[From Henry Norman] To All Wa’ab Landowners Entertaining Thoughts of Leasing Their Land to ETG:
The following post was authored by Mr. Henry K. O. Norman, publicized on the facebook page, Yap’s Development. We highly recommend all the people in Yap to take time read this article.
Some of you may have wondered, “Why are high profile sports figures getting so much money from contracts with sponsors?” (recent case in point: Golfer Rory McIlroy signed a $250,000,000 contract—two hundred fifty million dollars (!), over ten years—with Nike Golf (http://goo.gl/7TIOj))?
The reason, of course, is that Nike Golf figures that they will make A LOT MORE than what they offer Rory, by having his name on their roster (AAMOF, Nike projects a revenue of $28-$30 billion by 2015… )! Surely, it makes (some kind of) sense that, since Nike Golf stands to make billions of the resource “Rory McIlroy,” it is only proper that the resource generating this windfall (Golfer McIlroy) should be well compensated!
So, one might ask, what has this got to do with leasing Wa’ab land to ETG?
The answer is: Everything!
If ETG stands to make billions of dollars utilizing the land resources leased to them by YOU, it is only proper that the owner of that resource—YOU, and your descendants—is WELL COMPENSATED for generating those billions!
In the best interest of you and your family, for GENERATIONS to come, I would strongly advise you to make sure—and as the owner of the desired resource, you CAN AND SHOULD DICTATE the leasing terms—that some or all of the following is clearly spelled out in the Leasing Contract (and make sure that the “you” in the contract carries over to your heirs/descendants in perpetuity):
#1) COOPERATE. Form an alliance of ALL Wa’ab land owners that intend to lease their land to ETG. United, you will be STRONG (divided, you will be WEAK: the ETG lawyers are the best that Yuan can buy…)
#2) Make sure that you are a listed as a PARTNER in the venture that the land will be used for (this is recommended by your trusted Yap State Department of Resources and Development: “making landowners partners or shareholders of projects is viewed as the most appropriate arrangement for utilization of land.” (quote from http://yapdevelopments.org/?page_id=16, Section IV, Land Ownership and Availability Including Mortgages and Leases).
#3) Make sure that the Leasing Contract includes a clause that gives you (in ADDITION to the lease fee itself) a PERCENTAGE OF THE PROFITS made by ETG/OPP as a result of being given the privilege of using YOUR land! Something like “25 cents per visitor per month” or “x% of the gross income made by ETG/OPP”—You get the idea… Have it “iron clad” by consulting with a GOOD lawyer, well experienced with Land Lease issues (the expense will be a Good Investment on your part!).
#4) Do the math: One percent (1%) of $1,000,000 is $10,000 (and in the Rory/Nike case cited above, Rory’s $250 million is less than 1% of 30 billion). By 2023, ETG projects a yearly revenue of $1,000,000,000: ONE HALF percent (0.5%) of this is $5,000,000. Make sure this is divided fairly between ALL that leased their land, prorated in accordance with the size of the area leased). Be reasonable—if ETG/OPP makes a bundle, as land owners you are all ENTITLED to a fair share of that bundle.
You (and your heirs!) will kick your butt forever if you, in the future, will have to endure seeing ETG/OPP making truckloads of cash, and all you get out of the deal is a measly monthly rent!
If the ETG negotiator balks at this, or otherwise disagrees: WALK AWAY! If they need your land, they will come back later, pen in hand. YOU have the strong position, with considerable negotiation leverage! Guaranteed.
Last, but not Least: Good Luck! You will need it… These ETG folks are SHARP… Please do not allow yourself to be taken for some proverbial ride! As they say in California: Don’t take any wooden nickels!