Marconi head steps down in rebuild plan

David Briggs
The renovation and construction of new cabins at the Marconi Conference Center is part of a proposal by the nonprofit operator.   
04/19/2018

The executive director of the Marconi Conference Center has stepped down from her position after less than two years, a move designed to soften public perception of a conflict of interest. 

Amy Beilharz, an entrepreneur and consultant, was hired in July 2016 by the nonprofit Marconi Center Operating Corporation, which manages the Marshall center for California State Parks. The post was considered an interim job and part of an effort to re-envision the property. 

Ms. Beilharz is also the owner of ArtisTree, a design-build and hospitality consulting firm specializing in eco-friendly treehouses. A related company, Artistree-Marconi LLC, of which Ms. Beilharz is C.E.O., is at the center of a proposal the nonprofit operator pitched to State Parks last September. 

The proposed public-private partnership would allow Ms. Beilharz’s company to assume operations of the park as part of a 50-year contract with M.C.C.O.C. As a subcontractor, Artistree-Marconi would perform more than $4 million in deferred maintenance and undertake other projects, including building up to 25 “eco-lodging” cabins.  

According to the proposal, Artistree’s connections to Silicon Valley will “help forge a partnership with charitable contributors” to fund the renovation, and the “novelty” of the cabins will generate positive press and attract “millennials, green tourists, wedding parties and adventurers.” 

Meanwhile, the nonprofit could focus on its philanthropic mission of caring for the park’s natural, cultural and historic resources, the proposal states. M.C.C.O.C. would also pursue donations for other improvements, such as the rehabilitation of the empty, circa 1914 hotel. 

State Parks has submitted a letter of intent to negotiate with the nonprofit and is preparing a first draft of the agreement. 

In her resignation, Ms. Beilharz addressed the question of whether her simultaneous role at the nonprofit and her ownership of a firm with a financial interest in the center spelled a conflict of interest. 

“We met with the attorney’s (sic) regarding Artistree assuming operating, developing, and maintaining the park,” she wrote. “While there is not a legal conflict of interest, the clearest path forward is for me to exclusively represent Artistree.”

In a conversation last week, Steve Murch, board president for M.C.C.O.C., said that a conflict of interest is not illegal. 

“There can be a perceived conflict of interest just about anywhere,” he said. “You manage it by being open and telling people and making sure that people are seated at the right side of the table at the right time. Amy is out of M.C.C.O.C. and is seated at the right-hand side of the table with Artistree. So there should no longer be any conflict of interest.”

A Harvard MBA graduate, Ms. Beilharz is also the founder of Be A Female Millionaire, through which she provides coaching to entrepreneurs starting at $750 an hour. Her websites sell a variety of training programs and consulting packages that promise to help stay-at-home moms and women in unsatisfying careers become wealthy. 

Ms. Beilharz said she initially approached State Parks to express interest in developing eco-lodging at Marconi. The department connected her with M.C.C.O.C., which appointed her as an “interim consulting executive director.” 

Ms. Beilharz, who began her career in Silicon Valley, has no background leading nonprofit organizations. According to her, State Parks struggled to find parties interested in revamping Marconi, and the agency was eager to refer her to M.C.C.O.C.

Financial woes

The Marconi Conference Center has been under significant pressure from State Parks to become financially solvent. In 2016, the department suspended a $172,000 annual subsidy that made up 11 percent of the center’s annual revenue. 

At the time, State Parks agreed to extend M.C.C.O.C.’s operating contract for three years. The agreement also required the nonprofit to launch a new marketing and sales program, upgrade internet and cellular coverage at the facilities, and hold public meetings to receive input on future plans for the site. Mr. Murch says the meetings were not well attended.

According to M.C.C.O.C.’s proposal, a near-term injection of $5 million or more in capital investment is needed to offset annual losses and tackle the critical caseload of deferred maintenance. “To get this park sustainable, you’ve got to first start by just getting back to ground zero, and then start to invest in the future,” Ms. Beilharz said.

Marconi’s financial woes are not unique among state parks. One estimate of the agency’s total maintenance needs exceeds $1 billion. The park system reached a crisis point after the 2008 economic downturn, when 70 parks were at risk of closing. In 2013, the Parks Forward Initiative, a program resulting from legislation designed to rescue the parks and create accountability for the department, formed a volunteer commission to assess the system and provide recommendations. 

The commission’s report recommended that State Parks work with nonprofits to expand programming and resources into underserved communities. It encouraged private partnerships to assume operation of parks, and created a prototype of a modern-looking cabin that could be deployed to attract younger overnight guests.

Following the report, new state legislation gave State Parks additional leeway to pursue private partnerships. 

Prior to this, M.C.C.O.C.’s operation of Marconi was a less common arrangement. State Parks acquired the center as a gift from the San Francisco Foundation in 1989. Marconi was the site of the country’s first trans-Pacific radio receiver station, and the facilities and hotel were built by the Marconi Wireless Company to house its personnel. In the 1970s, Marconi was the headquarters of the drug rehab center turned self-described church known as Synanon. 

Following its acquisition by the state, a specific statute was passed to allow State Parks to contract with a nonprofit to develop and run the center. In 1994, M.C.C.O.C. received a 20-year operating agreement for the newly opened conference center.

According to the minutes of an October meeting of the East Shore Planning Group, where Marconi and Artistree presented their proposal, State Parks had previously mulled whether to seek new operators for the park, use the center solely for internal uses like staff training, or sell off the property altogether. The planning group later sent a letter to the parks department that voiced support for both a locally based operator and flexbility in partnering with private groups to more easily raise needed capital. 

According to Mr. Murch, M.C.C.O.C. is required to seek State Parks’ approval and consider multiple bids for any work it contracts out. Though it is unclear if they are required to seek multiple bidders for a private partnership, Mr. Murch said M.C.C.O.C. is speaking with other firms that have expressed interest. 

“We are not married to Artistree,” he said. “We can’t be. We don’t know the terms of the agreement [with the state],” or if Artistree will qualify for such a partnership under those terms.

Until the new agreement is finalized, the specific requirements that would be imposed on a sub-operator at Marconi are unknown. Christina Jaromay, chief of the Partnerships Office, said that in a public-private partnership, the nonprofit is responsible for ensuring that its sub-operators meet department policies. 

She added that the agency has placed a renewed emphasis on coordinating with nonprofit partners. “We’re making it a priority to make sure that our communication is ongoing,” she said. 

According to a March 2018 article in the magazine Bay Nature, private operators of State Parks have not always adhered to regulations. In one example, in 2014, Jack London Park Partners, which operates the Jack London State Historic Park in Glen Ellen, was cited for 13 unauthorized projects and 32 counts of violations of state or federal law, including the Clean Water Act, Environmental Quality Act and the Endangered Species Act. Jack London Partners managed to retain its contract to operate the park—to the dismay of groups such as the California State Park Rangers Association.

Jeff Price, the chair of the association’s “Park Threats” committee and a former park superintendent who oversaw the Marconi Center, called the prospect of a 50-year agreement “outrageous.” 

A gray area 

State Parks and M.C.C.O.C. appear poised to negotiate an agreement within a statutory gray area. According to the state’s public resources code, concessions involving the development and operation of full-service, multi-unit lodging facilities must go through a competitive bidding process that gives multiple firms a chance to bid. 

Yet according to Ms. Jaromay, the requirement to competitively bid concession contracts is not applicable here because M.C.C.O.C. is considered a nonprofit park “operator,” subject to a single section of code written in 1988 that deals specifically with the Marconi property. That code does not provide specific term lengths or bidding requirements. 

“That’s a complicated question and I don’t really know how to answer that,” Ms. Beilharz said when asked if Artistree would have an advantage over other firms without a formal review process. 

She added, “This isn’t a great business deal. If it had been, the state would have been able to find a good partner over the past five years. The reason I’m invested in it, is it’s a property worth saving and it could be a legacy project.” 

It may also be that the Tomales Bay community feels less stake in the park, which is tucked away on a wooded hillside. Still, Mr. Murch said the nonprofit will work with neighbors to address any concerns, including forming a community advisory board that was required by the center’s 1990 coastal permit, but was never formed. 

Last year, Marconi launched a new website to allow guests to book the center’s 40 rooms online, and recently received county building permits to renovate two additional rooms for lodgers. The website offers packages featuring horseback riding, kayaking and food tours created in partnership with local businesses. 

Despite these efforts, Mr. Murch said that the uptick in guests has been minimal. Most of the center’s revenue comes from conferences. State Parks itself is one of the biggest clients, hosting staff trainings and retreats at the center. 

A recent financial analysis calculated that the restoration of the historic 27-room Marconi Hotel, badly dilapidated and in need of seismic retrofitting, would cost $16.4 million. The report also considered the development of 25 new cabins on the site. It concluded that both scenarios would need a 25-year or longer agreement with State Parks for an operator to see a worthwhile return on the investment. 

Both upgrades would also require an amendment to the center’s coastal permit. Currently, Marconi’s permit allows for up to 200 overnight guests and 100 additional day-use guests. According to Mr. Murch, the center now serves a maximum of 130 visitors during conferences. 

A 50-year agreement is necessary to attract investments, Ms. Beilharz said. She believes it will take 10 years to return equity to investors and begin to see profit “for those of us who are doing all the work.”

Mr. Murch estimates that the center needs upwards of $45 million to achieve long-term sustainability, which he defines as an overhaul that would endure without significant upgrades for three generations. M.C.C.O.C. has not formalized a capital campaign to raise the money, and will move forward without a new executive director. 

Ms. Beilharz has approached investors on her company’s behalf, and the center’s website announces that it is raising funds to renovate the hotel. 

Until negotiations begin, Marconi remains in a holding pattern, and Mr. Murch emphasizes that “none of this is going to happen very fast.” M.C.C.O.C.’s current agreement expires in December 2019, and for all its ambitions, the specifics remain unclear. 

“The state,” Mr. Murch said, “is really going to have the final word.”

 

This article was amended on April 23.