A Commercialized Park Looks for More Money

It is America’s most commercialized national park. Its paying tenants have included former Soviet leader Mikhail Gorbachev and filmmaker George Lucas. But even with annual revenues of $50 million and an operating budget greater than those of Yosemite and Grand Canyon national parks combined, the future of San Francisco’s Presidio is far from assured.

Ten years after Congress created the Presidio Trust to run the fledgling national park, a new town is incubating within its borders at the foot of the Golden Gate Bridge. Some 2,600 people now call the Presidio home, as do a bank, a health club, numerous cafes, four preschools and a high school. More than 3,500 people work in the Presidio, which has millions of square feet of office space to lease.

The Trust says its efforts to coax foundations, dance companies, artists, lawyers, mortgage bankers and corporate headquarters to take up residence in what once was the nation’s longest-operating military base are crucial to the park’s financial future. Though the Presidio was propped up initially with a $25-million congressional appropriation, that figure has been whittled down every year. By law, the Presidio must be self-sustaining in six years or Congress can close the park and sell its land and buildings, including the nation’s largest concentration of historic structures.

When Congress created the Presidio Trust in 1996, it was the first time a federal corporation was established to operate a national park, and ordered to make a profit. The novel arrangement set off a debate that continues today. Proponents suggest that the national park system, hugely expensive to operate, could do well to augment its budget with increased commercial fees. Traditionalists caution against a future where corporations, as opposed to the National Park Service, are calling the shots at Yosemite and Yellowstone.

Moreover, critics ask, if continuing commercialization is the only way to ensure the park’s survival, at what point does the Presidio lose its identity as a park and become just one more pricey San Francisco neighborhood in a parklike setting?

Roger Kennedy, the director of the Park Service at the time the Presidio Trust was established, said he initially opposed it but eventually concluded that the only way to keep the Presidio intact and spare its historic buildings from demolition was to allow limited, tasteful development. More than half of the Presidio’s 800 buildings had been designated historic.

“Many of us took the view that it would be safer to put it into limbo than to consign it to hell,” Kennedy said.

The main challenge for the Presidio Trust over the next six years is to transform dilapidated 150-year-old military barracks, stables and hangars into profit centers -- a $600-million undertaking. The Trust will also have to spend an estimated $118 million to clean up an unknown quantity of hazardous materials left behind by the U.S. Army.

The Presidio, established as a military post by the Spanish in 1776, was used as a base for the Army from 1848 until its withdrawal in 1994. The post then became part of the Golden Gate National Recreation Area, operated by the Park Service.

Today the national park, a 1,400-acre greensward where the waters of San Francisco Bay and the Pacific Ocean meet, is a hugely popular recreational area, affording some of the most spectacular views on the San Francisco waterfront. The park’s hiking and biking trails are crowded, and its 300-acre urban forest is teeming with birds. Outdoor access is free to all.

The Presidio makes its money as a landlord. The strategy for self-sufficiency has been to establish a residential housing base from the park’s diverse array of buildings. From the Civil War to the 1970s, the U.S. military constructed dozens of neighborhoods across the Presidio’s hills and bluffs.

Many of the buildings have been converted to residential rental stock: single-family homes, duplexes and apartments. Pilots Row, overlooking Crissy Field, is a sweep of neat, red-tile-roofed, 1,200-square-foot homes that rent for $4,500 and are seen as a bargain.

The duplexes on Kobbe Avenue, former officers’ housing, rent for $6,000. Elsewhere, on high promontories, is the General’s House, one of three lavish estates that rent for $12,000 a month. Overall, the residential occupancy rate is 97%.

The next big push will be in securing more long-term commercial leases, with the Trust hoping to lure large entities such as LucasFilm Ltd., which developed the $350-million Letterman Digital Arts Center, home to George Lucas’ special-effects and computer-game empire. The park has been home to several foundations, among them the Gorbachev Foundation USA, established to promote democracy around the world.

In all, the Presidio Trust expects to be able to lease nearly 6 million square feet of real estate suitable for commercial use.

“We know we have to be self-sustaining,” said Craig Middleton, executive director of the Trust. “I certainly wouldn’t count on getting a bailout from Congress. As long as we don’t have a perfect storm, we are confident that we will be able to obtain” self-sufficiency.

Bill Wade, a former superintendent of Shenandoah National Park who heads an organization of retired Park Service employees, worries that if the Presidio’s business model does work, other parks would be pressured to follow its example.

“It serves as the premonition of what could happen, and is likely to, given what’s happened in the last few years -- turning whole parks or parts of parks [over] to ‘partners’ to be managed,” Wade said.

Funded by Congress, parks haven’t been vulnerable to market forces or made to rely on corporate largesse that, critics fear, could come with strings attached. Although concessions have always operated in parks, detractors of the Presidio model fear it could give rise to glitzy development and turn national treasures into theme parks.

“Our parks represent what’s best about this country. They capture our experience and commemorate important events in our history,” said Johanna Wald of the Natural Resources Defense Council in San Francisco. “If they were to be privatized, it would cheapen the experience of the visitor and it would denigrate the experience the parks were meant to capture and preserve.”

The Department of the Interior has begun to allow more commercial interests in parks, a change implemented through a number of policy directives over the last five years. Public-private partnerships have become vehicles for increased corporate fundraising and led to some company logos in parks.

Though he stopped short of calling the Presidio’s money-making mandate a model for the future, Jon Jarvis, director of the Park Service’s Pacific West region, said all parks are looking at previously unexplored financial options to augment insufficient congressional appropriations.

“Clearly we are experimenting with and developing a whole range of partnerships and leasing arrangements and concessions and other programs that generate non-appropriated dollars that can assist with the fiscal responsibility we have in all the parks,” Jarvis said. “It’s definitely a trend that the National Park Service is seeking out and entertaining partners to accomplish some of our larger goals. Most of the parks in the system are involved with that in a big way.”

Jarvis cited as an example the planned visitor center at Pearl Harbor’s USS Arizona Memorial, which the Park Service estimates will cost $34 million.

“That’s a big price tag for the National Park Service and the Congress to come up with,” he said. “We are seeking partners to do that. Partners want recognition. There has to be some balance to recognize corporations and their contributions. But we are not entertaining naming rights.”

Still, since the establishment of the Presidio, only one other park has been given a similar money-making mandate. The 89,000-acre Valles Caldera National Preserve in New Mexico’s Jemez Mountains, a sweeping expanse of high desert, must be self-sufficient by 2015. Its revenue is coming mostly from elk-hunting and fishing permits.

The Presidio’s Middleton cautioned against applying the self-sufficiency model to other parks.

“It’s a smart solution, it’s working for us,” he said from his office overlooking the historic Main Post parade grounds. “The beauty of this solution for the Presidio, and what makes it interesting, it was an approach that looked at a specific spot and the needs of that specific place and what would be done to save it. It created an authority designed specifically for that place.

“But I don’t think this has a lot of relevance for the national park system. I know that there is a lot of concern that it might be used as a model. I can understand the concern, but I really don’t think this model fits. It works here, but I can’t think of another national park site where it fits.”