National Park Service: Frank Friel

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Friday, August 5, 2011

Wasted Pennsylvania Taxpayer Dollars: The Independence Visitor Center Corp. ("IVCC") is not a "Tourism Promotion Agency" ("TPA")

Millions of Taxpayer Dollars Spent by The IVCC May Have Violated Permitted Uses of TPA Funds Including For Patronage Pay To Politically Connected "Key Employee" Who Now Works for The IVCC

In an effort to reduce budget shortfalls, Pennsylvania Governor Tom Corbett released a proposed 2011-2012 budget that "includes a 70% reduction in state funding for tourism marketing and promotion." On May 27, 2011, the Philadelphia Business Journal reported,

"Facing a $1 billion budget shortfall, Corbett hopes to save $5.5 million by eliminating the so-called Tourism Promotion Assistance distributed through 49 regional tourism-promotion agencies statewide. The money is used for television-and-print advertising, digital communication and other marketing."

As sacrifices are being made across the board to adapt to reduced funds, hopefully the Commonwealth's limited tourism promotion resources are not being used to continue supporting the unjust actions undertaken by the Independence Visitor Center Corporation ("IVCC"), a taxpayer supported public charity which operates the Independence Visitor Center, a Federal facility.

Tourism Promotion Agency Funding to the IVCC
From 2002 to 2009, the IVCC has received approximately $2.9 million of state taxpayer dollars from Tourism Promotion Agency ("TPA") funds allocated under the Tourism Promotion Assistance Grant Program to the Philadelphia Convention and Visitors Bureau ("PCVB"). Disconcertingly, such redistribution of tax dollars to the IVCC may have violated the permitted uses of those TPA funds and could therefore have potentially constituted the illegitimate and wasteful appropriation of public money.

Guidelines from the Pennsylvania Department of Community & Economic Development
The Pennsylvania Department of Community & Economic Development (“DCED”) published detailed guidelines entitled "Pennsylvania Tourism Office Grant Programs for Destination Marketing Organizations" ("Grant Program Guidelines"). According to the March 2010 release of these Grant Program Guidelines, the Tourism Promotion Act “establishes two grant programs that focus on local and regional marketing – the Tourism Promotion Assistance Grant Program and the Regional Marketing Partnership Grant Program.”

As a Tourism Promotion Agency, PCVB likely receives funds from the Tourism Promotion Assistance Grant Program, while the Greater Philadelphia Tourism Marketing Corporation (“GPTMC”) appears to be the Philadelphia recipient of the Regional Marketing Partnership Grant Program.

Appendix F of the Grant Program Guidelines lists Eligible and Non-Eligible Expenses for the grant funds (pages 39-40). While the reallocation of grant funds is not expressly covered, the delineation of Eligible Expenses emphasizes marketing-related expenditures. The Grant Program Guidelines repeatedly stress this marketing focus for the Grant Program funds.

In the “Introduction,” the Grant Program Guidelines state, “While we face significant economic challenges in 2010 the grant programs for Destination Marketing Organizations [i.e., PCVB] will continue to invest in tourism marketing and product development.” In Section I, Point A: Purpose of the Tourism Promotion Act, the Grant Program Guidelines explicitly state, “The purpose of the Tourism Promotion Act (Appendix A) is to support local and regional Destination Marketing Organizations in their efforts to market and promote tourism.”

As per the Grant Program Guidelines, eligibility to receive TPA funds is limited such that “only designated TPA’s may receive grants under the Tourism Promotion Assistance Grant Program.” “Pennsylvania has 49 designated destination marketing organizations that are eligible to participate in the Tourism Promotion Assistance grant program.” PCVB is a designated TPA. However, the IVCC is not, and has never been, designated as a Tourism Promotion Agency!

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Background on The Constitutional’s disputes with the NPS and Independence Visitor Center

The Constitutional Walking Tour of Philadelphia (“The Constitutional”) offers guided walking tours of the Independence National Historical Park area by providing a primary overview of Independence Park and visiting more than 20 of Independence Park’s most historic sites including the Liberty Bell, Independence Hall, Carpenters’ Hall, Declaration House, etc.

From 2005 to 2010, the Independence Visitor Center Corporation sold tickets for The Constitutional’s various tours only at the IVC’s main information and sales desk. The IVCC has received a 20.0% (twenty percent) sales commission on each ticket that it has sold for The Constitutional (ranging on average in gross price from $12.50 to $17.50). Since 2005, The Constitutional has requested to also license a dedicated ticket sales booth from the National Park Service and IVCC on fair, reasonable and non-discriminatory terms commensurate with Ride the Ducks and Philadelphia Trolley Works, for example. Additionally, since 2005, The Constitutional has requested to also license marketing opportunities and commercial use authorizations from the National Park Service and IVCC on fair, reasonable and non-discriminatory terms.

The Independence Visitor Center (“IVC”) is owned and operated by the United States of America - National Park Service (“NPS”), which then sub-contracts with the Independence Visitor Center Corporation (“IVCC”), a taxpayer supported public charity, to manage the IVC.

The IVCC and NPS have preferenced third parties including Ride the Ducks and Philadelphia Trolley Works, and the IVCC and NPS have discriminated against The Constitutional Walking Tour. The National Park Service has enabled the creation of this unfair business environment. The National Park Service and the IVCC have ignored and circumvented Federal management and concessions laws for the sale of goods and services at Independence National Historical Park that require open, transparent, competitive and appealable processes awarding concessions contracts for the sale of goods and services including tours.

To facilitate the administration of the National Park Service System, the Secretary of the Department of the Interior, acting through the NPS, is authorized under the National Park Service Organic Act (“Organic Act”) to carry out twelve categories of activities, none of which include transferring administrative responsibility to a private party [i.e., IVCC] or engaging in cooperative administration with a private party [i.e., IVCC]. 16 U.S.C. § 1a-2(a)–(l). Rather than grant the NPS discretion in its dealings with park concessioners, Congress established “carefully controlled safeguards against unregulated and indiscriminate use” of the parks in the National Parks Omnibus Management Act of 1998 (“Management Act”), which governs all national park public accommodations, facilities, and services. 16 U.S.C. § 5951 et seq.; see also 36 C.F.R. Part 51.2 (“policy underlying concessions contracts”). The safeguards are not limited to nationwide policy: Congress also manages the parks with significant visitor traffic on a park-by-park basis. See, e.g., 16 U.S.C. §§ 21–40c (Yellowstone), §§ 91–110d (Mount Rainier), §§ 212–218a (Abraham Lincoln’s Birthplace), and §§ 410z–410z-5 (Boston National). One of the dozens of national parks managed by specific statutes is Independence National Historical Park (“INHP”). 16 U.S.C. §407m–407s. As such, compliance here going forward would require the NPS, first, to reassume from the private IVCC the NPS’s duties “to administer, operate, manage, lease, and maintain” properties at INHP pursuant to 16 U.S.C. § 407s; second, to award “all proposed concessions contracts … through a competitive selection process” pursuant to 16 U.S.C. § 5952; and, third, to issue commercial use authorizations in a rational manner pursuant to a reasonable interpretation of 16 U.S.C. § 5966(c).

The IVCC and NPS have arbitrarily and randomly selected business partners in a non-competitive and clandestine manner; as such, the actions of the NPS and IVCC have from an economics perspective stifled competition, innovation and consumer choice. Ultimately the IVCC’s actions have enabled prices to increase for its preferred vendors to strengthen the for-profits’ financial performance. Visitors to Philadelphia will be better served when the IVCC’s management, manners and methods are fundamentally changed. This would include having the National Park Service abide by Federal concessions management laws. Specifically, this will entail only having the NPS award concessions sales contracts and not having the IVCC involved in any of the selecting, awarding, contracting and managing of Independence Park’s third party concessions, including inside the Independence Visitor Center. This is the model that is practiced in virtually every other of the 390 (three hundred ninety) National Park Service units across the United States (in 49 states) including at Yosemite, Yellowstone, Statue of Liberty, etc. Additionally, visitors and all stakeholders will be better served once the operation of the taxpayer funded IVCC is totally transparent and accountable. While part of the issue centers on a publicly funded charity competing against the private sector (i.e., by offering guided tours and services), it more so has to do with the manner in which the IVCC and NPS operate and discriminate against third party concessionaires, tour operators and vendors in a random and arbitrary fashion (i.e., with the licensing and leasing ticket sales kiosks by the IVCC to third party companies, for example).