Kentucky Tourism Leader Lays Out P3 Game Plan

Secretary Parkinson says partnerships bring ideas and funding to meet state’s needs

By Ed Green
P3 Kentucky Editor

Don Parkinson has become the point man on public-private partnerships for Gov. Matt Bevin’s administration. It’s no wonder. Parkinson, secretary of the Kentucky Tourism, Arts and Heritage Cabinet, oversees an agency responsible for supporting Kentucky’s more than $13 billion tourism industry. And his cabinet has plenty of needs to fill.

The Tourism Cabinet includes a range of state agencies and departments managing and marketing everything from parks to convention centers to entertainment and sports venues. Kentucky’s 49 state parks alone need more than $240 million in improvements – funding the state currently doesn’t have available to make the parks more of a draw for tourists and Kentucky residents.

We talked with Parkinson recently about public-private partnerships and how last year’s passage of P3 legislation can be used to support growth. The following are excerpts from that interview.

How do you explain public-private partnerships to people who are not familiar with the concept or might not support it?

I think people hear P3 and say, “gosh, you’re selling businesses.” This is all about tourism and making the elements of this cabinet bigger, not smaller. Parks in particular is a big, big business, and we need more money to get it where it needs to be. We need $241 million. The governor and the legislature a year ago gave us $18 million, which is great, but clearly is was not enough to get everything done.”

We look at P3 as an opportunity to grow state assets, to have more revenue coming in but so we don’t have the losses. We’re bringing in new people to invest and do it differently. So far we haven’t done a deal yet. We have a lot of conversations about deals, and we will get some. But in the end, it’s going to be new money coming in, and we take some of these assets off the books. We always retain title. It’s just the operating business. We always keep the real estate; we’re never going to sell our state parks system.

Here’s the bottom line, we’re only going to do these deals if it’s good for the taxpayer.

What are some of the things the $241 million would be used to improve?

Roofs, aesthetics, safety, water plants, roads, golf courses, the whole thing. That business is a very, very capital-intensive business. Any time you are in the retail, lodging and entertainment business, it’s very capital intensive.

What’s really interesting is we have to have the right balance here. The interior of the rooms are nice – flat screen TVs, wood floors, new drapes, all of that. The parks system almost completely has that. It’s the outside where you might have a problem or a leaky roof, but that stuff we’re getting fixed. We’re really optimistic.

One of the things that’s really interesting about the parks is through March since last July we have sold 8,100 more rooms than we did last year. That’s a lot of rooms.

What are some of the opportunities to use P3 to support tourism?

We’ve had people interested in coming in to build a lodge at a state park or marina, or whatever. We look at those unsolicited proposals as they come in, but we’ve had some really interesting surprises with people coming in and wanting to do business in places we hadn’t thought about before. The power of getting new ideas, getting outsiders to come look at what we have and give us some ideas of how we might do it better or different is really powerful.

In general, are the unsolicited proposals coming in the types of proposals you expected?

What I’ve seen so far has been very interesting. We got one recently for something we hadn’t even thought about before. That’s the power of P3 and having unsolicited bids like that. We had not thought about this proposition ever before. And here came a really buttoned-up, legitimate proposal. So we’re going to have to assess that. That’s just a lucky strike that we got that thing in. That’s really nice. We need to get more of those kind of deals in.

That’s the power of P3. We didn’t have the opportunity to do this kind of stuff before. And before, when it was just the state money going into invest in some of the projects we’ve seen over the last two months or so come in, we didn’t have the money to do any of this stuff.

Do you prefer the method of unsolicited proposals or the cabinet generating ideas to put out RFPs?

We’re really impartial. We don’t have a preference one way or the other. We love getting the unsolicited because it’s an idea that generally we haven’t really thought about before, and it hasn’t made our priority list. When we have a project and we’ve identified some things we want to do at some point, we will do an RFP and bring in candidates to talk about it. But I think the things with P3, after you’ve found someone that you want to pursue, then you can negotiate a final deal. That’s a big advantage that we didn’t have before. And it’s good for everyone.

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