Posted on 11/30/2002 5:48:23 PM PST by GailA
Underused resorts tax resources of state's parks
By Tom Charlier charlier@gomemphis.com November 30, 2002
COUNCE, Tenn. - With its sweeping lake views, spacious dining and meeting areas and indoor and outdoor pools, the new $12.2 million inn and conference center across from Pickwick Dam has the cushy feel of a private resort.
"The feedback's been excellent," general manager Roger G. Hendrick Jr. said as lunch customers began filing into the restaurant on a recent weekday.
"We're seeing a very good increase in corporate business. I have a lot of folks coming here just to relax a few days."
But the 17-month-old facility Hendrick runs isn't private at all.
It's the centerpiece of Pickwick Landing State Park and one of the major resort-improvement projects built at six Tennessee parks thanks to $56 million worth of bonds issued in the early and mid-1990s.
Attractive though they may be, these resorts could pose a huge financial burden for the oft-troubled state park system in the next several months.
For the fiscal year that began July 1, the state owes a $5.1 million repayment on the bonds. With only $2.5 million available from motor-vehicle title fees to pay the bill, state officials are scrambling to make up a projected $2.6 million shortfall.
The gap, compounded by Tennessee's overall budget woes, could force more cutbacks in a system that's already weathered reduced operations and efforts to close some parks.
"The money's got to be found somewhere," said Mark Williams, assistant commissioner of state parks for the Tennessee Department of Environment and Conservation.
"We're not going to be able to do some things that we need to do - not only at the resorts, but at the other parks."
Seven of Tennessee's 53 state parks are considered resort facilities, and six of them received major improvements - such as new, renovated or expanded inns or conference centers - funded by the bonds.
Besides Pickwick, where improvements totaled $16.9 million, the parks getting the facilities were Fall Creek Falls, Henry Horton, Montgomery Bell, Natchez Trace and Paris Landing.
The General Assembly authorized up to $74.4 million in bonds for the projects, although the total issued between 1992 and 1996 was $56 million.
Mike Gaines, finance chief for TDEC, said the problem with the resort facilities is that they haven't produced the revenues that state officials expected.
"The theory was that the revenues generated from the parks would increase sufficiently to cover the debt cost," Gaines said. "It hasn't happened."
Revenues from the seven resort parks have increased, from $15 million in fiscal 1997-98 to $19.5 million for the fiscal year that ended June 30. But the increases haven't been enough to cover rising costs and the bond payments, Gaines said.
In fact, the fallout from state budget troubles resulted in a $1 million drop in revenues from the resorts in fiscal 2000-01.
To critics, the bond debt and lagging revenues are symptoms of misplaced priorities in the state park system.
Kathleen Williams, president and director of Tennessee Parks and Greenways Foundation, said legislators, and not state parks officials, have been behind the dubious resort projects.
"Politicians are calling the shots on where things are built and when," said Williams, who also is co-chairman of a coalition called Tennesseans for State Parks. "You don't have professionals making the decisions."
Williams, who is not related to Mark Williams, said surveys have shown that Tennessee citizens believe the main purpose of state parks is to protect natural areas.
That goal is especially important, she said, because recent studies show the state is losing forests and green space much faster than other states.
"We're spending all our money building overbuilt buildings that we can't afford to heat or cool or maintain," she said.
"In state parks, we should be preserving the best natural areas before they're gone. Instead, we're on a building frenzy."
Gaines acknowledges the considerable criticism of the resort facilities.
"But you can't question that they're top-notch facilities. They're wonderful places, and they still could work."
That won't be easy, however. The financial burden from the projects has grown along with the bonds' payment schedule. This year's payment is 20 times higher than the $250,000 due in 1995-96.
In the years immediately following the bonds' issuance, the repayments were small enough that the state could more than cover them with the $2.5 million generated annually from motor-vehicle title fees.
The state even built up a temporary surplus with the fees and applied the extra money to bond repayments.
But as the repayments rose, they gobbled up the surplus. As a result, the state faced a $600,000 shortfall on the bond repayments in fiscal 2001-02, which was covered by the legislature.
State parks, including the ones that aren't resorts, generate about $30 million a year in revenue, slightly more than half the system's $55 million budget.
The state has begun charging entrance fees, but that money is dedicated to park maintenance.
Revenues at the resorts have been a disappointment in part because occupancy rates hover in the 50 percent range. And efforts to boost business have been hobbled by Tennessee's chronic budget troubles, although the sales-tax hike imposed this year might lessen the difficulties.
For one thing, state agencies in recent years have been forced to cut back on the training seminars and conferences that they traditionally conduct at state parks.
The loss of state-agency business alone cost parks $600,000-$900,000 in revenue last fiscal year, Gaines said.
"Some of our biggest customers are (from) the State of Tennessee," he said.
State budget problems also hurt because they left the parks with little or no money to advertise.
"They don't get much drive-by traffic," Gaines said.
Hendrick, Pickwick's general manager, said that during a recent trip to nearby Jackson, Tenn., he talked to many people who weren't even aware of the park's new inn and conference center.
The Pickwick facility was needed, officials say, because the old one was outdated, too small and deteriorating. The old inn remains standing while officials decide what to do with it.
Hendrick said he now has a small amount of advertising money to help get the word out about the park.
Word-of-mouth advertising from satisfied visitors also is helping, he said. While the old inn and restaurant used to reap about $1 million a year in revenues, the new facility generated nearly $300,000 in September alone.
- Tom Charlier: 529-2572
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