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Micheal Kluchkowski

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Reply with quote  #1 

Let's get started!

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Jack Wills

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An overview from the perspective of 33 years of living and working on Cortes:

Except for the boom era of roughly 2000 to 2008, there were never very many “jobs” here on Cortes.

In the 80s and 90s many worked their own shellfish beach leases, dug clams, fished, logged.Some jobs were at the local stores, the oyster processing plant, a very few at the marinas. We had no doctor. In the mid 90s to mid 2000s before the U.S. Border closed up, the major single source of income on the island was derived from marijuana growing and processing. That was in fact the biggest economic driver. Nearly everyone else that worked, worked off island or found a small niche business to earn a living.

Now the beach leases are no longer profitable, clams and fishing gone, coastal logging almost non-existent (thankfully) compared to previous times. Oysters are processed off-island. We no longer have a doctor, bank, year-round restaurant, RMT, three grocery stores and one petrol station no longer exist. High-profit “Mom and Pop” grow-ops are gone, along with their huge contribution to the local economy. The real estate buying/building frenzy has abated.

Other factors affect our economic well being: high cost of transportation. Ferry travel, an obvious one, has had very large cost increases over the years. This cuts down on tourism and the discretionary spending powers of tourists should they actually choose to come here. Another factor is the cost of shipping: getting raw materials here or sending finished good out has gotten very expensive due to much increased postal rates and regulations. We have experienced this as a direct detriment to our own earning abilities.

The current difficult economic conditions do not obtain on Cortes only, there is world-wide financial distress which has affected us here as well. To imagine we can remedy the economic situation here without an economic upturn in the outer world is like expecting to have a measurable impact on climate change by riding one's bicycle while China burns ever increasing amounts of coal to promote their own economic interests.

Economic downturns are nothing new here on the coast. Witness the town at Evans Bay on Read Island, no longer exists. Same with other settlements on these islands, Cortes included. Many outports in Newfoundland have quietly close up, their population moved away. Things change.
I am all for ideas to increase earning opportunities here. Ideas need to be carefully and thoroughly explored to give the best chance of success. We have witnessed many attempts at business ideas that were not really thought through, and so failed. People move to greener pastures.

We have seen that the most effective way to provide incomes on Cortes is to bring money in from off-island. This has been most successful where individual initiative and ideas are encouraged. Local “jobs” have never been an economic mainstay. Grants are not sustainable, throwing public money at the problem is not the answer. In fact, there will be less public money available as tax revenues decline due to decreasing property value assessments and fewer opportunities to make a living.

In this time of world-wide economic contraction, even heretofore good ideas may not work. The money is just not out there as it once was.

To flourish, find something that works for you, and re-invent yourself as necessary.

Big wheel keeps on turning

Regards,
Jack

 

 

 


 

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Micheal Kluchkowski

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Reply with quote  #3 
Hi Jack
How many possibilities are there for bringing money from off island? 
1) logging and fishing
2) tourism
3) construction
4) make things to sell off island

We already have a community of people that make things for sale, and we could expand this.  I'm a crafts person, but also a manufacturer. Most people who make things for sale need to do a production run of the same piece, and that's manufacturing.  This is not necessarily a big, dirty, noisy operation. Here's a link to a great example of a micro-factory.

http://www.shopbotblog.com/2014/12/how-to-start-up-a-micro-factory-in-your-garage/

I think the freight challenges could be mitigated with freight aggregation in Campbell River, particularly for courier deliveries. The freight issue also limits the physical scope of any business here.  We can't make big things here.  We do have the advantage of land, and we do have the ability to raise capital through rezoning.  In this scenario, the community buys a piece of land and then rezones it, selling enough parcels to pay for the purchase, while retaining the bulk of the land for community purposes.  This was brought up by Peter at the meeting.

Part of this land would be for affordable housing, using available government funding wherever possible.  This would take some negotiation with the government because for sure, we don't want an apartment building. 

Part of this land could be made available for manufacturing purposes, and I would suggest a big chunk should be low cost shop rentals.  Another part could be zoned for live-work space, perhaps as a bare land strata. 

The glue that would hold this together would be a Maker Space, which is essentially a shared production facility. It would incorporate digital fabrication equipment like CNC routers, 3D printing and large format printing. It would have a woodworking section, a metalworking section, an automobile maintenance section, a computer lab with good 3D graphic programs, a print shop,  a commercial kitchen with food-safe packaging equipment, collaboration space, a video production facility for making things like how to youtube videos, etc.

Besides providing the current makers on Cortes with expanded opportunities,  the goal would be to attract creative entrepreneurs to bring their talents, dreams and operating capital here. Many of them would be young, and bring their families. 

The Maker Space could be home to an educational program focused on Makers.  Imagine a week long course in woodworking using CNC equipment, for example.  At the meeting, we were introduced to the Mud Girl Collective, which seems to be doing well holding workshops on building with earth.  The Maker Space could facilite workshops of any kind.

Regards,
Micheal




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Jack Wills

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Reply with quote  #4 
Michael:
Thanks for your reply.

I checked the Shop-Bot link. I believe nearly all the processes outlined for the "Maker Space" can easily be accommodated by the existing cottage industry related zoning by-laws. As the link says,"factory in your garage". Most all of the proposed businesses could be accomplished in existing garage space or spare rooms, even a corner of the kitchen. No need to build a dedicated production facility. Should these potential business be profitable, the individual owners could choose to invest some of their profits into a shared production facility. Begin in your spare room, garage, back yard, purchase only the necessary production equipment. Start small. Minimize debt.

Re the proposed land purchase:
"In this scenario, the community buys a piece of land and then rezones it, selling enough parcels to pay for the purchase, while retaining the bulk of the land for community purposes." Could we define "Community" please. If this "community" is a consortium of interested parties (investors) as mentioned above, by all means, proceed. There is already a large cleared area in Manson's Landing. If you are speaking of using public (taxpayers) money to provide infrastructure for private business, is this not the same corporate welfare we rail against?

 
Land, housing, sewage treatment potable water system, production facility with multifaceted means of production.........
Let's see a cost analysis of this. Government money.......Michael, government is US! via taxes. I am fairly sure that we 900/1000 souls here cannot afford something like this. Seems a bit much to ask people from elsewhere to buy it for us. We cannot afford increased taxes to pay for it, and already have debt obligations of several hundred thousand dollars for fire fighting equipment and the newly purchased Whaletown Commons land.

Probably, this post will not make me popular, but I urge you and all interested parties to investigate the reasons why over the years so many small businesses have been tried and have failed here.
>Cabinet making shops......there were three at one time, professionally managed, and turning out good product.....gone.
>Metal working, specialty equipment manufacturing......... there have been several.......gone.
>Pizza delivery........gone.
>Catering businesses.......several......gone.
>Auto repair businesses.......several.......gone.
>Grocery/general stores.......at one time there were five in operation at the same time. Now three, and two are not very profitable.
>Bakeries......several........gone. One even was able to sell product on Quadra and Campbell River, transportation difficulties caused it to move  off island, and finally close down.
> Custom door manufacturing facility.....state of the art with vacuum jigs.......gone.
> Custom furniture makers.......gone.
> Need I list more?

Investigate also the businesses that have succeeded. Irene Blueth is a good example of a home based cottage industry. There are several who produce food or grow vegetables for summer residents. Hard work, but they do manage. These are not highly profitable businesses, but they allow one to continue living here. I also have invented a few businesses that have sustained me here over the last 30+ years.
.
The challenge is not that we have no talent, we have talent aplenty. The challenge is not that we have a lack of work space, we have that too.
The difficulty arises in finding markets off the island to sell to at a competitive cost. Then, unless we can provide something very unique, we are competing against a multitude of lower cost producers.

The objectives you seek in your previous posting are laudable and I believe do-able. I do not agree that it takes some dedicated facility and public money to accomplish it.

Regards'
Jack Wills



 
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Micheal Kluchkowski

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Reply with quote  #5 
A maker space is a for profit enterprise.  Here's and example in Vancouver
http://www.makerlabs.com/  Look under "membership" for rates.
Here's one in Victoria
http://makerspace.ca/

Taking Vancouver as an example, 12,000 sf of industrial space in East Vancouver is probably more that $12,000/month.  Note that they rent floorspace for $2.00/ sf/month, or $1000/month for 500sf.  The word is they're busy and expanding.

What would the business plan look like if there was no cost for land?

 A search of available shop space shows low availability, particularly for a small space.  At least $1.00/sf /month. 

A word about myself.  I'm 65 years old, and I've been a buillder and woodworker for over fourty years.  I have a pretty good shop, albeit too small, and I rent. I don't need to access a makerspace because I have my own.  Where is this shop space you refer too?  I've seen some houses for sale with a small shop included for the mid $200's.  Not possible for me, and not possible for most young people starting out.  Some Cortesians were lucky enough  or smart enough to buy land long ago.  I wonder if they could afford to now?

There are many available forms for a community structure, open for debate.  There's also many sources of funding, private and public, also open for debate.  With community support
land can be aquired and cash raised without raising property taxes, although there may be community projects that might be worth it if land was available, to be determined.

The list of business closures begs the question why?  Collaboration in freight and marketing would change things a lot, and access to shared resources and shared information lowers costs and improves competitiveness.  High tech and collaboration generates that unique product that you refer to. 

I think that we can do a lot better than to aspire to a poverty level income.  Let's aspire to average family income, $76,000/year.

Regards
Micheal


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Conrad

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Reply with quote  #6 
With respect, it seems that one source of income and employment for Cortes Island residents hasn't been mentioned explicitly and that's online work which brings money from off island. 

I believe that one of the reasons that so many of the service industry initiatives have closed up on Cortes is that these bring no new money to the island. Rather, these businesses have relied upon recirculation of money from local residents plus the brief, annual tourist influx, and many of the supplies and materials to support these industries have been purchased off Cortes ultimately with more money leaving the island than being brought here. 

We have a community of many talented craftspeople, and it's a wonderful idea to collaborate to find new markets aside from each other. If successful this could be a wonderful support to craftspeople and manufacturers on the island, but this is something discussed elsewhere, and not being a craftsperson myself I have little to offer to that discussion. 

As also mentioned elsewhere, reducing living costs through a variety of mechanisms such as accessible housing is another potentially helpful promise and one that I, among many other have taken advantage of. In fact, a brief calculation shows that about 10% of the Cortes Island population already lives in some form of land share arrangement. It's definitely worth exploring further how these land-share arrangements can become even more viable and resilient. We have many experienced people already on island who could share much wisdom from their living projects. 

Another approach to economic development is to recognize the diversity of online income streams for Cortes Island and support locals in exploring online work opportunities as well as potentially promote Cortes as a viable option for working professionals who already work online. As businesses decentralize and online work becomes more commonplace, this is also an area worth exploring how it could be further supported. 

I personally have been living on Cortes for 11 years and have made my income for the last five almost entirely from online work and, though I am far from wealthy, I earn more online than I was ever able to from Cortes income sources. In turn I have been in the position of being able to occasionally hire other people from the island for jobs around my home thus further distributing income that comes from off island. While computers aren't everyone's tool of choice, I thought it worth mentioning here that this is also a potential income stream for Cortes residents that could also benefit from further investigation.

Conrad

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Jack Wills

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Reply with quote  #7 
Good afternoon to all;

Conrad, welcome to the discussion. I am happy to see that Michael and I are not talking to each other in an empty room. I congratulate you in discovering a way to create a life and income here for yourself. I also see you have a good perspective on island economics.

Michael, thanks for your informative reply to my last post. I think in your first paragraph, you help me make my point. Both those enterprises you provide links to are located in major population areas (one even the provincial capitol) Both have well developed and competitive transport systems with many options for shipping a varied selection of what ever one might imagine. There are also a lot of developed  light industrial sites industrial. Economy of scale obtains.

What would the business plan look like if there was no cost for land? Come on, there is always a cost to be picked up somewhere. You may as well ask what the business plan would look like if the building was free, the raw materials were free, etc. Is the thinking perhaps that someone will donate the land? Nice if you can find that person(s). Perhaps you can convince the community to part with a bit of our recently purchased land known as the Whaletown Commons. We already own it, we already owe money on it. It has road access on two sides, one being the main road. The commons is relatively flat, allowing for easy development. It is fairly close to the ferry as well. How about floating that idea?

As you say, you already have your own marketplace. That being the case, it would seem relatively easy then to finance a production site.
You already have the most important ingredient........the market. that apparently is the major issue here. For most potential (or actual)producers,
there is little problem in providing a product. the issue IS selling it. Maybe what is required is a marketing co-op, rather than an industrial park, though no doubt it would be of more benefit to some if they could have the industrial park provided.

Which brings us to rentable light industrial space: The old oyster processing plant....was purchased some years ago with that very idea in mind. In face one of the buildings housed a cabinet shop (closed, I believe) and the still operating and ever popular U-Brew. The rest of the building and office space went begging for some time. It is now used for some fabrication and a bit of storage. When it was looking for businesses to rent space, there were no takers.

The Bank property (remember the bank?) That commercially zoned land was purchased by Quadra Island Building Supply, cleared and a well drilled. The idea was to anchor the area with a hardware store, rent out shop space and have apartment/office space above. There was a call put out for expressions of interest. No interest, no takers, hence there was never any further investment. Eventually, the Credit Union bought the land and built the bank......now closed. BTW, As I recall, break even rental costs were somewhere very much north of $1.00 SqFt.

Next point: transportation again. Rather than have a go here, I would urge you to contact Michael Gibbons. Michael owned ran Cortes Transport for a number of years. Hauled consolidated freight from and to Cortes and Vancouver and all points between. Need I say it? No longer operating. Ask him why.

Hi tech products.....better be something unique and small that cannot be sourced elsewhere. Most hi tech consumer thingies can be found on eBay, from China.....$1.99 each, free shipping.

$76,000.00 annually? What would we need that much for?

In closing, You could perhaps bolster your argument by doing a market survey of producers (real, not theoretical), find out real freight costs, Find out about real demand for items that might be produced here, cost out a facility as you propose to have built (include all services) find out real SqFt rental rates, make a business plan, submit it to the financial institution of your choice. If it is a go, then, Bob"s you uncle!

Regards,
Jack Wills
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Jack Wills

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Reply with quote  #8 
I am adding some additional comments to my above posting.

Michael, you commented above "Some Cortesians were lucky enough or smart enough to buy land long ago."  With all due respect, you are nearly as old as I am, so you must be aware that this is a throw away statement. You can say that of anywhere. I may have liked to live on the California coast, I may have wanted to live in downtown Vancouver. If I was lucky enough or smart enough to buy land there long ago........
I lived on a piece of land here that was originally sold for $11.00. (true story) If I was lucky enough or smart enough, I too could have gotten in on a deal like that. When I was a young person, I could not buy land anywhere either. Most of us had to work, rent, save, work some more.....
Sometimes a group will get together and purchase land. Ask around, you will find many examples. In parting, you quoted a figure of $200K. Yes that is an average price. What is the average price elsewhere in Canada? Also very recently, there was an opportunity to buy 10 acres of partially developed land @ 80K per parcel. 7 or 8 parcels, as I recall......no takers, NONE! If 80K cannot be afforded, in reality it is time to go elsewhere to seek ones fortune.

Further, and this is posted just 3 hours after my last post, I made a few calls, asked around, and found properly zoned shop space that could be had for $1.50 SqFt. It did not take long or very much effort to discover that either. You will have to do your own investigation. 
I knew of someone who operated a production business here working out of a tent (in winter).
If one really wants to make it here, it can be done.

Regards,
Jack Wills

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Micheal Kluchkowski

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Reply with quote  #9 

Jack, this discussion isn't about me, but as an aside, I have gone through the process of business formation including raising money, and my experience was nothing as straightforward or as easy as you describe.   Your research on per sf costs for shop space shows when I used $1/sf/month for shop space, I was too conservative.  Using your number of $1.50/sf, then rental for a small, 1000sf shop would be $1500/month.

I think that we all agree that we need to bring money from the outside to the island, and not count on trade between ourselves. 

Would you agree that the Cortes Island economy is shrinking, and the population mix is increasingly skewed towards Seniors?  What does the economy of Cortes Island look like in twenty years if this trend continues?  What percentage of the total cash flow to the island comes from government sources, including pensions, EI, aid to single parents, disability allowances etc'?  More accurately, what is the ration of earned to unearned income?  This is an important measure of the health and sustainability of the local economy.

Communities are given substantial powers over development in the Local Government Act and the Community Charter Act, and the responsibility to promote economic development.  We can do things to grow the Cortes Island economy, and this doesn't necessarily require government funding.  The various levels of government do have a variety of aid programs, sometimes with cash, but commonly more about organizational aid, and access to private funding sources with the lowest possible costs. I see no reason to reject whatever help is available, other than personal political philosophy.

You seem to have doubts that Cortes Island could be transformed into a desired location for certain kinds of business start ups, and if we only look to the past for examples, it doesn't make sense.  But the world economic order has changed, and is changing at an increasingly rapid rate.  The old models are being supplanted by new kinds of relationships, taking advantage of the interconnections of the digital age. 

Great new products and companies are often started by outliers, with little financial or emotional support.  Our economic system is very resistant to truly new ideas, because truly new ideas are disruptive to the existing order.   How many great ideas and great minds are lost because of lack of support? 

I've used "maker" to describe what I think should be promoted.  Many different activities can be described as something a "maker" does, but for me, the most important characteristic of a 'maker' is that their activity is unalienated labour.  In the process of 'making' the worker and the work become one, ungoverned and apart from the structure of the employer/employee relationship and the alienated labour that results.  'Makers'  are the creatives among us, and creatives have different requirements from, say, money-changers.  The talents and skills of creatives often don't include those needed to to navigate the moneychanger's networks, and as a result,  their contribution is lost.

Consider 'maker' as a class, as opposed to 'merchant'  and 'moneychanger'.  The maker class has been on the bottom of the economic order for a long time,  although the whole structure is built on shoulders of the makers.

Ultimately, the core contradiction of capitalism is that it needs the makers for growth, but the requirements of the makers conflict with the structure of capitalism.

The general proposal is to  be to provide help and assistance to makers so that they too may experience economic success.  What the maker does with success is different that the moneychangers.  Take the example of Elon Musk, who invested most of his profits from Paypay and put it into electric cars and spacecraft, neither of which would find much luck with venture capitalists without Musk's billions.  Take the example of Apple and Microsoft.  I was involved with personal computers from the beginning, and the people around me thought I was a bit touched.  Apple was started by geek outliers.  Bill Gates trolled the outlier geek community looking for ideas and personnel, and built his company using them. 

My point about the cost of a buy-in on Cortes Island it's it likely out of reach for the very people we need.

I've been involved with land share agreements in the past. When problems arise within the owner group, it's very difficult if not impossible to get out without loosing a lot of your investment.  Land share agreements exist as a way of circumventing the regulated subdivision process.  A bare land strata subdivision is a far superior structure, and it's not that difficult- I've done it. 

Micheal Kluchkowski











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Jack Wills

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Reply with quote  #10 
Good afternoon Michael:
Your quote for shop space cost from a previous post
 " Note that they rent floorspace for $2.00/ sf/month, or $1000/month for 500sf."
 That is as you say, $2000 for 1000sf. What I mentioned was $1500 for 1000sf.
Less cost here, but apparently still excessive.

Otgherwise, I can agree with nearly everything else you said.
I will repeat, Do the math, find investors, (crowdfunding?)
I will support you 100%
If you are looking for free stuff.......

Also, perhaps our basic philosophy may differ. I don't think we need all that much more "stuff"
My focus is on low impact living, organic gardening, beekeeping, etc.

If Cortes should become a hotbed of high tech development, watch land prices really soar!

Kind regards,
Jack Wills
Bye
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Micheal Kluchkowski

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Reply with quote  #11 
Thanks, Jack
Conrad,

I think there’s an important common interest between people who work in the physical realm and those who work with information.   As a maker, I’ve made the transition to the digital world.  The product is first created as a digital object; defined, examined and refined in a 3D space with a freedom from constraint and degree of resolution that can’t be achieved any other way.   The method of production is worked out in the digital space, so by the time the project gets to the machine, a lot of work that was traditionally done by the craftsman has already been done.  The time used in production, and therefore the cost, of the physical part goes down, making the end product more completive.

 

What I find is that my time is primarily used in the conception, design, organization, sale and customer fulfillment of the project, some of which I like, and some not. 

 

I realize that there is a varied collection of sophisticated talent on Cortes, and some of that skill and talent could be engaged in instigating and managing a project.  If a person is reasonably computer literate they can learn how to use 3D design software. A variety of people with specific talents can be included.  We need to compete globally, and that means we can’t compete on the low end.  We need to make things that are distinctive and fresh, and that takes a lot of time. 

 

How revenues would be appropriately divided is an open question, with many different options. 

 

On another note, the boat traffic in the summer is low hanging fruit in terms of marketing to an upscale audience, not only for the items they might be inclined to purchase on the spot, but because of their networks when they return to their other lives.  But they need to have somewhere to go and something to do when they come ashore, a brand they can talk about, and an online store. 

At the forum meeting it was suggested that the Cortes brand should revolve around the notion of Cortes as a centre for alternative thinking and practices, and this makes sense to me, with the history of Cold Mountain and Hollyhock.   I've lived in a variety of destinations that, whether organized or not, offer their visiters intellectual, emotional, and spiritual alternatives, a respite from the ridgid norm. Wealth doesn't exclude people from this need.  Relief is found in many forms, and hopefully inspiration is the result. 

 

 

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Brent Morrow

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Reply with quote  #12 
I just want to add that I think Jack summed up the realities of living and working on Cortes perfectly. People have tried different approaches to making money and sadly it's not that easy with the logistics we are faced with. The most successful way involves making your money off island and living as frugally as possible while on the island. During boom times there's more than enough work on Cortes but during downturns there's next to none.
I think the computer may be a good tool to earn income from off island but I have no experience with that.
Thanks Michael for creating this forum. I would add a few small details if possible:
1. The date and time of the posts. (Never mind. Now that I'm logged in I can see the date)
2. A quick way/button to get to the top of the page.
3. Just an observation but this thread is already getting longish and hard to follow. Would it be possible to click on each post , perhaps each with a title. It would make it easier to reread a post of interest without having to scroll and scroll through numerous posts.
Other than that it's fabulous !
Cheers and good luck [smile] BM
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BradBetz

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Reply with quote  #13 
If we want to have money come into the island, and 
if we want to have a great deal of control over how that is accomplished,
then we should encourage educational organizations that are home-grown.
 
If you are a student, you can go anywhere to get an education.  Why not Cortes?  I can tell you why.  The island is unique.  The people are unique.  The island is beautiful and relatively natural.  Speaking to the people here who are the same age as me (old), did you want the sameold sameold when you were 22? Nononono.  
 
Cortesians are unique.  We bathe in it.  We revel in it.  So lets succeed with it.  And let’s do some good while we’re at it and teach renewable, environmentally responsible stuff.
 
In my opinion, the best way we could brand ourselves is this.
Our brand is “an environmentally sound education”. 
As in “Get yourself a Cortes Education!”
 
It’s not like this is not already happening here.  What I don’t understand is this; I see this as THE natural fit for Cortes so why are people not glomming onto this and multiplying it? 
 
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