black hats to white hats: changing the brand image of parks and recreation through economica - dr....

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Black Hats to White Hats: Changing the Brand Image of Parks and Recreation through Economics John L. Crom University Distinguished Professor and Regents Profe Presidential Professor for Teaching Excell Texas A&M Univer Brand + Aid: Marketing and Social Media Conference January 2014

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Page 1: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Black Hats to White Hats: Changing the Brand Image of Parks and Recreation through Economics

John L. CromptonUniversity Distinguished Professor and Regents Professor

Presidential Professor for Teaching ExcellenceTexas A&M University

Brand + Aid: Marketing and Social Media ConferenceJanuary 2014

Page 2: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Present Position

Recreation and park provision is perceived to be a relatively discretionary, non-essential government service. It is nice to have if it can be afforded.

Page 3: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Reposition

Position recreation and park services so that they are perceived to be a central contribution to alleviating the major problems in a community identified by tax payers and decision makers.

Page 4: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Positioning Implications

Positioning is a relative rather than an absolute concept

Page 5: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 6: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

“We are not identified with major problems which confront our total American Society [which is a] deep concern and disappointment…[The field should] focus park and recreation services on the great social problems of our time and develop programs designed to contribute to the amelioration of those problems.”

Gray and Greben, 1974

Page 7: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

The “big idea” associated with repositioning is that funds are invested in solutions to a community’s most pressing problems. The term “investing” suggests a positive, forward-looking agenda with a return on the investments. Elected officials usually have no mandate to fund programs; their mandate is to invest resources into solutions.

Page 8: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Positioning Implications

Positioning is a relative rather than an absolute concept

Legislators’ political platforms represent residents’ concerns

Page 9: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Positioning Implications

Positioning is a relative rather than an absolute concept

Legislators’ political platforms represent residents’ concerns

The challenge is not financial, it is administrative

Page 10: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Politically Important Issues

Economic development (jobs, enhanced tax base, redevelopment)

Health (obesity) Safety (youth crime) Quality of life Education (after-school programs)

Page 11: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Benefits Related to Economic Prosperity

Attracting tourists Attracting businesses Reducing taxes Attracting retirees Enhancing real estate values Stimulation of equipment sales

Page 12: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Benefits Related to Economic Prosperity

Attracting tourists

Page 13: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Business Travel

Recreation and Park Attractions in

a Jurisdiction

Tourism

Opportunities for Local Residents

Visiting Friends and Relatives –

Personal Business

Conference and Convention

TravelPleasure Travel –

Sphere of Interest

Segments of Travel and their Inter-relationship with Parks and Recreation

Recreation and park attractions NOT operated by a public

agency

Page 14: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

POPULATIONAbility to Travel

Interest in Travel

TRANSPORTATIONINFORMATION AND

PROMOTION

ATTRACTIONS

Page 15: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Arts Theaters, Art Galleries, Museums, Performing Groups, Music Concerts

Heritage Places Ethnic Cultural Places, Shrines/Churches, Historical Sites and Structures, Educational Instructions, Industry Factory Tours

Parks National, State, Regional, Local, Beaches, Theme Parks

Recreation Events and Festivals, Aquatic and Coastal Areas, Outdoor recreations (e.g. camping, fishing, hunting), golf, tennis, skiing, sailing, softball), Fitness and Wellness Centers

Arenas College Sports, Professional Franchises, Concerts and Exhibitions

Other Gambling Places, Cruise Ships

A Taxonomy of Tourist Attractions

Page 16: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

POPULATIONAbility to Travel

Interest in Travel

TRANSPORTATIONINFORMATION AND

PROMOTION

ATTRACTIONS

Page 17: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Tourism is a public/non-profit sector driven business.

Page 18: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Context

1810 players on 133 teams participated in the tournament. All were from out-of-town. Because it was an elimination tournament, the length of time that the teams stayed in the community varied from 4 to 7 nights. 697 players’ parents were interviewed.

Financial Data

Income: Entry fees $300 x 133 $39,900

Tournament costs and staff time $119,617

Net loss($79,717)

A comparison of the Financial and Economic Returns to a City from an Amateur Softball Association Girls 18 & Under Class A National Softball Championship Tournament

Page 19: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Economic Data

Total expenditures in the local area by

the 1810 players and their family/friends$2,039,000

Economic impact on sales $3,731,000

Economic impact on income$1,162,000

Return on investment

For each dollar invested, residents’ income increased by $14.58 (1,162,000/79,717). Facility cost $12 million; payback period to residents is 10 tournaments of this size.

A comparison of the Financial and Economic Returns to a City from an Amateur Softball Association Girls 18 & Under Class A National Softball Championship Tournament

Page 20: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

The Conceptual Rationale For Undertaking Economic Impact Studies

FINISH START

For community residents who

pay taxes

Community residents & visitors pay

taxes

To a city council

Which uses them to subsidize

development of recreation

programs and facilities

That attract out-of-town visitors

Creating income and jobs in the

community

Who spend money in the local economy

Inflow of Revenues

Outflow of Funds

Page 21: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Parks attract non-resident visitors to the area

These visitors spend money in the local area

This new money creates income and jobs for area residents

State Parks as “Economic Engines”

Page 22: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Mustang Island State Park (145,711 visitor days)

Salaries and operating expenses 809,500

Revenue 632,000

Net Loss 177,500

Example of a Park as an Economic Engine

Page 23: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

New money into the county:

$809,500 + $698,500 $1,508,000 Impact on Sales (1.71):

$1,384,000 + $1,190,000 $2,574,000 Impact on Personal Income

$753,000 + $631,000$1,384,000

Impact on Employment 25 jobs + 21 46 jobs

Average pay for each job is $30,088

Page 24: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

So:

Every $1 of net state funds invested in Mustang Island State Park yields $7.83 in income for Nueces County residents. That is: $1,384,000 / $177,500

The cost of the state of each job created is $3,850 i.e. $177,500 / 46

Page 25: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Analogous to retail stores Investment in services and amenities

More Visitors

More Per Capita Expenditures

More Jobs and Income to Local Residents

Economic Success Depends on What Happens Inside a Facility

Page 26: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Cost to the council of staging the festivalIncome to the Council from admission fees,

Vendor concessions, etc.Net loss to the city

Income accruing to city residents outsidethe festival gates from visitor spendingin the community

Net gain in income to community residents:

Return on investment to residents on their $400,000 investment

Economic Return to a Community From a Festival

$400,000$170,000

$230,000

$343,000

$113,000

28%

Page 27: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Benefits Related to Economic Prosperity

Attracting tourists Attracting businesses

Page 28: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Conventional wisdom is that development is the “highest and best use” of vacant land for increasing municipal revenues.

Developers claim their projects “pay for themselves and then some” BUT

Page 29: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Conventional wisdom is that development is the “highest and best use” of vacant land for increasing municipal revenues.

Developers claim their projects “pay for themselves and then some” BUT

If a private company had a business plan that looked only at revenues and ignored costs, it would be quickly out of business. Why should the public tolerate such one-sided accounting by local governments?

Page 30: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Fiscal impact analyses frequently demonstrate that the public costs associated with new residential development exceed the public revenues that accrue from it. BECAUSE

The people who reside in developments require services. IN CONTRAST

Page 31: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Fiscal impact analyses frequently demonstrate that the public costs associated with new residential development exceed the public revenues that accrue from it. BECAUSE

The people who reside in developments require services. IN CONTRAST

Natural parks and open space require few public services – no roads, no schools, no sewage, no solid waste disposal, no water, and minimal fire and police protection.

Page 32: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

1. Allocate total municipal expenditures into service categories and assign them to selected land use categories (Residential, Commercial/Industrial, Farm/Forestry/Open Space)

Page 33: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

1. Allocate total municipal expenditures into service categories and assign them to selected land use categories (Residential, Commercial/Industrial, Farm/Forestry/Open Space)

2. Categorize municipal revenues by sources and allocate them to the selected land use categories

Page 34: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

1. Allocate total municipal expenditures into service categories and assign them to selected land use categories (Residential, Commercial/Industrial, Farm/Forestry/Open Space)

2. Categorize municipal revenues by sources and allocate them to the selected land use categories

3. Compare revenues to expenditures for each land use category

Page 35: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

$1.40

$1.20

$1.00

$0.80

$0.60

$0.40

$0.20

$0.00Commercia

l & Industrial

$0.27

Page 36: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

$1.40

$1.20

$1.00

$0.80

$0.60

$0.40

$0.20

$0.00Commercia

l & Industrial

Farm/Forest Open Space

$0.27$0.35

Page 37: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

$1.40

$1.20

$1.00

$0.80

$0.60

$0.40

$0.20

$0.00Commercia

l & Industrial

Farm/Forest Open Space

Residential

$0.27$0.35

$1.16

Page 38: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Write down the place you would like to Write down the place you would like to live, given your druthers (i.e., your live, given your druthers (i.e., your preferred place, ignoring practical preferred place, ignoring practical concerns such as a job, family, language, concerns such as a job, family, language, and heritage).and heritage).

Page 39: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Write down the place you would like to Write down the place you would like to live, given your druthers (i.e., your live, given your druthers (i.e., your preferred place, ignoring practical preferred place, ignoring practical concerns such as a job, family, language, concerns such as a job, family, language, and heritage).and heritage).

Write in one sentence, why you picked Write in one sentence, why you picked that place.that place.

Page 40: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Write down the place you would like to live, Write down the place you would like to live, given your druthers (i.e., your preferred given your druthers (i.e., your preferred place, ignoring practical concerns such as place, ignoring practical concerns such as a job, family, language, and heritage).a job, family, language, and heritage).

Write in one sentence, why you picked that Write in one sentence, why you picked that place.place.

More than 80% of participants will cite More than 80% of participants will cite some park, recreational, cultural, or some park, recreational, cultural, or environmental ambiance dimension in their environmental ambiance dimension in their responses.responses.

Page 41: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Business Relocation Business Relocation ContextContext More than 10,000 economic More than 10,000 economic

development groups are development groups are competing to attract businesses.competing to attract businesses.

Footloose IndustriesFootloose Industries ““Information Factories” whose Information Factories” whose

main asset is highly educated main asset is highly educated professional employees.professional employees.

Page 42: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Parks, Trails and Recreation: An Indicator Species

American Heritage Dictionary:

“The presence, absence, or relative well-being in a given environment is indicative of the health of its ecosystem as a whole.”

Page 43: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

DriversDrivers

Beyond a threshold salary level, Beyond a threshold salary level, people are persuaded to relocate by people are persuaded to relocate by quality of life factors rather than quality of life factors rather than money.money.

Page 44: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 45: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

DriversDrivers

Beyond a threshold salary level, Beyond a threshold salary level, people are persuaded to relocate by people are persuaded to relocate by quality of life factors rather than quality of life factors rather than money.money.

No matter how “quality of life” is No matter how “quality of life” is defined, parks, recreation, and open defined, parks, recreation, and open space are part of it.space are part of it.

Page 46: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

DriversDrivers Beyond a threshold salary level, people are Beyond a threshold salary level, people are

persuaded to relocate by quality of life persuaded to relocate by quality of life factors rather than money.factors rather than money.

No matter how “quality of life” is defined, No matter how “quality of life” is defined, parks, recreation, and open space are part parks, recreation, and open space are part of it.of it.

There are no great cities in this world that There are no great cities in this world that do no have a great park (recreation and do no have a great park (recreation and culture) system.culture) system.

Page 47: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

DriversDrivers Beyond a threshold salary level, people are Beyond a threshold salary level, people are

persuaded to relocate by quality of life factors rather persuaded to relocate by quality of life factors rather than money.than money.

No matter how “quality of life” is defined, parks, No matter how “quality of life” is defined, parks, recreation, and open space are part of it.recreation, and open space are part of it.

There are no great cities in this world that do no There are no great cities in this world that do no have a great park (recreation and culture) system.have a great park (recreation and culture) system.

““Disamenity compensation” – companies located Disamenity compensation” – companies located where there is only mediocre quality of life have to where there is only mediocre quality of life have to pay higher wages to attract the same quality work pay higher wages to attract the same quality work (and vice-versa). (and vice-versa).

Page 48: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Comparison of the Perceptions of Comparison of the Perceptions of the Relative Importance of General the Relative Importance of General Elements in Location Decisions Elements in Location Decisions Between Decision Makes in Large Between Decision Makes in Large and Small Companiesand Small Companies

ElementsElements Small CompanySmall Company

MeansMeans

(n=38)(n=38)

Large CompanyLarge Company

MeansMeans

(n=42)(n=42)

Government Incentives Government Incentives 3.93.9 14.214.2

Quality of LifeQuality of Life 33.333.3 14.714.7

LaborLabor 10.310.3 24.024.0

Proximity to CustomersProximity to Customers 28.428.4 11.611.6

Operating CostsOperating Costs 17.217.2 24.324.3

TransportationTransportation 6.76.7 7.77.7

Page 49: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Comparison of Perceptions of the Comparison of Perceptions of the Relative Importance of Quality-of-Relative Importance of Quality-of-Life Elements in Location Decisions Life Elements in Location Decisions in Large and Small Companiesin Large and Small Companies

ElementsElements Small CompanySmall Company

MeansMeans

(n=38)(n=38)

Large CompanyLarge Company

MeansMeans

(n=42)(n=42)

Primary/Secondary Primary/Secondary EducationEducation

19.419.4 18.018.0

Recreation/Open SpacesRecreation/Open Spaces 26.426.4 12.112.1

Cost of Living/HousingCost of Living/Housing 23.023.0 34.534.5

Personal Safety/Crime Personal Safety/Crime RateRate

12.912.9 13.213.2

Cultural OpportunitiesCultural Opportunities 10.610.6 9.59.5

Health/Medical ServicesHealth/Medical Services 7.17.1 9.29.2

Page 50: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

SignificanceSignificance

““Companies that are 5 years old Companies that are 5 years old or younger account for all the or younger account for all the country’s net job creation.”country’s net job creation.”(i.e. 2.7 million jobs in 2012)(i.e. 2.7 million jobs in 2012)

On average, they produce 5 jobs On average, they produce 5 jobs eacheach

Page 51: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

SignificanceSignificance

Most new business growth comes Most new business growth comes from small companies.from small companies.

90% of businesses in the U.S. 90% of businesses in the U.S. employ 10 or fewer people.employ 10 or fewer people.

Small business owners often Small business owners often “satisfice” rather than “optimize” “satisfice” rather than “optimize” their profit potential.their profit potential.

Page 52: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

A Business Leader’s A Business Leader’s LamentLament

““What’s the greatest problem a What’s the greatest problem a business has today? Workforce. If you business has today? Workforce. If you interview 50 businesses at random, I’ll interview 50 businesses at random, I’ll bet 49 would say that my biggest bet 49 would say that my biggest problem is getting qualified workers. To problem is getting qualified workers. To get workers, you have to get people get workers, you have to get people who want to be in your community who want to be in your community because they love the community, it’s because they love the community, it’s got things to offer. got things to offer.

Page 53: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

A Business Leader’s A Business Leader’s LamentLament

As the incoming CEO of [a local] As the incoming CEO of [a local] company said, I’ve got 80 people company said, I’ve got 80 people making over $100,000 in this operation. making over $100,000 in this operation. All of them are young, aggressive, All of them are young, aggressive, highly compensated people. They went highly compensated people. They went to the best schools in the country, they to the best schools in the country, they could go anywhere they wanted, they could go anywhere they wanted, they are the A players in the business world. are the A players in the business world. I need things that A players want.I need things that A players want.

Page 54: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

People working in high tech companies are used to there being a high quality of life in the

metropolitan areas in which they live. When we at Dell go and recruit in those areas, we have to be

able to demonstrate to them that the quality of life in Austin is at least comparable or they won’t

come. It’s not just about salary. It’s about what’s the community like where I’m going to live.

- Vice President, Dell Corp., Austin

Page 55: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Benefits Related to Economic Prosperity

Attracting tourists Attracting businesses Reducing taxes

Page 56: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

$1.40

$1.20

$1.00

$0.80

$0.60

$0.40

$0.20

$0.00Commercia

l & Industrial

Farm/Forest Open Space

Residential

$0.27$0.35

$1.16

Page 57: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Section G – last underdeveloped part of a city available

Page 58: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Section G – last underdeveloped part of a city available

Original master plan - 7,711 population of which 1,820 would be school age. 125 acres of open space

Revised master plan – 205 acres of open space; reduction of school age population to 1,104 (716 fewer)

Page 59: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Section G – last underdeveloped part of a city available

Original master plan - 7,711 population of which 1,820 would be school age. 125 acres of open space

Revised master plan – 205 acres of open space; reduction of school age population to 1,104 (716 fewer)

Result: 1 less school to build and operate Cost savings substantially greater than

revenues from residences on the additional 80 acres available in the original plan would have generated

Page 60: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Fiscal Impact Analysis revealed If do nothing, taxes for an average

homeowner will increase $250 per year to support growth

Break-even value of a new home was over $300,000

Page 61: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Breakeven cost for the town to purchase development rights on farms and other open space was $10,000 per acre, i.e., annual cost of servicing bonds for this purpose equals annual costs accruing town residential use

Page 62: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Protected 2000 acres, i.e., 2/3 of remaining open space in the town by:Purchasing development rights on 1,200 acresIncentive zoning (TDRs) on 200+ acresMandatory clustering protecting 600+ acres

Page 63: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Annual cost of purchasing development rights was $50 per year (cf. $250 from development). Over the life of the bonds the average homeowner saved $5,000

Page 64: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Benefits Related to Economic Prosperity

Attracting tourists Attracting businesses Reducing taxes Attracting retirees

Page 65: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Retirement RelocationRetirement Relocation

The new clean growth industry in The new clean growth industry in AmericaAmerica

Page 66: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Target MarketTarget Market

GGrowing number of rowing number of RRetired etired

AActive ctive MMonied onied PPeople eople IIn n

EExcellent xcellent SShapehape

Page 67: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Target MarketTarget Market

GGrowing number of rowing number of RRetired etired

AActive ctive MMonied onied PPeople eople IIn n

EExcellent xcellent SShapehape

G.R.A.M.P.I.E.S.

Page 68: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Life Expectancy at Age 65 and Life Expectancy at Age 65 and Age of Exit from the Labor Age of Exit from the Labor

Force (Medians)Force (Medians)

Age of Exit from

the Labor ForceLife Expectancy

at 65

Males Females Males Females

Early 1950s 66.9 67.6 77.8 80.1

2011 61.6 60.5 82.8 85.4

5.3 7.1 5.0 5.3

Page 69: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Economic ImpactEconomic Impact

Annual inflow of 100 retired Annual inflow of 100 retired households with $40,000 annual households with $40,000 annual income = a new $4 million annual income = a new $4 million annual “payroll”“payroll”

Page 70: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Median Net Worth of Households, and Homeownership and Equity in Different Age Groups in 2011

Head of Household Age

Median Net Worth ($)

Homeownership (%)

Equity in Own Home ($)

All 68,828 66.9 80,000

Under 35 6,676 39.1 20,000

35-44 35,000 65.0 40,000

45-54 84,542 73.5 70,000

55-64 143,964 79.0 97,000

Over 65 170,516 80.5 130,000

65-69 194,226 81.6 125,000

70-74 181,078 82.4 130,000

Over 75 155,714 78.9 130,000

Page 71: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Median Income of Households 1980-2011 in 2011 Adjusted Dollars

Age of Head of Household 1980 1990 2000 2011

% Change 1980-2011

Mean Size of

Household in 2011

Per Capita Income in

201115-24 33,033 30,031 36,370 30,460 -8% 2.82 10,801

25-34 50,252 50,644 58,007 50,774 1% 2.85 17,815

35-44 61,400 64,327 70,216 61,916 1% 3.35 18,482

45-54 65,283 69,934 75,283 63,861 -2% 2.81 22,726

55-64 50,798 53,991 58,580 55,937 10% 2.18 25,659

65 and over 22,840 28,117 30,148 33,118 45% - -

65-74 N/A 33,851 36,767 41,598   1.91 21,779

75 and over N/A 21,997 24,572 26,277   1.60 16,423

National average

      50,854   2.55 19,943

Page 72: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

GRAMPIES Are an Appealing GRAMPIES Are an Appealing Economic Target Market Economic Target Market Because:Because:

Social Security and Private Retirement incomes are Social Security and Private Retirement incomes are stable – not subject to the vicissitudes of economic stable – not subject to the vicissitudes of economic business cyclesbusiness cycles

““Positive” taxpayers i.e., generate more tax revenue Positive” taxpayers i.e., generate more tax revenue than the cost of serving them (e.g., schools, criminal than the cost of serving them (e.g., schools, criminal justice)justice)

Contribute to development of the health care industryContribute to development of the health care industry

Volunteer pool – active in churches, service Volunteer pool – active in churches, service organizations, and philanthropic organizationsorganizations, and philanthropic organizations

Stimulate housing and retail, but do not put pressure Stimulate housing and retail, but do not put pressure on local job markets or social serviceson local job markets or social services

Page 73: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Key RequirementKey Requirement

Amenity rich community Amenity rich community especially recreation: especially recreation: socialization; active lifestylesocialization; active lifestyle

Page 74: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Key RequirementKey Requirement

Amenity rich community Amenity rich community especially recreation: especially recreation: socialization; active lifestylesocialization; active lifestyle

Sun City and Leisure World Sun City and Leisure World communitiescommunities

Page 75: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Key RequirementKey Requirement

Amenity rich community Amenity rich community especially recreation: especially recreation: socialization; active lifestylesocialization; active lifestyle

Sun City and Leisure World Sun City and Leisure World communitiescommunities

Retention is as valuable as Retention is as valuable as recruitment recruitment

Page 76: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Survey: 270 Recently Survey: 270 Recently Relocated GRAMPIES in the Relocated GRAMPIES in the Lower Rio Grande ValleyLower Rio Grande Valley Top 3 out of 40 reasons for moving Top 3 out of 40 reasons for moving

away from the previous residence away from the previous residence were:were:– Desire to live in a more recreationally Desire to live in a more recreationally

enjoyable areaenjoyable area– Desire to get away from cold weatherDesire to get away from cold weather– Desire to live in a place where Desire to live in a place where

recreation opportunities are plentifulrecreation opportunities are plentiful

Page 77: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Benefits Related to Economic Prosperity

Attracting tourists Attracting businesses Reducing taxes Attracting retirees Stimulation of equipment sales

Page 78: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 79: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 80: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Twelve years ago there was almost no pleasure driving in New York. There are now at least ten thousand horses kept for pleasure driving.

Frederick Law Olmsted, 1870

Page 81: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

…to enjoy the use of the park, within a few years after it became available, the dinner hour of thousands of families was permanently changed, the number of private carriages kept in the city was increased tenfold, the number of saddle horses a hundredfold, the business of livery stables more than doubled, the investment of many millions of private capital in public conveyance made profitable.

Frederick Law Olmsted, 1886

Page 82: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 83: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Economic Partners’ Support GroupTo lobby for better funding for the recreation and park agency

Comprised of:

- Recreation equipment retailers

- Department suppliers

- Concessioners

c.f. State and National Tourist Associations

Recreation Coalition at the Federal level

Armed forces and defense contractors

Page 84: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Benefits Related to Economic Prosperity

Attracting tourists Attracting businesses Reducing taxes Attracting retirees Stimulation of equipment sales Enhancing real estate values

Page 85: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

1,300 acres total150- acres for a golf course

Cost of golf course development = $4 million

Page 86: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

1,300 acres total150- acres for a golf course

Cost of golf course development = $4 million

College Station sub-division lots = $30,000

Pebble Creek averages 3 lots per acreGolf course replaced 450 lots

450 lots at $30,000 = 13.5 million

Page 87: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

1,300 acres total150- acres for a golf course

Cost of golf course development = $4 million

College Station sub-division lots = $30,000 Pebble Creek averages 3 lots per acre

Golf course replaced 450 lots 450 lots at $30,000 = 13.5 million

Total cost of the golf course - $17.5 million

Page 88: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Pebble Creek lots = $40,000 on average

($10,000 more per lot because of golf course)

Page 89: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Pebble Creek lots = $40,000 on average

($10,000 more per lot because of golf course)

1,150 remaining acres X 3 lots per acre = 3,450 lots

3,450 x $10,000 premium = $34.5 million

Page 90: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 91: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Nash established as the central principle of his plan: “that the attraction of open Space, free air and scenery of Nature, with the means and invitation of exercise on horseback, on foot and in Carriages, shall be preserved in Marylebone Park, as allurements or motives for the wealthy part of the public to establish themselves.”

Page 92: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

At Regent’s Park, Nash brought to the urban landscape the principles of picturesque landscapes that had been developed by Capability Brown in country estates half a century earlier, and his erstwhile partner Humphry Repton

Page 93: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 94: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 95: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 96: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Liverpool City Council (1837):The Council is well disposed to provide a public park and the subject has been discussed, but the value of the land is so great in the vicinity of Liverpool and the council have had so many demands upon it that they do not consider justified in incurring such an expense.

Page 97: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Richard Vaughn Yates purchased 97 acres for around £50,000: 40 acres for a park

Page 98: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Richard Vaughn Yates purchased 97 acres for around £50,000: 40 acres for a park

Hired Joseph Paxton, the leading botanist-garden in the country based at Chatsworth

“A marketing coup” Paxton’s first venture into

municipal design Assisted by James Pennethorne –

a protégé of Nash – worked with him at Regent’s Park

Joseph Paxton

Page 99: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 100: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 101: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 102: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 103: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

1843-1850 Cost of land acquisition and development of the park ₤146,619 ($236,057)

Projected income from lot sales ₤155,872

($250,954)

Surplus ₤9,253 ($14,897)

₤1 in 1850 = ₤43 in 2013 (using the retail price index) Contemporary value using the average earnings index: ₤1 in 1850 = ₤699 in

2013

Cost of land acquisition and development of the park ₤103 million ($166m)

Projected income from lot sales ₤109 million

($181m)

Surplus ₤6 million ($15m)

Page 104: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 105: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 106: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

“A perfection that I had never dreamed of. I cannot undertake to describe the effect of so much taste and skill as had evidently been employed…and all this magnificent pleasure-ground is entirely, unreservedly, and forever the people’s own…but you are inquiring who paid for it. The honest owners—the most wise and worthy people of Birkenhead—in the same way that New Yorkers pay for ‘The Tombs’, and the hospital, and the cleaning (as they amusingly say) of their streets.”

Page 107: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton
Page 108: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Value of Real EstateWard 1856 1873Twelfth 8,149,360 62,457,680Nineteenth 8,041,183

110,519,303Twenty-Second 10,239,022

63,104,530 $26,429,563

$263,081,515

Increase in Assessed Valuation = $209,651,950Tax rate in 1873 was $2.50so Tax revenue on increased AV = $5,241,200

Page 109: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Value of Real EstateWard 1856 1873Twelfth 8,149,360 62,457,680Nineteenth 8,041,183

110,519,303Twenty-Second 10,239,022

63,104,530 $26,429,563

$263,081,515

Increase in Assessed Valuation = $209,651,950Tax rate in 1873 was $2.50so Tax revenue on increased AV = $5,241,200

Total Cost of land and development $13,902,515for Central Park

Annual debt charges $830,158

Page 110: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Value of Real EstateWard 1856 1873Twelfth 8,149,360 62,457,680Nineteenth 8,041,183

110,519,303Twenty-Second 10,239,022

63,104,530 $26,429,563

$263,081,515

Increase in Assessed Valuation = $209,651,950Tax rate in 1873 was $2.50so Tax revenue on increased AV = $5,241,200

Total Cost of land and development $13,902,515for Central Park

Annual debt charges $830,158

Excess of tax revenues over debt charges $4,411,140 (In 2013 dollars $8,110,000,000)

Page 111: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

1868 - Writing to the developers of Riverside Chicago: FLO cited “the vast increase in value of eligible sites for dwellings near public parks.”

Page 112: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

1868 - Writing to the developers of Riverside Chicago: FLO cited “the vast increase in value of eligible sites for dwelling near public parks.”

1919 – FLO Jr: “It has been established that…a local park of suitable size, location and character, and of which the proper public maintenance is reasonably assured, adds more to the value of the remaining land in the residential area which it serves than the value of the land withdrawn to create it.”

Page 113: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Increase in property value

Decrease in property value

Distance from park

Page 114: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Benefits Related to Economic Prosperity

Attracting tourists Attracting businesses Reducing taxes Attracting retirees Stimulation of equipment sales Enhancing real estate values

Page 115: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Critics who argue there is inadequate evidence to support the potential contributions of these benefits are wrong. There is strong enough empirical support for all of the benefits listed to justify their advocacy in formulating policy.

Page 116: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

Credibility of the Evidence

“we have come a long way in essentially less than a half-century and have much to be proud of…In fact, few areas of scientific inquiry have realized such advancements in so short a time.”

Driver, 1999

Page 117: Black Hats to White Hats: Changing the Brand Image of Parks and Recreation Through Economica - Dr. John Crompton

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