The National Park Service recently issued a prospectus soliciting bids for a 10-year contract for operation of Northwest Trading Post, a retail establishment near the mid-point of the 469-mile Blue Ridge Parkway.
The location is about an hour north of both Boone and Blowing Rock, North Carolina. The trading post sells gift and craft items with an emphasis on regional handicrafts including baskets, pottery, and quilts. Snack items including chips and beverages are also sold.
The trading post encompasses 2,160 square feet with an adjacent building adding another 960 square feet for storage. The main building was constructed in 1958. A two-story addition and a major renovation took place about a decade ago. According to Southeast Region NPS Concession Management Specialist Mark Morgan, the trading post has been operated as a nonprofit for over 20 years.
The draft contract requires an additional month of operation compared to the existing contract with an eight-month season to begin each year on April 1 rather than April 15, and end November 30 rather than November 15. Estimated initial investment for a new concessionaire is $443,000, approximately half of which represents the possessory (ownership) interest to be paid to the existing concessionaire. As with other NPS contracts, the possessory interest will convert to a leasehold surrender interest subject to annual depreciation.
Annual revenues at NWTP for 2008, 2009, and 2010 have been $299,704, $295,169, and $305,854, respectively. The proposed franchise fee under the draft contract is one-half of one percent of annual revenues (substantially lower than for most NPS contracts), while an additional six-tenths of one percent of annual revenues must be paid into a repair and maintenance reserve. Bidders are free to offer a franchise fee higher than the fee proposed by the NPS.
The existing concessionaire is considered a preferred offeror, meaning it will have the opportunity to match the best bid assuming the concessionaire chooses to enter an initial bid. Preferred offerors are permitted only for relatively small contracts such as that being issued for Northwest Trading Post. Offers must be received by the National Park Service by September 7.