The Now City Programmatic JV Playbook

Working draft · July 21, 2026 · Internal

Why this document exists: Now City's strategy is districts, plural. Edgewater is the first. The instrument that turns a one-district sponsor into a district platform is the programmatic joint venture: one capital partner underwriting a pipeline of deals under pre-agreed economics, instead of a new raise for every phase. Done right, it compresses years of fundraising into one negotiation and makes the platform investable. Done wrong, the sponsor spends a decade as staff for their own capital partner. This playbook is how we do it right, and it is built to improve after every conversation, starting with Kadlub and Atkins Dame tomorrow.

1 · Where Now City sits today

Our current structure is already a proto-programmatic design, which is an advantage most sponsors pitching a platform do not have:

• The $15M Phase One Campaign (platform + District Value Creation Fund) is Stage 0 capital: it buys control, entitlement, and structuring of the whole district.
• The Land SPV (~$34M, anchored by the $5M landowner contribution under a signed LOI) is the conversion moment where fund investors repay or roll.
• Phase capitalizations (Phase 1 ≈ $185M, ~$650M pipeline) are where a programmatic partner changes everything: instead of raising each phase separately, one partner pre-commits to the pipeline under agreed terms.
• The platform raise means we can also offer participation in the engine itself, not just the pipeline. Few sponsors can offer both doors; we should treat that as a differentiator and price it accordingly.

Two programmatic products we can take to market, in order of readiness:

Product A, the Edgewater pipeline JV. One partner (PERE co-GP program, family office, or OZ platform) commits equity across phases 1 through 4 under a master JV agreement with per-phase closings. Each phase still underwrites individually (their protection), but terms, promote, and process are pre-agreed (our speed).

Product B, the district platform JV. A partner backs Now City the master developer across multiple districts: Edgewater plus the next city. This is what the $3M platform raise grows into. It is premature to negotiate today, but every Product A conversation should be designed so the partner naturally graduates toward Product B.

2 · Marketing the platform

Institutional partners underwrite five things, in roughly this order: sponsor, pipeline, product, process, and only then projections. Our marketing assets map onto that stack almost completely:

The Upside Explorer deserves emphasis in every platform conversation: letting a capital partner drive the model themselves is the single strongest process signal we own. Nobody pitching them this quarter does that.

Gaps to close before a formal process: a one-page platform teaser (the programmatic ask specifically, distinct from the deal-level materials), a track-record narrative that honestly frames a first-district sponsor (lean on the bench, the systems, and the advisors doing this their whole careers), and a data-room index so diligence feels institutional from day one.

3 · Sourcing and matching the partner

The categories, and what each wants:

• PERE co-GP and operating-partner programs. Fastest to yes, most structured, most control-hungry. They run this playbook weekly; we will be negotiating against their paper.
• Family offices (direct). Slower, more relationship-driven, far more flexible on structure and horizon. The natural fit for a decade-long district and for our values story. Our existing archetype spec targets exactly this.
• Insurance and pension separate accounts. Cheapest capital, latest arrivals; they buy stabilized or near-stabilized. Cultivate for the Y4/Y6/Y8 recapitalizations, not for entitlement risk.
• OZ platforms. Structurally aligned with the ten-year hold, and the 2027 designations create timing energy. Their constraint is the OZ compliance envelope; ours is keeping the district story primary.

Matching criteria that matter more than brand name: appetite for pre-development and entitlement risk (most say yes and mean no), check size per phase versus their minimums, discretion (do they have committed capital or do they re-approve every deal upstairs), pace of their investment committee, control culture (ask for a sample approval matrix early; it is diagnostic), and what happened to their last three operating partners (call them; this is the single best diligence step a sponsor can run).

Red flags: a partner who wants exclusivity over the pipeline before committing capital to any of it; a partner whose model requires replacing our fee load with their asset management fees; a partner who cannot explain how their last operator relationship ended.

4 · The economics: waterfall and fees

Market ranges for programmatic structures of this scale, as negotiation scaffolding rather than gospel:

• Equity split: partner 80 to 95 percent, sponsor 5 to 20 percent co-invest per phase. Our land contribution logic can satisfy part of the sponsor co-invest without cash, which is worth real money and should be negotiated as such.
• Preferred return: 8 to 10 percent has been the long convention; in the current rate environment expect 9 to 11 asked, and expect pressure toward compounding rather than simple.
• Promote: a common shape is 20 percent over the pref, stepping to 30 percent over a 12 to 15 percent IRR hurdle, with top tiers above that negotiable. Development-risk phases justify the higher tiers; do not let stabilized-asset benchmarks price entitlement-risk work.
• Fees: development fee 3 to 5 percent of hard plus soft costs, asset management around 1 percent of equity or 25 to 50 bps of gross asset value, plus construction management where earned. Fees keep the lights on; promote builds the platform. Never trade the fee base away for promote points that pay in year nine.
• Promote crystallization: with our recapitalization windows at years 4, 6, and 8, negotiate promote crystallization at recap events, not only at final sale. This turns the rolling-recap design into a sponsor-economics feature.

The crossing question is where platforms are won or lost. A full cross (all promote subordinated to the return of all capital across the whole pipeline) means one difficult phase confiscates the promote earned on three good ones; that is the "glorified employee" outcome arriving through the waterfall. A per-deal waterfall with no memory is the sponsor fantasy and rarely survives negotiation. The livable middle: per-phase promotes with a limited lookback or clawback tied to realized partner losses, not to paper marks. Decide our floor before the first term sheet, because this term is hard to move once anchored.

5 · Control: the approval matrix and the employee traps

The approval matrix is the real constitution of the venture; the waterfall just divides the money. Principles:

• The partner approves the what: annual business plans and budgets, capital events (debt, sale, refi), variances beyond agreed thresholds (10 to 15 percent line-item, 5 percent total is a common zone), affiliate contracts, and anything that changes their basis.
• The sponsor controls the how: design within approved standards, contractor selection within budget, leasing within approved parameters, day-to-day everything. If the matrix requires partner sign-off on tenant improvements or change orders below the threshold, we are being hired, not partnered.

The traps that create glorified employees, each of which we should be able to recite from memory in a negotiation:

1. Exclusivity without commitment. They get a right of first refusal over the pipeline; we get no committed capital. That is a free option on our life's work. Exclusivity must be paid for with committed capital or must expire quickly and automatically.
2. Removal without cause, or thin cause. "Cause" should mean fraud, gross negligence, willful misconduct, or key-person failure with a cure period, adjudicated, not declared. No-fault removal, if it exists at all, must buy out promote at fair value including unrealized.
3. The always-winnable buy-sell. Any buy-sell mechanism favors the deeper pocket. Prefer put/call at appraised value with a promote true-up over shotgun clauses.
4. Promote subordination across the pipeline (see the crossing discussion above).
5. Fee credit against promote. Fees offset against promote means we work for free until year eight. Resist, or cap the offset.
6. Key-person freezes that stop everything. A key-person event should pause new phases, not strangle in-flight ones.
7. Playbook capture. Institutional partners learn from operators and sometimes internalize the strategy. Guard the district IP: the JV licenses our systems (Upside Explorer, standards, brand); it does not own them. Non-competes should bind narrowly (the district, the metro) and mutually.
8. Budget approval as management. Granular consent rights are management with extra steps. Fight for thresholds, cure periods, and deemed-approval clocks (silence past N days equals consent).

6 · Term sheet anatomy and markup discipline

Sequence: capital conversations → mutual NDA at diligence (not before) → non-binding term sheet → JV agreement. The term sheet stage is where 80 percent of the leverage lives; everything after is drafting.

The markup checklist, in the order a partner's paper usually presents it: parties and exclusivity scope; capital commitments (committed versus "targeted"; discretion; funding conditions); the per-phase approval mechanics (what makes a phase "qualifying," who can decline it, and what happens to a declined phase, which must revert to us free and clear); economics (split, pref, promote tiers, crystallization, crossing); fees; the approval matrix; transfer and change-of-control provisions (their fund selling its position matters as much as ours); removal and cause; buy-sell and exit; key person; guarantees (construction completion and carve-outs land on the sponsor; cap and price them); IP and exclusivity; governing law and dispute resolution.

Concede early and cheaply: reporting cadence and format, information rights, audit rights, reasonable co-invest minimums. Concede late and expensively: promote tiers, crystallization timing. Never concede: thin-cause removal, uncompensated pipeline exclusivity, ownership of the platform IP, unlimited crossing.

7 · Running the negotiation

Run at least two serious counterparts in parallel; a programmatic negotiation with one partner is a term-taking exercise. Lead with our structure page posture, which is already written: "We lead with this. We build it with you." Anchor with our own term sheet skeleton rather than marking up theirs when possible; whoever drafts, frames. Use the verification register as a live trust instrument: every open item we close on schedule is evidence for the sponsor-quality underwrite. And rehearse: run the negotiation against an AI playing the institutional LP (this is the one genuinely good idea in the Thesis Driven workshop format, and we can do it any afternoon, free, with the actual Edgewater numbers).

On the $299 workshop itself: register. The recording, exercise templates, and sample JV term sheets are cheap raw material for our own templates, and knowing the standard curriculum tells us what every other sponsor in the room will sound like. This playbook is how we sound different.

8 · What tomorrow's meetings can teach this playbook

Both meetings are with people who have already run district-scale versions of this play in Oregon. The extraction agenda lives in the companion meeting guide, but the mapping is worth stating here:

Rudy Kadlub, Costa Pacific Communities. Orenco Station: PacTrust as land-rich master developer, Costa Pacific as residential co-developer inside the master plan; NAHB Master Planned Community of the Year; later Villebois in Wilsonville, a multi-hundred-acre phased community run for two decades; and a 2001 recapitalization by an investor group, which is to say he has personally lived the sponsor-capital partnership question. He has sat in both chairs of our Door 3: the vertical developer inside someone else's master plan (what Ethos or Rembold would be to us) and the community developer courting programmatic capital (what we are). Ask him about land takedown pricing mechanics, what PacTrust did that made Costa Pacific effective, and what the investor group's paper got right and wrong.

Jim Atkins and Dike Dame, Atkins Dame. This is the deepest well available to us anywhere: Dame is the Dame of Williams/Dame, the developers of the Pearl District and South Waterfront, the exact precedent our own site names as Edgewater's closest structural mirror. Their current project, Eugene's River District, is a near-perfect analog running eight years ahead of us: a development agreement with Eugene's Urban Renewal Agency (2020), city-owned riverfront land, phased takedowns, six residential buildings toward 500 to 1,000 homes, a MUPTE-style tax exemption fight recently won (~$20.7M), an affordable partnership with the housing authority (Homes for Good), and Heartwood delivered. Ask how the Eugene DA allocates infrastructure obligations and takedown triggers, how they capitalized the early buildings in this rate environment, and how the Pearl's developer-city compact translated to a smaller market, because Salem is smaller still.

Both meetings should end the same way: not with an ask for capital, but with the ask for their scar tissue on exactly the terms in sections 4 through 6, and an open door to a continuing advisory relationship with the district.

9 · Making this playbook compound

After every capital conversation, term sheet, and meeting like tomorrow's, this document gets a dated addendum: what we heard, which section it changes, and what we now believe that we did not before. That discipline, applied for a year, produces the thing Thesis Driven sells tickets to, except grounded in a real district, real Oregon relationships, and terms we have actually traded. That is also a Now City Labs product in embryo: the district playbook is what the platform ultimately licenses to the next city.

Internal working document. Market ranges are negotiation scaffolding, not advice; structure and securities decisions run through counsel.