Updated: Oct 30, 2019
I've spent the past few years in an intense creative effort to turn the Timber House Resort into an amazing new commercial tourism business. Through the process, I've developed an industry-transforming sustainable tourism business model focused on rural seasonal resorts and trailer parks. It's called Net Zero Resorts (NZR).
Introducing Net Zero Resorts
We've been in a pre-launch process at Timber House Resort in Brighton, Ontario for the past 12 months. Our pre-launch involved exploring and adapting our NZR model to provide maximum benefit and opportunity for current trailer owners in rural trailer parks and to develop the policies and understandings with our owners on how to best serve owners while respecting their choice to participate or not.
With NZR, rural resorts become hubs for tourist experiences. NZR, at its heart is a sharing economy system that creates sustainable venues for tourists to enjoy curated experiences while generating shared benefits for participating trailer and resort owners. Through NZR we transform rural tourism by improving the experiences, enjoyment and financial outcomes of trailer and resort owners.
Our Official NZR Launch is Today!
So today we're announcing we're launching Timber House Resort as the first NZR property by offering purchase contracts for trailers and rental contracts for all sites that aren't already supporting or participating in our NZR model. These will be offered via an online marketplace that will market both trailers for sale along with rental contracts for the associated sites under the NZR system. Buyers will be able to enact a bid for a trailer purchase/site rental or a right of first refusal for these at a future date, this may also include purchases of fractional interests in trailers and resorts.
To launch NZR at the Timber House Resort we've renovated some trailers for overnight guests and have added great new amenities and services, with more to come. Our new overnight guests are already enjoying a uniquely authentic connection to our local culture and cuisine, freely mixing with our trailer owners and other guests while enjoying epic views of Presqu’ile and Prince Edward County. We're investing significantly to add these exciting new tourism experiences and resort amenities.
Why are we so excited about this launch and how did we get to point where we're making this announcement? It has been a challenging process of transformational change and we think telling the story will help prospective new customers and also our current trailer owners understand why we're doing this. In gaining this understanding, buyers and sellers will be in a better position to assess what we're offering and their decision to support or participate.
So How Did NZR Come About?
A few years ago, I had been spending almost all my time operating the Timber House Resort, a 50 site trailer park and a 10 room boutique hotel and banquet facility. This had started many years ago as a side gig and family business. It grew into a full time early retirement project about 10 years ago. Until then I'd spent my days running a Toronto internet business that built mobile applications and trading systems.
I'm young for a 62 year old, but I could see the day coming when I'd want to fully retire and exit from being Bob Newhart running the Timber House Resort. So I shifted my focus to crafting a graceful exit that'd be most beneficial for our customers, our staff and ourselves. Also I know a lot of resort owners at a similar life-stage and wanted to build a platform they could consider using for the same purpose. To accomplish this I've focused full time on fixing the problems that inhibit developing trailer parks and rural resort businesses to their full potential. By unlocking this potential we can attract new buyers, investors and customers to power great new opportunities for resort owners and trailer owners.
NZR's Unique New Shared Tourism and Seasonal Use Model
Having owned and operated the Timber House Resort for over 30 years, I'd seen plenty. Trailer parks are, well, trailer parks. Cliches abound. Wealthy people don't often own trailers. Although, with NZR, more will. Most parks operate with limited services beyond provision and operation of the sites on a rental contract. Typically, customers occupy their trailers seasonally over the years with the trailer remaining continuously on-site. Trailer parks typically have 'mom and pop' owner/operators, often older, short-staffed and wearing many or all hats. Generational ties to the land are frequently the case, both for resort owners and customers.
Resorts are often under-used. Across Canada, the average nights a site in a typical trailer park is occupied is 22 nights or 6% of the year. Revenue is low and primarily from site fees. With limited opportunities to bring in more revenue, resort owners have little incentive to go beyond keeping the lights on. Trailer owners like the low costs and adapt to the limited services, sometimes grudgingly. These resorts are a great bargain for those who are able to occupy their trailer frequently, but this can erode the owner's profit margin. In short, trailer parks can be 'delicate' places and resistant to any kind of change. Customer-owner relationships are like an old-shoe, often comfortable, but well worn, sometimes with rips and tears.
What's really great about trailer parks is the people and places. Customers, and owners, just by being there, are resilient, inventive, and inspiring. Resort properties are typically located on prime settings, places of celebration and connection with others and nature. Often on waterfront or beachfront, resorts are exceptional real estate with extraordinary value in these times of rapid population growth and increasing scarcity in the face of oncoming climate change. In short, trailer parks tend to be underestimated in terms of their value and potential. Scratch the surface of a trailer park and the rewards are wonderful.
So that's why we developed Net Zero Resorts, an entirely new model for rural resorts. With Net Zero Resorts, trailer parks equitably share the resort with tourists alongside traditional seasonal uses. NZR adds hotel-style and Air B'nB-style accommodation in selected, specially adapted shelter (trailers, caravans, cabins, etc) along with great new amenities and infrastructure, including adaptation to and mitigation of climate change impacts. Adding premium overnight occupancy produces high multiples of site revenue to fund new infrastructure, amenities and experiences for tourists and current occupants alike.
Unique Experiences Without Having to Own
Net Zero Resorts helps resorts attract new customers to an updated experience that is available with or without owning a trailer. From the beginning of this process, Net Zero Resorts' platform capabilities help resorts attract a newly invigorated composite clientele of tourists, vacationers and seasonal customers to share great new experiences. Net Zero Resorts is built to achieve the key sustainability transition needed for our world: decoupling experience from ownership.
Trailer owners become partners in the process of establishing a Net Zero Resorts property, choosing their level of involvement to suit them but that is also consistent with the resort’s new goal of providing accommodation to the travelling or vacationing public. NZR resorts will be a beacon to urbanites who crave connection with nature and will come to treasure the connection with the authentic rural spirit of the locale and its people. For this reason, existing owners are encouraged to select their involvement level as either Continuing, Supporting or Participating in NZR. These capitalized terms are explained below.
How Does the Model Work for Existing Trailer Owners?
The NZR model invites our existing trailer owners to be long-term partners in the development of the Timber House Resort. While a fair number of our owners love, like or at least accept the NZR model, we appreciate that the changes involved in implementing this commercial trailer park resort concept may not be welcome for everybody. But we are confident this change is a positive development and we are excited about being able to offer everything our park has to offer to a broader range of tourists and vacationers, while at the same time, working with our trailer owners to offer them the opportunity to turn their trailers into income producing assets over a generous transition period.
Change is difficult, it brings fear and inflames the rips and tears in those 'old shoe' relationships. If we should learn anything from world history, it is that our efforts should seek the ideal of doing the right thing for all (ie; trailer owners), not just a privileged few (ie; resort owners and wealthy tourists). This has led us to develop NZR’s platform capabilities to moderate a fair transition process for trailer owners, along with a zero carbon and energy adaptation process to achieve sustainability and reasonable sharing of the financial results.
Do No Harm (DNH) Framework
With any change, there are almost always those who will be adversely affected, just as maintaining the status quo may adversely affect others. NZR's model explicitly seeks to balance these adverse effects. Taking account of the need to find the right balance and the need to have our choices stand up to the test of time and changing context, our business model operates on a version of the CDA Collaborative's ‘Do No Harm’ conflict sensitivity approach. https://www.cdacollaborative.org/wp-content/uploads/2017/02/Do-No-Harm-DNH-Trainers-Manual-2016.pdf Our goal in using this approach is to implement our transition to the NZR model in a manner that minimizes the negative impacts on all involved parties, without compromising the goal of implementing our new model.
Our DNH approach documents our harm avoidance choices by looking at our actions through a lens of interrelationships between our actions/programs and the divisions and tensions that divide people into groups or to the connections they cause to bring groups together. This framework helps us analyze our own work and understand the relationship between what we are doing, the context in which we are operating and how policies and actions can be aligned with positive impact by minimizing divisions and increasing the connections among people.
The choices we make and these interrelationships are documented for posterity and regular review. Through this process, we allow for a documented approach to each challenge that provides the opportunity for continued revision and improvement over time to better serve the balance implied by seeking to minimize negative impacts on all involved parties.
We publicly manifest our intention into action through ‘Fair Transactions’ identified by the actions within our DNH framework. Fair Transactions present our offerings in the context of how we run our business. Key aspects of how we run our business are embedded in other Fair Transactions. The governance processes and changes we describe below will guide any needed updates to our fair transactions we describe herein. Over time, and through the establishment of our board and new investors, we will cede control and choice for these fair transactions, and indeed the whole of our business.
The launch of the Timber House Resort as the first NZR resort is articulated within the following initial fair transaction list that addresses our Net Zero ideals. From our perspective as the only owners of Timber House Resort and in consultation with our key staff members, Jordan and Lucy, we’ve established these initial fair transactions to launch the NZR at the Timber House Resort.
We've developed initial Fair Transactions. These can be reviewed in more detail in our NZR white paper. Initial Fair Transactions are as follows:
Fair Transactions For Current Trailer Owners
Fair Transactions For Sales of Trailers or Resorts
Fair Transactions towards Zero Carbon Adverse Impacts and Zero Energy Adverse Impacts
Over time and in our governance process described below, we will review and amend our Fair Transactions as needed. In doing so, we construct an integrated trading system known for its key transactions in our business. Through our framework we identify the why, how, who, what, and when, for transactions in line with our objectives of approaching zero harm by balancing adverse effects for all parties, and achieving zero carbon and energy adverse impacts. This allow us to manifest them with high standards of clarity, durability, immutability and trust, all ultimately operating on a substrate of suitable automation.
Fair Transactions For Current Trailer Owners - Lots of Choice
For current trailer owners, NZR starts with a new rental contract and a Good Faith transition process built on Fair Transactions for Current Trailer Owners. It provides current owners with three options:
'Continue' under their site rental arrangement, but neither Participate in or Support NZR and, to minimize adverse impacts on owners, be given a generous period to remain in the park, to further consider participating or supporting NZR, at least on exit, to sell their trailer to an NZR buyer. All such owners are given a formal Notice of Conversion to the NZR commercial tourism model for their trailer site along with appropriate termination dates and assistance to sell their trailer to someone who wants to participate, or choose to participate themselves, subject to terms of participation at that time. If their trailer isn't sold by the end of the Notice to Convert period, the owner must vacate the trailer and may either remove the trailer from the site or alternatively the Timber House Resort will provide the owner a first refusal option to continue to offer the unoccupied trailer for sale on the site, provided that the trailer meets the requirements of the NZR program.
Transition to 'Support' NZR financially each year and stay in their trailers until Oct. 31, 2025 or later, grandfathered under their existing site rental arrangements with the prospect of a more favourable financial arrangement compared to the Continue option, when they eventually sell their trailer to a new owner for participation in NZR. Current owners may shift to Supporting or Participating in NZR and are not required to pay NZR entrance fees that new buyers would pay as described below. Supporting owners are given a formal Notice of Conversion to the NZR commercial tourism model for their trailer site along with appropriate termination dates and assistance to sell their trailer to someone who wants to participate or to choose to participate themselves, subject to terms of participation at the time of becoming a Supporting owner. If they don't choose to Participate in NZR and their trailer isn't sold by the end of the Notice to Convert period on Oct. 31, 2025, the owner must vacate the trailer and may either remove the trailer from the site or alternatively the Timber House Resort will provide the owner a first refusal option to continue to offer the unoccupied trailer for sale on the site, provided that the trailer meets the requirements of the NZR program. Supporting owners who stop paying Supporting charges for each year revert to 'Continue' status with the appropriate NTC termination date, as described in Continue (1.) above.
Transition to 'Participate' in NZR by entering into the Net Zero Contract with the 10 month seasonal use option OR the year-round investment use option for primarily renting the appropriately prepared trailer to tourists and vacationers. Under the year-round investment use option, the owner may also occupy the trailer as a hotel guest for up to a 90 day 'season' at a time. The site rental agreement auto-renews annually, subject to termination by either party and other terms as provided for in the NZR contract, and subject to contract updates as determined by the board. During the Preparatory period, the trailer may be occupied in the same fashion as our current site rental arrangements.
Fair Transactions for New Buyers
For new buyers of trailers, NZR starts with a purchase process built on our Fair Transactions For Sales of Trailers or Resorts. New buyers purchasing a trailer in the park under NZR will pay an NZR entrance fee currently consisting of the following:
10% (shaded sites), 12% (WaterView sites) or 14% (Waterfront sites) of the purchase price of the trailer.
Climate offset fee of $1,400
Fair Transactions for Climate Resilience
Our Fair Transactions towards Zero Carbon Adverse Impacts and Zero Energy Adverse Impacts establishes a series of offset levies to fund zero carbon and energy initiatives along with climate impact mitigations and, eventually, climate impact insurance. Non-NZR owners are grandfathered and pay 5% offsets on minimal Supporting costs only, on Participating, owners pay offsets on all energy. Levies are charged on key transactions:
5% on overnight stays booked directly on the Timber House Resort website
$1400 on new buyer purchase of site and trailer
These funds can be used to reduce resort energy costs, CO2 emissions or to mitigate climate impacts. Insurance product is TBD. Immediate uses of offset review will likely include coastal engineering to mitigate flood risks.
Moving to New Industry-Transforming Governance and Profit Sharing
After sufficient ‘preliminary’ support and participation in the NZR model by current trailer owners and new buyers, the existing Timber House corporate entity will adopt a B-Corp corporate and governance structure. The new structure will formalize a profit sharing arrangement.
Profit sharing will apply to profits above the base profit level attained in the 2017/18 fiscal year. The base profit amount will be retained for the benefit of current owners of Brighton Shores Summer Estates Limited, Dave Dingle and Michele Walkau. Additional profit beyond this base profit will be distributed to various stakeholders as generally described below, subject to variance, terms and conditions set at the time of B-Corp establishment:
80% for Dave and Michele until their ownership interest is diluted below 70%.
10% for all trailer owners (not supporting, NZR participants and NZR supporters) distributed in equal portions, or as changed through mutual agreement with the board.
10% for full time staff in equal portions, or as changed through mutual agreement with the board.
Dave and Michele’s current ownership interest will allow them to continue to exert executive control over decision making up to the point where they sell their controlling interest.
After B-Corp establishment, a board will oversee the business. The board will consist of trailer owners, staff, Dave and Michele, and outside institutional investors, vendors and possibly community members at large. The board will assess the initial NZR ownership structure and will consider alternative corporate structures such as Co-operatives.
We're hoping to attract investors who are excited by our vision and progress. We're seeking funding to acquire other resorts while we continue improving and building at Timber House Resort. Ideally we'll stay involved for a good long time, but with a great improvement over our current, mom and pop, understaffed operation that will make it feasible for us to continue.
The idea of NZR is to build at scale, to do so by offering other mom and pop owners a similar attractive exit or reduced involvement. This provides a mechanism to acquire other resorts and further leverage automation and expertise to reduce costs and improve performance. Most importantly, our staff, community and current trailer owners will face a more predictable future with the possibility of more beneficial outcomes as we fade away from day to day operations but stay involved to lend greater certainty to what the future will bring under the NZR Model.
About the NZR Model
Net Zero Resorts are a new kind of resort - literally a hotel built on a trailer park. Net Zero Resorts offers luxury trailer parks for groups, families and friends to enjoy shared experiences without the burden of having to own the shelter of a trailer, caravan, cabin, or tent. The Net Zero in Net Zero Resorts reflects our net zero harm goal that seeks to balance and minimize adverse affects for all parties, and our objectives to achieve net zero carbon adverse impacts and net zero energy adverse impacts.
NetZeroResorts.ca integrates physical resort properties with digital technology to create exciting new experiences for tourists, vacationers and seasonal guests. Physical Net Zero Resorts properties are supported by our decentralized internet platform that introduces a portfolio of sharing-economy business models and applications that are deeply interwoven into resort operations. These applications greatly assist trailer owners, occupants and visitors at rural resorts by injecting trust, better overall experiences and improved financial outcomes for all concerned.
Financial and business partnerships are explicitly built and continuously developed as digital applications, alongside infrastructure and other management systems. These are an essential mechanism to facilitate automated and optimally transparent capture of value, expenses and profit, along with encoding of contractual commitments and communications with customers, and undertakings with respect to suppliers, regulatory obligations and other entities.
Looking For Like-Minded Investors To Join Us
Under NZR, resorts and the trailers within them can be developed and managed as institutional assets. NZR fundamentally is designed to facilitate healthy and successful exits for trailer owners and resort owners, and to attract institutional investment for resort and trailer development. The NetZeroResorts.ca platform is designed to tap the outsize asymmetrical opportunity to advance global sustainability goals represented by the density-rich urban-rural interface found at rural resorts.
We're launched at our first resort, TimberHouse.net and are seeking funding to develop more resorts across Canada and beyond.