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Az State Parks considers consolidating concession contracts

Arizona State Parks has hired a consultant to explore whether a single concessionaire for all 30 state parks would save money, offsetting several years of deep budget reductions.

CHM Government Services, which was hired Friday, will spend the next three months analyzing legal and business aspects of Arizona’s state parks to determine if a massive contract with one concessionaire is possible and feasible.

State parks Executive Director Bryan Martyn said no other state has a sole concessions contract and if it can work in Arizona it might become a model for other states.

“We could change the way parks are run in the country and, theoretically, we could change the way parks are run around the world,” Martyn said.

He said there are currently concessionaires operating in seven of the state’s parks. They typically run gift shops, rental businesses, restaurants and other services that the parks do not have the expertise, staff or funds to operate.

Martyn said revenue reductions from the state in recent years have made it imperative that parks start to look at such options.

The Arizona Office of the Auditor General reported in September that the parks had $25.7 million in revenues in fiscal 2012, down from $54.7 million in fiscal 2008.

The report recommended that parks assess and, if necessary, modify how they bring in revenue. It also said they should continue and expand partnerships with private and local government organizations.

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CHM Government Services will look into the feasibility of exactly that.

Margaret Bailey, a senior vice president at CHM, said the firm will spend the next three months figuring out the current state of Arizona parks, including analyses of finances, investments and real estate.

She said CHM will then determine the best path forward, whether that is single concessionaire or a different arrangement.

“It’s all about making sure the state of Arizona gets a fair return” for opportunities it can provide to concessionaires, she said.

Any deal would have to meet various legal and business requirements, she said.

If everything falls into place, Martyn said Arizona State Parks could request bids in as little as six months from the handful of concessionaires in the country who could handle working with all the parks.

“Within a year, we will have a completely different parks system in Arizona,” he said, although he added he is not tied to that timeframe.

Bailey said getting a fully operating plan in place in a year might be “optimistic,” but her company is hoping to provide Arizona State Parks with enough information to make some important decisions within a year.

“Our job is to take the info that is publically available … and do any evaluation of what is possible and what may not be possible,” Bailey said.

Martyn concedes that it has yet to be determined if a single-concessionaire model would be a net financial gain for the state, but he said initial indications are that it would.

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And, because Arizona would be the first to try such a system, Martyn said the state would get a “smoking deal” from bidders. That’s important because the state simply cannot continue to fund state parks at past levels.

“It’s not like a library or museum anymore,” he said.

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Alyson Zepeda/Cronkite News Service

Tonto Natural Bridge State Park near Payson is one of 30 parks in that Arizona State Parks system.

Concession progression

Arizona State Parks contracts with concessionaires at seven of its 30 parks for services including:

- Buckskin Mountain State Park: general store

- Cattail Cove State Park: restaurant

- Fool Hollow Lake Recreation Area: canoe rental, ice cream

- Kartchner Caverns State Park: food and gift shop

- Lake Havasu State Park: Jet Ski rental, bait and tackle shop

- Patagonia Lake State Park: bait and tackle shop

- Slide Rock State Park: ice cream

But parks officials are now looking at ways to make more money from concessions in the face of steadily shrinking revenues in recent years. Revenues by fiscal year were:

- 2008: $54.7 million

- 2009: $44.9 million

- 2010: $34.5 million

- 2011: $24.1 million

- 2012: $25.7 million