Franchises and concessions are awarded in a manner similar to the procurement process (e.g., by using RFP’s 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 2013, the City collected $197 million from 60 existing franchises, with the Department of Information Technology and Telecommunications (DOITT) and the Department of Transportation (DOT) as the top revenue raisers, including over $128 million from cable television and $35 million from street furniture franchises. The FCRC also approved ten franchise transactions, including two new information service franchises.
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 2013, the City awarded 192 new concessions and collected nearly $47 million in revenue from nearly 600 operating concessions. The Department of Parks and Recreation (DPR) was the leading revenue raiser with restaurants and golf courses.
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. In Fiscal 2010, 26 concession awards required public hearings.
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 2010, the City awarded 19 concessions utilizing the different procedure method. In addition, 22 requests to negotiate sole source concessions were approved by the FCRC in Fiscal Year 2010, but had not reached the award stage as of the end of the fiscal year.