February 01, 2007

Why the Land RFP Failed.

Most of this is from a prior post on December 1st when I guessed at most we would get was one bidder. I was wrong--we got none, but here goes again.

Don't get it.... We are putting out an RFP (Request for Proposal) that:

  • Asking someone else to build a first class General/Corporate Aviation facility on a 4.5 acre parcel owned by ORH
  • Proposer does not own property but pays a ground lease of approximately 48,000 per year for 20 years, with an option to renew the lease for 10 years
  • In addition to the rent, the successful proposer will have to pay a portion of their collected parking fees and fuel flowage fees to the City of Worcester not to mention of portion of labor, parts and restaurant sales
  • During course of the lease any sub-letting of the successful proposer needs to be approved by the airport commission
I really do not see how any can recoup their investment in a facility like this with these terms. Honestly will be surprised if their is many actual proposals requiring a $10,000 deposit submitted.

Here is an addition:

How can we expect anyone to invest in this when the future management structure of ORH 149 days from now (July 1st) is not known. For now we should just hold off on any RFP until the management is finalized.


Anonymous said...

SAnyone in business has to make projections to determine the viablity of such an undertaking. They can probably reasonably estimate expenses because they own similar facilities elsewhere. This isnt like the City trying to estimate Skybridge costs.

But how the heck does the potential bidder possibly estimate his revenue, given all the lose ends, uncertainity, and unanswered question about ORH's future?

I must have missed it before, but I am surprised to see a restaurant as part of this RFP, so I guess we have gotten out A restaurant RFP, but still not THE restaurant RFP?

Anonymous said...

Article regarding the RFP in this week's Worcester Magazine Feb 1-7th in the city desk section.

Bill Randell said...

the airport is in complete lame duck status right now.. No commercial airlines will be coming, nobody will bid on any RFP's. Considering we are losing $150,000 in this lame duck period, we should try to wrap up these discussions ASAP and move on. Why wait until July 1st??

It is too bad that an RFP was not done on the entire airport like it should have been, but right now there is no time.... Lets just wrap this thing up with MassPort and move on.

Good points Jahn. There is still another RFP (in addition to the two parcels) for the restaurant slot in the terminal that was approved last January, which was never released.