Wednesday, December 31, 2014

The Delaware North Companies (DNC) And The Yosemite Concessions Contract

Dale Matson
Townsley Lake Yosemite
Here is a portion of the story by Mark Grossi and Carmen George excerpted From the December 30th Fresno Bee.

Yosemite National Park will take bids next month on a contract worth nearly $2 billion to run the Ahwahnee Hotel, Badger Pass Ski Area and other retail outlets, but the high-stakes jockeying is already happening.

Delaware North Companies, the park’s concession operator for 21 years, last week announced that its “intangible” assets — including names, such as the Ahwahnee Hotel — are worth $51 million. And Delaware North says that if a new company takes over the Yosemite concession, it’ll have to pay to use the names.

The National Park Service says the names of historic hotels and other properties are as much a part of the park as Half Dome. But to protect other contract bidders from the added cost, the Park Service is allowing the possibility that names could be changed. It’s a hedge against a dispute later on, federal officials said.

I am not a lawyer but this seems to me to be overreaching on the part of DNC. It also appears to me that the Park Service needs better legal advice when negotiating a contract with vendors. How would you understand this statement?

“Delaware North’s 1993 contract with the Park Service required the company to acquire all assets — and to sell them all, if not chosen for the next contract, Stellmack said. Delaware North said those purchased assets include the names to the properties.”

What does “acquire all assets” mean?
It makes sense to me that DNC could and did rename the lodge in Fish Camp that they purchased from Marriott but they did not purchase any structures in Yosemite nor did they pay the costs of adding to the existing infrastructure in Yosemite.

“For now, the Park Service is not directly addressing the issue over the value of a name, instead focusing on the bids. The contract is expected to be awarded in mid-2015.”

I believe this is an issue that should be settled before the Park Service allows any bids. Can you see the potential legal problems with this strategy? I also believe it is foolish to suggest the possibility that the names could be changed since the names belong to Yosemite and Yosemite was set aside for and belongs to us, the citizens of the U.S. You don't have our permission to change the names.

Will the "Yosemite Park and Curry Company" now retroactively sue both the Park Service and DNC since they were not reimbursed for “all assets” when they lost the bid to DNC? This is a no lose situation (financially) for DNC. Even if they don't get the bid for the Yosemite concessions, they will still claim they are owed $51 million dollars. The bids will not begin on a level playing field if DNC does decide to bid since they will not have to front the extra $51 million dollars.

Both the Park Service and DNC need to reconsider their positions. It looks like the contract extensions for DNC were simply kicking the can down the road. Extending the contract six years beyond the original expiration date was unfair to other potential vendors who may have underbid DNC in 2008.

DNC needs to reconsider their position since much of good business is good will. DNC is not expressing good will by appearing to make an unreasonable demand of reimbursement for assets they never produced.

I also see a potential lawsuit coming from the Sierra Club since the idea of vendors and vending machines in Yosemite is not something they embrace anyway. This conflict would be the perfect time for them to make a point. I hope not. I hope they would offer constructive feedback also.  


  1. Well, as I predicted in this article, DNC is suing for damages in federal court.

  2. The Latest is here in the Fresno Bee:
    It is obvious that the NPS determined that it has no chance in court. What DNC did was legal but unethical since trademarking the Yosemite names gave it unfair bidding leverage. Now the NPS has taken it upon itself to rename the iconic sights in Yosemite leaving the naming of sights in the "People's Park" to the mercy of unnamed bureaucrats. Where is the Sierra Club when you really do want their involvement in preserving the past. Here is my solution. Make the "new" names temporary and hold a national contest for names of the iconic sights trademarked by DNC. Then vote to select the best names. Two more issues. Can the new vendor also trademark names or is there a contract stipulation against it. Finally, The NPS needs to reconsider who can bid on future contracts. Were there ever even performance survey evaluations of DNC?