Joseph Potvin
New Member
The sustained interest and discussion on this blog is a pleasure to read and reflect upon.
Although MOOSE makes an effort to publicly document every aspect of its initiative (bilingually where feasible), this tends to result in a considerable volume of documentation. And that volume makes it difficult for community observers to notice each nuance of the company's business strategy. It's not particularly easy to explain business model innovation.
We're delighted to report on our new relationship with LeMine Investment Group and Consortia N.A. The 2nd page of our Canada Day media release, which Allandale25 has kindly pointed to, includes a renewed attempt to summarize how the cash flow and ROI are planned to work. Please review that. Meanwhile, it's been a fascinating ride to be a start-up in this business...
Some observers on this thread have concluded that in MOOSE's approach, rail is being put forward as a "loss leader" for the property value increment. Well, sure, one could say that an elevator is a loss leader for a high-rise hotel or condo. Given that all the money is made in the units, and there's no fee for people to use the elevator, then perhaps that notion holds. But then, by that measure, one would list each of the operational expenses of running the hotel or condo on the "losses" side of the ledger. Suppose the manager were to test that idea: in the interest of cutting unnecessary losses, the hotel or condo could either under-fund elevator maintenance, or could charge a fee, say 25 cents per person per ride on the elevator. I'd reckon that it won't take too long for such a decision to cut into revenues on the units. Certainly it would do wonders for management-tenant relations! The real question is: what's the optimal amount to spend on the elevators? And for MOOSE, we're looking at the optimal amount to spend on the railway. But make no mistake: the real money is in the property within a short walk of each station.
The way MOOSE looks at rail service in relation to property-generated income is explained in more detail in our Property-Powered Rail white paper, published a year ago (with a couple of edit updates since then). Here's an excerpt that speaks to the above-mentioned point.
Regarding the mission-critical nature of the Prince of Wales Bridge to our business, on which point someone referenced an article in "Inside Ottawa Valley", the straightforward answer is that (a) our management model requires a single rule-set, and the inter-provincial crossing gets us unified federal regulation; and (b) our commercial dynamic requires whole-region operation, otherwise it's not very useful to locate a business or residence within a short walk of any given station. In sum: a train (or metro) is useful to the extent you can go places as a pedestrian. Incidentally, this is also why you'll see us go to bat legally to keep the Chelsea line in operation -- it's the only railway that provides National Capital Region access to Gatineau Park. Cut off access to the park, and that degrades the value of properties throughout the system. MOOSE maintains all the details about each case online.
On behalf of the MOOSE team, including our extensive new set of business associates through LeMine-Consortia N.A. which we announced with Canada's 150th Anniversary, thank you for the constructive criticism of our railway start-up trajectory, sustained by the Urban Toronto blog community. We'll try to keep abreast of your further questions and comments.
Joseph Potvin
Director General | Directeur général
Moose Consortium (Mobility Ottawa-Outaouais: Systems & Enterprises) | www.letsgomoose.com
Consortium Moose (Mobilité Outaouais-Ottawa: Systèmes & Enterprises) | www.onyvamoose.com
joseph.potvin@letsgomoose.com
joseph.potvin@onyvamoose.com
Mobile: 819-593-5983
Although MOOSE makes an effort to publicly document every aspect of its initiative (bilingually where feasible), this tends to result in a considerable volume of documentation. And that volume makes it difficult for community observers to notice each nuance of the company's business strategy. It's not particularly easy to explain business model innovation.
We're delighted to report on our new relationship with LeMine Investment Group and Consortia N.A. The 2nd page of our Canada Day media release, which Allandale25 has kindly pointed to, includes a renewed attempt to summarize how the cash flow and ROI are planned to work. Please review that. Meanwhile, it's been a fascinating ride to be a start-up in this business...
MOOSE Consortium is Canada's first private-sector "created-from-scratch" start-up in a century to enter the metropolitan passenger rail market. Other new railway companies have resulted from the acquisition or break-up of existing railway companies. Its name is an acronym for "Mobility Ottawa-Outaouais: Systems and Enterprises". A year ago, on 29 June 2016, MOOSE published a white paper on how to commercially finance and manage a metropolitan railway system in today's market. The release of that paper was timed by MOOSE to mark the 125th Anniversary of the 1891 start-up of the fully private sector "Ottawa Electric Railway Company", which in its era brought the first motorized public transit system to Canada's Capital. After exploring various possibilities in capital markets, MOOSE received an invitation to meet on 29 June 2017 with Lemine-Consortia N.A. Coincidentally, this was exactly a year to-the-day after publishing its commercial financing model.
"All the money's in the property" explained Joseph Potvin, Director General of MOOSE. "Therefore, in essence, our 'Property-Powered Rail, Open Market Development Model' is all about real property value optimization. And in this context, a safe, affordable and beautiful train service is just a method for generating that value."
"All the money's in the property" explained Joseph Potvin, Director General of MOOSE. "Therefore, in essence, our 'Property-Powered Rail, Open Market Development Model' is all about real property value optimization. And in this context, a safe, affordable and beautiful train service is just a method for generating that value."
Some observers on this thread have concluded that in MOOSE's approach, rail is being put forward as a "loss leader" for the property value increment. Well, sure, one could say that an elevator is a loss leader for a high-rise hotel or condo. Given that all the money is made in the units, and there's no fee for people to use the elevator, then perhaps that notion holds. But then, by that measure, one would list each of the operational expenses of running the hotel or condo on the "losses" side of the ledger. Suppose the manager were to test that idea: in the interest of cutting unnecessary losses, the hotel or condo could either under-fund elevator maintenance, or could charge a fee, say 25 cents per person per ride on the elevator. I'd reckon that it won't take too long for such a decision to cut into revenues on the units. Certainly it would do wonders for management-tenant relations! The real question is: what's the optimal amount to spend on the elevators? And for MOOSE, we're looking at the optimal amount to spend on the railway. But make no mistake: the real money is in the property within a short walk of each station.
The way MOOSE looks at rail service in relation to property-generated income is explained in more detail in our Property-Powered Rail white paper, published a year ago (with a couple of edit updates since then). Here's an excerpt that speaks to the above-mentioned point.
2.1 Entrepreneurial Interest in Property as the Driving Force
The Property-Powered Rail Open Market Development Model (PPR) has a dual purpose, with a directional feedback loop in operation between the two. The micro-economic entrepreneurial incentive structure is designed to increase target property income and realized asset values by generating emergent effects (J. Goldstein, 1999) in the form of public transit services as “external economies” (Marshall, 1890, p. 221).
(a) Return on Investment Optimization in Real Property: For investors in strategically located commercial and residential property, PPR describes a way to increase net income and realized- asset value, with controlled financial risk, through the creation of a network of “linked localities”. This is accomplished through private- sector open market development and operation of attractive, safe, efficient and affordable metropolitan passenger railway systems and enterprises. The limited business objective of a PPR project is to optimize real property values (assets and incomes) amongst all of the linked localities, within walking distance of stations. Property-value increases are independently verifiable through routine real property market data.
(b) Metropolitan Transit Systems and Services: For transit stakeholders, PPR describes a self-financing development strategy for metropolitan-scale passenger railway systems and extensions, with zero dependence upon public debt or taxes. Public interest benefits, including low fares, excellent service, and environmental advantages are positive externalities relative to the business of optimizing real property value. In this context, PPR describes a functional incentive structure for private-sector financing of metropolitan rail systems under one or more of the following circumstances:
Persistent fiscal constraints impeding public-sector development of essential services;
Economic culture favouring open competitive commercial development of essential services;
Fragmentation of a metropolitan region into numerous jurisdictions and layers of authority.
The Property-Powered Rail Open Market Development Model (PPR) has a dual purpose, with a directional feedback loop in operation between the two. The micro-economic entrepreneurial incentive structure is designed to increase target property income and realized asset values by generating emergent effects (J. Goldstein, 1999) in the form of public transit services as “external economies” (Marshall, 1890, p. 221).
(a) Return on Investment Optimization in Real Property: For investors in strategically located commercial and residential property, PPR describes a way to increase net income and realized- asset value, with controlled financial risk, through the creation of a network of “linked localities”. This is accomplished through private- sector open market development and operation of attractive, safe, efficient and affordable metropolitan passenger railway systems and enterprises. The limited business objective of a PPR project is to optimize real property values (assets and incomes) amongst all of the linked localities, within walking distance of stations. Property-value increases are independently verifiable through routine real property market data.
(b) Metropolitan Transit Systems and Services: For transit stakeholders, PPR describes a self-financing development strategy for metropolitan-scale passenger railway systems and extensions, with zero dependence upon public debt or taxes. Public interest benefits, including low fares, excellent service, and environmental advantages are positive externalities relative to the business of optimizing real property value. In this context, PPR describes a functional incentive structure for private-sector financing of metropolitan rail systems under one or more of the following circumstances:
Persistent fiscal constraints impeding public-sector development of essential services;
Economic culture favouring open competitive commercial development of essential services;
Fragmentation of a metropolitan region into numerous jurisdictions and layers of authority.
Regarding the mission-critical nature of the Prince of Wales Bridge to our business, on which point someone referenced an article in "Inside Ottawa Valley", the straightforward answer is that (a) our management model requires a single rule-set, and the inter-provincial crossing gets us unified federal regulation; and (b) our commercial dynamic requires whole-region operation, otherwise it's not very useful to locate a business or residence within a short walk of any given station. In sum: a train (or metro) is useful to the extent you can go places as a pedestrian. Incidentally, this is also why you'll see us go to bat legally to keep the Chelsea line in operation -- it's the only railway that provides National Capital Region access to Gatineau Park. Cut off access to the park, and that degrades the value of properties throughout the system. MOOSE maintains all the details about each case online.
On behalf of the MOOSE team, including our extensive new set of business associates through LeMine-Consortia N.A. which we announced with Canada's 150th Anniversary, thank you for the constructive criticism of our railway start-up trajectory, sustained by the Urban Toronto blog community. We'll try to keep abreast of your further questions and comments.
Joseph Potvin
Director General | Directeur général
Moose Consortium (Mobility Ottawa-Outaouais: Systems & Enterprises) | www.letsgomoose.com
Consortium Moose (Mobilité Outaouais-Ottawa: Systèmes & Enterprises) | www.onyvamoose.com
joseph.potvin@letsgomoose.com
joseph.potvin@onyvamoose.com
Mobile: 819-593-5983
Last edited:
