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How Will California's Parks Do Under Private Management?

Patrick's Point State Park in Humboldt County, California. (Photo: Lee Coursey)

California embarked this week on a grand experiment in common property resource management when, in order to help close a gaping budget hole, it turns over dozens of state parks to private firms and community coalitions.

Seventy of the state’s 278 parks were set to close July 1. But a last-minute change to the state budget will keep all but five open, though many will not be managed by the state. At least six parks will remain open under corporate contracts with firms like American Land and Leisure, which operates campgrounds in 12 states. Dozens more have been rescued, at least temporarily, by local municipalities, private donors, and non-profit organizations.

Economists have long-held that the tragedy of the commons — any individual has too little incentive to protect from exploitation a non-excludable resource he holds in common with potentially countless others — could only be overcome by state intervention or private ownership.

Had Elinor Ostrom, the first woman to receive the Nobel Price in economics, not succumbed to pancreatic cancer last month, she would have no doubt watched with great interest the developments in California. After all, Ostrom was honored by the Nobel Committee in 2009 for challenging “the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatized.” Groups of individuals could, she observed, frequently overcome the tragedy of the commons by cooperatively managing resources.

California might have been Ostrom’s next case study. The experiment upon which the state is set to embark will provide an opportunity to compare the relative efficacy of resource management provided by central government control, private ownership, and local cooperation.

American Land and Leisure, the Utah-based company soon to operate three state parks, is banking on entry, parking and camping fees to cover the costs of park operations and an undisclosed share of revenues it must pay to the state. Fees can be raised subject to approval by the state parks department.

Meanwhile Coe Park, the state’s second largest, will stay open for three years largely because of a $900,000 donation from a semiconductor tycoon in nearby San Jose. The philanthropist hopes to build an endowment from medium-sized donors with no strings attached.

In some cases, non-profit groups plan to add services and still break even at parks that have historically run in the red under state control. In the Napa Valley, two non-profits will introduce year-round operations, add pricier overnight accommodations, and rent out historic buildings. Near Benicia, north of San Francisco, maintenance at Benicia Capitol State Historic Park will be provided by the city, while 300 dues-paying members will pay for a park manager and seek to boost revenue by expanding hours of operation. Another group plans to finally introduce credit card payment kiosks in parking lots.

The substitution of corporate and community control for state management alarms some Californians who fear diminished accessibility amid higher fees and reduced operations. Only time will tell if those fears are justified.

But the nature of the agreements and the plans of the new park managers suggest the California experiment may produce some winning results.

The state had been losing money on these parks. What if a private firm could find enough efficiencies and enjoy sufficiently lower labor costs to keep the parks running, keep fees from climbing, and still kick back a share of revenues to the state? What if innovating philanthropists who know their backyard parks like the backs of their hands develop new amenities that attract happy park-goers and additional revenues? And what if the benefit of natural resource amenities to locals—residents, hoteliers, restaurateurs, and retailers, are sufficiently great to keep parks open and protected by municipalities and local coalitions.

Elinor Ostrom taught us that the preservation of common property resources does not rely exclusively on the state. Californians are about to put that theory to the test. Here’s hoping she’s right.