Thursday, May 03, 2007

Kennedy Square

Note: I am out enjoying a 20th Anniversary celebration with my wife. (Perhaps the person I really should be celebrating with under these circumstances.) As such, I am not focusing on writing. I was able to write the weekend’s Beyond Belief postings in advance, and hope to quickly post them at their regular time.

For today, I pulled out a file that has been sitting on my desktop for a while. Once upon a time I was interested in writing a blog novel – a piece of fiction in which I would illustrate some of my ideas about value. Here’s the first entry. Enjoy.

12:00 AM, January 1, 2020.

The first hour of the first day of a new decade seems like a perfect day to start a new blog. Particularly this blog.

Midnight struck just a few minutes ago. I could see the fireworks going off around the Washington Monument from my office window across the Potomac. However, the night is still young from where I sit. I'm one of the bidders in the Kennedy Square auction. That auction ends at midnight in the last time zone on Earth; seven hours from now.

I know that most of you are familiar with the Kennedy Square auction. However, just in case somebody stumbles onto this site who has been asleep for the past three years, I'll give you a summary.

On July 15, 2018, the United Nations General assembly approved a plan to use space for the common benefit of humanity. The plan was to auction off objects in space and to use the money to fund a global education project. Education, certainly, is something that benefits all of humanity. In the mean time, objects in space are transferred to private land holders for the sake of private development.

The Kennedy Square auction is the first auction. Kennedy Square is 100 kilometers wide and 100 kilometers long, with the Apollo 11 landing site right in the middle of it. This was divided up into 1 million plots of land, each a square 1 hectare in size.

The middle four square kilometers around the Apollo 11 landing site itself was donated to the Smithsonian Institution. The 12 square kilometers that surrounded that was donated to the University of Earth, the benefactor of this auction. This left 984,000 plots of land up for public auction.

Some people might consider me a nut, but I was going to spend $25,000 so that I could own my piece of the moon. There were some limitations on who could bid. Only individuals could bid. Countries, corporations, nonprofit organizations, were all locked out. These rules were permanent. No person was permitted to transfer title to any government, corporation, or organization other than the University of Earth. All titles will be required to be in the name of a specific individual owner who had sole discretion over what happened to the property.

I assumed that, just like on Earth, most people would go for the flat land on the lunar sea. Because I wanted cheep land, I selected a string of craters - or a string of connected sinkholes, I really do not know which - called Word Rille. This shouldn't be worth much. Right?

Well, as the auction progressed, I discovered I was wrong. What people wanted something that they could identify from Earth. They wanted to point to something and say, "That's mine." Crater Moltke was actually fetching some of the higher prices in the region. The only place more expensive was Cat's Paw; a set of craters just west of the Apollo 11 landing site. From the rim around the craters it would be possible to see the Apollo 11 landing site itself. That is if anybody was ever actually going to live there.

I want to see the Kennedy Square become an actual community. That was my real motive to become a part of this. That's what this blog is all about. Hopefully, it will be the history of a new community - a community that comes into existence in a little more than 6 hours.

3:42 AM EST

We're getting close to the deadline, and prices are starting to rise. Europe is awake now; it's nearly 9:00 AM in London. It is mid day in India, and late evening in China.

A part of the bidding program allows a user to find the plot of land with the lowest current price. People are using that to put bids on the cheapest land so quickly that one can barely read it. It will pause for a while on a round number. It stopped for a couple of hours at $500, then started going up from there.

A couple of weeks ago, Worm Rille prices passed $1000 per hectare. I am not a gambler. I am not one of those who ends up trapped, bidding more and more because I just cannot stand to lose a bid. When I lost the bid for a couple of hectares, I took the money and applied it to hectares I had not yet lost. I had promised not to go above $25,000, and I was going to keep that promise. The only question was: how much land could I afford for that price?

Now, prices for Worm Rille land was approaching $2000 per hectare. I have bids on 11 hectares, and I find that being threatened.

Looking at the data, there are large open areas where the price of land is still going for less than $700 per hectare. So, I could take the money that I am now using to bid on 1 hectare at Worm Rille and use it to bid on as many as 7 hectares elsewhere.

The number of hectares one owns is important. After the bidding ends, winners will immediately become members of the Kennedy Square Landowner Association. They will have one vote on the association for each hectare that they own. Twenty-five hectares means 25 votes on the association.

Another map that bidding software shows is one that color-codes the price of the land. One of the cheapest sections was a featureless piece of land about 10 kilometers west of Worm Rille. As soon as somebody outbids me for a hectare of Worm Rille land, I'm bidding $1000 each for some of this featureless land.

5:11 AM

Less than 2 hours of bidding to go. I still have the high bid on 6 hectares on Worm Rille, and 10 hectares on a patch that I have been calling in my head, "The Nothings." Yet, now, even prices at The Nothings are going up. The lowest bids right now are sitting at $815.32, and still rising. Even the cheapest land may be selling for more than $1000 when this is over.

The University of Earth will be pleased. The total of the winning bids is now $1.7 billion. That is a respectable endowment for a brand new university. This does not include the fact that there will be an additional bid each year for more of the solar system's resources. If the United Nations auctioned off the amount of land equal to Kennedy Square every year, it would take over 3,000 years to sell off the moon alone. Selling off Mars and the other planets, asteroids, comets, and the moons of the outer planets would take forever to sell. Estimates are that there are over 1 trillion chunks of rock the size of a city block or larger circling the sun - most in the Oort cloud, quite some distance out.

Then there are also questions of selling off land on other solar systems. Scientists now know of 1,314 planets orbiting other stars. Some of them are earth-sized. Some of them are in a habitable zone. Some of them are earth-sized and in the habitable zone of their respective stars. However, none of them so far have been shown to have an earth-like atmosphere.

However, it doesn’t matter. We have proved that we have the ability to live at any star that has rocks orbiting it, and every star has rocks orbiting it. We can simply turn the carbon, iron, water, methane, and ammonia in those rocks into orbiting space stations filled with life.

There are people already talking about how we would create an earth colony on Proxima Centauri. It's a small, cool star. This only means that stations would orbit closer to its surface than they would to a star like our own sun. Proxima Centauri, because it burns much more slowly, will probably outlast our sun.

I'm sorry. I'm dreaming. None of that is for my lifetime. That's for a distant future.

5:30 AM

I've got a small window of opportunity to tell you about myself. My name is Samuel Lewister. I am a 26 year old associate at the Space Properties Title Company. The founders created this company specifically to deal with the United Nations auctions. Our only business is in registering titles to land not on Earth. Right now, we do not have a single customer. In a little under 1.5 hours, that will start to change. As soon as we confirm payment, we will register the high bidders of each hectare as the rightful owner subjects to the terms and conditions specified by the United Nations.

The owner of the winning bid will have until February 1 to pay for and claim title to their land. Lands not claimed by that date will revert to the Kennedy Square Land Owners' Association, to be sold at auction under the terms and conditions established in the original auction. The Association will auction off all unclaimed lands at the start of each month, subtracting an amount appropriate to cover the costs of the auction, and submit the remainder to the University of Earth.

I know, it's all boring stuff. In my business, I specialize in boring. Dry, sleep-inducing language that is designed, as much as possible, to strip away all of the ambiguities of language.

Anyway, I have been a space enthusiast since I can remember. My dad has a huge collection of all of the film footage ever shot and all of the books and reports written from the Apollo era. I would pour over them for hours as a kid. I turned my bed into my own space capsule. When I was 11, I stayed in bed for over a week while I played the Apollo 11 transcripts over my computer - except when I had to go to the bathroom. My mom insisted that I come to the table or go outside to play, but I dad always sided with me. He let me play out my mission. My mom forced me to take a bath the instant I 'splashed down', as it were.

6:00 AM

Less than an hour to go. A quick update. I need to build in a safety margin in some of my areas. The high bid is getting close to my cap both at Worm Rille and The Nothings. At the Rille somebody beat my bid for one of the 6 hectares I was still winning on. I let him take control of the property. Instead, I distributed the $2,250 that I had bid and distributed the money among my other properties - to buy me a little time.

There's a huge bidding war going on at Cat's Paw. From what I can tell from the map - I can color-code it for author with the highest bid - there are a lot of people trying to their 25 hectares in a reasonable close proximity - overlapping with others who want their 25 hectares in close proximity. This leads to some major bidding wars. Property at Cat's Paw was now selling at over $20,000 per hectare.

6:42 AM

Lost another hectare at Worm Rille. Redistributed the money. Put in high bid for a couple more acres at The Nothings.

6:50 AM

Another one gone. Bottom prices are now over $1100 - which is not much less than what I am bidding at The Nothings. I have this worry of somebody coming in and sweeping the whole lot out from under me with a last-minute bid. I broke my rule. I busted into my piggy bank and added a could hundred to each bid in the nothings, just to be safe.

7:00 AM

DAMN! I had a nice section of land in The Nothings; 4 hectares wide and 3 hectares long. At the last minute, somebody put a bid on one of the middle two hectares. I don't know what he bid, but I tried to get it back, and failed. I didn't have time to move my bids, or I would have shifted the whole plot to a couple of hectares. The bidding ended before I had a chance.

Anyway, I ended up with 4 hectares at Worm Rille, and 11 hectares at The Nothings. That will be 15 votes in the Land Owners' Association.

I've got some stuff that I need to take care of for now. Give me a couple of hours. I'll be back.

9:30 AM

Okay, I've taken care of the paperwork. I sent in my payment for the 15 hectares and got my titles. As a registered landowner, I received a login and password for going to the Kennedy Square Landowner Association Extranet Site. There, I filed as a candidate for the Board of Directors and filled in my profile.

I really would like to win a position on the board. I think that space development is the most interesting thing happening in the world today. It is the future. Millions of years from now, people will look back on the events of this era - the start of the 3rd Millenium CE - as the time when humans left Earth.

If you will pardon me, I have some campaigning to do.

11:00 am

It's been 30 hours now since I slept last. Please pardon me if my writing becomes a bit unfocused.

I've been logged onto the Kennedy Square extranet site looking through the database. I thought you might be interested in knowing some facts about this community we are building.

If you have been paying attention to the news, you will know that we raised over $1.7 billion for the University of Earth charter. This money will go to constructing a set of schools to educate children from some of the poorest countries of the world. Research shows that education - particularly the education of women - is the best way to fight poverty and overpopulation.

So, who paid the money?

Remember, only individuals can own land - not countries, companies, or organizations. However, we know the native countries of those involved. You can look it up on the web site. But, those who do not want to go through the effort, let me list the top seven.

United States, 273,893; China, 201,783; European Union: 173,290; Japan: 95,933; India: 77,190; Russia: 51,679; Saudi Arabia: 50,036

These numbers are subject to change. People have until February 1 to claim their title. Any land not claimed by February 1 will go back to the University of Earth, and will be auctioned off on March 1st. Also, if any property owner falls 6 months behind in the payment of his homeowner's association fees, then that land will be considered abandoned. The University of Earth will regain title to that land as well, to be auctioned off at the following month.

Of course, one of the services that Landowner's Association offers is the option of setting up trust accounts from which monthly dues will be withdrawn.

3:00 pm

I'm getting really tired. I have been looking over the other candidates for office, and talking to some of the other land owners. I'm going to need some sleep soon, but there is just so much to be done.

Before I go to sleep, I want to tell you something about how I plan to serve if I get elected to the Landowners' Association.

Each landowner will pay a monthly landowner association fee of $10 per month. Like I said earlier, if anybody falls 6 months behind in his fee, the Landowner Association will consider his plot to be abandoned and the University of Earth will auction it off to a new owner. If possible, the money gained from the auction will cover past fees.

This means that the Association will have an annual budget of nearly $10 million per month ($120 million per year) from LOA fees alone.

One of the things that I think that most of you are going to want (speaking to those readers who are fellow land owners) is for the Association to do things that will improve the value of your land. I think that one of the first things we need to do to accomplish this is to take a survey of the territory.

I want to propose that the Association solicit bids for somebody to send the best camera we can afford to the moon to fly over Kennedy Square as low as possible while still staying in orbit to get the best pictures possible of what we have purchased.

Now, I've been talking to the University of Earth. The Board of Regents for the University is interested in making a school project out of just an adventure. It will involve all of the departments in the entire school. Science and engineering departments, of course, would run the mission. However, even its business, economics, marketing, law, political science, languages, and most other departments would have something to contribute. By relying on the contributions of these college students, we should be able to run a fairly large mission.

I mentioned that the marketing and business schools at the University would get involved. They will be looking at other business opportunities - at ways of making even more money to have an even larger mission.

Anyway, I want the Landowner's Association to be at the heart of this mission. We will provide the core funding and be the decision-makers for the mission. It is, after all, our land that they will be looking at.

7:00 pm

I need to do some campaigning before I go to sleep. So, let me tell you why you should vote for me as a member of the Kennedy Square Land Owners' Association. Let me tell you something about what I believe.

However, first, I want to make sure that, if you're a member of the association, that you understand the rules.

There are 15 seats on the Board of Directors for the Landowner' Association. There will be one election. Each person will be able to cast a number of votes equal to the number of hectares he or she owns (e.g., I will be able to cast 15 votes).

The top 15 candidates will have a seat on the Board. Each candidate will have a number of votes on the board equal to the number of votes cast. So, if the 15th place candidate gets 5,316 votes, then he will be on the board, and can cast 5,316 votes for or against any measure put before the Board.

After the first election, where the winning 15 candidates are selected, there will be a second election for those who voted for candidates that did not win a seat on the board. These people will then get to decide which of the winning candidates will represent them.

Everybody gets represented on the Board. That's the rule.

So, I want to explain to you why I should be your representative on the board.

First, I believe in compromise. There are purists out there who want to insist that everything be done according to their specific model of how things should be done. They have a simple two-step process to developing space. Step 1: Convince everybody that I am right and they are wrong. Step 2: Develop space the way I think it should be done. Just between you and me, I think that Step 1 is going to take longer than I am willing to wait.

The fact is, purists have set themselves up to vote 'no' on every single plan to develop space - because no plan will ever meet their standards. They are no better than those who would always vote 'no' because they are flat opposed to space development. They have different reasons, but they have the same results.

I will certainly not agree with everything I vote for, but I will make sure that we make progress.

Second, because I am realistic. Are we going to have a big tourist hotel at Cat's Paw in 10 years that anybody on Earth can visit for a few hundred dollars per night? Of course not. I do not know what the future will bring, but that does not argue against starting out. Lewis and Clark did not know what they would find on their journey. But, they just put one foot in front of the other and, after a lot of hard work, they reached their destination.

I am going to fit the projects that I vote for to our available budget. There will be no unrealistic grand schemes. There will, instead, be steady and affordable progress.

Third, because I believe in market systems. There are those who want to develop space as if it is a big commune - no private property, no private development. This is a recipe for doing nothing. Nobody is going to invest the types of resources in developing space unless they can expect something in return. We need to set up rules so that they can profit from taking risks. Then, they will take risks.

Fourth, because I know people in the industry. I am associate for Space Properties Title Company. We set up the auction and we are handling all of your transactions. I know the rules and I have corresponded with people around the world about their hopes and dreams. For somebody who will be a part of the first space property land owners' association, I have as much experience as one can possibly have.

Okay, it's time for bed. I'll be back tomorrow.

Happy new year, everybody.

4 comments:

Martin said...

I am looking forward to the rest of this story. Great intro. Really got me hooked.

Amarantha.Francoise said...

By 2018? I could only dream.

Unrequested criticism: Your numbers don't always add up. The purchase prices probably take the form of a skewed normal curve, or course, with a lot of people buying at the lower prices and fewer and fewer as prices get higher. But with almost a million hectares available, each time prices went up a hundred dollars, the whole fund would go up .1 billion. So with the LOWEST prices at over $2,000, that's well over two billion. If the highest prices at time of sale are $50,000, with a skewed normal curve . . . okay, well, numbers in the trillions of dollars are not improbable. (Which makes me wonder, what if the national debt were a surplus and applied to education? O, the places we'll go . . .)

Also - not necessarily a problem, because you didn't specify the size of the registrar - do you know how much it would take to register a million plots in a month? (I'm consistently rounding to do it in my head. To one significant digit, it's accurate.) About thirteen hundred a registered each hour, twenty-four hours a day. Considering all the questions, the difficulty in getting people off phone lines (probably easier than phone tech support, but not by much, and dealing with people who are very excited - although more positive than tech support) you can probably only deal with two or three people a day. There would be a lot of people who bought only one plot. Figuring in ten percent not following up with payment, maybe take five as the average plots per person, and the agency must have . . . hm, only 250 people times three shifts plus support staff. Should probably be a government agency, then.


As you might tell from my volume of words, space colonization gets me excited.

Alonzo Fyfe said...

Amarantha.Francois

I sent your response to Samuel Lewister, who responded thusly.

The distribution curve was highly skewed. The vast majority of buyers simply wanted to own a piece of the moon, and did not care what land they purchased. With 10 minutes left to go, the lowest prices were at $1,100, and over 85% of the available lots were within a couple hundred dollars of this amount.

At a few places, the property values went much higher than this. This included Moktke Crater (presumably because it could be seen from Earth), and Cat's Paw (because it is both a clearly identifiable place and near the Apollo 11 landing site). It is such a small fraction of the total available land that it had little impact on total value.

Thus, the $1.7 billion is accurate.

(Also, note the exclusion of 16,000 hectares of what would have been the most highly priced land on the map - the Apollo 11 landing site and areas near it.)

As for the issue of registering a million plots in a month, we actually performed much of that work in advance. We were working on a grid, so that the description of each parcel of land was simple. Participants in the auction had to register, so that we knew who they were before they placed the bid. The final process was simply one of matching bidders to titles. Once we verified that we had received payment, we put their name on the title.

This was actually my contribution to the project. I actually lead the task force that put this system together. That's one of the reasons why I was staying up late on the night of the auction, at the office, in case something went wrong.

Registering bidders in advance did cut down on the number of bidders, which suppressed price. But, not doing so would have exponentially increased the cost. It is unlikely that the higher price would have covered those higher costs.

Registering the titles, of course, was an additional fee, above and beyond the price of the land.

Samuel Lewister

Alonzo Fyfe said...

Addendum:

Further Comments from Samuel Lewister.

Many people believed that the money raised from the Kennedy Square auction would be higher than it was.

However, one has to remember that there will be more auctions in the future. There is no particlar reason to pay a high price for lunar real-estate now when a cheeper block of land will be available later.

Next year, as you well know, the United Nations has authorized the auctioning off of land in and around Shackleton Crater (near the South Pole). This includes 100 hectare (1 square kilometer) 'industrial blocks' for mining and refining.

The year after that, they are telling us to prepare for the auction of a small number (we are told, between 20 and 100) near Earth asteroids. Winning bidders here will not own just a percentage of the surface area. They will own the whole asteroid.

The year after that, they are looking for a Kennedy Square type auction centered around the Apollo 12 and 14 landing sites. These sites were close enough together that they would fit in the same auction.

In the mean time, we are preparing to launch an auction for the next bright comet that comes into view. So, as the comet lights up the sky, you will be invited to consider the fact that you could own that piece of ice, if you have the winning bid.

(Note: Naming rights continue to belong to the International Astromonical Union, who will continue the policy of naming comets after their discoverers.)