Letter to Park Commissioners about “Privatization”
Date: Mon, 1 May 2017 10:49:12 -0700
From: Jonathan Mark
Dear Seattle Board of Park Commissioners, Supt. Aguirre, and Deputy Supt. Williams,
My name is Jonathan Mark and I am part of the Protect Volunteer Park group. I appreciate your public service, and would like to offer some comments regarding Parks partnerships and the term “privatization”.
The question has come up: if park lands and facilities remain owned by the city, then how can it be called “privatization”? I see two separate parts of this question:
Operating agreements: The City might partner with a private organization to operate City facilities, or operate programs in City facilities. An example is the Associated Recreation Council (ARC), a nonprofit which operates a variety of programs at Parks facilities all over the city. Some call this privatization, but I would not use that term if the operating agreement were structured to be fair for the public (as with ARC which compensates the City in a number of ways for the use of facilities, including paying a percentage of user fees).
I would definitely use the term “privatization” to refer to the use of private capital funds. I oppose the use of private capital to develop facilities in Seattle parks. Private capital does not come for free; its owners will expect a tangible return. One way or another, the public will pay. It may be higher user fees, or operating agreements which do not favor the City, or public parklands being managed according to the preferences of the capital providers rather than the public.
Here you can see where Volunteer Park figures into it. In 1933 the City accepted a museum building built using private capital, which was turned over to the public to maintain and keep the lights on, with the operator providing public benefits (free admission four days per week). It looked like a good deal at the time. But capital is not value-neutral, nor does it share our values as Seattle residents. Capital has rich, influential owners who will use their power to make sure their capital produces the maximum return.
So now after 84 years, we have seen the Public Benefits Cut, but Public Spending Maintained. We still manage this City property as if for the benefit of its original donor, we pay SAM to operate there, we have given away 93% of the free admission days that used to be provided, and SAM can still convert a publicly voted renovation project into an expansion project, get Mayor Murray’s promise for an extra $10 million from the city, and hold itself exempt from the public involvement policy which applies to Seattle Parks’ property.
(Also, SAM moved downtown and the City guaranteed repayment of $45 million in bonds to build SAM’s new facility, but at Volunteer Park the public is also still on the hook for continued financial support of SAM’s former home. The $45 million guarantee counts against the City’s borrowing limit, which means $45 million less for other City priorities. SAM has leased 8 of the 12 downtown floors to Nordstrom Inc. until 2031, but the Seattle public is still helping finance the entire building.)
Seattle Art Museum has 70 trustees (PDF), powerful people who are fully engaged in advancing the institution’s interests. The SAM executive director makes $503,000 (almost 3 times the mayor’s salary) and SAM has additionally hired an employee to seek approval for the Asian Art Museum renovation and expansion project as a “Senior Advisor to the Director”. At Volunteer Park a city-owned but privately capitalized building is backed by a powerful campaign to shape city policy toward SAM’s objectives.
If we bring more private capital into Seattle parks, we can expect to see similar behavior from its owners, working to serve the interests of their capital investment at public cost. Or worse; proposals such as at Evans Pool would give the private capital investor long-term operating agreements, so they would have a stronger position than SAM has at its Volunteer Park facility. SAM has no rights at the Asian Art Museum building except the 1933 agreement which either party can terminate with 3 years notice. But the SAM trustees can still agree to act entitled to the building and use their political influence as if it were SAM’s property.
Sometimes people are unsure whether a nonprofit organization should be considered public or private. I view nonprofit organizations as private, the same way as for-profit companies. It is just a different financial structure: no profits, but a federal tax exemption granted to donors. The leadership of a nonprofit is unelected and unaccountable to the public, only to the IRS and to the people it hopes will donate money or volunteer.
Thank you for considering my comment.
Jonathan Mark, member of Protect Volunteer Park