But we've taken note of TrueCasey's bizarre Island project, and just commented about it on his blog. We have no faith that he will actually publish it, so here it is, complete and unedited:
FC 12:36 pm on August 28, 2009
Well, We just did some math.
In order to accommodate all your sponsors, you will need to have a minimum of 501 rooms in the resort. Pretty simple math, the total number of days committed to sponsors in each cycle is identical to the number of dollars raised per month. 500,500.
There are 1000 days in each cycle.
500,500 (total room-days per cycle) / 1000 (days per cycle) = 500.5 (rooms)
Can’t build half rooms, so you need to make it 501. Plus you’ll need one for yourself. 502. And whatever other friends you want to invite. Maybe 510.
Realistically, you probably need even more, because you need to allow for the fact that at times some rooms will be closed for maintenance, and not everybody is going to perfectly “fit” into a schedule that has the place at 100% capacity all the time.
So, you need about 600 rooms. And that’s just to accomodate the people you have made a commitment to. If you want to offer rooms to others, it needs to be even bigger. Since you’re on an island, you’ll also need employee housing and other facilities, which will add to the cost of construction and maintenance.
And you expect to be able to operate this resort on an ongoing basis with your sponsor’s money. $500,500 per month. Oh yeah, you plan to take 10% for yourself, so really you’ll have $450,450 per month available to build and operate this place, or $750 per month per room.
Most mid-grade motels in urban areas spend that much! Most resorts spend double that or more! And most of those aren’t on islands where everything is more expensive.
And that’s just operating costs. Even if you sold every single sponsorship tomorrow, it would take a few decades to save up enough money to build a 600 room resort. Look at this: http://www.hotel-online.com/News/PR2003_2nd/May03_HotelWaterParkStudy.html
Yup, that’s right. Contruction costs for a luxury resort type hotel start at around $250K per room and go as high as almost $600K. And that’s in the continental US. Again, add more on an island. Dude, you’re looking at a “starting price” of about $150m to build the place and it’ll probably be more. Even allowing for interest on the money you’re collecting, it’s almost 20 years! You need to register Island2032.com quick!
Bottom line is your plan is not feasible.
It’s also illegal. You can’t tell people “you’re a sponsor” and at the same time say “you’re entitled to future use of the facility”. Either people are sponsors, in which case they have no rights to anything other than the advertising they pay for, or they are investors, in which case they have partial ownership in perpetuity (and you need a license to sell the shares and they need to be qualified investors), or they are customers who are pre-paying for some future service, in which case you are pretty much committing fraud, because there’s no reasonable way to deliver what you’re promising for the amount of money you’re asking people to pay.
Sorry Casey, the numbers for this plan just don’t work out. The legal structure doesn’t work out. Faith is not a viable plan.
And that's the way things are at FalseCasey HQ, where it's too fucking hot, the air is full of smoke and we really want this shit to end.