The process allows entities that have granted operating rights, often in the context of airports, stadiums, or other large venues, to recoup costs associated with establishing and maintaining those concessions. It represents a mechanism by which a granting authority aims to offset expenses incurred during the initial negotiation, setup, and ongoing management of agreements with vendors or service providers. For example, a city-owned airport might implement a program to regain expenditures related to vendor contract negotiations, infrastructure improvements specific to concessionaire operations, and regulatory compliance oversight of those operators.
This practice is important because it provides a dedicated funding stream for facility upkeep and improvements. Without it, these expenses would need to be absorbed by other revenue sources, potentially diverting funds from essential services or leading to increased taxes or fees elsewhere. Historically, such practices have evolved as a method to ensure the financial sustainability of public and private facilities that rely on commercial partnerships to provide services to their users or patrons. Its implementation allows for dedicated financial resources for long-term facility development and maintenance.
