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How Private Dollars Can Manage Public Parks

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How Private Dollars Can Manage Public Parks

September 25, 2019
Urban PolicyOther

Editor's note: The following is the second article in the Urban Policy 2019 published by the Manhattan Institute.

The parks in America’s towns and cities are accessible locations for people to visit and congregate. If these public spaces are managed and designed correctly, they draw pedestrians, foster activity, generate revenue, and increase real-estate values.[1] They become desired destinations, invigorating neighborhoods and enhancing a community’s brand. There are 22,764 parks in the nation’s most populous cities.[2] To manage these parks and park systems, three models currently prevail.

Purely Public Operation

This is the traditional option. In this model, a park is incorporated into a city government, typically as part of a parks and recreation department. Public employees manage all the components, from sanitation and security to landscaping and amenities. The department’s budget funds all costs associated with public management. Any revenue generated by the park, such as special events, is funneled into an annual general fund.

This model is still the most common, but it presents challenges, since park departments typically manage numerous public spaces. It may ultimately become difficult to focus on the endless details that go into presenting a good public space. Urban park departments tend to pay above-market wages. They also ignore numerous opportunities to earn non-tax income.

Hybrid Public/Private Operation

Here, a city government funds a park while contracting certain park operations to private management. While the city government generates revenue—via events or other forms of programming—private contractors oversee park maintenance, from landscaping to facilities maintenance. The proportion of public funding can also determine public control of the space.

The Central Park Conservancy, for example, operates New York City’s 843-acre Central Park while still receiving funding from the city government. The Golden Gate National Parks Conservancy, meanwhile, is a nonprofit cooperative association and a partner to the National Park Service and the Presidio Trust, which collectively manage 80,000 acres of national parkland around the San Francisco Bay Area. The conservancy generates park support through private philanthropic dollars, cooperative agreements, and earned income from visitor services such as tours, books, interpretive products, and food and beverage operations. This model reduces a city government’s exposure to escalating operating costs. Of course, this model still sometimes subjects parks to higher labor contractor costs because of government-mandated, above-market salaries.

Purely Private Operation

In a pure privatization model, a private, nonprofit organization oversees all the park’s operations, including sanitation, programming, horticulture, security, and maintenance. In addition, the organization generates all the revenue to support the public space. A private model commonly involves an agreement between a nonprofit and a city, with the municipal government granting the organization control over the revenue generated in the space. When self-sustaining, a privately run park benefits public tax rolls. According to one study a few years ago, the success of the Bryant Park Corporation raises the value of the park’s immediately abutting buildings, resulting in an additional $33 million annually in real-estate taxes.[3]

Purely private parks can offer a favorable path for public spaces, especially those with high pedestrian traffic in metropolitan regions. Occasionally, a private, nonprofit organization is able to gain control of a park’s budget, operations, and revenue generation without restrictions imposed by a city. This is a particularly helpful approach for city parks that confront challenges due to deferred maintenance. Wisconsin’s Milwaukee County, for example, has several parks that have suffered from this problem. But this trend is not unique to Milwaukee County—mismanagement has afflicted many public spaces.[4]

A purely private park, when geographical and socioeconomic factors permit, shows that a public space does not always require the financial stewardship of a city hall or county courthouse. New York City’s Bryant Park Corporation (BPC) and Dallas’s Klyde Warren Park have diverse revenue streams: sponsorships, concessions, philanthropy, and programming.

Parks Done Right

Bryant Park has been transformed from a magnet for crime to a vibrant public space.[5] This was not the result of geographical serendipity. Midtown Manhattan in the early 1990s was still associated with urban disorder. Moreover, the park’s layout, while notably improved, still retained its basic structural elements incorporated decades earlier. It was through proper management—backed by innovative funding, smart design, programming, and unconventional thinking—that Bryant Park became financially self-sustaining and pleasant for future generations. The lessons from Bryant Park are applicable to other parks and park systems, many of which remain underfunded, underused, and underappreciated in U.S. cities.

City governments contemplating privatization should keep some important principles and considerations in mind, as outlined below.

Avoid Public Dollars and Understand How Market Prices Work

When managing a public park, it is best to use private revenue sources for maintaining open and vibrant spaces. Responding to current public disinvestment, parks and park systems should seek alternative private monies that can offset a government’s revenue shortfall. Private resources are preferable—public dollars burden taxpayers and arrive with strings attached. The announcement of a federal, state, or local grant may help finance a project for a public space, but the grantee must continually navigate cumbersome requirements. These requirements typically translate into added costs, and time, whether it is meeting archaic work rules or filing repetitious reports.

Expending private dollars also contributes to better managerial decisions and avoids inefficiencies. Too often, city governments systematically underprice on the revenue side and overspend on the expense side. For example, a manager will hire expensive designers who require massive public and private funding for the park’s overdesign and execution, all with the hope that people will follow. There is no sense of urgency to seek earned revenue to support expensive or new design, even if it does get built.

Chicago’s Millennium Park, completed in 2004, cost $475 million, with the city’s bill alone accounting for $270 million.[6] When projects reach such costly levels, managers—private or public—often make decisions that only escalate their expense budgets. They forgo opportunities to collect revenue from sources like food carts, public events, or user fees. On the expense side, a city government may sign a deal with a labor union that explodes the park’s costs. The outcome is perverse: city hall ignores what the market is signaling, both on the expense and revenue sides. Unfortunately, too many public space projects, particularly in the Northeast and California, have pursued this costly and foolish way for completing a park turnaround.

This approach contrasts with that of Klyde Warren Park, a public space on a deck over a highway in downtown Dallas. Operated by the Woodall Rodgers Park Foundation, the 5.2-acre park and desk cost $110 million. The privately operated nonprofit relies on sponsorships, rentals, and revenue from an affiliated park improvement district for most of its operating budget and raised over half of its construction costs from private philanthropy. Klyde Warren, which is undergoing another expansion, has attracted $2 billion in economic development and more than 6 million visitors since it opened in 2012.[7]

BPC, which manages Bryant Park, has not accepted public dollars since 1997. Several inventive revenue sources, along with years of patiently working the property’s profit-and-loss statement, have made this approach possible. These revenue sources include sponsorships of park programs, rents paid by kiosks and restaurants, and support by a business improvement district created and run by BPC.

Review Revenue Options

Multiple revenue sources can expand budgets that are adequate to maintain parks. Sponsorships help generate revenue by underwriting features, activities, and events. By securing corporate partners, parks may finance physical improvements or spearhead new initiatives that ultimately attract more people. In Boston Common, the nation’s oldest public space, corporate outings and holiday parties support the park’s Frog Pond, a year-round destination.[8] In Green Bay’s Titletown, a new park adjacent to Lambeau Field, the Packers have partnered with Microsoft to establish an entrepreneurial incubator.[9]

In selected cases, parks can also benefit from advertising. For instance, if a public park agency owns excess land along a heavily trafficked highway, setting up a private billboard—with advertising—could generate real money. Licensing goods that visitors would buy as souvenirs is also effective in larger cities.

When considering sponsors, public space managers should explore their regional networks, determining which companies will embrace, and fund, projects and programs. Promoting sponsors in a restrained manner is always preferable. Bryant Park, for instance, credits companies with small signs in flower beds or on umbrellas with understated logos.

Philanthropy can also help. Park conservancies, which work in partnership with local governments, often employ a donation-based approach to managing public spaces. The Golden Gate National Parks Conservancy, for example, raises philanthropic dollars for programming, maintenance, and educational initiatives. Of course, there is always uncertainty in annual funding streams that rely on voluntary donations. But fund-raising can still contribute to the revenue needed to operate and maintain a public space.

Programming Saves Money

Park programming typically offers the best financial deliverables, drawing people in at a relatively minimal cost and raising dollars without government assistance. Packing city parks with programming is important, since urban public spaces commonly lack the scenery of national parks. (Yosemite National Park, with its natural beauty, does not require special events to entice crowds.) When exploring programming opportunities, park managers should engage their community by building relationships with prospective event partners and matching amenities with local demographics.

A park can present everyday features, like Ping-Pong tables or reading rooms; offer core programs, like yoga and art classes; and promote monthly or weekly events like film screenings and concerts. Public spaces should apply wide-ranging programming options, from children’s events to fitness and games. Eclectic options, from bird watching to swing dancing lessons, also can enliven a public space. In Bryant Park, square dancing has attracted more than 1,000 people. Such programming, when it draws attendees, creates revenue, especially when pricing an event that exceeds its actual cost. In 2016, Klyde Warren Park brought in $326,135 in event revenue.[10]

Programming commonly thrives in parks that complete physical improvements. In 2011, Philadelphia’s University City District, a private partnership, completed a pedestrian plaza outside 30th Street Station, the metropolitan region’s central transportation hub. Once a drab intersection with congested traffic, the plaza became a popular destination for pedestrians, from commuters to college students. This public space now features active programming, including musical performances and a farmers’ market.[11]

Understand How Operations Work

Unforeseen developments occur in public spaces—sewer lines get clogged, stone pavements break, storms damage trees. That is why public spaces require reliable revenue streams. In Bryant Park, the operating and construction budget is partially drawn from rent paid by the Bryant Park Grill and Café, along with food kiosks. Such funding sources are then deployed to maintenance costs.

Managing a successful and active public space entails enhanced services, proper sanitation, safety, and excellent horticulture. A park must plant seasonal flora, mow lawns, collect garbage, and clean restrooms to keep its environs safe and beautiful. The alternative risks a hazardous environment, one that attracts criminals and deters visitors.

Maintenance is difficult, especially in the management of restrooms. It is critical to aim for the seemingly unattainable in order to deter nuisance behavior. A park’s restroom, for example, can feature mosaics, recessed lighting, flowers, and even music. This means that an office worker, when using the park, can use the restroom, without concern, instead of running back to the office. During lunchtime, or in a rush, this same worker should know that the public space offers free Wi-Fi. By providing ample electrical outlets and proper seating, a park can attract office workers and students, throughout a long daytime schedule.

Uniformed park workers and security have to constantly monitor public spaces. Trained employees should create a sense of safety, immediately attend to any litter or vandalism, monitor restrooms, and ensure the operation of proper lighting to deter nighttime predators. With a sufficient horticulture budget, employees can also tend to gardens, flowerpots, shrubs, and trees.

Embrace Unconventional Thinking

Modern parks can benefit from unconventional thinking and inexhaustible attention to small details. In Bryant Park, BPC applied the thinking of William H. Whyte on what creates energized, crowded spaces.[12] One small, yet consequential, detail is the movable chair. Scattered throughout the park are 5,000 movable pieces of furniture, uniformly painted green. They create a sense of control for visitors, creating flexibility when conversing, working, or lounging.

A public space can also transform its existing, and overlooked, physical features, as Newark’s Military Park learned with an old monument. That park features the Wars of America, a monument designed in 1926 by Gutzon Borglum, renowned for his creation of Mount Rushmore. The monument includes bronze figures in honor of past wars, and once contained a reflecting pool. The pool was later abandoned, sitting empty for years. In 2010, the Military Park Partnership was created to revitalize and operate the park, which had fallen into disrepair. Today, the former reflecting pool features floral displays. In Pittsburgh, meanwhile, the city’s parks conservancy repurposed a parking lot. At Schenley Plaza, the conservancy created an active lawn with gardens, dining kiosks, and free, family-oriented programming.[13]

Public spaces should also continually upgrade existing infrastructure or reinvigorate historic sites. In 2017, Houston’s Levy Park reopened after a $15 million revamp that turned the once-underutilized space into a vibrant destination with gardens, playscapes, and programming. In Buffalo, meantime, the Erie Canal Harbor Development Corporation reclaimed the Erie Canal Harbor, originally built in 1825 and once considered America’s “Gateway to the West.” Today, the area is known as Canalside, a 23-acre redeveloped public space at the canal’s historic terminus. Canalside now benefits fom an adjacent mixed-use district, including offices, hotels, and retail.[14]

Parks can find advantages in their climate. In Green Bay’s Titletown, a 45-foot-tall hill, incorporated into a physical structure, offers snow tubing in the winter and becomes an attractive greenspace during the summer. In Bryant Park, an annual Winter Village, reminiscent of those in Germany, includes retail vendors, a food hall, and free-admission skating. Attention to every detail, including lighting, results in an elegant space.

Other unconventional moves can highlight a park’s details. For instance, parks habitually turn off fountains in the winter, fearing liabilities or damaged pipes. But a frozen fountain, with its majestic icicles, draws attention, as in Bryant Park. People, armed with their smartphones, will take pictures of this scene, resulting in free marketing on social media platforms or coverage in local news.

Finding inspiration for detailed features requires travel. In an age when the cost of airfare has significantly declined, it is helpful to travel to different regions, observing what other parks or park systems have adopted. Employer-sponsored conferences usually create these opportunities. By visiting other public spaces, a park manager can develop a model, discover new ideas, and learn what does or does not work.

Conclusion

Whether it is a park or park system, public spaces can improve greatly through private management and private dollars. Maintaining them, however, requires constant attention to security, sanitation, design, lighting, and programming.

A vibrant public space not only draws visitors—it also increases real-estate values and plays a pivotal role in revitalizing its urban surroundings. The project will never be “done,” but by avoiding public dollars, building diverse revenue streams, understanding how operations work, and embracing unconventional thinking, a public space can have a positive impact on a city’s economic development.

About the Author

Charles F. McElwee is assistant editor at City Journal. 

Endnotes

  1. This paper is drawn from interviews with Daniel A. Biederman, president of Biederman Redevelopment Ventures, who offered insight into best practices for private management of a public space.
  2. Charlie McCabe et al., “2018 City Park Facts,” The Trust for Public Land, August 2018.
  3. Keiko Morris, “Bryant Park Perimeter Brings Rent Premium,” Wall Street Journal, Mar. 8, 2015.
  4. Don Behm, “Milwaukee County’s Maintenance Backlog for Parks Now ‘Seemingly Insurmountable,’ Report Says,” Milwaukee Journal Sentinel, Sept. 21, 2018.
  5. Paul Goldberger, “Bryant Park, an Out-of-Town Experience,” New York Times, May 3, 1992.
  6. P. J. Huffstutter, “Park Gives Windy City a Fresh Face,” Los Angeles Times, July 15, 2004.
  7. Christine Perez, “The Expansion of Klyde Warren Park,” D Magazine, Oct. 23, 2018.
  8. Kristi Palma, “USA Today Readers Say the Boston Common Frog Pond Is the Best Skating Rink in America,” Boston.com, Dec. 23, 2017.
  9. Richard Ryman, “Titletown District: Packers, Microsoft Add UW Support to TitletownTech Business Development,” Green Bay Press-Gazette, July 19, 2018.
  10. Klyde Warren IRS Form 990, 2016.
  11. Kaid Benfield, “In Philadelphia, a Porch for an Entire City,” CityLab, Aug. 9, 2012.
  12. William H. Whyte, “Revitalization of Bryant Park–Public Library Front,” Nov. 26, 1979.
  13. Lisa W. Foderaro, “Revival Is Planned for a Derelict Downtown Newark Park,” New York Times, Feb. 5, 2013; Yoni Bashan, “Behind Reborn Newark Oasis Stands a ‘Park Whisperer,’ ” Wall Street Journal, May 16, 2014.
  14. Cynthia Lescalleet, “Houston’s Revitalized Levy Park Co-Earns ULI’s Urban Spaces Award,” Forbes.com, Oct. 9, 2018; Caitlin Dewey, “How Canalside, Once a Wasteland, Became Buffalo’s Pride,” Buffalo News, July 4, 2019

 

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