Sunday, August 23, 2009

Seasteading? Not so sure...

I might be going to the Seasteading Institute's "Ephermerisle" weekend event in a couple months... The annoying financial sitch is making that less a possibility at the moment, but I have to admit, I find the prospect intriguing. Not just the party and the meeting of a bunch of people with whom I ostensibly share some values, but the idea of Seasteading itself.

That said, I have some serious concerns with the Seasteading Institute's direction.

To explain a little of their goals, essentially they would endeavor to build a platform in the Pacific Ocean, about 20 miles off the coast of San Diego. On this platform, they'd build a residential community of anarcho-capitalists and live peacefully in a stateless society. Sort of a zionistic plan indeed... But also, I fear, incredibly unrealistic.

The numbers aren't looking good... They have about $500,000 in the bank (according to their website), and for a 400' x 400' platform in the middle of the ocean, including a residential/hotel structure and all the safety/security requirements, the amenities and everything else, they are estimating at a total cost of $114,333,000.........

Seems a bit low, right?

Yeah. So I had a chat with my brother the other day, who is a knowledgable and rather successful project manager who has spent the last 5 years of so building high-rise apartment buildings in Manhattan, NYC. I was curious about the size of rooms and some basic figures for designing a large hotel. He said that essentially you'd want to plan on 800 square feet per room at a minimum. So I posed the idea of a 12 story hotel with a footprint of 25,000 square feet. That's about a 158' x 158' square. Considering you'll need some walking space, you'll need to leave room for other structures like movie theatres, grocery stores, clothing stores, bowling alleys, office spaces (physical production facilities/factories?) and whatever else people are going to want to actually do living out in the middle of the ocean, then using 15% of the total area of the platform on the foot print for living quarters seems like a reasonable amount.

I should also note that based on the "ClubStead" engineering specs, the bulk of the weight would need to be situated over the 30' diameter pillars rooted down on the ocean floor.

At any rate, a 12 story structure in the middle of the ocean is about equivalent to a moderately sized cruise ship, so I doubt very much the structure could support anything more than that. Sooo... Assuming 800 sf per room, minus the first two floors (which would naturally be facilities & lobby, etc.), a 12 story structure with a 25,000 sf foot print winds up being 31 rooms per floor at 10 floors, or 310 rooms total. This also assumes relatively small rooms, unfortunately.

Now, after that conversation, I had a chat with my father - who is a professional designer of Airports and various other development engineering projects. I proposed the idea as potentially a casino and asked what one might expect the costs to be... Ya know what his response was?

$1,000 per square foot.


25,000 sf x 12 floors
= 300,000 sf x $1,000
= $30,000,000 just for one structure.

Furthermore, I learned that the design costs are typically around 10-12% of the building cost. So, the Seasteading Institute would be looking at dropping about $3,000,000 for the design work. And that's not for the platform, mind you, but for just the "hotel" we put on it.

On top of all that, my dad's estimate was for land-based structures. Surely the engineering cost of something that will be on the water and need to withstand erosion, rough waves, tsunamis and sea-monsters - and be 100% waterproof all over - will be much much more than $1,000 per square foot.

For something like this to work ever, any anarcho-capitalist or libertarian should know that it has to be a commercial venture. As far as I can tell, the only thing that will really work to make a Seasteading project functional is if it's a resort hotel & casino open to any number of travelers... I actually think there's a really smart opportunity here if done right. Cruise ships run in and out of San Diego all the time, they are also required to stop at a non-American port between docking at their home port... Right now most of them go to Mexico. Holland America's ships stop at Ensenada. Stopping instead at a unique resort instead might be a really interesting experience - especially since at least on the San Diego/Hawaii runs the stop in Ensenada is only a few hours, and about 2-300 miles out of the way. The cruise lines would save gas (a giant expense for them) and the passengers would get a really interesting experience.

But for that to work, you need more than just 12 stories of hotel.

You need casinos, concert venues, an array of restaurants, and you need entertainment facilities of all kinds. You need shopping, and of course, everything that everyone hates to think about like garbage, recycling, HVAC, communications people, and all the rest. If I had to guess, between restaurants and venues and the hotel - not to mention the platform itself - we'd be looking at well over $300,000,000 for the bare minimum, and if we're honest... Probably more than that.

310 tiny rooms with nothing else around really won't cut it.

By contrast, the MS Amsterdam - one of the cruise ships who's instrumental entertainment I was responsible for while working with Stiletto Entertainment - holds about 1,200 passengers and nearly 700 crewmen.

The Seasteading people are estimating a 200 room hotel with a 70 person staff. 70 staff?

Two things are quite clear to me. The Seasteading Institute people are grossly underestimating costs. They are also thinking on a scale which cannot possibly be profitable, and by extension cannot possibly work.

I'd really like to see "liberty in [my] lifetime". I think the overall mission of the Seasteading project is brilliant. But unless they start acting less like a non-profit and more like Steve Wynn, I just don't see how it's going to work. The project needs major investors, it needs a very serious business plan and it needs to start thinking more things through.

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