City seeking to make ‘peak’ pay off

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Uneven and unpredictable sinking of the Pikes Peak Summit House has resulted in the need for dozens of heavy-duty jacks to support the structure.

Fifteen years ago, the Colorado Springs City Council voted to replace the Carle family, who had been the concessionaires on Pikes Peak for 99 years, with a national firm, ARA Services.
ARA, which has since changed its name to Aramark, won the contract with a bid that was substantially higher than any other. Not only would the city’s yearly revenue from the peak almost double, to $500,000, but ARA also would invest $1 million in the peak’s aging infrastructure. At the time, city leaders believed that the mountain environment would be dramatically improved and that a new summit house would be erected in time for the new millennium.
It didn’t happen.
This month, the city began the process of selecting a new concessionaire. In its request for proposals, the city established a minimum annual payment of $1 million and expresses the hope that the new concessionaire will have “… ideas for participation in the construction of a new Summit House.”
“It’s been 15 years, and nothing is materially different,” said Vice Mayor Larry Small, who was a councilman in 1992. “The contract has never produced any tangible results.”
Repeated messages seeking comment from Aramark were not returned.
Small also was critical of the city’s management of the mountain.
“There’s no business plan,” he said. “Every year we just operate it out of deficit revenue. I don’t like pulling a million dollars out of the LART fund every year to support it, but that’s what we do.”

Promises and assurances

ARA’s bid proposal of 1992 was replete with vague promises and assurances that have never materialized.
“You have our commitment to make the Summit House and Glen Cove Inn a Flagship Facility within the Forest Service,” wrote Larry Kilfoy, then ARA’s vice president for business development.
Asked whether ARA succeeded, Bill Guman, who served on City Council at the time the contract was executed, answered: “No. I think they forgot about us.”
But Dave Nickerson, who as the city’s Planning, Development and Finance director is responsible for negotiating and overseeing the contract, disagrees.
“Based on what they had to work with, they did a great job,” he said. “They completely revamped and updated the Summit House, and made it much more efficient, with much better merchandise, and sales increased dramatically in the first year. They did what they said they would do.”
The Gift Shop, according to the proposal, wouldn’t simply carry rubber tomahawks and T-shirts, but also would feature “a diverse collection of local/regional handicrafts” and other upscale gifts, some priced in four figures.
ARA also agreed to pay for $783,000 in improvements to the Summit House and Glen Cove Inn, as well as paying for $217,000 in “interpretive displays”.

Few changes

But 15 years later, little has changed. The improvements and interpretive displays are nowhere in evidence. A new summit house remains a distant dream, and the old one is held up by heavy-duty jacks. Cheap Chinese-made souvenirs dominate the merchandise selection at the three gift shops: one at Crystal Reservoir, one at Glen Cove and one at the Summit House.
The Summit House gift shop is by far the largest of the three. On a recent weekday afternoon, it was jammed with customers, either waiting for a booth at the coffee shop (and an opportunity to sample the famous doughnuts) or browsing among the T-shirts and ceramic mugs.
“You get most of your revenue at the top,” said former concessionaire Bill Carle. “People want that mug or that T-shirt that says ‘I made it!’”

Visitors to the Summit House browse among a selection of Pikes Peak souvenirs.

Profit potential

As the city asserts in its recent RFP: “… the concession contract has been very successful, with average gross revenues of $3,779,119.22 in the years 1999-2006.”
Because of this success, the city wants at least $1 million annually from the new concessionaire, almost twice as much as Aramark is presently paying. The RFP doesn’t mince words, saying that “the financial proposal is extremely important to the City of Colorado Springs … firms that offer (more than) $1 million will score higher than firms that propose less.”
By rank order of importance, financial proposal is first, financial capability is second and “past performance and experience on similar projects” is sixth — dead last.
At a pre-proposal conference on the Summit last week, several would-be concessionaires expressed dismay at the terms.
“At 25 percent of sales, you can’t make it unless you jack up your prices and scale back your labor force,” said one concessionaire who asked not be identified. “Prices on the peak are already way over those in similar locations — a bottle of Gatorade costs three bucks. Can you charge four? I don’t know.”
Freireich, the Aramark spokesman, would not say whether the company will submit a proposal to keep the Pikes Peak concession.
“Generally, we don’t discuss new business opportunities,” he said.