With a shutdown of lodging and dining operations on the South Rim of Grand Canyon National Park looming just six weeks off, Xanterra Parks & Resorts has gone to court to force the National Park Service to keep the operations running until problems surrounding long-term contracts can be resolved.
In a filing Wednesday in U.S. District Court for the District of Colorado, the concessionaire asked for a preliminary injunction to bar the Park Service from closing the South Rim lodging and dining operations on December 31 when the current concessions contracts expire.
"Our hope is we will resolve this amicably and do what’s in the best interests of our employees and the public. But we’ve been at it for 15 months. We’re down to the wire here," Betsy O'Rouke, vice president of sales and marketing for Xanterra, said Wednesday afternoon during a phone call.
National Park Service officials were unaware of the filing and had no immediate comment.
Other concessions operations at the Grand Canyon that would be impacted without resolution include mule rides, basic services on the South Rim, and Phantom Ranch operations, according to Xanterra.
The filing is just the latest measure taken in a dispute between the Denver-based Xanterra and the Park Service at the Grand Canyon over new concessions contracts to replace those expiring at year's end. In an attempt to attract more bids for concessions operations on the South Rim, the Park Service in 2013 decided to split the lodging and dining operations into two contracts. Earlier this year Delaware North won the smaller of the two contracts.
The move by the Park Service has been costly. Along with splitting the South Rim concessions contract in two, the agency decided to buy down by $100 million the "leaseholder surrender interest" Xanterra had accumulated down through the decades with its investments and improvements in the concession facilities. To come up with that money, nearly 90 units of the National Park System, along with the Washington headquarters, contributed $75 million, with Grand Canyon providing the remaining $25 million. Under the plan, Grand Canyon will eventually repay that "loan."
Xanterra, which in October filed a lawsuit charging that the Park Service acted arbitrarily and capriciously in splitting the concessions, has argued that the split allocated "far too much NPS-controlled employee housing in the park to the new smaller (DNC) contract, and so little housing to the new larger contract, with the result that it is not possible to house many employees needed to perform under the larger contract."
Xanterra also has taken great exception to terms the Park Service is offering for the larger of the two contracts. It maintains that the agency's decision "to boost, to 14 percent of gross receipts from 3.8 percent, the franchise fee concessionaires must pay at the South Rim," is economically untenable.
"Xanterra believes this will result in a cumulative negative cash flow for any concessioner over the entire term of the larger contract and represents a wholly unfeasible economic proposition," the concessionaire said in October when it sued the Park Service.
While Grand Canyon officials since have offered slightly lower franchise fees, to 10 percent for the first five years and then 12.5 percent for the remaining 10 years, Xanterra has not submitted a bid under those terms, Ms. O'Rourke said Wednesday.
"Instead of increasing competition for the new larger contract, NPS has done the opposite and eliminated it," a release from the concessionaire said.
In that release, Xanterra again took aim at the employee housing split the Park Service has engineered, saying the agency "has refused to fix this fundamental defect. Instead, it has suggested irrational alternatives that would, for example, require Xanterra to permanently triple bunk adults working fulltime into small, old, hastily winterized cabins."
The motion Xanterra filed Wednesday asks that the Park Service's "actions on the new larger contract solicitation ... be set aside under the Administrative Procedure Act because they are arbitrary and capricious and flout NPS’s statutory and regulatory obligations."
“The NPS has created a dire situation at the Grand Canyon because both of the existing contracts expire on December 31, 2014,” said Andrew N. Todd, President and CEO of Xanterra. “We are asking to maintain status quo with both existing contracts so that the NPS can address the housing problem, which may become intractable if the new smaller contract takes effect on January 1, 2015, as planned. If the housing problem is not solved now, visitors to the park in January 2015 may find the many lodges, restaurants and other essential facilities that Xanterra previously ran shuttered.”
Ms. O'Rourke could not say when Xanterra would start shutting down South Rim operations if the injunction isn't granted.
Story Categories:
A copy of National Parks Traveler's financial statements may be obtained by sending a stamped, self-addressed envelope to: National Parks Traveler, P.O. Box 980452, Park City, Utah 84098. National Parks Traveler was formed in the state of Utah for the purpose of informing and educating about national parks and protected areas.
Residents of the following states may obtain a copy of our financial and additional information as stated below:
- Florida: A COPY OF THE OFFICIAL REGISTRATION AND FINANCIAL INFORMATION FOR NATIONAL PARKS TRAVELER, (REGISTRATION NO. CH 51659), MAY BE OBTAINED FROM THE DIVISION OF CONSUMER SERVICES BY CALLING 800-435-7352 OR VISITING THEIR WEBSITE. REGISTRATION DOES NOT IMPLY ENDORSEMENT, APPROVAL, OR RECOMMENDATION BY THE STATE.
- Georgia: A full and fair description of the programs and financial statement summary of National Parks Traveler is available upon request at the office and phone number indicated above.
- Maryland: Documents and information submitted under the Maryland Solicitations Act are also available, for the cost of postage and copies, from the Secretary of State, State House, Annapolis, MD 21401 (410-974-5534).
- North Carolina: Financial information about this organization and a copy of its license are available from the State Solicitation Licensing Branch at 888-830-4989 or 919-807-2214. The license is not an endorsement by the State.
- Pennsylvania: The official registration and financial information of National Parks Traveler may be obtained from the Pennsylvania Department of State by calling 800-732-0999. Registration does not imply endorsement.
- Virginia: Financial statements are available from the Virginia Department of Agriculture and Consumer Services, 102 Governor Street, Richmond, Virginia 23219.
- Washington: National Parks Traveler is registered with Washington State’s Charities Program as required by law and additional information is available by calling 800-332-4483 or visiting www.sos.wa.gov/charities, or on file at Charities Division, Office of the Secretary of State, State of Washington, Olympia, WA 98504.
National parks and their natural resources belong to you. The National Parks Traveler works to ensure you know how these essential places are being cared for.
Sign Up For Our Weekly Newsletter
Unsubscribe at any time.
INN Member
The easiest way to explore RV-friendly National Park campgrounds.
Here’s the definitive guide to National Park System campgrounds where RVers can park their rigs.
Our app is packed with RVing- specific details on more than 250 campgrounds in more than 70 national parks.
You’ll also find stories about RVing in the parks, tips helpful if you’ve just recently become an RVer, and useful planning suggestions.
Comments
Xanterra, call the NPS and go all in with a concession shutdown. Who else can run that concession better than Xanterra? Not the NPS! I was visiting Grand Canyon in April and Xanterra concessions were operating successfully while the NPS couldn't even show movies in the Visitor Center because the projector was broken for months.
As an employee at the park this is a really distressing situation to be involved with. Thanksgiving is next week, followed by Christmas. Then the new year. Will we have a job? Very disappointed with the NPS and the intermountain region and the Department of the Interior for not stepping in and doing what is right and fixing the contract prospectus so it is profitable for ANY concessionaire and allocating the housing appropriately. DNC is willing to work with Xanterra on the housing issue but NPS is not willing to work with Xanterra. There are almost 1000 employees of Xanterra affected by this issue. NPS needs to STEP UP immediately and grant Xanterra the temporary contract to run through 2015 until the larger contract can be negotiated through our legal system, the courts. Currently as an employee I need to be professional on the job and work AS IF I will have a job January 1st, 2015 but with the knowledge that there is a very good chance I will be homeless and without a job. Remember, employees live in the park. Its not just a job but its our home and we choose to work here. NPS STEP IT UP and RESOLVE THIS ISSUE and consider the men, women, and children whose lives are affected directly, not just the guests!
I agree, Anxious. Something that Xanterra might do is step back and address the underlying issues that have diminished Xanterra's Brand, previously Fred Harvey Company, at the Grand Canyon. Complicated but would think addressing these underlying issues on both sides with consideration for the citizens and internationals that work and visit the park would be a good tact. The legal exercises on the battlefield I fear won't come close in themselves.
While I wish the best for the employees I for one am not a fan of Xanterra. This is based on our experiences around Yellowstone a few years back. I have never in my life seen such unappy and in my impression, fearful employees. It was uncomfortable for us and from all appearances even more uncomfortable for the employees. Perhaps things have changed but it is something we still remeber clearly.
I have to agree that I wish the employees well, but have had Xanterra leave a bad taste in my mouth in the past.
In most circumstances like this situation, it takes both hands pushing against the other to end up motionless.