The New Economic Era Of Park Development
Over the past several years of municipal fiscal restraint, a noteworthy trend has emerged: the public sector is increasingly diversifying the funding for developing, operating, and maintaining open space projects in perpetuity. By concurrently considering planning, design, and economics, we can not only introduce new ways to bridge the gap between municipal fiscal capacity and project completion, but importantly park systems can also generate significant utility for end users and their surrounding communities.
Particularly over the last decade, parks have evolved in various ways to generate income. Traditional sources of funding – especially public sector support for operating and maintenance costs – have become increasingly limited in recent years. Property tax caps and other tax limitations, which have been the bedrock of municipal finances, have created significant budget challenges for local government services and their corresponding public spaces. As a result, parks have sought innovative approaches to financial sustainability.
One notable evolution is the growing reliance on earned income from concessions and special events. Parks are strategically leveraging their spaces to host a variety of events – from festivals and
concerts to markets and sports competitions – and utilizing private support to augment their internal teams’ capacity and capabilities. In addition, build-operate-transfer (BOT) scenarios are becoming increasingly popular. BOTs are a contractual relationship in which an organization hires a service provider to set up, optimize and operate a public facility with the contractually stipulated intent of transferring the operation to the organization as a captive center in the future. By capitalizing on these opportunities, parks can not only enhance community engagement but also generate revenue through event fees, sponsorships, and increased visitor spending. Indeed, these arrangements also allow for the more vibrant development of new park amenities in the short-term.
External value capture represents the most untapped resource for assisting in funding public realm projects. There has also been a shift towards exploring external value capture as a significant resource for funding public realm projects. This involves identifying and harnessing the increased property values that result from well-planned and well maintained public spaces. Parks are increasingly viewed as amenities that enhance the desirability of surrounding areas, leading to higher property values. Municipalities and developers can leverage this increased value and corresponding vibrancy to finance park projects and improvements.
Our experience working on public parks throughout the region for many decades provides us with a wealth of experience to draw from, along with a collection of successful case studies (refer to our selected projects) demonstrating the amazing economic return on public investment. Across our portfolio and through additional research from around the country, we have seen a ratio of 4:1 or better: every public dollar spent on quality open space stimulates five dollars of private investment.
By integrating considerations of planning, design, and economics, parks are evolving to create sustainable funding models. This evolution not only enables the financing of public realm projects in innovative ways but also contributes to the overall well-being of communities, attracting private investment, and enhancing the economic value of the surrounding properties.