The National Park Service recently issued letters to NPS concessioners offering relief related to the impacts of the COVID-19 pandemic. The relief consists of the ability to postpone (not avoid) payment of franchise fees until December 15, 2021. This relief is available to all concessioners. NPS also sent a letter to concessioners who had sought franchise fee relief which offered to lengthen (not extend) their Category 1 or 2 contracts by two years and Category 3 contracts by one year.
The offer to extend contracts, however, was heavily qualified. First, it only applied to concessioners whose gross revenues had dropped by at least 20% between 2019 and 2020. Second, it did not apply to concessioners whose current contracts had been extended or continued, were temporary contracts, or whose original term was less than 5 years or for 20 years. NPS did not provide the reasons for this qualification. In addition, by accepting the offer, a concessioner had to forego any right it may have, now or in the future, to relief related to the impacts of the COVID-19 pandemic.
NPS also stated the offer to lengthen contracts would expire on May 3, 2021. Concessioners were not required to accept NPS’ offer to lengthen their contracts. Notably, under NPS’ offer to lengthen certain concession contracts, concessioners will receive the same relief regardless of how far below 20% their revenues dropped or if their costs increased without a notable change in their gross revenues. By not accepting the offer, concessioners would retain all of their existing rights under their contracts to seek appropriate relief, including franchise fee relief. NPS also did not provide any reason for imposing a May 3 deadline to accept the offers, nor did it state that the offer would not be made again in the future.