In a reversal of its existing policy, the National Park Service recently agreed that fire suppression systems are items of property which qualify for Leasehold Surrender Interest (LSI) under NPS concession contracts. As such, if a concessioner installs such a system, it is entitled to compensation for that property at the conclusion of its concession contract.
The concessioner was required by its contract to install fire suppression systems pursuant to its Concession Facility Improvement Program (CFIP). When the concessioner asked NPS if the systems qualified for LSI, the agency responded that they did not and cited to its internal policy manual. The concessioner then had its attorney follow up with a letter explaining the basis for the items qualifying for LSI. The agency then responded in writing, confirming its initial position. In its response, NPS stated that “in fact, the October 2015 Draft Leasehold Surrender Interest Guide states that fire protection systems are disqualified from LSI because they are not personal property of independent form and utility.”
The concessioner’s attorney then followed up with a second letter which explained that the agency’s internal policy guide was not binding on any party, and which pointed out in additional detail the legal basis for the systems qualifying for LSI. In addition, the concessioner had meetings with its Superintendent to explain the situation. In response, NPS had their own attorneys review the issue and, as a result, the agency changed its position and agreed that fire suppression systems “are non-removable equipment and are LSI eligible events.”