A Concession Lease Agreement covers many areas. It contains:
Definitions
Terms of Agreement
Operational Condition
Special Conditions
Legal Requirements
Each part of the Concession Lease Agreement is important to your operation and the success of your concession. Be sure you know what will be required before you bid on any concession, and be sure you will be able to meet the obligations if you commit to it.
Disclaimer: The information provided is by necessity general in nature. Specific contract language will supersede any statements or information that may be found on this webpage.
Length of the Concession Lease Agreement
A Concession Lease Agreement is generally awarded for a maximum period of 10 annual terms. In a few instances, agreements have been awarded for a lesser number of terms.
This is based on circumstances as determined by the Department of Conservation and Natural Resources (DCNR) Bureau of State Parks that warrants a shorter period of award. These agreements can be awarded directly by the DCNR Bureau of State Parks.
Depending on the type of concession operation and if substantial capital development (permanent improvements or development that become the property of the bureau at the termination of the agreement) is required by the concessionaire that will exceed at least $100,000, it is possible to award up to a 35-year agreement, if approval is granted by the Governor's Office.
Rental Payments
There are generally three different types of rental payments received from concessions:
- Annual Lump Sum Payment only
Annual Lump Sum Payment + 5% of the annual adjusted gross receipts
Annual Lump Sum Payment + 7% of the annual adjusted gross receipts
Selecting which of the above listed methods is used is determined by the DCNR Bureau of State Parks prior to the solicitation of competitive bids and is based on the financial history of the involved concession.
Rental payments are required on a time schedule that is contained in the concession lease agreement. It may differ based on the type of concession operation and/or the operating season.
Consumer Price Index (CPI) and Increases to Rental Payments
Concession Lease Agreements that contain an Annual Lump Sum Payment of $500 or more are usually subject to a CPI increase at the beginning of each two year term the agreement is in effect.
The CPI increase is not applicable to Annual Lump Sum Payments of less than $500.
The CPI increase is not applicable to the payment of any required percentage of the annual adjusted gross receipts.
Leased Premises
Each Concession Lease Agreement specifies the area of the park that is designated as the leased premises. A concessionaire is only permitted to operate and conduct business under the terms and conditions of the Concession Lease Agreement in the facilities or areas specified.
Maintenance of Leased Premises
The Concession Lease Agreement will specify the type of maintenance work to be done and whether it is required to be completed by the concessionaire or the park maintenance staff.
This can range from daily litter pick-up to grass mowing, to building repairs, etc.
Some Concession Lease Agreements require the concessionaire to undertake all maintenance on their leased premises while others may allow for maintenance of certain items by both concessionaire and park staff.
Required Submittals
Each concessionaire, based on the terms and conditions of the Concession Lease Agreement is required to submit on a timely basis:
Certain payments
Forms
Financial statements
Other items
Failure to submit any of the required items in a timely fashion can result in the concessionaire being assessed liquidated damages for failure to comply with the agreement.
Rental Payment -- The rental payment is required by specified dates, as listed in the Concession Lease Agreement. Failure to do so can not only result in the assessing of liquidated damages, but an interest charge of 18% will also be imposed on late payments.
Annual Financial Statement -- Each concession operation is required to submit an Annual Concession Financial Statement (#6000-FM-SP0024), or any revisions thereof, by the due date listed in their agreement. This provides the DCNR Bureau of State Parks with a financial statement of the concessionaire's operating season.
Liability Insurance Policy -- Concession Lease Agreements usually require the concessionaire to carry specified amounts of liability insurance with the DCNR Bureau of State Parks listed as a certificate holder and additional insured.
Fire Insurance Policy -- If a building or buildings are leased to the concessionaire as a part of the concession operation, the concessionaire may be required to provide fire insurance in an amount equivalent to the replacement cost of the building, as determined by the Bureau of State Parks.
Performance Guarantee -- A performance guarantee equal to the annual lump sum rental payment or an amount established by the DCNR Bureau of State Parks is required for most Concession Lease Agreements. Should the concessionaire fail to provide the concession services agreed to or meet the conditions of the agreement, and it results in the termination of the agreement, the performance guarantee will be liquidated and used to finance the process necessary to secure another concessionaire or to repair or replace facilities that may have been neglected by the terminated concessionaire.
Other Documents or Payments as required by the Specific Concession Lease Agreement -- It is the concessionaire's responsibility to meet all due dates and deadlines for submitting the required information, reports, and payments. The involved park staff is not required to send notices or reminders that items are due.
Concession Lease Termination
If a concessionaire wishes to terminate an existing agreement, they may do so by notifying the DCNR Bureau of State Parks, in writing, according to the time frame listed in their Concession Lease Agreement.
The DCNR Bureau of State Parks will not terminate a Concession Lease Agreement unless:
It becomes necessary due to the continued lack of concessionaire's compliance with the agreement terms and conditions
It becomes necessary to close park facilities for safety or economic reasons
There are unforeseen circumstances that dictate a closure
If the bureau requires closure and the concessionaire is not able to operate for most or all of a season, it has been the DCNR Bureau of State Parks' policy to extend the existing agreement for an additional year, if acceptable to the concessionaire.
Pricing
A concessionaire may charge prices and rates that are reasonable and fair. A copy of all prices and rates must be submitted annually to the involved park office. The DCNR Bureau of State Parks must approve all charges, prior to opening each season.
Non-exclusive Rights
A concessionaire does not have exclusive rights to all concession operations within a particular state park, but rather, only to the specific operation at the specific location as described in the Concession Lease Agreement.
Concession Operation
A concessionaire is required to operate at specific times and on specific days as listed in the Concession Lease Agreement. Any early closure or reduction in operating days or hours must be approved by the Park Manager.
If a concessionaire wishes to operate on additional days or additional hours, approval must also be requested from the local park manager.
Americans With Disabilities Act
Each Concession Lease Agreement contains a clause that requires the concessionaire to comply with the Americans with Disabilities Act Accessibility Guidelines. Any service-oriented concession, such as watercraft rental, would be required to provide access to watercraft and watercraft capable of serving disabled visitors that wish to rent a watercraft.