“The language used around finance has created an environment where there is a lot of mysticism…today, we want to demystify,” Dev Pathik, founder and CEO of The Sports Facilities Advisory, said during his opening remarks at NRPA’s most recent Innovation Lab in San Diego. The theme, “Why Wall Street Cares About Parks and Rec,” set the stage for an event focused on financing — specifically the best practices for seeking it and most impactful arguments that can be made in order to sway potential purse-string-holders to make an investment. Bottom line, Pathik said: “The case must be made that the service you’re championing is essential to the well-being of your community.”
Connecting the Dots, Making the Argument
Perhaps the most popular inroad to soliciting outside financing has been the demonstration of economic impact. NRPA’s own recently released Economic Impact of Local Parks study highlighted the significant contributions of parks and recreation in municipalities across the country, noting the industry as a whole is responsible for some $140 billion in economic activity each year.
Another is to tout the importance of equity of access, making the argument that residents who live near a park or park-like amenities are healthier — both mentally and physically — and enjoy increased property values, thereby buoying the entire community. Accessible parks, recreation and open space amenities are also attractive to businesses looking to relocate or set up shop in a given locale, bringing an expanded tax base, jobs and prestige in tow.
Hard data related to these areas does grab the attention of financers and budget-makers alike, but Pathik urged Innovation Lab attendees to look for deeper, long-term connections that could indicate an even broader impact. Inspired by the work of Dr. Bruce Y. Lee, director of operations research at Johns Hopkins Bloomberg School of Public Health’s International Vaccine Access Center, Pathik suggested one such connection was through public health. “When we produce a feasibility study, economic impact analysis, etc., the conversation is a money conversation,” Pathik said. “It’s not about equity or access in that conversation. When we find ourselves in front of commissions, councils, etc., we want to have something quantifiable to say about importance of access beyond economic impact.
“Dr. Lee used U.S. Census Bureau data and did a population analysis looking 20 years out at the BMI of a city…if you live within half a mile of four fast-food restaurants, you are twice as likely to die as someone who lives near two. Proximity to parks, though, encourages walking, so those people are more likely to live longer. You can imagine what this does to the conversation when it shifts from financial cost to what [investment in parks and recreation] does to the health of a community.”
Pathik pointed to potential long-term savings in the health sector that would be precipitated by greater availability of the sorts of amenities that get people up, moving, walking, exercising and socializing — amenities like those routinely offered by park and recreation departments. Indeed, companies like Greenfields Outdoor Fitness, helmed by CEO Sam Mendelsohn, are eager to sign on to such concepts and often cite ancillary health benefits as reasons for including their products — outdoor fitness equipment like chest and vertical press machines, stair climbers, core strengthening machines and others — in park renovations or new builds. “Our goal is to help every local park offer this social, multi-generational fitness opportunity to its community members, thereby filling an essential role in our society and cementing the public park as a relevant feature of the modern landscape,” Mendelsohn said.
Promoting the idea of a deeper connection between healthcare costs, health impacts and park and recreation assets advances the argument that such assets are “essential” to communities, and thus should be held to somewhat different standards than investments that could be expected to generate 100 percent cost recovery. It also brings more partners to the table, giving wary financers a better sense of security. “That’s the beginning of checking the boxes to see if something is financeable,” Pathik said.
Essential and Financeable
It’s helpful to remember, especially when approaching investment banks or other holders of investible capital, that Wall Street is in the business of “selling you money,” as Pathik puts it. “Wall Street makes money selling you money — that is why they care and that is the basics of it. If [the amenity or service you’re attempting to finance] is not essential, if you don’t have a broad stakeholder group, if you don’t have some revenue or way of funding it, it’s very difficult to get the attention of Wall Street.”
So, what does it mean to be essential? Dan Gilman of Jefferies Global Investment Bank, which offers products and services in investment banking, equities, fixed income and wealth management in the Americas, Europe and the Middle East and Asia, shed some light, saying, “We ask a couple questions right off the bat — particularly for parks and recreation, we want to know who is going to use [an amenity], whether it will be essential, and, the biggest thing: Does this generate revenue?”
A project needn’t generate piles of revenue or even recoup 100 percent of its initial cost to get financing, so long as investors understand it’s an essential part of a community, some reliable partners and money are initially brought to the table and some amount of revenue is reasonably expected to be generated. Beyond Wall Street there are scores of additional funding partners that can help bring essential park and recreation projects to fruition, including community redevelopment agencies, foundations, local banks seeking to fulfill community reinvestment act obligations, developers and others. Bob Cornwell, formerly of CSG Advisory Group in San Francisco and who lent his voice to an afternoon panel in San Diego, provided an overview of common mistakes made by both the public and private sector when coming to the table on such collaborative arrangements. He also emphasized the importance of ensuring a voice from the park and recreation field be included from the start of any potential development or redevelopment project, so that the many benefits — and essential contributions — of parks and recreation can be realized by all involved. “Leverage your assets,” Cornwell advised. “Everybody wants what parks have right now.”
View presentations from the San Diego Innovation Lab, including Cornwell’s information on common mistakes and tips for forming useful and lucrative public/private partnerships.
Samantha Bartram is the Executive Editor of Parks & Recreation magazine.
Innovation Lab: Boston
Following our most recent sojourn to sunny San Diego, NRPA is next headed to Boston, Massachusetts, to host an Innovation Lab on data and technology. May 12-13, NRPA and several high-level park and recreation professionals, as well as many partners in our industry, will converge to discuss the latest trends in technology and how best to leverage the data we collect about our programs, facilities, initiatives and special events.
Check our Open Space blog for an upcoming post by NRPA Vice President of Urban and Government Affairs, Kevin O’Hara, focused on Boston Mayor Marty Walsh’s Office of New Urban Mechanics, which seeks to explore how new technology, designs and policies can strengthen the partnership between residents and government.