Archive for the ‘Criticisms of Privatization’ Category.

Getting It Exactly Backwards

In opposition to a proposal for park privatization in Utah:

Mary Tullius, director of the Division of State Parks and Recreation, doesn’t think so.  She says the state prides itself on giving Utah families affordable destinations like state parks. And if those destinations were made private, the quality would suffer.

“History has told us that whenever you privatize something people are so focused on making money that they don’t pay attention to the infrastructure or to the maintenance of the facility. What happens after five years and they’ve run something and they haven’t taken care of it and they turn back to the state? And then the state has a much bigger problem,” she said.

This is exactly backwards.  As readers probably know, my business is the private operation of public parks.  The number one problem we have in taking over government parks is that they are usually terribly run down.  By the time the government is finally willing to turn to private companies for help (generally in the category of “last resort”) the government has typically been ignoring the capital maintenance needs of the parks for years.  As I have written before, government is terrible about appropriating sufficient amounts of capital maintenance dollars.  We see it in everything from parks to the Washington metro.

Nowadays, as a condition of taking over the operation of public parks, our company is generally asked to make a large up-front contribution to tackling deferred maintenance in the park.  In fact, in our newest contract with the Tennessee Valley Authority, we actually have rebuilt the entire park and campground from the ground up.

I am sure there are some private operators who have let things run down, but in general this has occurred when the public authority has insisted on giving the operator a series of 1-year contracts rather than a real 10-20 year contract.  Who is going to replace the roof if the contract only lasts for another 6 months.  On the other hand, who is going to fail to keep things nice if he knows he is going to be there for another 15 years?

I hear this kind of rant from people within the government all the time.  They seem to believe it, but it is hard to find an example where it is true.  When I worked for an oil company, they planned on having to totally rebuild their retail stations every 20 years or so.  What legislature plans for this kind of expenditure?

My current proposal to keep a number of Arizona State Parks open is here.

Arizona Parks Privatization Editorial

The AZ Republic has an editorial today saying that privatization is not the answer for the Arizona State Parks budget woes.   On the plus side, they did actually call me for my opinion yesterday before they published it.  On the down side, they ignored everything I said.  Here is my response:

I run one of the larger private parks management companies in the country, which is based right here in Phoenix. Like many Arizona residents, I am a frequent visitor to our state parks and am sympathetic to their current budget pain. Further, I am not one to offer up privatization as a panacea for all the park’s woes — the state parks organization fulfills a variety of public missions that cannot be undertaken well privately. But I think you missed a couple of important considerations in your editorial today counseling against privatization options.

First, from my experience with public recreation agencies around the country, these budget pressures on parks organizations never really end. Recreation is almost always a key pawn in budget fights, and even if Arizona State Parks funding is restored this year, we likely will be fighting the same battles in a few years. Private concession management of parks has the advantage of taking parks off the budget, so they no longer can fall victim to budget fights. For example, in the famous 1995 federal government shutdown, private concession run facilities in the US Forest Service were the only federal recreation options that remained open through the whole budget battle.

Second, while small low-visitation parks, on a standalone basis, may not represent a very good business opportunity, there are a variety of ways to handle privatization of smaller parks. We run approximately 175 public parks and campgrounds across the country, and well fewer than half of these stand on their own as private business opportunities. But many public agencies have learned to package smaller, low-visitation parks with higher-visitation parks into multi-park packages that both provide operators a business opportunity as well as meet the public’s goal of keeping all of its parks open. Further, states like California have found many creative ways to keep historic sites open using private management. These solutions, at places like Columbia State Park, not only keep historic buildings open to the public but also create events and services that bring history alive and make it more interesting, particularly to children.

I know that private management is often sloughed off with statements like, “they would just build a McDonald’s or put in a bunch of billboards.” But thousands of parks nationally are managed privately, and this never happens. In part, this is because business people should get some credit for intelligence, and they understand what attracts people to outdoor parks in the first place and don’t want to mess with the ambiance. In addition, we often have 100+ page operating agreements in place that carefully set out the quality of our services and the approvals we must obtain to make any changes to the facilities.

Further, it is sometimes suggested that private companies would just jack up the price. Well, Arizona State Parks is proposing to raise the Slide Rock entrance fee to $20. In contrast, we run nearby picnic and day use areas at places like Grasshopper Point and we rapacious capitalists only charge $8.

I am not advocating that Arizona State Parks turn off the lights and throw the keys to a private company; but I do think that private concession management could offer a piece of the long-term solution to keeping state parks open, both now and in future budget battles.