For many government entities, the need to do more with less is now a defining feature—and a frequent driver of innovation. In 1989, the US Army decided that it no longer needed to occupy the Presidio of San Francisco, an expanse of prime real estate that hade been a military base for more than two centuries. Two outcomes for the site soon emerged: It would become a national park, or it would be subject to commercial and residential development. Ultimately, it came under the jurisdiction of the Presidio Trust, an agency that runs the Presidio as a park but uses private-sector partnerships to pay for its upkeep. “The Park That Paid Off,” a Case Study article published in the summer 2015 issue of SSIR, explores both the evolution of this hybrid model and the challenges that come with trying to maintain it.
To supplement the article, we offer a sidebar piece that elaborates on how the Presidio trust has met those challenges.
By Greg Beato
The Presidio isn’t a typical national park. It’s located next to busy urban neighborhoods. Along with its vast open spaces and sweeping views of the Pacific Ocean, it has a dense and costly infrastructure of buildings and roads. In short, it’s a one-of-a-kind place that has required a one-of-a-kind approach to managing its assets. That has been the case ever since the Presidio Trust took charge of the park, back in 1997. “We were solving for a particular challenge,” says Craig Middleton, the longtime executive director of the Presidio Trust. Still, there are several broad principles that have guided the trust over the course of nearly two decades—principles that are relevant to other entities that seek to achieve large-scale goals by building public-private partnerships.
Don’t let a worst-case scenario keep you from pursuing a best-case opportunity | The creation of a special trust to manage the Presidio marked a radical departure from the way that the US National Park Service (NPS) had long operated. And since the trust represented an unproven model, there was always a chance that it could go wrong—that using the trust approach could undermine the NPS system overall, for example. But just because a dire outcome was possible didn’t mean it was probable. “The NPS and some of the major Friends of the Park groups always worried that the Presidio Trust structure would be a precedent for other national parks,” says Toby Rosenblatt, who chaired the founding board of the trust. “And we’ve always said, ‘You shouldn’t make that leap,’ because very few other national parks or monuments have so many leasable resources.”
To achieve your goal, fortify your role | An organization that aims to undertake innovative, cross-sector work must have the legitimacy to do so. The Presidio Trust owes its existence not just to an informal agreement or even to a formal memorandum of understanding, but to an act of Congress. Early on, in particular, the ability to cite that legislation made a big difference. “The NPS and its attorney were continuously objecting to what we were doing and seeking to argue with us,” Rosenblatt recalls. But the Presidio Trust Act made it clear that the trust has full jurisdiction over the assets that it manages. And that legal clarity allowed the trust to pursue its mission despite resistance from a larger and more established federal agency.
Focus on saving money as well as making money | Congress gave the Presidio Trust a mandate to attain self-sufficiency within 15 years of its creation. In some quarters, that provision raised concerns that the trust would over-commercialize the Presidio. But in charting a path to financial sustainability, minimizing expenses can be no less important than maximizing revenue. “One of the things that the self-sufficiency requirement did was create a real sense of stewardship around the finances,” says Middleton. “We make choices like you would if you were a family on a limited budget or a small business: Cost control is more than 50 percent of the game. In a lot of other government agencies, you don’t necessarily see that [commitment] as part of the internal culture. It may be imposed from the outside. But for us, it’s an internal part of the culture.”
Leverage the virtues of a virtuous cycle | As the Presidio became a nicer place for a picnic or a mid-day stroll, it also became a more attractive place for residential and commercial tenants. And as buildings began to fill up with tenants, the Presidio Trust coffers began to fill up with cash that allowed it to enhance the natural and architectural assets of the park. Private-sector ventures, in other words, helped to support the park’s public assets—and vice versa. “That cross-sector aspect of [the trust] is what has fascinated me,” says Greg Moore, president and CEO of the Golden Gate National Parks Conservancy, which works closely with the trust. The early history of the trust, Moore suggests, showed “that you could actually achieve synergy [by] leveraging these different sectors’ investments and, in a way, the intellectual and creative capital that came from each sector, too.”
To pursue a grand vision, start with grand balance sheet | When the trust devoted most of its early efforts to revenue generation, some observers viewed that policy as a deviation from the NPS’s “grand vision” for the Presidio. In fact, however, the vision that the NPS developed for the site in the early 1990s included a revenue component. “The original master plan anticipated that in the early years we would need to concentrate on generating lease revenues,” says Rosenblatt. “The open-space and park aspects would come along as the economics permitted. And now, in the past five years, there’s been an increasing emphasis on programming for public use.”
Along with its vast open spaces and sweeping views of the Pacific Ocean, it has a dense and costly infrastructure of buildings and roads. In short, it’s a one-of-a-kind place that has required a one-of-a-kind approach to managing its assets. That has been the case ever since the Presidio Trust took charge of the park, back in 1997. “We were solving for a particular challenge,” says Craig Middleton, the longtime executive director of the Presidio Trust. Still, there are several broad principles that have guided the trust over the course of nearly two decades—principles that are relevant to other entities that seek to achieve large-scale goals by building public-private partnerships.
Read more stories by SSIR Editors.