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Old 04-25-2007, 11:32 AM   #1
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State Park Upgrades Worry S.D. Campgrounds
RV Business
Wednesday, April 25, 2007

Private campground owners in South Dakota are concerned that extensive improvements at Custer State Park in the Black Hills will hurt business, according to a report in the Rapid City Journal.

Doug and Michelle Olson, owners of nearby Crooked Creek Campground, admire the 71,000-acre park and its magnetic ability to draw tourists to the area. They even support much of the overall improvement plan for the park's four state-owned resorts.

It's the scheduled upgrades at the park campgrounds that have them agitated. Olson and others in the private campground business believe the extension of electricity to 300 of the park's 357 existing campsites, plus the addition of 50 rustic camping cabins, will put the park's nine campgrounds into more direct competition with the private sector.

"We're probably six miles from the border of the park. We'll definitely feel it," Doug Olson said. "If they keep doing what they're doing down in the park, people are going to be less likely to stop here. And that won't just hurt us. Even the restaurants, the hardware store, grocery store "” anybody with a small business will feel it."

Olson and campground owners and managers fought unsuccessfully to delete the cabins and electric sites from a $12 million bonding package approved by the state legislature earlier this year. The package was endorsed by Gov. Mike Rounds and the state Game, Fish & Parks Commission, as well as most legislators.

Regency Inns Management of Sioux Falls, which is managing the state-owned resorts on a new 10-year lease, will make annual franchise-fee payments toward retiring the bonds issued for the construction work. But revenue from campground improvements, particularly the new cabins, also is important to the payoff plan.

The Olsons and others say the upgrades are a violation of an unofficial "non-compete" agreement with campground owners.

During the legislative debate, Republican state Rep. Alan Hanks of Rapid City, a campground owner, challenged the addition of the camping cabins and electrical hookups. He said that the campground improvements violated a "gentleman's agreement" that the park wouldn't compete with private campgrounds. Adding electricity would break that agreement, Hanks said.

Others in the private campground industry refer to that unstated agreement, which they say was intended to limit the park's campgrounds to a more rustic experience, leaving the private campgrounds to cater to those customers who want more creature comforts.

Federal campgrounds in the Hills have maintained that rustic style, and Custer State Park should have done the same, Mount Rushmore KOA general manager Josh Daiss said.

"The private industry's concern is that there's always been a clear definition of camping in the Black Hills," he said. "The public sector was geared toward the no-hookup, more true outdoors experience, I guess. And in turn, the private camping industry invested money to provide services to those people who wanted electricity and hookups."

Daiss said Kampgrounds of America Inc. (KOA), based in Billings, Mont., saw the effects of public campground upgrades in Branson, Mo., when a state park near the company's private campground added electricity to its campsites.

"The state park across the street shut down for a year "” our best year ever "” to put electricity into their campsites," Daiss said. "And the year they opened up, we had our worst year ever."

KOA has since sold that property, which has now become time-share units, he said.

Custer State Park superintendent Richard Miller said the improvements at the campgrounds aren't designed or expected to squeeze anyone out of the private camping business. The park's nine campgrounds already run close to 100% occupancy, and the plan doesn't add any campsites, Miller said.
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