Creative Strategies for Financing Parks and Recreation

April 1, 2016, Department, by Donald L. Rockey Jr., Robert Barcelona, Bob Brookover, Dustin Thorn and Dominic Saturday

Creative financing strategies from several financially successful departments of the South Carolina Recreation and Parks Association.Recent economic hardships have brought about financial challenges for many government-sponsored programs, including parks and recreation. One of the oft-repeated concerns expressed by park and recreation administrators is the availability of sufficient financial resources for operational and capital expenses. Thus, agencies have had to become more creative and entrepreneurial when delivering services and providing facilities for an increasingly diverse and demanding constituency. The purpose of this article is to explore strategies for creative financing among exemplary park and recreation agencies as identified by the South Carolina Recreation and Parks Association.

While there are numerous examples of the impact of economic hardships on park and recreation departments, there are also illustrative success stories of departments that are thriving. One such story is the Rock Hill, South Carolina Department of Parks, Recreation and Tourism. In 2011, at the height of the economic downturn, Rock Hill embarked on the development of an $11 million outdoor center, including a 250-acre park with a cycling velodrome, BMX/supercross, cyclocross and mountain biking trails. This specialized complex has allowed Rock Hill to carve a niche in attracting sports-based tourism events. Another example of growth among parks and recreation agencies is the city of North Myrtle Beach Parks and Recreation Department’s completion of a $15 million sport tourism and recreation park.

These financial ventures were made possible by agencies finding creative means to finance the projects. For example, Rock Hill’s outdoor center provides a complex example of diversification by leveraging multiple financing mechanisms, including hospitality taxes, sponsorships and federally backed private loans. The unique and creative aspect of this project was Rock Hill’s use of the New Markets Tax Credits and stimulus fund monies. This diversified financing approach allowed the city to extend the scope of the project by adding features and amenities for approximately the same financial investment as the velodrome alone would have cost. 

Significance

While specific success stories highlight how individual agencies have found ways to finance park and recreation programs and facilities, there is very little research that has explored the best practices of these agencies. Most of the existing research has examined public opinions of financing strategies, with some researchers suggesting government-sponsored park and recreation providers should strive to maintain or improve constituent trust and commitment to create a balance between existing and new funding sources. According to a 2006 study, only 39 percent of the public wanted to have user fees or increased taxation, but the majority of those surveyed wanted the parks to remain non-exclusive and affordable. A 2005 case study of Gwinnett County, Georgia, suggested strategic planning is the key to financial management of public recreation. 

Implementation and Design

To better understand the issues faced and strategies implemented by park and recreation agencies, researchers contributing to this article conducted interviews with the directors of seven South Carolina park and recreation agencies. These agencies were selected because they were identified as “financially successful departments” by the South Carolina Recreation and Parks Association. The agencies represented municipal, county and special district park and recreation agencies. Interviews with directors and key staff focused on the unique nature of each community, economic challenges, strategies employed to overcome these challenges and future projects and programming. The research team took detailed interview notes, met to discuss the content of each interview and developed a set of overarching themes. The themes provided insight into strategies agencies employed to best position themselves to grow financially, despite difficult economic conditions. 

Strategies that Work 

Through the data analysis, six strategies or trends emerged. These strategies were broadly applicable to the park and recreation field, and may be adapted in many communities across the United States. While there were cross-cutting strategies that emerged from these interviews, they were applied in a variety of ways by the agencies and readers should consider the best ways to apply these within their own communities.

(1) Contributing to Economic Development: Recreation and park services were widely believed to be an economic catalyst for the community. For example, numerous programs, facilities and events offered by park and recreation agencies have become tools to generate revenue within the community. Sport tourism (i.e., traveling to another place to engage in or watch sport) was mentioned as having a powerful economic impact on the communities. Local residents and businesses were likely to support investment in parks and recreation if they saw economic benefits from these investments. Leaders interviewed for this study communicated the economic impact the facilities sponsored by capital growth have had on their communities. For example, independent analysis showed that Greenville County Parks, Recreation and Tourism (GCPRT) generated more than $10 million in economic impact across the county in 2012. Similarly, the city of North Augusta hosts the annual Nike Peach Jam basketball tournament, an elite men’s and women’s basketball showcase that generates more than $4.5 million for the local community, and generates positive press through coverage by ESPN and other outlets. The continued success of the event over 20 years has led to increased funding for facility development and improvements. 

(2) Nurturing Public Support: Another key to successful financing was the development and centrality of public support. As mentioned in the previous strategy, community support is the key to getting financing and continuing to grow. For example, the 2006 study, “Public Response to Park and Recreation Funding and Cost-Saving Strategies: The Role of Organizational trust and Commitment,” published in the Journal of Park and Recreation Administration, found that park and recreation administrators who took actions to build trust and demonstrate commitment were able to expand funding beyond just taxes. All of the leaders interviewed indicated they intentionally and strategically worked to build community support by nurturing relationships with nonprofit “friend” organizations, boards, private citizens and partnerships. All mentioned they were able to build trust because the park and recreation agencies used capital funds responsibly in the past. 

(3) Strategic Planning and Assessment: Strategic planning and evaluation to help guide growth efforts is essential to successfully securing funding. Interviewees stated that in order to use capital funds in a responsible way, they needed to conduct research to assess community needs and to evaluate current facilities, programs, policies and employees. Interviewees consistently mentioned how they used frequent needs assessments to determine interests in the community. This information was then used to determine growth and development. Interviewees emphasized that it is important to deliver on strategic planning efforts. For example, Gwinnett County, Georgia, makes all its key financial decisions and develops partnerships based on a strategic plan. Directors and key staff noted that they were successful in delivering on their strategic plan. Rock Hill obtained funding to develop the “Rock Hill Outdoor Center Greens,” a multiuse athletic field designed for passive and free-play activities, as a result of public input stating that there was not enough space in the city for residents to throw a Frisbee, fly a kite or kick a soccer ball. Interviewees often mentioned that the trust created through delivering on their plans was essential to establishing a positive image within the community. This trust was viewed as a major asset for gaining needed economic capital for future projects.

(4) Adopting an Entrepreneurial Approach: Successful agencies in South Carolina found ways to generate revenue through creative and innovative strategies. Examples include the Charleston County Parks and Recreation Commission’s dog-themed events with music and beer sales, as well as Rock Hill’s velodrome facility, developed in a former industrial area that is now changing to a shopping and residential area. The city leadership capitalized on the momentum of the recreation facility to create a new, revitalized “live where you play” community. The change is creating a long-term revenue source for the city and its recreational offerings. In all cases, successful park and recreation directors talked about the importance of understanding the marketplace and offering programs and services that met the public’s needs and willingness to pay for services.

(5) Leveraging Special Taxes: Many agencies took advantage of special taxing systems to improve parks and recreation infrastructure. Conventional ideas ranged from the use of hospitality and accommodations taxes to finance tourism-related projects such as parks, convention centers and athletic fields, and “penny” sales taxes used for capital improvement projects. Novel taxing systems included the creation of municipal improvement districts (MIDs) in blighted neighborhoods or areas of town that needed improvements to encourage development and the use of federal New Market Tax Credits for the development of recreation and athletic facilities as part of commercial and residential development of a former brownfield site. Successful agencies highlighted the need to have someone on staff who is responsible for identifying these innovative taxing mechanisms and working with city finance and planning departments to identify new opportunities.

(6) Partnerships: The directors continually mentioned the partnerships they developed to assist with capital funding. For example, the Irmo-Chapin Recreation Commission, city of Aiken and Greenville County all specifically mentioned that private special-interest groups approached them with project ideas that met defined needs within the community and provided fiscal resources to get the project off the ground. The expectation was that the park and recreation department would find additional funding and manage the project’s development, implementation and operations. These large-scale projects, such as the development of the MESA Soccer Complex, a 60-acre, 16-field soccer facility in Greenville County, were pursued when they were able to meet a clear need in the community. 

Conclusion

The major take away from this project was that success builds trust with citizens and stakeholders, and that trust often led to the acquisition of new resources for facilities and programs. While there were some creative strategies being employed (novel taxing mechanisms, different entrepreneurial approaches), agencies were able to leverage the success of earlier innovations and creativity into broader and stronger community support. Creating new strategies and/or repositioning agencies and getting that first “win” often led to the public and decisionmakers wanting more. 

Don Rockey is a professor in the Department of Kinesiology, Recreation and Sport Management at Coastal Carolina University. Bob Barcelona is an Associate Professor at the University of New Hampshire. Bob Brookover is a Senior Lecturer at Clemson UniversityDustin Thorn is an Assistant Professor at Coastal Carolina University. Dominic Saturday is an undergraduate student at Coastal Carolina University.

 

References

Gibson, H. (1998). Sport tourism: A critical analysis of research. Sport Management Review, 1, 45-76.

Maynard, S., Powell, G., & Kittredge, W. (2005). Programs that work: A strategic plan at the core of public recreation financial management: A case study of Gwinnett County, Georgia. Journal of Park and Recreation Administration,23(1), 115-129.

Mowen, A., Kyle, G., Borrie, W. & Graefe, A. (2006). Public response to park and recreation funding and cost saving strategies: The role of organizational trust and commitment. Journal of Park and Recreation Administration, 24(3), 72-95.

Powell, M. (2013, September). Private money, public parks. Parks & Recreation, 42-47.

Samnaliev, M., More, T. & Stevens, T. (2006). Financing public recreation lands: attitudes about Alternative policies. Journal of Park and Recreation Administration, 24(3), 24-49.

Willett, P. (2015, July).  Nike peach jam gives North August a boost. Retrieved from here.