Concession Opportunity On The Blue Ridge Parkway
The National Park Service recently released a prospectus soliciting proposals for the operation of Mabry Mill and Rocky Knob Cabins; two concessions on the southern Virginia section of the Blue Ridge Parkway.
The former is probably the best-known stop on the parkway, while the latter is likely one of the least-known. The two operations are nearby one another and a natural combination for a single concessionaire. Mabry Mill is a retail operation that also serves food while Rocky Knob Cabins offers lodging but no food or retail. Both facilities are open May through October.
Once operated by National Park Concessions that was absorbed into Forever Resorts, the two concessions have been operated under a temporary contract by another concessionaire since 2011. The current concessionaire is not considered a preferred offeror, meaning it cannot win the contract by agreeing to match the best offer of another bidder. The two properties have no leasehold surrender interest (e.g., there is no equity interest to pay to the previous concessionaire).
According to the NPS, revenues for Mabry Mill for 2009, 2010, and 2011 were $843,000, $886,000, and $776,000, respectively. Approximately 60 percent of these revenues originated from food and beverage sales.
Revenues for Rocky Knob Cabins were $64,000, $72,000, and $51,000 during the same periods, indicating the difficulty of making a go of it using the cabins as a stand-alone concession. The prospectus mentions that revenue declines in 2011 can be primarily attributed to the fact that it was the first year of operation of the existing concessionaire.
The NPS estimates an initial investment requirement of $345,000 on the part of a new concessionaire. Approximately a third of the initial investment is for personal property that may be purchased from the existing concessionaire or acquired from other sources. This would include furniture, fixtures, and equipment. Deferred maintenance (maintenance that should have been done, but wasn’t) accounts for an additional $91,000 of the initial investment requirement.
The contract is for 10 years beginning January 1, 2014. Under its terms, 1 percent of gross revenues goes to the Park Service, and 3.5 percent goes into a repair and maintenance fund.
With only seven cabins, Rocky Knob Cabins is the smallest lodging concession in the national parks. It is also a peaceful and enjoyable place to spend a couple of nights as we have discovered on two occasions. Enjoying morning coffee from a cabin’s front porch rocking chair is about as good as it gets, especially for $75 a night.
Proposals for the two concessions must be received in the NPS Atlanta office by June 13th. A walk-through of the properties is scheduled for April 17th.
On a related issue, it appears no concessionaire has been located for Bluffs Lodge, another small, but very popular, lodging facility on the Parkway.