Wednesday, May 2, 2012

Warren Meyer on Park Privatization

Greetings!  Dru Stevenson has been kind enough to allow me to join the bloggers on this site.

Quick background:  I have a mechanical engineering degree from Princeton and an MBA from Harvard.  I have been blogging for nearly 8 years at Coyote Blog, and I write a column at Forbes.com.  Probably most relevant to this site, for the last decade I have run a company called Recreation Resource Management which privately operates public parks.

So I suppose you can say I have a horse in the privatization race, but while I am passionate about the potential, my experience has also helped me better understand many of the traps in this public-private partnership world.

In particular, you will find I frequently focus on incentives, both public and private.  For example, in the park world, I distrust both inspections and "public spirit" as mechanisms for ensuring quality operations.  The best contracts in our business are those where it is in a company's best (most profitable) interest to keep a park clean and well-maintained.  While this may seem like like a chimera to some, I would point out that McDonald's and Marriott keep their bathrooms tidy without any government inspections or contractual obligations to do so.  Why?

We will try to tackle some of these issues in later posts, but in this introduction I just wanted to take on an preliminary issue:  Why do we have public parks and recreation at all?

In my history of public discussions on private operation of public parks, it is no surprise that I run into a lot of skepticism about having any private role at all.  But I also run into the opposite -- folks who ask (or demand) that the government sell all the parks to private buyers.  So why shouldn't privatization of parks just consist of a massive land sale?

The answer has to do with profit potential.  Over time, if in private hands, a piece of land will naturally migrate towards the use which can generate the highest returns.  And often, for a unique piece of land, this most profitable use might not be a picnic area with a $6 entrance fee -- it might instead be something very exclusive which only a few can enjoy, like an expensive resort or a luxury home development (think: Aspen or Jackson Hole).  The public has asked its government to own certain unique lands in order to control their development and the public access to them.

Public ownership of unique lands, then, tends to have the goal of allowing access to and enjoyment of a particular piece of land for all of the public, not just a few.  Typically this entails a public agency owning the land and controlling the types of uses allowed on the land and the nature and style of facility development.  I call these state activities controlling the "character" of the land and its use.  (One could legitimately argue that private land trusts could fulfill the same role, and in fact I have personally been a supporter of and donor to private land trusts.  However, I am not an expert in this field and will leave this discussion to others).

Having established a role for the government in setting the character of the lands we call "parks," we can then legitimately ask, "does this goal require that government employees actually staff the parks and clean the bathrooms?"  I'll begin addressing that question in my next post.

3 comments:

  1. This is a great post - and welcome aboard! I think having a variety of perspectives will enrich this blog. I look forward to your future posts.

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  2. Another blog for Google reader...thanks for the pointer Warren.

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  3. McDonalds keeps its bathrooms clean? You must be visiting different McDonalds than I am.

    I have two young kids, and we stop almost exclusively at McDonalds for quick, non-gas stops on our road trips (in part because I love love love their iced coffee, no sugar syrup). I have seen many, many disgusting bathrooms in McDonalds on my road trips. Not necessarily more often than not, but a large minority.

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