Cracks in the Model?

The High Line was a stone’s throw from the Hudson River Park , a stretch of waterfront running from Pier 99 and West 59 th St to the southern tip of Manhattan. In 1998, then-Governor George Pataki signed the Hudson River Park Act, which designated the area as parkland and established the Hudson River Park Trust, a quasi-governmental “public benefit” corporation, with a board of directors appointed by the governor, mayor and Manhattan borough president. The Trust was authorized both to develop and maintain the park as a self-sustaining entity by fundraising and generating revenue within the park. However, the legislation provided for state and city funding. [25] Though not a PPP in the mold of the Central Park Conservancy or Friends of the High Line, the Hudson River Park Trust and its affiliated 501(3)(c) nonprofit tapped private funds to maintain a popular and heavily used public park.

An aerial view of the High Line.

But by 2013, the Trust was running an annual budget deficit of more than $7 million and faced daunting infrastructure costs, including an estimated $100 million to fix Pier 40, the park’s largest pier. After a failed bid to create a neighborhood improvement district with powers to tax area businesses and residents, the Trust in a desperation move successfully lobbied for the right to sell air rights along the park’s periphery. [26] The Trust also proposed developing land within the park. Critics questioned the wisdom of a strategy that stood to benefit private developers more than park-goers. Elsewhere in the city, PPPs for parks created controversy over such issues as licensing and concessions deals, parks closures or restrictions for private events.

Spending cuts . Meanwhile, the city was cutting back on parks spending. The 2010 parks budget, $1.6 billion (including operations and capital projects), came to a middling $189 per resident, 11th among the country’s 100 most populous cities. Moreover, already-scarce city resources were subject to political influence at the city council and borough level. [27] The city employed just 5.9 parks workers per 10,000 residents, compared to 15 in Seattle, 12.2 in Miami, and 10.8 in Chicago. [28] Yet it planned to cut staff in Parks and Recreation from 6,092 in 2012 to 4,784 by mid-2014. [29]

But many parks fortunate enough to draw significant private contributions were thriving. The Prospect Park Alliance in Brooklyn, for example, had 2011 revenue of about $11 million. [30] Public/private partnerships brought a major influx of funding to a number of New York’s marquee parks. In 2012, hedge fund billionaire John Paulson gave $100 million to the Central Park Conservancy.

Such donations, however, also provoked controversy. Some critics argued that large gifts claimed as tax deductions cost the public purse needed tax revenues, and benefited already wealthy parks while depriving the general public. According to this argument, a better public investment would be direct support of the parks. [31] Others noted that large gifts created inequality; not all parks had wealthy neighbors. They suggested a form of wealth redistribution: in 2013, New York State Senator Daniel Squadron pushed to redirect some of the funds and expertise of wealthy parks nonprofits to their poorer counterparts. Calling attention to the dire condition of many of the city’s parks and playgrounds, especially those in poor and outer-borough neighborhoods, Squadron argued:

One solution is to provide more financing for parks in the annual city and state budgets. This can and should be done, but it should be supplemented by an ambitious new program: the creation of a Neighborhood Parks Alliance, which would form partnerships between a well-financed conservancy, a “contributing park” and “member parks” in need of more money and support. [32]

Former High Line Chair Alschuler agreed that unequal distribution of resources was an urgent problem, both for New York City parks and nationally. But he cautioned against reducing the role of public-private partnerships. Rather, he put the onus on the city to use public resources freed up by privately raised funds to increase the public dollars spent on parks. He argues:

The lack of investment in these parks, the lack of operating funds, is unacceptable. We have to work as a community to address that. We need to do it in a way that promotes the conservancy model, because to eliminate it would only compound the problem.

The Central Park Conservancy’s Blonsky warned that an assessment on conservancy budgets would chill charitable giving, but agreed that more prosperous nonprofits should assist other parks. CPC was doing so already. “We actually work in 12 different parks outside of Central Park right now,” he says.

That’s something that we’ve been doing for probably about 10 years.  In fact we just signed a new management agreement with the city in June [2013], and those properties are now included in our management agreement.

Still, skeptics cautioned against considering the PPP a panacea for public parks. They pointed to disadvantages such as inconsistent and unreliable levels of donations. There was also the already visible risk that government would take advantage of private donors to cut funding to parks. Few public parks, they argued, could attract enough private support for the PPP model to work.

As the public-private partnership model attracted global attention and potential imitators, it became important to determine: what made for a winning PPP, and when was it less effective? What advantages could a PPP bring to a park, and what were its drawbacks? The model clearly brought enormous benefit when used in a propitious environment. When was a PPP likely to succeed, and when might another model be preferable?

[25] “Additional funding by the state and the city may be allocated as necessary to meet the costs of operating and maintaining the park,” Hudson River Park Act, 1998.

[26] Laura Kusisto and Eliot Brown, “Hudson River Park Plan Is Questioned,” Wall Street Journal, July 22, 2013.

[27] Lisa Foderaro, “A Little-Known Reason for Disparities in New York’s Parks,” New York Times, June 16, 2013.

[28] Trust for Public Land, City Park Facts 2014.

[29] New York State Comptroller Review of the Financial Plan of the City of New York, Report 2-2014, June 2013, p.36.

[30] 2011 IRS form 990 filings.

[31] Felix Salmon, “Philanthropic donation of the day, John Paulson edition,” Reuters , October 23, 2012.

[32] Daniel Squadron, “Can a Tree Grow in the Bronx,” New York Times , May 24, 2013.