P3s and Parks: Different than the Rest?

A recent New York Times story on BP, the London-based oil and gas company, used the problems facing BP and its origins as a public company to argue that in some cases public control can outperform private – citing in particular the challenge of balancing the goals of public interest and private profit. There is a lot of talk these days about the challenges of P3s, including public agencies like the city of Chicago losing money on its privatization of parking or challenges in making the transit partnership work in Denver. These projects raise the question of whether the inclusion of private partners and funding results in more efficient or innovative projects…or not.

Most P3 projects in the news these days are projects that include the designing, building, financing and operation of infrastructure projects. Across the country these days, public private partnerships are being used to build bridges, roads, transit systems, and water systems. The use of private finance – or the prospect of cost-savings – is the linchpin of these P3 arrangements.

In these cases, P3s represent a fundamentally different way for governments to deliver infrastructure projects and related services. They require heavy involvement and reliance on the private sector, and the new relationship presents new challenges to public agencies that aren’t always up for the job – from negotiating the contract to long term financial management. Are P3s for parks different?

The central question always for park department leaders and locally elected officials when contemplating a P3 is will it ultimately serve the public interest? And secondly, what’s the best model for designing and managing the partnership?

I think Park P3s are different and so far have shown greater success. Let’s review the basics:

  1. Parks are publicly owned and key decisions remain public.

    Government has two roles as a decision maker and a doer. Most agree that the policy and decision-making role should stay with government but once decisions have been made about service delivery, capital projects or park programs have been made there are a variety of ways to deliver it, including via private partners. The goal and responsibility of government is to fairly and competently manage private sector involvement – and to ensure the active engagement of the public. The key here is that the public has entrusted the city to make decisions about the use of the land in a way that benefits all city residents.

    Park conservancies are given responsibility for managing public spaces but they do not have the power to unilaterally alter the policies governing these spaces.

  2. Park conservancies and city park departments have a shared mission, shared responsibilities and flexibility.

    In a park partnership the partners share in making all of the critical decisions involved in running the park – as defined by their operating agreement; the tasks are clear-cut ad it’s possible to define clear roles. Both partners share a common vision and mission. They are also in a relationship that allows both to adapt to changing circumstances.

  3. Park conservancies asked to steward a park are mostly nonprofit organizations. Park projects are about cash infusions not profit-making.

Let’s face it, park conservancies are not in the job because they’re going to make money. The cash raised through events, concessions, sponsorships and donations goes to the park – and fundraising for operations and capital is not easy, mostly philanthropic and hard to sustain.

Parks and park systems must constantly evolve to stay vital, relevant and well-used, all while balancing a bottom-line, which gets harder every year. In order to do this we are seeing various forms of quasi-public and quasi-private partnerships emerging the goal of which is to keep the public’s interest as a priority.

John Crompton in writing about park partnerships says that the best way to secure the future of park and recreation services is to broaden the base of people who invest effort, energy and resources into their well-being – in other words empowering citizens through involvement with park managers. Nonprofit conservancies or special districts have the singular focus that makes them eager for community investment; and, they have a built-in accountability in that if they don’t do their job right, philanthropic and event support will go away.

In an article last year in Parks and Recreation magazine, R.J. Cardin, director of Maricopa County’s (home of Phoenix) Department of Parks and Recreation sees the upside of trying new things in his county where private partners contribute about 20 percent to Maricopa’s overall park system.

“We do many public-private partnerships at Maricopa County,” Cardin says. “Much like a good stock portfolio, we have tried to diversify our service delivery system. We look to the private provider to not only come in and provide service but also to invest in the parks by putting capital development into the parks.  In return, our residents benefit through additional amenities and we generate revenue that can be used for other services and programs. We look to our residents and visitors to express their facility and program needs and we find the most efficient and effective manner to provide for that need when feasible.”

Having private partners of course doesn’t mean that public agencies give up on enterprise ventures, ways to attract new revenue or ways to run a more efficient department. But the job is getting harder as park users have greater expectations about their parks and demand more kinds of services – which leads to a rise in capital costs for developing and maintaining infrastructure. The goal out there seems to be that when it makes sense, engage partners and plan for learning – there are still lessons to be learned out there in an effort to find out what’s the best way of getting the job done.

http://www.nytimes.com/2013/01/16/business/when-privatization-works-and-why-it-doesnt-always.html?_r=0

http://business.time.com/2012/05/11/chicagos-parking-meter-debacle-the-check-is-not-in-the-mail/

http://www.denverpost.com/business/ci_20782125/rtd-stunned-by-bnsfs-charge-use-northwest-rail

http://agrilifecdn.tamu.edu/cromptonrpts/files/2011/06/59_10.pdf

http://www.parksandrecreation.org/2012/April/Public-Private-Partnerships/