Franchises and concessions are awarded in a manner similar to the procurement process (e.g., by using competitive sealed proposals or competitive sealed bids). MOCS oversees and certifies agency compliance with the applicable laws and regulations for franchises and concessions. In certain circumstances, franchises and concessions are also subject to the approval of the Franchise and Concession Review Committee (FCRC).
- Franchises are grants of the right to occupy or to use the City’s inalienable property, such as streets or parks, for a public service, e.g., transportation or telecommunications.
- Concessions are grants for the private use of city-owned property such as for food sales or recreational activity, with the City’s compensation typically tied to the concessionaire’s revenue. Concessions are also subject to the City's Concession Rules as codified in Title 12 of the Rules of the City of New York.
The FCRC is comprised of six members: two represent the Mayor, one represents the Law Department, one represents the Office of Management and Budget (OMB), one represents the City Comptroller, and representatives of the five Borough Presidents share one vote, which is allocated according to the location of the franchise or concession at issue.
To award a franchise, the FCRC must conduct a hearing and approve the franchise with at least five votes. In Fiscal Year 2014, the FCRC approved four franchise transactions, all of which were information services franchises. The City's 60 existing franchises yielded greater than $200 million in revenue, including greater than $131 million from cable television and $48 million from street furniture (i.e. bus shelters, newstands and automatic toilets) during the reporting period.
Concessions, depending on their award method, may or may not require FCRC approval. Those procured by competitive sealed bid never require FCRC approval. In Fiscal Year 2014, the City awarded 125 new concessions and collected nearly $50 million in revenue from operating concessions. The Department of Parks and Recreation (DPR) made greater than 89% of the awards, representing greater than 99% of the value for citywide anticipated revenue.
Public hearings are held for all "significant" concessions, i.e., those awarded via a method other than competitive sealed bid that either have a term of 10 years or more (including option periods) or a projected annual income to the City of more than $100,000 or are considered "major" concessions pursuant to the rules adopted by the City Planning Commission.
Concessions awarded via different procedures, i.e., sole source or non-for-profit, require two FCRC approvals, each with the support of at least four votes: first, a preliminary approval allowing the agency to enter into negotiations, and then, once the concession agreement is finalized, a vote to approve its grant. In Fiscal Year 2014, the FCRC approved five requests to negotiate sole source concessions, one by DPR, two by NYC & Company and two by the Department of Transportation, which had not reached the award stage as of the end of Fiscal 2014.