Out with the old. Maswik South units at Grand Canyon National Park are slotted to be demolished. David and Kay Scott photo.

The recently issued NPS concession prospectus for Grand Canyon National Park'™s South Rim proposes some major construction in the Maswik lodging area.

Maswik currently includes 250 motel- and lodge-style rooms plus 28 quad-cabin rooms in two sections, Maswik North and Maswik South. The prospectus specifies that the winning bidder for the major South Rim concession will be required to demolish the Maswik South complex and replace it with 'œ90 mid-scale standard lodging rooms with microwave and refrigerator, and 30 mid-scale lodging rooms with kitchenettes including stovetops.'

The work is to occur over a two-year period, with completion scheduled for full operation during the 2017 season. The National Park Service determined the Maswik South complex is near the end of its useful life and would require too large an investment to merely update.

Interestingly, the Park Service is leaving it to the winning concessionaire to design the new lodging that must fit into the same area of Maswik. NPS estimates the project will cost approximately $11.5 million, an expense that is to be borne by the concessionaire.

Units in Maswik South are currently among the least expensive in the park and rent for slightly under $100 per night, approximately half the rate charged for nicer and larger Maswik North rooms that are nearer the rim.

Future visitors to the park can almost certainly expect considerably higher rates at Maswik South following the opening of the new units. South Rim concessions have long been operated by Xanterra Parks & Resorts (formerly Amfac), which in 1968 acquired Fred Harvey and later, in 1995, acquired TW Services that at the time operated concessions at Bryce National Park, Zion National Park, and the Grand Canyon'™s North Rim.

Concessions on the park'™s North Rim and at Bryce Canyon are currently operated by Forever Resorts. Xanterra continues to operate Zion Lodge.

NPS and Xanterra have agreed that the latter holds a leasehold surrender interest of $198 million in South Rim facilities. This amount includes all South Rim properties including the Yavapai lodging complex plus Market Plaza that will be included in a separate prospectus. In other words, Xanterra would be paid nearly $200 million should it not win either of the new contracts.

NPS indicates it will pay approximately $19 million of this amount in order to reduce the expense of a new concessionaire. With $41 million of the $198 million assigned to Yavapai and Market Plaza, the main concession would require a new concessionaire to pony up $138 million ($198 million total value less Yavapai value of $41 million, less $19 million NPS buy down). This is in addition to the $11.5 million for Maswik construction.

NPS split the South Rim concessions in order to generate competition within the park. Thus, whichever company wins the major contract that includes Maswik, is unlikely to also win the subsequent contract to operate Yavapai. Currently, Delaware North holds the concession for Market Plaza, while Xanterra operates Yavapai Lodge.