TOPICS > Economy

Presidio National Park Must Become Self-sufficient

November 30, 2006 at 10:25 AM EDT

SPENCER MICHELS, NewsHour Correspondent: It’s not the kind of thing you’d expect at a national park: an upscale spa, where you can get a facial or a massage or other treatments, at prices ranging from $110 to $825.

But the Presidio of San Francisco, designated a national park in 1994 after serving 218 years as a military base, is doing a lot of unexpected things. That’s because the Presidio right now is the only national park in the country that has to pay its own way or be sold off to developers.

According to an act of Congress that saved the Presidio from being released into private hands, the park, with plenty of historic buildings that need expensive maintenance, has until 2013 to prove that it is self-sufficient. If it is successful, some say it might serve as a model elsewhere.

Rather than use the National Park Service to run the park, Congress set up the Presidio Trust, which acts like a corporate board, with most trustees appointed by the president. Craig Middleton is its executive director.

CRAIG MIDDLETON, Executive Director, Presidio Trust: Ten years ago, it was pretty controversial as to whether or not we could do this kind of experiment, and I think it’s proving to work.

We’ve got a lot of bipartisan support in Congress; our financials look good; the park is coming to life as a park. And so I think that, you know, there are enough constituents for this park that it will be here for a long time.

Tenants include spa, Lucasfilm

SPENCER MICHELS: SenSpa paid $5 million to renovate a ratty, old ammunition warehouse, and now pays rent to the trust on a 15-year lease. The building remains U.S. property.

It takes $42 million per year just to run the 1,500-acre urban preserve next to the Golden Gate Bridge. The need to raise a lot of money to keep 800 structures in repair has led to some controversial decisions about what to do with those old buildings.

Letterman Army Hospital was torn down, and in its place Lucasfilm, with the blessing of the trust, built a $350 million digital arts center.

LUKE SKYWALKER, "Star Wars:" I am Jedi, like my father before me.

EMPEROR PALPATINE, "Star Wars:" So be it, Jedi.

SPENCER MICHELS: Lucas is the company that made the six "Star Wars" movies and does special digital effects for hundreds of other movie clients.

GEORGE LUCAS, Filmmaker: Ten, 15, 20 years from now, the whole world will be digital. In the national park here, there is a monument that says, "This is where all this started."

SPENCER MICHELS: Lucas had to pay for all the construction and, since no one can buy national parkland, he pays the trust $5.5 million a year rent.

MICH CHAU, President, Lucasfilm: This turned out way, way, way better than we expected.

Critics concerned about heritage

SPENCER MICHELS: Company president Mich Chau dealt with neighbors and skeptics who opposed the project.

MICH CHAU: This is a national park, after all. And I think a lot of folks were very concerned that we would come in here and build a downtown skyscraper, a high-rise, and not be respectful of the heritage.

We created an incredible space. The buildings look like they've been here for a hundred years, and the park that we put in the park is warm, it's inviting, it's cozy.

SPENCER MICHELS: But some critics object to the project's size and location.

DON GREEN, Economist: The buildings are nice, and the grounds are decent, but if you had the choice of having open space in a national park rather than an office park, some of us would prefer that.

SPENCER MICHELS: Retired economist Don Green says that, by requiring commercial tenants to pay for expensive rehabilitation of buildings, the Presidio Trust caters to wealthy companies and excludes many cash-strapped nonprofits and the public from the rehabbed buildings.

DON GREEN: But virtually none of them now have public access, and they offer almost nothing to the public. I think it hurts the visitor experience.

SPENCER MICHELS: The president of the Presidio Trust, former business executive David Grubb, says he is sympathetic to those concerns.

DAVID GRUBB, President, Presidio Trust: We may have to borrow some money, additional money, from the treasury just for this reason. We will then try to fix up buildings ourselves and then lease them to people and nonprofits, and we're trying to get a better spread.

Apartments in the park

SPENCER MICHELS: The battle over how much money the trust needs to raise and how it does it is currently being played out at the defunct and decrepit Public Health Service Hospital in the Presidio. A developer is hoping to turn it into 230 luxury housing units, many with ocean views.

When you first moved here, what did you think of this place?

CLAUDIA LEWIS, Neighborhood Activist: Well, I was concerned about what would happen with the hospital.

SPENCER MICHELS: Claudia Lewis, who lives nearby, represents neighbors opposed to those plans.

CLAUDIA LEWIS: The trust seems to be focused on the bottom line and how much revenue they can generate.

SPENCER MICHELS: Lewis and her group want to downsize the project.

CLAUDIA LEWIS: This would be one of the largest apartment complexes in the entire city of San Francisco, and it's set in a national park. Here we have a unique federal entity, the Presidio Trust, that has zero accountability. There's no oversight over the decision making of the Presidio Trust.

SPENCER MICHELS: Trust chairman Grubb says the plans for the hospital project are not yet final. He also denies that the trust excludes the public.

DAVID GRUBB: I don't think so, because we've certainly tried to make ourselves available through the public meetings and through the major staff meetings we have with everybody, so we're trying.

SPENCER MICHELS: The trust itself financed rehabilitation of smaller residential units: 1,150 homes and apartments that used to be occupied by enlisted men and officers. Twenty percent of the units are for low-income people who work in the Presidio. The rest go at market rate, anywhere from $475 a month for a single room to $10,000 or more for a general's house.

This building -- actually two residences -- was an officer's home built at the turn of the century.

PRESIDIO TENANT: Oh, yes, it's refinished.

SPENCER MICHELS: For Cynthia Floss and her family, it's a dream come true, a four bedroom home in a national park at $4,800 a month.

There have been some areas devoted to the public and open space. One of the first projects completed was restoring Crissy Field, a former Army airstrip along the bay, to a natural habitat with a running path.

Presidio may become model

SPENCER MICHELS: Dr. Edgar Wayburn, long-time president of the Sierra Club, lobbied hard for the Presidio, and House Speaker-designate Nancy Pelosi honored him for it on his 100th birthday.

REP. NANCY PELOSI (D-CA), House of Representatives Speaker-Elect: When I was a newly elected member of Congress my first few years, he came to see me, and he said, "I just have one word to say to you." I said, "What is that, Ed?" "Presidio." So...

SPENCER MICHELS: Wayburn said in an interview that, in the end, compromise was necessary.

DR. EDGAR WAYBURN, Conservationist: I was satisfied because I felt this was the best we could do, and disappointed because in my ideal visualization for the Presidio, it would remain much more free of buildings.

SPENCER MICHELS: Eric Antebi is the Sierra Club's national spokesman.

ERIC ANTEBI, Sierra Club: I think what's happening in the Presidio is very similar to what's happening in a lot of national parks. The park system is under a great deal of financial strain, and so the managers of these park units, including the Presidio, are having to make some very difficult tradeoffs that in many cases can compromise the mission of the Park Service itself.

SPENCER MICHELS: The mission of the National Park Service, which celebrated its 90th birthday this year, is to conserve the scenery and the natural and historic objects and the wildlife of the parks.

The agency has always been supported by public funds, but the success of the Presidio has raised speculation that Congress could force other national parks to pay their own way. Executive director Craig Middleton says that's unlikely, since the Presidio is unique.

CRAIG MIDDLETON: This model fits here. We're next to an urban area. We can generate revenue from the buildings that we have. It doesn't work other places.

SPENCER MICHELS: The Presidio remains a work in progress. Plans call for a Disney family museum in an old barracks on the main post. Rents are now covering operating expenses. By the time federal appropriations shrink to zero in seven years, income should be adequate to keep this unusual national park off the auction block.