NOTICE: Currently pending (as of January 2021) changes to our fundraising strategy may result in the for-profit LLC layer of the structure being removed, making the nonprofit entity the top layer of the stack. This would affect the sections on structure, ownership, equity, and control.
TL;DR: Initially the for-profit LLC will own and control the property, paying the mortgage and investors and leasing the property to a member-based nonprofit that will control the internal organization of the community. Once the LLC’s lenders and investors have been repaid and bought out, the MBC will then own the property. The MBC will be run by a board of directors, initially mostly appointed, later mostly to fully elected, and the pod leaders with the board's approval. Members will pay a membership fee to join the community and use the property and an additional fee for private room(s), and they will be responsible for communal labor for the organization as well as pod-specific responsibilities.
This Limited Liability Corporation will hold the property, investments, mortgage, crowd investing, etc. Currently a Vermont LLC, possibly to re-incorporate in Oregon or otherwise after crowd investing and before buying property there. This is the entity that investors will have debt from and/or equity in, secured by the ownership of the property. This LLC may eventually also acquire other properties to start more communities once it has assets and corporate credit to leverage.
A second LLC may be formed to hold the larger unimproved parcel of land separately, as necessary to meet the requirements for government subsidy or guarantee of its mortgage.
CoDwell Laurelwood, MBC
Every organizer and member of the project will be a Member of this Mutual Benefit Corporation, with voting rights and an ownership stake in the organization and its operations, but initially not over the property itself.
A second charitable nonprofit corporation may be formed alongside the MBC to operate parts of the project, such as educational and arts-focused pods, in ways that make those parts eligible for tax exemption and other benefits.
The crowd investing campaign is offering a revenue share to investors. This revenue share will be calculated from the gross revenue of all entities described above, with amounts paid between the entities counted only once.
Ownership / Equity
To achieve our funding goals, the project has been organized as a for-profit business, the LLC described above. That entity will exist as long as is necessary to repay the debt-based investors and the mortgage or other lender(s), and to buy out any equity investors and owners per the terms of their investment agreements.
After the LLC has achieved the goals above, ownership of the property will transfer to the MBC, giving the board and members control of the property entirely.
While the LLC exists, top level control of the property will be in the hands of Clarence “Sparr” Risher (Founder) as well any equity investors per their investment agreements, individually and/or collectively through some lead investors. This will include overall financial decisions related to the property ownership and use and final authority on alterations to the property.
The MBC will be founded with a 3-5 person board of directors, and will be responsible for operational decisions related to the rest of the CoDwell project. These decisions will relate to the “pod” system, membership processes, division of responsibilities, etc. The directors will initially be Sparr and one person elected by the members joining within the first three months of the project, with the remaining seats filled by some combination of equity investors and individuals chosen by Sparr for their experience in coliving and cohousing leadership.
Director positions in the MBC will be up for re-election on a three year cycle, starting with the member-elected position being re-elected after three years. The investor and appointed positions will follow but not until at least one year after their equity in the LLC has been bought out, and such that no year will have more seats up for election than the other two years in the cycle combined.
Members of the MBC will have voting rights to elect first one and later other directors. These voting rights will also extend to any matters the board puts to the membership as a vote, which are likely to include some but not all large scale planning decisions.
Members will have access to the common areas of the property and facilities, with limitations established by the directors or stewards of specific spaces, facilities, and amenities. Examples of such limitations:
weather related landscape damage
high demand facility reservation schedules
facilities and tools with high per-use or per-hour costs
event reservation schedules
Members who pay additional monthly fees will have exclusive use of private rooms for residential (bedroom) or other (studio, office) purposes.
At an amount proportional to their total paid membership fees, members will be entitled a share of the assets, or their liquidated value, in the event the MBC dissolves. This would not include the property itself until after its ownership passes from the LLC to the MBC.
Every member will be responsible for
A monthly membership fee paid to the organization (exception: “comets” who pay a smaller yearly membership fee)
Some number (2-5?) of weekly hours of communal labor. This will include some tasks commonly recognized as chores, also some large and small scale project efforts, possibly including a literal barn raising. The budget for the use of this pool of labor will be decided by the board, based on proposed projects and needs of the pods.
Each pod will be responsible for accomplishing certain goals for the larger community. These goals will be proposed by the pod leaders each quarter, for approval by the board. One pod might set a goal to build something, another to grow food, another to teach some classes, another to host some events, and another to contribute additional money or equipment to the group. Many pod goals will include a labor budget to utilize the communal labor pool from the organization responsibilities above (e.g. the garden pod may set goals that require the use of communal labor for gardening tasks).
Within each pod, member responsibilities will be set by the pod leader(s), who are selected by the board. Most such responsibilities will be focused around the goals the pod has committed to, such as maker pod members being responsible for operating the shops and teaching shop classes, garden pod members being responsible for leading garden chore time and organizing harvests, etc. Where feasible these responsibilities will be fairly distributed between members of the pod.
Our "comet" membership tier is exceptional. These are members who spend most of their year away from CoDwell, visiting for up to a week at a time, 5-10 weeks a year. While on site, they will have all the rights of a member with one private room, except that the room will not be dedicated to them year-round. Their responsibilities will include either the usual share of communal labor and temporarily joining a pod that welcomes their contribution and participation, or a double share of communal labor.