FLAGSTAFF, Ariz. – Mobile food trucks, revamped lodges and a possible valet service are coming to the Grand Canyon’s South Rim under a new 15-year concessions contract.
The National Park Service announced Thursday it has awarded the contract that is among the most lucrative in the parks system — worth about $1 billion over its lifetime — to Xanterra South Rim LLC.
The Grand Canyon struggled in three previous rounds of bidding to attract any offers responsive to its terms.
For more than a century, Xanterra and its predecessor companies have operated services at the South Rim, the park’s most visited area, known for its historic lodges and sweeping views.
Andrew Todd, Xanterra’s president and chief executive, said the company is eager to start developments within the park.
The contract subject to congressional review calls for mobile food trucks on the South Rim and expanded patio dining at the historic El Tovar Hotel to accommodate crowds during the busy summer months.
Xanterra also has the option of running a valet service at El Tovar, where finding a parking space nearby can be tricky during peak visitation hours.
The popular Bright Angel Lodge will be upgraded, while the Maswik South Lodge will be torn down and replaced with 90 standard rooms and 30 rooms with kitchenettes at a cost of $12 million. Xanterra also plans to build a quick-service restaurant at the complex.
The park’s struggles with attracting bidders were due mostly to the money that Xanterra was owed for improvements it has made there. Grand Canyon officials responded by borrowing $100 million within the Park Service to reduce what must be paid to Xanterra to about $60 million if another company won the contract. Xanterra now is operating under a temporary contract that expires at the end of the year.
The latest proposal for the long-term contract was released in February and included a franchise fee that nearly doubled the 3.8 per cent Xanterra was paying under its previous 15-year contract. The figure was adjusted from a high of 14 per cent in another version of the contract proposal.
The Park Service wouldn’t say how many bids it received on the long-term contract or the franchise fee Xanterra is paying under its temporary contract.
Xanterra and the Grand Canyon have had a somewhat rocky relationship over the past year. The concessionaire sued the park last October, alleging a contract proposal gave an unfair advantage to a competitor and would result in a money-losing operation. The company also sought to trademark the names of popular hotels and other places at the Grand Canyon. It later dropped both efforts.
The Park Service made clear in the latest contract proposal that it considers names like Phantom Ranch, Bright Angel Lodge and El Tovar to be property of the agency, pursuant to its trademark rights under common law.
David Nimkin, Southwest regional director for the National Parks Conservation Association, said he’s glad that period is over.
“What it portends is a brighter future for the national park, for Grand Canyon, in part because the funding needs for the park are so dire and the ability for them to fulfil some of their needs with an increase in franchise fees is overdue.”