Deal to develop parkland near dunes riles conservationists

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Posted: Aug 27, 2015 5:09 PM
Deal to develop parkland near dunes riles conservationists

INDIANAPOLIS (AP) — The parkland surrounding Indiana's towering dunes was intended to keep industry away from a geological marvel molded over thousands of years at the southern tip of Lake Michigan.

Yet five years after a politically connected developer suggested officials should hire a company to rehabilitate a dilapidated beachfront pavilion at the popular tourist destination, the small construction project has ballooned into a decades-long privatization deal with the state. It includes two beachfront restaurants, a rooftop bar, a glass-walled banquet hall promising "the best view in Indiana" — and there is potential for even more development.

What's more, the company ultimately picked to do the job was co-founded by Chuck Williams, the developer who pitched the initial idea. Williams, a regional chairman of the state Republican Party, worked behind the scenes for over a year with the administrations of two GOP governors, shaping and expanding the plans. He faced competition from just one other company — a bid that was deemed "good" though not as profitable.

"On its face, it looks suspicious," Antony Page, vice dean of the Indiana University law school in Indianapolis, said of the deal by Williams' Pavilion Partners. "A big Republican supporter gets a potentially very lucrative contract?"

Deb Butterfield, a spokeswoman for Pavilion Partners, called the effort "a showcase project" for Indiana that would "put an exclamation point on what a beautiful asset this is."

Conservationists since the late 1800s have sought to protect the dunes on Lake Michigan's southern shore, which offer a glimpse of Chicago's skyline on a clear day. First came Indiana Dunes State Park, which turns 90 on Saturday. Later, Congress created the Indiana Dunes National Lakeshore, a 15-mile sliver of land encompassing the park.

Although conservationists have focused on this contract because of the uniqueness of the property, privatizing services and amenities is increasingly common practice at underfunded parks across the country. The U.S. Forest Service has contracted out some campground operations. And even in Indiana, lodges and marinas at several state parks are operated by private business.

Still, opponents say the favorable terms of the contract, as well as the apparent advantage Williams had over his competitors, are indicative of murky proceedings that can surround privatization deals. Aside from Williams' involvement, some question whether the state should have involved any private company to shape the long-term vision for Indiana Dunes State Park, a publicly owned property that draws more than a million yearly visitors.

Jim Sweeney of the conservationist group The Izaak Walton League of America said it adds up to a "usurping" of public land in the name of private development. He and other critics maintain the state Department of Natural Resources did not hold public meetings or seek out more competitive bids because Williams was the preferred candidate all along.

"The DNR sold their soul on this thing," Sweeney said. "The amount of money coming back into the state coffers is paltry."

Williams did not return calls seeking comment. The Department of Natural Resources also released a statement denying Williams was given preferential treatment and maintaining the agency was "in compliance with state and federal laws."

"The bidding process was not subverted" and Williams "did not have an unfair advantage," the agency said, although acknowledging Williams first "presented an idea" to the agency in April 2010. Emails obtained by The Associated Press and other media outlets show Williams and his architect worked on the project with DNR officials long before it went to bid.

The only rival bid came from a nonprofit group of local conservationists, lawyers and finance professionals. They wanted to lease remodeled space in the pavilion to outside vendors, paying down construction debt with revenues. DNR officials told an oversight board that Williams' proposal "was more completed" than the competitor's but made no mention of working with privately with Williams.

Preliminary figures submitted to the DNR by Williams suggest the project will yield a handsome profit. In its first year, the development is expected to turn a $141,000 profit — a figure projected to climb to nearly $500,000 in a decade.

In return, the DNR will get 2 percent of the company's annual revenues and $18,000 a year in rent for property that state parks Director Dan Bortner describes as having a "million dollar smile."

The scope of Williams' deal could also expand. Under the terms of the contract, Pavilion Partners gets first right-of-refusal if additional projects are planned for the park, which could include a hotel or marina. The company is also authorized to hold private events on the beach, including concerts and festivals.

Deanna Malatesta, an associate professor and Indiana University, characterized the contract as a "sell off of public property."

Before becoming one of nine regional chairmen of the state Republican party, Williams served as the head of the Porter County GOP. Over roughly a decade, Williams, his wife and business ventures collectively pumped roughly $350,000 into the county political operation, according to state records. He also donated about $8,000 to former Gov. Mitch Daniels and has given about $3,500 to Gov. Mike Pence, both of whom are Republicans. Williams, who was once a Valparaiso city councilman, currently serves on a public tourism board tasked with promoting the Indiana Dunes State Park.

The appearance that politics played a role has rankled many in the area, said House Minority Leader Scott Pelath, a Democrat whose district neighbors the dunes.

"People see certain public private-partnerships that evade the normal types of transparency and they become worried about sweetheart deals," said Pelath, of Michigan City. "There is an increasing worry that natural resources continue to be seen as something to be exploited rather than be enjoyed."