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CPA panel narrows options for concession agreements
A duty free retail concession program for the CNMI’s ports is “off the table,” according to Barrie Toves, Commonwealth Ports Authority board member, who cited its short length of five years.
Toves chairs the ad-hoc committee in charge of presenting a draft report on the options the CPA board has with its concession program in the years to come.
The incumbent concessionaire right now is Duty Free Shoppers. In an interview, Toves said the ad hoc committee would not recommended “option 2,” or a duty free retail concession agreement laid out by consultants Ricondo & Associates in a report.
The first option would be essentially status quo, and would open negotiations for a master concessionaire agreement between DFS and CPA. The second option, now “off the table,” would open up a bid process for competing concessionaires but would limit agreements to five years.
The third option is similar to the second but would stipulate a prepayment of rent to fund capital improvement projects CPA might plan. Also, unlike the second, it is not limited by Commonwealth code to five years but may be as long as 20.
The five-year limit in the second option appears to be the reason why the option will be “off the table” in Toves’ report to the board.
Ricondo earlier said an agreement of this length “would prevent a concessionaire from investing in a product of a high enough quality.”
It is in the best interest of the Commonwealth, Toves said, to engage in a master concession agreement with a concessionaire. He clarified, though, that he “is not saying that it will be with the incumbent” DFS.
In a board meeting this week, Toves announced that the committee is “very close” to completing its draft report for the board to consider. He asked the board for a “little more time” to finalize it. The committee plans to meet again on Dec. 5, he said.
Toves said they expect to present the report to the board for action at a proposed Dec. 12 board meeting. The board heard his recommendation and chose to defer action until then.
