TDEC Meets With Potential Fall Creek Falls Hospitality Partners

Thursday, January 5, 2017

Representatives from the Tennessee Department of Environment and Conservation (TDEC) on Thursday met with five prospective concessionaires interested in operating certain hospitality offerings at Fall Creek Falls State Park.

“Today’s meeting was an opportunity for potential partners to ask questions and tour the park,” said TDEC Deputy Commissioner Brock Hill. “The right partner will help us more effectively steward taxpayer dollars while ensuring the long-term viability of Fall Creek Falls’ hospitality operations.”

An official Request for Proposals (RFP) was posted in December and includes the inn, cabins and golf course. The State will continue to own the park and all of its facilities including the newly rebuilt inn, conference center and restaurant. It will also continue to own the natural areas, including the trails, waterfalls, and campgrounds. The potential hospitality partnership will help the State protect taxpayer investment in the park’s assets, especially a new Fall Creek Falls State Park inn, which comprises the majority of the proposed partnership.

“Securing consistent funding over long periods of time for adequate maintenance of state park facilities is not a unique challenge facing Tennessee,” Commissioner Hill said. “State and national parks across the country are facing similar challenges related to funding, and in our case, the challenge has resulted in our most prestigious park having a dilapidated inn that can’t even generate enough revenue to offset its costs. Taxpayers deserve more for their investment, which is why we’ve chosen this option.”

The Tennessee General Assembly was recently able to fund approximately $20 million that will go toward the complete rebuild of the inn. The proposed concessionaire agreement will help protect that investment, requiring the concessionaire to establish both a maintenance reserve and personal property reserve to assist with future maintenance needs of the inn and other hospitality facilities. The State will also receive a percentage of gross revenue. 

The Tennessee State Building Commission in December approved the issuance of the RFP for the demolition and rebuild of the Fall Creek Falls inn. Prior to its approval and the release of the RFP, TDEC did an extensive analysis with input from industry consultants on all possible options for the inn, including renovation and rebuilding in a different location. TDEC concluded that renovation would cost nearly as much money as it would to do a complete rebuild and that the cost of building a new facility at a different location within the park would be cost-prohibitive.

“Occupancy at the inn is currently below 40 percent,” said Commissioner Hill. “The new inn would increase occupancy and visitation while providing increased tax revenues for the local government and reliable employment for local citizens once the rebuild is complete.”

Some TDEC employees would be affected by the inn rebuild, although many specifics are to be determined.

“We are committed to working with any employees affected to finding other employment opportunities inside TDEC or state government,” Commissioner Hill said.  “We have also proposed that the concessionaire agreement include provisions to protect those who may be temporarily displaced by the inn rebuild. These provisions vary by employee class, but can include anything from maintained employment and guaranteed interviews upon the re-opening of the inn. Severance packages, including free college tuition benefits, could also be provided to certain employees under state policy.”

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