Glacier Park lodge contract up for bid
A prospectus to operate the main lodges and Red Bus tours in Glacier National Park for 16 years was released in December, but any company interested in competing for the contract will need to pay millions before the first visitor hits the sheets.
The National Park Service estimates the initial investment to secure the contract at $32.7 million, which includes $22 million in possessory interest held by Glacier Park Inc., the current concessionaire.
Possessory interest is what GPI owns in real property inside the Park. Most of GPI’s possessory interest is in cabins at Rising Sun and $14 million in the Many Glacier Hotel. NPS has agreed to buy down GPI’s possessory interest by $3 million from $25 million.
The possessory interest will be depreciated over the course of a 16-year contract. It should zero out after 40 years unless NPS approves more private investment projects. GPI also has nearly $5 million in personal property in the lodges — including paintings from the turn of the century that adorn the walls.
The contract, which includes hundreds of pages of inventory, rules and regulations, and other guidelines and stipulations, became available in mid-December.
A GPI spokesman said the company will pursue the new contract. GPI also owns lodges outside the Park, including The Lodge at St. Mary on the east side, Grouse Mountain Lodge in Whitefish, and Glacier Park Lodge in East Glacier.
A spokesman for Xanterra, which operates lodges in Yellowstone National Park and several other national parks, said the company won’t comment on whether it will pursue the contract. Xanterra is owned by entrepreneur Phillip Anschutz. His Anschutz Exploration Co. is currently drilling exploration wells for oil and gas on the Blackfeet Indian Reservation.
The contract calls for the operation of Lake McDonald Lodge, Apgar Village Inn, Rising Sun Motor Inn, Swiftcurrent Inn and Many Glacier Hotel, as well as Two Medicine Camp Store, public showers and laundry facilities, and the Red Bus tours. All told, that includes 498 guest beds and 467 employee housing beds.
Gross revenue from the operation in 2008 was $16.2 million. During 2010, Glacier Park’s centennial year, gross revenue reached $18 million. NPS netted $1.142 million in 2008 and $1.254 million in 2010.
The new contract proposes a minimum franchise fee of 1 percent of annual gross receipts. Another 2.35 percent must go into a repair and maintenance reserve. The concessioner also must provide $518,000 and $539,000 in deferred maintenance in 2015 and 2016 respectively.
NPS owns the Red Buses, but the contract calls for rehabilitating a minimum of 15 buses over the first 12 years of the contract at a cost of not less than $4.11 million — at least five by the end of 2020, at least six more by the end of 2023, and the remainder by the end of 2025.
The fleet’s other 18 buses must be replaced with alternative fuel vehicles costing not less than $4.025 million — at least two by 2025 and a minimum of four per year after that until the entire fleet is replaced by the 2029 season. NPS encourages but does not require that those 18 buses also be rehabilitated.
The contract will go into effect Jan. 1, 2014, and is subject to congressional oversight. The last contract expired in 2005, and GPI has operated the lodges under extensions since then. The contract is available for review online at www.concessions.nps.gov/prospectuses.htm.