Report: Tonto Bridge Could Turn A Profit

Privatizing state parks could gut the state system

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Tonto Natural Bridge State Park has strong potential to make a profit if turned over to a concessionaire, concluded a study funded by the Arizona State Parks Foundation.

Moreover, such a shift to private companies may prove necessary soon since state parks can’t survive long on dwindling budgets and shrinking visitation, concluded the report by ProsConsulting, funded by a group that lobbies for parks statewide.

However, the long-awaited report on the prospects for privatizing the battered state parks system also concluded that turning the parks over to private companies or public-private partnerships also holds many perils.

The report says the 28 state parks have lost 40 percent of their workers in the past three years, sharply reduced hours and failed to make even basic investments in infrastructure.

However, the parks have also become far more efficient. The operating costs of the parks in 2010 fell only $325,000 short of revenues, compared to a shortfall of $1.7 million in 2009 and $2.3 million in 2008. The 28 parks in the system last year had an operating budget of about $18 million and brought in revenues of about $11 million.

However, the report concluded that the current system has become “unsustainable.”

The researchers concluded, “something significant will and must happen to evolve the organization that is a steward of a great system of public treasures into a sustainable, economically feasible system with a politically palatable future.”

The report examined the possibilities and pitfalls of turning over the system to private operators or perhaps other government entities.

The report ultimately recommended establishing an independent state entity that could contract with private companies and run the park on a more businesslike model, while still safeguarding the many historic and wildlife-oriented parks that will never pay their own way.

The report concluded that only a handful of the state’s parks had enough visitors to attract the interest of private concessionaires and those parks currently generate the revenue necessary to support the great majority of parks that stand little chance of breaking even.

Tonto Natural Bridge State Park fell into a middle group that could operate profitably — but only if a concessionaire invested in things like adding a campground, lodge for overnight visitors, rentable yurts and a seasonal cafe and grill. Ironically, the park had most of those amenities years ago when operated by a private entity.

The town of Payson with help from Star Valley, the Tonto Apache Tribe and a citizen support group contributes $35,000 annually and thousands of hours of volunteer labor to keep the park open. Payson officials have previously said they would be interested in taking over the park if it could turn to a private concessionaire to run it.

The privatization report documented the toll that the financial chaos and shrunken hours of operation have had on visitation at the world’s largest natural travertine arch. Four years ago, the park had 93,000 visitors and pumped $26 million into the local economy. However, in 2010, the number of visitors had fallen to 58,640.

In 2010, the park cost $309,000 to operate and brought in $217,000 in revenues, according to the report.

The report concluded that the park had a high potential for finding a partner, thanks to the community support and Payson’s contributions.

The report warned against the temptation to turn the parks like those with camping and boating facilities along the Colorado River, Slide Rock in Sedona and Kartchner Caverns over to private contractors, which would doom the small, historic and wildlife parks.

The report said many of the parks couldn’t easily be privatized without major new investments — or repaying some $4.5 million in federal grants used to build and maintain park facilities. The state has invested another $150 million in the system. Moreover, many of the park lands are actually owned by the federal government and state land department, then leased by state parks.

On balance, the report recommended the establishment of a semi-independent state entity that would take over the parks, perhaps with some continuing state support. That “quasi-governmental agency” could then more easily strike deals with private companies, concessionaires and partners like Payson to boost the revenue from the high-visitation parks to maintain the smaller, preservation-oriented parks.

Such an agency could operate on a more business-like basis, the report concluded. Moreover, its independent status would free it from the chaotic and unpredictable state financing system, which has in the past several years featured repeated raids on park operating funds and various special funds to reduce the state budget deficit.

Failing to rescue the state parks system will cost rural communities heavily, the report concluded.

For instance, since 2007 visits to state parks have dropped by 4 percent, to 2.2 million. At the same time, the amount of money spent by the average traveler dropped sharply, according to a survey by Northern Arizona University.

Back in 2007, visitors to state parks pumped $266 million into rural economies. But last year, that impact dropped by 16 percent. The total loss of economic activity cost the state some $44 million in tax revenues, which compares to the $18 million operating budget for the whole system.

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