Financial Times Sits Down For Shrimp With Larry

It’s a tough market these days, so the world’s canniest investors are turning to new sources of wisdom. Not Black Rock, the world’s largest asset manager with $4.7 trillion… but the Black Rock Desert, with Mr All Teeth-No Hat himself, Larry Harvey. I heard about this story last night from a banker in Dubai.

So, when Burning Man is being discussed in a paper literally dedicated to trade in commodities – have we reached Commodification yet?

Some might consider Larry a surprising choice to be dispensing wisdom to FT readers. He recently gave his $40 million company away after 30 years, but not before he spent millions of dollars on accountants and lawyers valuing it. They got 2 separate valuations, and then chose to price it at the lower one. Perhaps they were Satanically pranking themselves.

Still, when it comes to eating Shrimp Louis and waxing poetical, Larry’s there to please. Read the whole interview at FT, I want to comment on a couple of things of particular interest to Burners.

 


 

Lunch with the FT: Burning Man’s Larry Harvey

Over Shrimp Louis, the festival’s ‘chief philosophic officer’ talks about ‘radical self-reliance’, conservative values and why a ‘sudden change’ is on the way

Image: Financial Times © James Ferguson

Image: Financial Times © James Ferguson

[John’s Grill’s] wood-panelled walls are lined with photographs of famous diners, from Alfred Hitchcock to Steve Jobs. It has survived the 1960s counterculture revolution, half a dozen earthquakes and several cycles of tech industry boom and bust. So too has another San Francisco institution, Larry Harvey. “Well, this is an old-line place, isn’t it?” he says, as I greet him at the back of the restaurant. “It smells like leather and old men.”...

Placing his water bottle between us and with his embroidered black shirt pockets stuffed with cigarettes, notebook and spectacles, he has aged like a Rolling Stone…Harvey says, “I don’t drink much alcohol” but encourages me to “have a drink or two. You might write a more sympathetic story.” …He asks me about Brexit…

“It’s not unlike what’s happening here,” he says. “Fortunately it looks as if the republic isn’t ready to be ruled by a narcissistic celebrity.” A “life-long Democrat”, Harvey is confident that Hillary Clinton is going to sweep Donald Trump to a “historic defeat”. “It’s worked out so beautifully. Bernie [Sanders] pushed her to the left significantly.”

So much for the Mainstream Republican Values of Burning Man. And indeed, the Progressive Left values of the many Sanders supporters I know amongst the Burner community.

Harvey himself is unperturbed by the growing presence of tech billionaires at Burning Man, describing them as “our cousins and neighbours”. It is “ludicrous” to say that money — which is banned from the festival other than to pay for ice and coffee from the Center Camp Cafe — is evil. We’re not the Occupy movement,” he says, gesturing with half a hard-boiled egg that he has been holding for several minutes. “Civilisation and commerce have always gone hand-in-hand. We’re an international city, for God’s sake. You don’t whistle that up out of nothing.”…Progress comes from “struggle, shared with others, towards some common goal,” he says. “It doesn’t come from love per se.”…Harvey is an atheist and declares himself allergic to the supernatural…At the festival, the burning of the man brings everyone together in a moment of catharsis. “They witness themselves, and they too feel real and themselves, this supercharged entity and yearning, because they’ve been circling around the centre in this chaotic whirl for days,” Harvey says. “Everyone feels like they’re one with everyone else … That’s called transcendence.”

See, I always thought I was living in a community when I was at Burning Man. I didn’t realize that the important thing was everybody circling around this Central Intelligence Axis, summoning a supercharged entity from the chaos. It’s a very binary thing: you can go clockwise, or counter-clockwise. Go with the flow, or stop and it will wash over you. Of course, that’s not supernatural or anything. Burning an effigy in a pentagram, after lighting it from a cauldron called The Devil, burning a Temple, nothing to do with anything supernatural.

I’m not sure that “for God’s sake” is the best phrase to use when asserting one’s atheism.

Here’s what Burning Man was like when I first went. I think many of us old school Burners still see Burning Man this way.

Maybe Larry’s going to FT seeking some new suckers financial heavyweights to chip in for the next phase of their real estate ambitions:

It takes me a long time to get Harvey to address why the festival that puts “leaving no trace” among its core values is using donations to buy a permanent home on a Nevada ranch earlier this year — not least when its founder also bemoans the “imperial sway” of private property. Several tech entrepreneurs — including a founder of Airbnb and a venture capitalist who backed Twitter and Snapchat — donated $6m to Burning Man so it could buy Fly Ranch, a 3,800-acre property.

Some donors asked to remain anonymous; Harvey acknowledges (but does not deny) speculation that they might include the Google boys, who have been spotted hanging out at First Camp, or Elon Musk. But he insists that they have been promised “nothing” in return — “not a role in governance, not tickets … It’s a gift.”

With a “no-hustle” fundraising model established, Fly Ranch is not the limit of Harvey’s ambitions: the group is now eyeing the adjacent Hualapai Flat, a playa not unlike Black Rock’s, which Harvey says is on the Department of the Interior’s list of “disposable properties”. “We’ll be first in line to bid for that.”

While he insists there is no set business plan, Harvey envisions Fly Ranch to be an “auxiliary space” — the “minor key” to the “major key” of the big burn, which, he concedes, can be a “brain-numbing and eardrum-abusing experience”.

Retirement villages in the desert? Will there be beachfront property on this playa? I am ROFLing at the thought that nobody from Google gets tickets from BMOrg. Numb your own brain.

danger ranger tweet self service cult wash your own brain

Investors in the new Timeshare at Flysalen may want to consider insurance or a hedging strategy. Seems like Larry’s been watching Doomsday Preppers:

I ask if he feels, after 30 years, that Burning Man’s ideals are starting to be felt beyond the desert. “I’d like to mischievously quote Milton Friedman,” he says, invoking the rightwing economist. “He said change only happens in a crisis, and then that actions that are undertaken depend on the ideas that are just lying around.” With the “discontents of globalisation” set to continue, he predicts that crisis will hit by the middle of this century. “I think there really is a chance for sudden change.” However, I struggle to pin him down on exactly which Burners’ ideas he hopes will be “lying around” when it does…he is much more eager to talk about organisational details, such as Black Rock City’s circular layout, “sort of like a neolithic temple”.

Indeed, Harvey insists he has a “conservative sensibility” and is “not a big fan of revolution”. “Do I sound like a hippie? I’m not!” And he bristles at being called anti-capitalist, although he hung out with the hippies on Haight Street in 1968. “I was there in the spring, autumn and winter of love, but I missed the summer,” he says, due to being drafted into the US army. “It was apparent to me that it was all based on what Tom Wolfe called ‘cheques from home’. The other source that shored it up was selling dope. I thought, that isn’t sustainable.

[Source: Financial Times]

We heard last December that Burning Man was going to turn over a new leaf in environmental sustainability. I’m still waiting to see what this actually means. They got a donation from Solar City?

Projects like this suggest we are heading in the opposite direction from sustainability and Decommodification:

Image: SFist, Big Imagination (Facebook)

Image: SFist, Big Imagination (Facebook)

Is this art, spreading the ideals of the community to make the world a better place? Or just a fancy way to get your signage on TV?

How will this help when the shit hits the fan and civilization collapses? We will all live in converted 747s?

Not to worry, though. Time and space dance to Larry’s tune:

Read the full story at the Financial Times

 

The Great Public Land Heist Has Begun – Are We Part Of It?

Image: Outside Online

Image: Outside Online

“Conservation is a great moral issue, for it involves the patriotic duty of insuring the safety and continuance of the nation.” — Theodore Roosevelt

Call me a conspiracy theorist – if you must – but a lot of stories have been hitting my news feed lately related to our favorite little patch of Northern Nevada that surely can’t all be unrelated.

First we had the announcement of a zoning change around Gerlach, that seemed to enable the Temporary Autonomous Zone concept so favored by Larry Harvey and Peter Lamborn Wilson, aka Hakim Bey. That seemed possibly related to Billionaire Burner Larry Page’s BMOrg-endorsed vision to have all kinds of new testing grounds for Google. Not just a TAZ – also a PAZ and a SPAZ (Permanent and Semi-Permanent).

Next, the town of Empire – a “quasi-ghost town in Burning Man’s back yard”, with its abandoned Gypsum mine and potential associated site contamination issues – was sold for $11.38 million.

Then, BMOrg breathlessly announced the long awaited closure of their Fly Ranch deal, with details “coming soon” (of course). Donors put up the money for the purchase of “Nevada’s Coolest and Least Known Attraction”, but they’re not telling us who yet (or, quite possibly, ever). The Burning Man Project (as far as we have been led to believe, that is the owning entity) now has a 3800 acre ranch in an area where the local government just approved groups of up to 500 people to do whatever they want, with very minimal oversight from the authorities:

“Unless somebody comes in and points a finger and says, ‘hey they’re doing that,’ we’re not out there driving around looking for it,” [County Planner Dr Eric] Young said. “We will have an occasion to be out there from time-to-time for various inspections, (but) there are certain things like that where there’s not going to be a county person standing there looking at it.

Online pundits say the De Haviland Dash-8 is the new aircraft of choice. Image: simairline.net

Online pundits say the De Haviland Dash-8 is the new aircraft of choice. Image: simairline.net

Next, we heard that BMOrg have created their own commercial airline, with planes carrying up to 30 passengers at a time. Burner Express Air is imagined to be carrying 2500 passengers per day in and out of Burning Man. Assuming that they only fly passengers in daylight hours, and every flight is full, that’s a minimum of 84 flights per day. Assuming planes start just after sunrise and stop just before sunset, that’s 12 hours a day – or one new planeload every 8 minutes. That’s their vision. $995 per person for a round-trip flight from Oakland, $495 from Reno. A couple of million dollars per day. Fossil fuel and noise pollution be damned! No spectators be damned!

Like most of the aviation world, the flights will be subcontracted out to other operators. Prime contractor Advantage Flight Solutions are hiring 50 new employees to cope with the anticipated load – which sounds like a lot for a week, but more realistic for something that is anticipated to be year-round.

Also in the area just recently, a long-standing case between Burners and a powerful local land-owner (whose $7 million boat, the biggest one on Lake Tahoe, mysteriously sunk at the dock) was finally settled. The court ruled that the abandoned art car, which had not been to Burning Man in at least 4 years and was in a state of disrepair, was not a valuable piece of art work worth $1 million. The Burners lost and had to pay the other side’s legal costs: about $50k.

Remember this Burning Man founder’s claim that it’s because of them that Elon Musk and Bunny Ranch owner Dennis Hof built their Gigafactory in Reno, in one of the world’s biggest free trade zones.

Screenshot 2016-01-28 11.38.13

He recently got a tour of the Gigafactory with Reno Mayor Hillary Schieve and Councilman David Bobzien.

Apple also just announced plans to build a $1 billion data center in the Reno free trade zone.

Is there some Billionaire Burner version of Atlas Shrugged going on, Galt’s Goodell’s Gulch in the world’s hottest new tax haven? A utopian occult colony? A Monte Verita or Woodstock for the 21st Century? Or just “Esalen in the Desert”?

Whichever way you look at it, that’s a helluva lot of dots. I see connections between all of them. Others are pointing some of the dot-connections out too, including Burning Man Founders and the first-ever full time Burning Man beat reporter. YMMV; maybe we’re all wrong. Still, there are a few more dots to come yet in this post.

That recap of recent goings-on brings me to last week’s story from Outside Online (who previously did a must-read oral history of Burning Man called Hot Mess):

The Great Public Land Heist has Begun

Last week, the House committee on Natural Resources voted to adopt HR 3650, the summary of which reads:

“This bill directs the Department of Agriculture, through the Forest Service, to convey to a state up to 2 million acres of eligible portions of the National Forest System (NFS) in it that it elects to acquire through enactment by the state legislature of a bill meeting certain criteria. Portions of the NFS conveyed to a state shall be administered and managed primarily for timber production.”

It’s not just about timber. This sets the precedent for wilderness being sold to developers. Hillary Clinton has been accused of cashing in on this, as has Harry Reid. Donald Trump is opposed to it.

Why is private ownership of vast tracts of land you currently own bad? Well, it’s historically been demonstrated to reduce public access, and moves the land out of any unified, managed or regulated conservation program. Yes, there is a significant financial gain to be had by selling these lands, but that’s a one-off instance of profit from lands that currently contribute massively to local, state, and the national economy. The outdoor recreation industry alone, which relies on land access to exist, employs 6.1 million Americans and contributes $650 billion to the economy annually. The land where you and I currently go to camp, climb, cycle, hike, hunt, fish, and paddle is under threat. 

The Teddy Roosevelt Conservation Partnership—an organization of hunters and fishermen—called the bill an “overt attempt to undermine public land ownership.” Its president and CEO, Whit Fosburgh, went on to state, “Make no mistake, these are the first votes on legislation that would legitimize the wholesale transfer or sale of America’s public lands.”

In fact, the heist is so blatantly anti-American that even Donald Trump opposes it. “I don’t like the idea because I want to keep the lands great, and you don’t know what the state is going to do,” Trump told Field & Stream. “I mean, are they going to sell if they get into a little bit of trouble? And I don’t think it’s something that should be sold. We have to be great stewards of this land. This is magnificent land.”

[Source]

Federal lands, might get handed to the States and sold off to raise money? Hmmm, wonder if there are any possible connections between BMOrg and that?

Well, we have BLM Special Agent Dan Love, the head of security for the Federales at Burning Man, leading from the front lines in the Bundy Ranch stand-off with Cliven and his family. Harry Reid was forced to back down when his family connections to a Chinese solar plant planned in the area were exposed.

bundy cattle trespass solar

bundy cattle 2

Recently, though, the Bundy family got caught up in another stand-off with the BLM in Oregon at the Malheur Wildlife Refuge – this one linked to Uranium, the Clintons, and the Russians. It turned fatal when the Feds assassinated a patriot Lavoy Finicum before he could meet with a local Sheriff, Cliven turned himself in for arrest and is locked up without bail in Federal prison awaiting trial. About a week ago the BLM announced they were resuming their operations on the land.

Then we have Love again as the alleged main instigator of ChocoTacoGate. BMOrg pulled some big strings, bringing in former Senate Majority Leader Harry Reid in what the Washington Post called “a trippy alliance”. They hired Reid’s hand-picked former head of the BLM Bob Abbey to help smooth the waters with the many Government Agencies involved in Burning Man. Long-time BLM official Gene Seidlitz was moved out of the way. BMOrg fought the law, and BMOrg won.

I also noted last year the last-minute decision of the BLM to not allow access over one of their roads to Further Future 1. That land was also involved in a BLM land grab dispute, related to a nearby mine. From what I gather, there is a very large new gold mine quite close to Black Rock City and the Fly Ranch site.

Let’s recall too the ditching of local EMS provider Humboldt, for big commercial festival provider CrowdRX. Looks like they were in the right county for Burning Man (Humboldt), but the wrong one for the Burning Man Project (Washoe).

One last set of dots connected to all of this is in the form of Burning Man founder Will Roger Peterson. From his web site:

WILL ROGER PETERSON

BORN 1948

CURRENT POSITIONS:

FOUNDING MEMBER, BOARD OF DIRECTORS, BLACK ROCK CITY LLC

(BURNING MAN)

    DIRECTOR, NEVADA RELATIONS AND SPECIAL PROJECTS

FOUNDING MEMBER, BOARD OF DIRECTORS, BLACK ROCK ARTS FOUNDATION   CO-CHAIRMAN, CIVIC ARTS COMMITTEE

MEMBER, BOARD OF DIRECTORS, FRIENDS OF THE BLACK ROCK/HIGH ROCK    VICE PRESIDENT

MEMBER, SIERRA FRONT-WESTERN GREAT BASIN, RESOURCE ADVISORY COUNCIL (RAC)   CHAIRMAN

    REPRESENTING DISPERSED RECREATION

MEMBER, NEVADA RECREATION ADVISORY COMMITTEE (REC RAC)

MEMBER, BLACK ROCK-HIGH ROCK-EMIGRANT TRAILS NATIONAL CONSERVATION AREA RAC SUB GROUP  CHAIRMAN

Looks like he sits on several of the boards that would be making recommendations to government about what land is ripe for sale…

My gut instinct tells me, something big is afoot. Are we headed for the ultimate version of Brexit: the BURNEXIT? When the tech industry all vanish off the face of the map, and move to tax havens in the desert where they can take LSD every day for weeks to “increase productivity”? 

A Permanent Utopia?

Fly Ranch Geyser, Washoe County

In NYMag, Nellie Bowles reports that BMOrg have their sights set on a permanent community, and once again will be bussing investors from First Camp out to the nearby Fly Ranch property.

Burning Man’s leadership, nicknamed “the Borg,” has been quietly pushing the entity toward a new phase.

Quietly? As quiet as you can be with half a dozen people in your media team, a Minister of Propaganda, and staff flying all around the world for panel discussions.

As the six founders who built the festival and still guide it start to age, a new generation of leaders is being tapped, including the charismatic and ambitious Bear Kittay, now “Burning Man’s social alchemist and global ambassador.” The Borg is cagey about plans, secretive about money, distrustful of the press (whose Wi-Fi they’ve shut down this year). But co-founder Marianne Goodell has hinted at another major change…developing a private tract of land as a permanent Burning Man community. 

 

Time for a change? Bear Kittay, Marian Goodell and Danger Ranger. // Photo by Christoper Michel

Is this Burning Man’s future? Bear Kittay, Marian Goodell and Michael Mikel. // Photo by Christoper Michel

Last year, the Borg renewed efforts to purchase and develop a nearby property, the geyser-filled Fly Ranch, which they’d been eyeing for years. As Goodell recently said on a podcast called Positive Head. “For the long-term survival of the culture, we are going to need a physical space…We will, as time goes by, find it hard to only be in the Black Rock Desert. We may need to find a place that would allow for infrastructure. I’m certain that’s in our future.

fly geyser mapFly Ranch is, by all accounts, spectacular: it’s about 4000 acres (880 of which are wetlands) with 23 hot and cold springs and around 40,000 feral horses. There’s one 104 degree lake that’s a couple hundred feet wide. Rod Garrett, one of the original architects of Burning Man, had drawn up plans for a Burning Man Fly Ranch city, a mix of homes and communal spaces built to blend into the desert.

“Employees and affiliates may build on a ‘Homestead’ basis, or rent or buy into the Village community at the project’s north end,” he wrote, in his lengthy proposal.

According to one plan, Fly Ranch buildings would be made with unpainted, rammed earth and sod. No fences would be allowed, and all members of the community, who could either build homesteads or buy into a communal village, would live by Burning Man’s “Ten Principles”...Organic vegetable farming and a Burning Man-like conference business would serve as the economic base of the community.

Growing organic crops in the Alkaline desert, hundreds of miles from the nearest small town. A conference center in the middle of nowhere, in a place with notoriously harsh physical conditions and world famous bug infestations. Sounds like a lot of smart business planning has gone into this idea over the decade+ they’ve been developing it.

FlyGeyserFestival co-founder Will Roger writes of this new Burning Man city in utopian terms: “I fondly hope that this concept can develop rapidly, and become not only a destination for learning and wonder, but a model to the world of a community, although remote, that is ideal and sustainable. It is for the Burning Man Project to create this wilderness paradise.” 

Development of this scale would require a lot of money, and last year, the organization began giving tours of Fly Ranch to potential investors. People around the playa whispered that well known burners like Elon Musk, Sergey Brin, and hotelier Chip Conley were among those shown the property (though none have confirmed that they actually were). 

Burning Man first tried to buy it in 2005. They tried again a few years ago, but the asking price was around $11-12 million, and they only raised about a half a million dollars, he said. But last year, the landowner Sam Jasick passed away, leaving his son Todd in charge, and Todd said he’d welcome another offer. Roger, who lives in the nearby town of Gerlach, decided this time he would get it right.

During last year’s festival, he said they were leading two tours a day. They had set up a little camp there for prospective investors to lounge and get a sense of the area’s energy.

Because nothing says “Decommodification” like 2 busloads a day of investors going to the real estate sales lounge. And nothing says “sustainability” like building a 70,000 person city for the purposes of entertainment, creating art just to burn it down, and in a week producing the amount of CO2 emissions of a small country

From Roger’s perspective, buying land means Burning Man can serve more people — the demand for tickets already far exceeds the supply. “This year, 60,000 people didn’t get tickets to this,” he said. “By owning our own property, it means putting in our own infrastructure. It could be a retreat center or an art park.” He said the plan would be to build that retreat center and a museum, hold smaller events, and create a city to test out what it would be like to live on Mars (guess which tech billionaire could be thinking of that?). “What interests me is the experiment in a permanent community,” he said, adding that the tech titans felt the same way. “They’re interested in that too, yes.”

So far, not interested in it enough to fund a Series A for this 30-year old start-up. But maybe this is the year.

Part of the appeal of the site is recent moves Will Roger has made on the board of a local Advisory council to get the BLM to re-designate land so that it can be sold.

burning_man suitsAdjacent to the Fly Ranch property is, Roger said, “a playa, public land.” He had joined a political group: the Sierra Front-Northwestern Great Basin Resource Advisory Council. In this position, he helped to declare that land disposable, defined by the Bureau of Land Management as “land that can be sold.” He added, “Getting it on the disposable land list was crucial because we could have our own playa then, something smaller for five to 10 thousand people.” The property is “A-rated solar, A-rated wind,” and Roger said the income from that power generation would become the foundation for a community. “If you look at a 100-year plan, it could be remarkable as a planet changing culture,” he said.

If someone can figure out a way that you can put solar panels miles away from industry or population, and that itself makes so much income that it could sustain a growing community, then that could indeed be planet-changing. Usually, local generation offsets costs rather than creating revenue – and industrial-scale facilities are built near the main power transmission grid.

As Burning Man emerges as an emotional and intellectual center for the tech world, Roger thinks the chances of a deal going through are higher than ever. His employees were leading tours while he hung out at First Camp — “I don’t swim in that world, but my staff swims in that world,” he said. He said he was just thrilled the vision to create a town has finally come closer to fruition. “I’ve had my dream in this and my heart broken so many times,” he said. “Now I’m 66 years old, I’m almost retiring, and it might happen.”

Emerges? Isn’t that how the whole shebang has been marketed, since DARPA first unleashed their Web weapon on the general public in the 90’s?

Although Roger says he doesn’t swim in that world, 4 years ago when they bussed me out to the site on one of these investor tours he was the man in charge. Swimming in the world of hot springs was part of the sales pitch – everyone was encouraged to get naked, of course. The details about how investors would get a return on the most expensive desert land on earth were sketchy…“we’re going to run a business based on the Ten Principles“. Ummm, which ones? Gifting and Decommodification? Leave No Trace? So how does that work again? Everyone volunteers for free, pays to stay in a conference center where you bring your own bedding and catering and take out your own trash, the Founders get the ticket revenue (which of course “isn’t enough due to all our costs”), and investors donate the money?

A year has passed since we sat together in the playa, and it hasn’t quite happened yet. When I asked a Burning Man representative about their plans, the website they had up saying that they’d begun to develop the land came down. But on the Wayback Machine you can still see their statement: “The Burning Man Project is pleased to announce the initiation of the preliminary stages of the development of the Fly Geyser property.”

A quote on the site from Will Roger reads: “The Fly Ranch Project is a key component of a broader plan for economic and community development in the Northern Nevada area.”

Read the full story at NYMag.

Permanent infrastructure for Burners is a great idea. Destruction and pollution is so 1980’s. Leave It Better trumps Leave No Trace. A Center for Philosophy, to spread the culture around the world? I could see that happening. Putting these things together, a couple of dozen miles further out into the wilderness from Gerlach? That leaves me scratching my head. I always thought the key to real estate investment was location, location, location.

If you build it, they will come…maybe they should build it in Colorado and sell weed to tourists to pay for the thing.

 

drug-war-cartoon2

How Much For That Ranch In The Desert?

The Black Rock Beacon published a story about the Burning Man Founders’ cash out. The $10 million figure they use seems very much on the low side, unless it is per director. See The Great BMOrg Cash Out $28-45 million post – so far, no-one has attempted to dispute the calculations from our guest author A Balanced Perspective. These calculations did not include the estimated $2.5 million per year in royalties paid to Decommodification LLC, a private company owned by the founders which in 2017 will probably be sold back to themselves (ie., another entity in their complex web of for-profit and tax-free companies). This transaction is by no means a done deal, since the directors still have the power to vote against the transfer.

The cash out numbers we have estimated do not include any rent the organization pays for the use of their Nevada work ranch and other properties. This year, just before the announcement that Burning Man had finally “completed” their transition to a non-profit, the ownership of the Gerlach ranch was transferred to yet another private company in their complex, non-transparent corporate web.

Santafemous did some investigation of this property:

Beginning in 1999, Burning Man had a 10 year lease on an 80 acre parcel they called The Work Ranch (80 Jackson Way) and, in 2001,they purchased 200 acres next door (88 Jackson Way) called Black Rock Station.

“…this property originally served as a landing zone for all the stuff left on the playa after every event..the years of stuff now amount to an unorganized tract of land. We will completely remove and relocate operations to Black Rock Station…because Washoe County Community Development isn’t happy with some conditions on the property.”

…Some of the…properties are, “Black Rock Station (a fully functioning work ranch), the Gerlach Office, “Helen’s House”, the Black Rock Social Club and the Gerlach Showers. From these properties, Burning Man uses these properties for administrative operations, supplies storage, and staff support facilities.”

work ranch burning_man2

aerial view burning_man_80_acres

In a 2008 permit application, the ranch at 88 Jackson Lane was owned by Black Rock City, LLC

On January 9 2014, the title was transferred from Black Rock City LLC to Black Rock City Properties LLC for $0. On March 3, 2014, BMOrg announced the completion of their non-profit transition.

Black Rock City Properties LLC was formed at the end of 2013, presumably for the sole purpose of this real estate transfer. It has the same address as Burning Man’s HQ. Black Rock City LLC is listed as the managing member. Will Roger is the only listed director. This is different from Gerlach Holdings LLC, which lists all 6 founders as officers  – does anyone know what that company does?

So just before they announced they’d fully transitioned to a non-profit (which later turned out to be not true), they shifted the real estate holdings out of one company in their group, and into another. Why?

The government valuation information on the work ranch is:

2013/2014 Fair Value

$582,177 taxable

$203,762 assessed

According to a consultant from Piscataway Homes, Gerlach real estate is only going one way: down. Dramatically so.

2014/2015 Fair Value:

$487,244 taxable

$170,535 assessed

They purchased the property in 2001 for $70,000. In 2013 the taxable improvement value was $550,177.

Does Black Rock City LLC pay rent to Black Rock City Properties LLC? Although there is no direct evidence either for or against that, I think it is a reasonable assumption. The IRS Form 990 filings from the non-profits show that both Black Rock Arts Foundation and the Burning Man Project pay rent. Since both organizations are housed at BMHQ, this establishes the precedent that BMOrg is cross-charging rent (and other expenses) across its various entities. Occupancy was $5500 in 2012 for BMP, and $12,900 for BRAF. Office Expenses were $9,497 and $26,390 respectively.

The rent charges skyrocketed (62%) at the same time that BMOrg announced their transition plan, 2011. They’ve been growing dramatically every year since.

Rent (from Afterburn reports):

2013    $732,900

2012    $615,944

2011    $444,000

2010    $274,000

2009    $167,000

2008    $236,000

2007    $281,000

In 2013, Burning Man moved its headquarters from 3 floors of a $17 million building in Market Street, to a building in the Mission. Here are the details on that building from LoopNet:

660 alabama

The 2 lower floors are 11,555 square feet each; level 4 is 15,000 square feet. Burning Man’s headquarters address is Level 4, 660 Alabama Street.

Burning Man took up 3 floors in their Market Street offices. The floors there are 4500 square feet each.

Consolidating the work force onto a single floor that is slightly larger seems to make sense. The top floor at 660 Alabama has high ceilings, as you can see in the photos here. There are stairs in the offices, but these seem to go to a mezzanine, rather than to one of the lower floors.

bmhq stairs

bmhq mezzanine

This page from 2010 lists the rent for the upper 3 floors of the building at $65,100 per month.

Assuming the lower floors are priced less than the penthouse, a reasonable estimate for the rent is half the total: $32,550 per month.

Rents in San Francisco have been steadily increasing over the last few years, so let’s factor in 10% growth per year. This brings us to $43,000 per month by 2013, or $520,000 per year.

From the 2013 Afterburn report, total rent of premises was $732,900.

So my estimate is about $200,000 per year goes to rent the Nevada properties. If this ends up in the pockets of the founders, then this is another $1.5 million or so over their 7-year cashout. Presumably this is a revenue stream that will continue as long as the event is held on the Playa.

If the money doesn’t go to the founders, then why would they transfer the real estate holdings out of Black Rock City LLC, before transferring Black Rock City, LLC to the Burning Man Project? If the properties needed to be transferred at all, why not transfer them directly to the Burning Man Project? Why form yet another private, secret corporation?

If all the rent simply goes to the HQ building, then that is more than $60,000 per month. The company claims 30 full time employees and contractors, so they would be paying $2,000 per person, per month. Even in rent-hungry San Francisco, in the hipster Mission District, that seems unfathomably high.

Another possibility is that Burning Man rented the whole building, then sublet the other floors. Revenue data is not shown in the Afterburn reports, all we have to go on is Maid Marian’s claim of $30 million per year. This scenario still does not explain the last minute transfer of real estate holdings to another private company.

As always, if anyone else has other data, or a different take on the math, please share.

ranch burning_man4