-profit services. Those are decisions for the lawyers and accountants. During construction it functions as the prime contractor, the builder of the project. After the project is complete, it morphs into a private system in which people and communities take care of their own. It it likely to own the campus... the public land, the streets, the utilities and the infrastructure. It will ask very little of Auckland Council or of Central Government. For both, it is expected to be an economic engine, paying far more in taxes and rates than it will receive in benefits. It does so for two reasons:

  1. The current system is not working well. Government struggle for resources and this will become more difficult as New Zealand's population ages. The people need to lighten the government load.
  2. People have a need to control their own local affairs. They have been doing so successfully for over 10,000 years in small communities. There is a vacuum at present in this area of local concerns. This would fill it.

Its expected to uses a traditional tripartite system with a Board of Directors that has a traditional legislative role: it makes policy and speaks by resolution, an elect CEO to head administrative staff and with responsibility to execute Board mandates and policies. It also is expected to include a disputes tribunal to resolve local issues.

In addition to management of local affairs, this organisation will pay taxes and use the estimated $200 million net profit to invest in the economic and social wellbeing of its citizens. It will seek to enable private industry and business to thrive by providing financing, capital and business expertise that levels the playing field. It will grow its Legacy Fund while it grows the common wealth; it will have the mandate to make the businesses of its citizens more successful. This is not a new concept.

Consider these two sets of buildings in the photo below. Both look very similar in size and scale, but they are a world apart in the detail.

On the left, the buildings were commissioned by the future owners. Each has its own character. The detail varies by building. The balconies are designed to let the occupants step out and observe the plaza... which is for pedestrians, in contrast with the photo on the right, where the pedestrians are secondary.  In the photo to the right, a developer tried to recreate an old-town look. But the developer bought all his doors and windows from the same factory. Likewise, the cladding is fake and it feels cheap. Incidentally, the developer went broke... could not sell enough units before the economy collapsed.