A concession is a business that is operated in a given geographical area and the duration of the concession depends on that details stated in the contract. The owner of the concession must pay a fixed fee to the person who owns the rights to the location of the business operation. Golden Gate Park is a fine example when talking about concession management because the park has many different businesses and festivals. Golden Gate Park was created in the 1870’s because San Franciscans believed they needed a park much like New York’s Central Park.
The park was created from sand dunes and shores that were known as the ‘Outside Lands’. At 1,000 acres long the park stands a symbol for natural beauty. Throughout the years Golden Gate Park has attracted many entertaining facilities and events. For example, the legendary free Grateful Dead and Jefferson Airplane concerts that took place in the1970’s and also the Japanese Tea Garden. There are number of other concessions that are in the park as well such as the Golden Gate Carousel, and the Outside Lands Festival.
Smaller concessions also take place in the park such as weddings, picnics, and corporate events, however these all need to be paid for in advance by contacting the San Francisco Parks and Recreation (Golden Gate Park).. Despite there being a large amount wonderful concessions in the park that are beneficial towards San Francisco’s economy and its citizens some San Francisco locals are beginning to become worried. Some fear that by privatizing the park it is taking away from Golden Gates charm that it once had.
One example of this privatization is the rising cost to rent space in the park due to the amount of money events like Outside Lands brings in to the park (Jones). The Golden Gate Carousel is located at the children’s playground, and was built in 1881. Since than there have been three carousels, they have always showcased beautiful animals and decorative panels, also organ music is played when it is on (Parks and Recreations Commitee ). The base rent for the carousal is based on the respondent’s proposal for the Minimum Annual Guarantee.
The MAG is the total annual amount that the concessionaire agrees to pay at a minimum as rent under the concession agreement. Furthermore, if the respondent’s proposal is not high enough the parks and recreations committee is allowed to higher the base rent. A normal lease term for the Golden Gate Park carousel concession is 5 years. Ever since the recent renovations had taken place in the Children’s Playground the carousel concession has increased its overall profit margin. For example, in 2010 the total gross revenue was $116, 500 and 2011 it was $147,731.
When it comes to the use of the facility the concessionaire is held responsible to operating the Carrousel, which includes selling the tickets and day-to-day maintenance. The city of San Francisco takes responsibility for long-term maintenance of the carrousel. Furthermore the concessionaire takes care of marketing and securing appropriate permits for private parties. In terms of control of performance standards the concessionaire must maintain the premises with the utmost of care. For example, the kiosk must be constantly cleaned and sanitized; SF’s parks and recreations committee will monitor to make sure this gets done.
The “lessee needs to achieve a 75% diversion rate, and provide adequate composting and recycling collection services to the public/attendees, event producers, and vendors to achieve that diversion rate. ” Furthermore, there needs to be different garbage containers according to different the recyclable materials. That are being thrown away. For example, compostable containers must be green and recycling blue. Also, 50% of the food from the kiosk must come from a 200-mile radius from San Francisco (Parks and Recreations Commitee ).
One of the most interesting concessions in the park is the Japanese Tea Garden, which is the oldest Japanese garden in the United States. The garden is also one of the most visited attractions in San Francisco. This concession, which was built in 1814, attracts so many people because it has many beautiful buildings and surroundings to see such as the Zen Garden, The Drum Bridge, and the Lantern Of Peace. This concession makes money through various facilities in the garden; for instance the teahouse, gift shop, audio tours, the bus parking lot, and the curio stand.
In the teahouse you may purchase tea and cookies for the price of $3. 95 and there is a $5 Garden entrance fee. The minimum lease term for this particular Golden Gate Park concession is 5 years. The Minimum Annual Guarantee for the tea garden is set at a minimum bid of $180,000. Despite the tea garden being one of San Francisco’s main attractions it has had some problems in the past. For example due to the drop in tourism in 2001 the Japanese Tea Garden has suffered in revenues. The total revenue for the tea garden in 2001 was $1,119,896, and the profits for 2002 were $1,052,096.
Furthermore, the surrounding area of the Japanese Tea Garden contains sensitive plant and animal habitat. With that being said the lessee must comply with the environmental regulations given by city council. Not only must the lessee be in accordance with the environmental rules but also she/he must create a “Zero Waste Goal” plan and present it to the parks and recreations committee. The concessionaire must annually report their progress on meeting the “Zero Waste Goal” plan (Martin). In order to reserve space for either corporate or private picnics you must pay a fee.
The fee varies depending on how many people will be participating in the picnic. For example, if a company wants to host a corporate picnic between 1-200 participants it would cost $241; and if the participants were over 750 the cost would be $906. There are also rules and regulations that the concessionaire must follow while renting the picnic space. For instance, if there are special activities, inflatable jumpers, or a tent than a $1 million liability insurance is needed. If the picnic exceeds over 150 people there needs to be a portable restroom near the area that the picnic is taking place(San Francisco Parks and Recreation).
In 2009 the parks and recreations committee for San Francisco entered in an agreement with Another Planet Entertainment to create the Outside Lands festival. Outside Lands is a three-day music event that is held in Golden Gate Park. The permit that was granted in 2009 allowed Another Planet Entertainment to hold the festival for three years in a row. Since the creation of this festival it has become ingrained in San Francisco’s culture not only offering the best of music but also a culinary experience.
Outside Lands brings in half a million people to the park each year and contributes $60 million to the San Francisco economy. With that being said not only is Outside Lands an important concessionaire for the park but for all of San Francisco. The only competency that both parties face is that the area surrounding where the festival takes place contains sensitive fauna and animal life. However, Another Planet Entertainment has been doing an exceptional job each year to make sure that the sensitive surrounding environment is not harmed. The total rent for the area of use has risen ince the festival had first begun. For example in 2008 the total cost of the rented space was $815,000 and in 2011 the costs had risen to $1,450,747. Outside Lands has now become an internationally known event is comparable in size and rental cost to other internationally known US events. (Kingsey) In conclusion I believe that Golden Gate Park is a perfect vehicle for facilities management. From the research that I have done I have decided that there are not many competencies of concessionaires except for one. This competency being the rising costs of rental space for large events.
Golden Gate Park has always been known for its free events such as Power To The Peaceful and the 1970 Grateful Dead and Jefferson Airplane concerts. However, since the Outside Lands festival has been such a big success events like Power To The Peaceful can no longer take place because the rental space is far too expensive. This has frustrated many locals who believe that Golden Gate Park to moving to far into being privatized; but this is a double edged sword because Outside Lands brings in a lot of money to the San Francisco economy.
My personal opinion regarding this issue is that if an event is being thrown for free and the organization that is setting the event up is a non-profit than the fee should be different. I also found it very interesting that the San Francisco parks and recreation committee has implemented such strong environmental regulations for their concessionaires. I really admire the “Zero Waste Goal” that the tea garden manager must create and follow by.