Wednesday, March 26, 2008
03/13 - Jekyll Island figures just don't add up
ajc.com > Business
State auditor reports that visitor figures are good
By DAN CHAPMAN
The Atlanta Journal-Constitution
Published on: 03/13/08
Image: The Jekyll Island Authority seeks the massive construction of hotels and condos to boost visitation, while residents oppose. An audit shows the island already turns a profit. - Keith Hadley/AJC Staff
Jekyll Island — depending on who's talking — is either in danger of financially slipping into the Atlantic Ocean or is competently keeping its nose above water.
Jekyll's governing body and development partner Linger Longer say the state park is in dire straits, showing a precipitous decline in both visitors and revenues over the last 15 years. Only the construction of hundreds of condos and hotel rooms can save the state park, they say.
"A significant revitalization is something that will make Jekyll a compelling destination," said Linger Longer's Jim Langford.
But wait just a minute.
According to the state auditor, the region's top legislator and a citizens' group, Jekyll Island's condition isn't that critical. The park still makes money. Visitation drops, on average, only one percent a year. With a few new hotels and shops, Jekyll will be as good as new, they say.
"The Authority and Linger Longer are crying wolf and painting this picture of a rundown Jekyll so they can maximize their commercial activity," said Sen. Jeff Chapman (R-Brunswick), whose district includes Jekyll.
Authority officials and Linger Longer repeatedly cite a 47 percent drop in visitors to Jekyll as justification for large-scale development of the state park.
Jekyll officials say that car traffic, hotel occupancy and convention-center business have dropped significantly the last decade. And, for the first time in years, the state park registered a deficit in fiscal 2006, according to the Jekyll Island Authority's annual report.
It's a bleak picture. Problem is, it's not quite accurate.
In its 2006 annual report, the Authority stated it was $210,575 in the red. But the Authority actually turned a profit of $1,950,081 that year, according to the state auditor's office.
In all, the Authority's annual statements under-reported revenues by $11.3 million since fiscal 1997, according to a state auditor, John Thornton.
Nobody accuses the Authority of misappropriating the money. The Authority didn't include federal grants for historic preservation, or local sales tax revenues used for sewer projects, as overall earnings, according to Eric Garvey, the Authority's marketing and business development director. Instead, the money went into capital reserve accounts not listed in annual reports.
Chapman said the reserve account kept the information from being easily available to the public.
"The JIA Annual Reports are not prepared in conformity with generally accepted accounting principles," Thornton wrote to Chapman on Feb. 14. "As such, we do not believe the JIA Annual Reports from 1997 through 2007 provide an accurate picture of JIA's annual revenues or expenditures."
Garvey denied that facts and figures are misused to portray a negative impression of Jekyll. He likened the annual reports to "marketing" documents and "snapshots of our annual performance.
The 7.5-mile long barrier island near Brunswick is poised for massive redevelopment by Linger Longer and others. Langford's company proposes a $352 million "town center" project with hotels, condos, shops and parks running from the dunes to the maritime forest. Langford said a revised project — "with significant changes" — should be unveiled by early April.
Chapman, along with a statewide citizens' group, has tried to thwart Linger Longer's plans. The senator introduced three bills this legislative session to keep new development off the beach, as well as to ensure the affordability of most new lodgings for middle-class Georgians, as state law intends. All bills were roundly defeated in committee last month.
Chapman first grew suspicious of the Authority's redevelopment plans last June when the island's governing body hurriedly granted the Trammell Crow Co., builders of a beachside hotel and condo project, a $10 million rent abatement. Chapman earlier this year asked the Georgia Department of Audits and Accounts to investigate the Authority's books.
"JIA has given the distorted impression that it was on the brink of financial insolvency," Chapman said in a Feb. 26 statement.
Said Garvey, "We want our annual earnings statement to be reflective of what we're able to generate through normal business activity. Our full financial accounting is audited each year and, as far back as we know, we've received clean management reports from state auditors."
The drop-off in visitation claimed by the Authority and Linger Longer is another dispute. Between 1996 and 1997, the number of estimated visits to Jekyll plummeted from 3.5 million to 1.9 million — a 44 percent drop, according to data compiled by the Authority.
But that year, the counting method was flawed, according to Ken Cordell, a U.S. Forest Service expert on park visitation. Cordell compared the count gathered by Jekyll with one compiled by the Georgia Department of Transportation. The DOT figures showed only a slight drop-off in traffic that year.
State auditors also reported that parking fee revenues in 1996 and 1997 barely changed. Authority records show that hotel occupancy rates dipped only 1.9 percent during that time period. And the number of visitors taking historic district tours actually rose 10 percent.
"It is a relatively safe assumption that something about the JIA method of counting and estimating visitation changed between 1996 and 1997," Cordell concluded.
David Egan, co-director of the nonprofit Initiative to Protect Jekyll, the citizens' group opposed to large-scale redevelopment of the state park, said the Authority stopped counting decals affixed to cars owned by island residents or frequent visitors. In all, Egan said, visitation has declined by 15 percent — not the 47 percent claimed by the Authority and Linger Longer — between 1996 and 2007.
Garvey said he didn't want to haggle over statistics.
"We're much more interested in the future," he said.