CIP-102: Acquire Baby Parcel for NFT Leases

CIPs
#1

CIP-102 - the “Baby Parcel”

We propose the Baby Parcel project, with 3 goals:

  • Purchasing a parcel of land and make NFT land leases available to CityDAO Citizens. This will be a breakthrough crypto primitive- the first NFTs that represent rights to visit, use, and potentially even build on land. It’s a step towards land ownership NFTs.
  • Serve as a prototype for the Big Parcel (CIP 66) project and test learnings on a smaller scale while a larger land purchase is scouted.
  • Serve as a logical next step to Parcel 0, adding more rights to the NFT land agreements.

We view this as the training wheels for learning how to ride the Big Parcel bike with NFT leases, land purchases outside of Wyoming, and more.

Specifically, we propose to purchase a vacant piece of land in the San Luis Valley of Colorado, where land is cheap, near tourist attractions such as Great Sand Dunes National Park, and where there are minimal HOAs or land use restrictions - for $9,999 or less - and to then experiment with subdivided leasehold interests for the holders of the NFTs. For example, CityDAO could purchase a 5 acre lot for around $5k, and “subdivide” the parcel into 10 half-acre parcels that would represent certain rights related to each sub-plot (Baby Parcel NFTs). We could also look at using Harberger mechanisms for rights transfers and additional value creation for CityDAO.

Project Facilitator Team:

  • Josh - Project Lead, real estate transactions
  • Scott - real estate
  • Lyons - strategy
  • Konrad - operations
  • Gugz - Big Parcel liaison and planning

Project Team: facilitators will select and reward up to 6 Citizens who aid the project in dev, media, and design.

Project Facilitator Rewards: $2,500 USDC + 3 Citizen NFTs each

Project Team Rewards: $1,000 USDC + 1 Citizen NFT each

Additionally - CityDAO will retain one Baby Parcel NFT and the Project Facilitator and Project Team will collectively get the right to decide what to do with said NFT as a collective team.

Please Note - the rewards are an incentive for completion of the project. Upon successful launch of Baby Parcel NFTs as determined by the multisig holders, the multisig is authorized to transfer the comp.

Benefits for CityDAO / the Community:

  1. Community Engagement – The Baby Parcel will provide CityDAO with a project that is achievable in the short run. The community will have something to be executed about, and the “doers” can get back to work adding value to CityDAO in a meaningful way. Once news of the Baby Parcel breaks, CityDAO can expect an influx of interested and willing contributors to step forward.

  2. Innovating in NFTs and Real Estate: the Baby Parcel will provide a safe environment to be used as a proving ground for concepts that are relevant for Big Parcel execution (for example: land token experimentation, NFT transfer of property rights, potential Harberger experimentation, NFT design and execution, etc)

  3. “Tuition” - The Baby Parcel will be the most important learning experience yet for CityDAO. CityDAO will have the opportunity to obtain intel / insight into the overall process without creating a “bet the DAO” situation as will be the case by the time we wish to move forward with the Big Parcel. For a legitimately minimal expense, CityDAO can find out what does - and does not - work with respect to creating a land token standard and using NFTs to allocate property rights. Whatever CityDAO learns from the Baby Parcel, it will be money well spent for the collective direction of the DAO and our mission.

  4. Financial Considerations - Treasury Impact. The project team requests $9,999 offramped to the CityDAO bank account upon passage of this proposal for Parcel acquisition and legal costs. Any unused funds will be returned. This represents around 0.4% of our treasury.

Process Flow/Community Touch Points:

a) This CIP-102 will be put up to Forum and then Snapshot for approval by the Community through governance.

b) If approved, the Community will be asked for a temp check “taste and preferences” vote (through Discord or less formal means than Snapshot) from between 3-5 selected parcels around 5 acres (For example: https://www.realtor.com/realestateandhomes-detail/Ll-9th-St-Lot-10_Blanca_CO_81123_M90319-30673; https://www.realtor.com/realestateandhomes-detail/7-Sixth-St_Blanca_CO_81123_M91246-07855; https://www.realtor.com/realestateandhomes-detail/Estrella-Rd-Lot-11_Blanca_CO_81123_M93297-21676).

c) After the vote, the Project Team will offramp fiat for the purchase, closing costs, and 10 years of approximate insurance and taxes, along with a budget provision for 10% of the purchase price to be used for other operating expenses (to be held in an interest-bearing account with the intent of finding ways to pay such expenses in crypto and potentially automate such processes)

d) The Project Team will consummate the transaction using an appropriate legal mechanism, like a wholly-owned special purpose vehicle (“SPV”) incorporated and designed to handle the liabilities and related issues of purchase and subsequent operation. CityDAO will fund the SPV’s treasury with the funds needed to consummate the transaction.

e) Once acquired, the Project Team would commence meetings with the Community to build momentum for how to use the Property in the short run. The intended short term goal will be to use NFTs and/or a token-land standard to transfer as many property rights to holders as possible without creating legal risk or running afoul of the law of course. We intend to prove-out concepts using an MVP model that will be instrumental to execution on the larger vision with the Big Parcel.

Key Similarities/Differences between the Baby Parcel and Big Parcel:

Baby Parcel Big Parcel
Experiment w/ Harberger Taxes and Public Goods Use Cases X X
Co-Living possible X
Co-Working X
Retreats possible X
City Building X
Construction/Development likely X
Fractionalization/Tokenization X X
Affordable Housing X
Blockchain tech based solutions such as NFT key to doors, etc possible X
Flexible Zoning/Land Use Restrictions X X
Acreage 5-160 500+
Proximity to Airport ideally X
Ease of Subdivision ideally X
Multiple Existing Structures X
Legal Precedent for Establishing City X
Requires Outside Financing X
Community Engagement X X
NFT transfers of property rights X X
Requires Public Affairs/Local Gov’t Support X
33 Likes
#2

This seems quite reasonable, especially as a method to learn about subdividing parcels, using NFTs to sell land leases, which could also be used for the Big Parcel. I also agree that this is a logical step after Parcel 0 and that it’s not financially onerous to the DAO. Looks good to me.

8 Likes
#3

I support this as long as usage rights are granted for Josh to grow his marijuana.

3 Likes
#4

This should give the “wen revenue” crowd something to think about… :rofl:

2 Likes
#5

looks good to me too. as long as we are doing something, that is better than nothing.

2 Likes
#6

I very much support this!

It’s all about learning, experimenting, and proving that we have the basic building blocks of land ownership! These small steps are vital to master.

“the Baby Parcel will provide a safe environment to be used as a proving ground for concepts” & “CityDAO will have the opportunity to obtain intel / insight into the overall process without creating a “bet the DAO” situation” :100: :100: :100:

1 Like
#7

“tuition” makes a lot of sense. Gotta experiment to learn and grow. Love it

1 Like
#8

Ideas must be explored and practiced, otherwise it is on paper and support!

#9

Love to walk before run idea again. 100 % support

2 Likes
#10

good it s a good idea

#11

I suggest that the construction mode of online and offline synchronization can be adopted. Build online 3D event venues while buying plots. Online can accept advertising, or rent the right to use it for profit

#12

maybe we can do it like test

#13

I like the idea of smaller scale tests to play with pieces of the puzzle we’ll need in the future.

However, I’m failing to understand how this is a leap step improvement from Parcel 0. Through designing the Parcel 0 NFTs and their legal agreements, we learned a LOT about what sorts of rights we can pass through to token holders and how to structure it. These learnings aren’t apparent in the CIP.

Is there something special about the area these properties are in that would make us more comfortable entering into lease agreements? (We decided against this for Parcel 0 for legal reasons)

Development costs are not included.

I also think to adequately test partial common ownership mechanisms there needs to be some sort of real value to drive variation in value across sub plots.

This is Parcel 0 in my opinion:

the first NFTs that represent rights to visit, use, and potentially even build on land.

What I do like and think is an interesting route is to just focus on an NFT Lease Standards, possibly for a specific state, and whether or not all that data can be inside the NFT without referencing a blanket PDF. Adding bare physical land isn’t the interesting part here for me.

1 Like
#14

Josh prob has more context, but my understanding is the reason this is exciting is because Parcel 0 NFT Agreements are basically symbolic, for conservation only. The goal with baby parcel is to offer a few real, usable NFT leases, than people can legitimately use.

2 Likes
#15

Can we consider a property that at least has water and/or trees? we already have a piece of desert scrubland.

3 Likes
#16

@scottfits @DAOvolution I think this is the most important part of the CIP right here. Keep with the “tip of the spear” in development. That is worth getting it pushed through!

1 Like
#17

Water in what sense? Water rights? Or just an existing well?

Parcel 0 is not just desert scrubland, its also steep and unforgiving, and would be difficult to develop. The area targeted for baby parcel would be easier to create on.

As @scottfits mentioned, the biggest part of this project is expanding on rights allocation using the NFT and enhancing projects that we learned a ton from with respect to Parcel 0.

As @alexthims points out, there is heavy dev work involved. I have spoken to Reeves about preliminary needs on the Dev side. We have to stop blocking over money. The dev team - like the rest of the DAO - needs something to work on and this project will not require extensive outlays. Are we here to build?

#18

I like the low-cost experimentation and setting precedents, for sure. I’m just saying it’d be cool if there was like a little stream and a patch of grass at the next spot. I haven’t looked into these properties beyond some pictures, but another observation is this proposes to spend something like 12 or 13k in team comp to get a $5k piece of land. Should we spend at least an even amount on both? just seems imbalanced or something.

#19

a little pricier, same area, with a stream

https://www.realtor.com/realestateandhomes-detail/2971-Trinchera-Ranch-Rd_Fort-Garland_CO_81133_M18933-05794

1 Like