In a strongly worded response to Xanterra Parks & Resort's request for an injunction to remain in business past year's end on the South Rim of Grand Canyon National Park, lawyers for the National Park Service argue that the concessionaire is trying to thwart competition and feels its history on the rim entitles it to remain there.
Less than three weeks remain until Xanterra's current contract to operate lodging and dining facilities on the South Rim expires, and there is no temporary contract in place to ensure continued operation of the El Tovar Hotel, Bright Angel Lodge, Maswick Lodge, and other lodgings and restaurants beyond New Year's Eve.
On December 16 a U.S. District Court judge in Denver is scheduled to hear arguments over Xanterra's request that the Park Service be barred from closing the South Rim lodging and dining operations on December 31 and allow the concessionaire to remain in business there until a new 15-year contract is awarded.
Doing so, the federal government counters in its 48-page response, would not maintain the "status quo," but rather upset it, cause competitive harm, and prevent the Park Service from making concessions contracts more competitive as Congress directed it to through the National Parks Omnibus Management Act of 1998.
"In its Complaint and Motion for a Preliminary Injunction, Xanterra stresses that it has operated at the South Rim of the Grand Canyon for over a century, as though this history constituted an entitlement to continued operations," the government's response reads. "Xanterra has resisted the Park Service's efforts to enhance competition for the South Rim concessions, complaining, for example, that the Park Service's $100 million buy-down of its LSI was 'not requested nor welcomed by Xanterra.'
"In an effort to maintain its advantageous position, Xanterra now seeks a preliminary injunction that would allow it to continue operating nearly all of the South Rim concessions, deprive Delaware North of the benefit of its successful bid for a new contract that includes some concessions that Xanterra now operates, prevent the Park Service from entertaining bids from any competitors, and limiting the terms of a temporary contract to essentially the terms of Xanterra's expiring contract ' all for the duration of this litigation."
The clock is winding down on efforts to keep the El Tovar Hotel open past year's end/Xanterra Parks & Resorts
The standoff between the Park Service and Xanterra has been brewing for more than a year, and has laid open the problem of possessory interest, or "leaseholder surrender interest," in the National Park System. That interest essentially is built up as a concessionaire invests in properties it operates for the Park Service. If a new concessionaire is awarded a contract, it must pay the outgoing concessionaire the amount of LSI it has accumulated.
At the Grand Canyon, Xanterra's LSI was determined in 2013 to stand at $198 million -- "the highest amount associated with a single contract in Park Service history," according to the government's response to Xantera's request for an injunction. Park Service officials viewed that amount as a barrier to other companies that might be interested in operating the South Rim concessions, and a decision was made to 1) break the single concessions contract for the South Rim in two, and 2) buy down Xanterra's LSI by $100 million, a sum 88 park units contributed to earlier this year.
It was in 2013 that the Park Service announced that it would split the single South Rim contract into two, and both Xanterra and Delaware North bid on the smaller of the two. This past August the Park Service announced that it was awarding the contract to Delaware North. That left the larger contract, known as the "001 Contract," up in the air. That contract had been extended three times to Xanterra after the initial contract expired. The third extension, which runs out this Dec. 31, is the last one allowed by law.
It's the contractual expiration of the 001 contract that is the "status quo," the government argues, not Xanterra's right to continue to run the concessions. If the court grants the injunction, it would go against the status quo, the government contends. Granting of an injunction also would deny Delaware North the contract it rightfully won for the other concessions on the South Rim, the motion argues.
"...Xanterra fails to show that it will suffer irreparable harm because of any actions by the Park Service. Instead, the alleged harms are the result of the expiration of Xanterra's existing contract (which has already been extended for the maximum period allowed by law) and its failure to be the successful bidder on one of the new contracts," the motion reads. " In addition, the balance of equities favors the Park Service. In contrast to Xanterra, whose alleged injuries are not traceable to any NPS action and are therefore illusory, an injunction would prevent the Park Service from exercising its lawful authority to execute a contract with Delaware North.
"In the larger scheme, it would also thwart the goal of fostering competition among prospective concessioners, and would introduce uncertainty into the concession contracting process going forward. Moreover, an injunction would be adverse to the public interest, because it would stymie the competitive process that helps ensure satisfactory service to Park visitors and a fair return to taxpayers."
Park officials did not respond Thursday to an inquiry into whether they have a plan for managing South Rim concessions if the injunction is denied and if a temporary 1-year contract is not awarded. However, in the government's response park officials said they were working hard to negotiate a temporary agreement. Too, they denied that visitors to the park would be greatly impacted if there's a lapse in hotel and restaurant operations.
"Even in the unlikely event that the Park Service is unable to enter into a temporary contract to address the services covered by the 001 Prospectus before the existing contract expires on December 31, 2014, the Park itself will remain open to day visitors and tent campers, and the concessions under the new 003 (Delaware North) Contract would be available, including an RV campground," the motion notes.
"Visitors may be inconvenienced by restaurant and other closures, but only a small minority will have planned to stay in concessioner lodging, and given the time of year, they will doubtless be able to find accommodations nearby. Nonetheless, even a short interruption of some services in the Park is not a desirable outcome, and NPS is working hard to prevent this. However, it is not in the public interest to keep all of the South Rim concessions open at any cost."
Comments
I've lived and worked in Grand Canyon National Park for nearly 20 years now, and have not seen anything nearly as heartless and absurd as the behavior of NPS regarding this contract. It is truly shameful that they have no regard for the lives they are affecting with this decision.
To my knowledge, not one person from NPS has been willing to look in the eye a single individual and explain to them why they think that they do not deserve to live in respectable housing, or why they believe those individuals deserve to be out of work. Many people here are anxious- some to the point of being ill. I've struggled with my own emotions as my own home is one that has been designated to the other concessionaire, which can't assure me if I worked them that I would be entitled to it. Yet, we still have to smile and pretend all is right with the world for our guests. Morale is incredibly low.
NPS claims that Xanterra is trying to block competition. If their solution is so good, then why are there not multiple bidders for this contract? Why is there a danger of services closing down the first of the year?
What business is going to be able to profit with NPS demands for such a large portion of receipts? Where are they going to find employees willing to work for them when they will not be able to offer a decent place to live? NPS's solution to have people live outside the park is simply not feasible. The small community just outside has it's own water shortage situation, and the nearest sizable community is 70 miles away. Rents in Flagstaff are simply outrageous, and travel in winter would be hazardous, and endanger lives. This crisis, which is a major portion of Xanterra's case, will be a problem for any concessionaire that takes over the contract. This circumstance is one of Xanterra's primary reasons for the lawsuit. (The homes lost in the contract process belong to families, and/or people who have been in the park many years.)
Furthermore, NPS is being heartless to both their own employees and the general public.Their investment of 100 million dollars in the park comes at quite a price. Their own employees have been told to expect layoffs, lack of seasonal hiring, etc. Programs to cut include children's programs, parking lot lighting, and preventative search and rescue. A water pipeline in dire need of replacement will continue to break, and the breaks will only get worse. If there is no water, the park would be forced to close, and that entire investment would go to waste.
As it is, NPS law enforcement does not operate 24/7. If my understanding is correct, this is due to budget. Need a law enforcement officer, or having a medical emergency at 2 A.M.? Better hope it's not too bad. We have to drag someone out of their nice, warm home. Not always an easy task. Excuses are abundant for not providing services at that hour. I can't imagine another community where law enforcement goes home and goes to bed!
(And yet Congress wants to create 7 new national parks? Where are they coming up with the money for that?)
Do I think Xanterra is perfect? Absolutely not. I do believe their brand and business model could stand a major overhaul. (That might be a bit easier if NPS weren't so controlling!) But is the solution to create an unfeasible business contract? Is it to tell hundreds of employees (without ever even facing them) that they no longer have homes and or jobs? Is the solution to enter into an unprofitable contract? Or for NPS to rob the parks of many of their treasured programs, and make cuts to those things that ensure guest safety? This does not seem logical.
I think the public deserves better than this. I think people that have dedicated their lives to this park deserve better. I've been here 20 years, and have never been so frightened! I think NPS's own employees deserve better.
NPS, Mr. Jarvis, Mr. Uberuaga, these are real lives you are affecting here!
The above comment offers some important insights into behind the scenes issues that are "invisible" to park visitors, but which are very real to both concession and NPS employees.
Thank you for a well-written and heartfelt letter that deserves careful consideration.
Unfortunately, that seems to be the new business model throughout too much of America these days both inside and outside of gvvernment. Welcome to America's future middle class.
I still question, however, how much of the blame for this situation lies at the feet of either the NPS managers in GRCA or WASO and how much can be traced directly back to Congress.
Lee, you keep accusing congress yet you haven't once provided one example of how Congressional medling is involved or the cause of the problem. Sounds like empty accusations to me.
Let us not forget the deeper issue. When the National Park Service and/or its concessionaires start describing a national park in terms of a city, do you really have a national park in the first place? Is a national park supposed to be sprinkled with "villages" requiring so many resident "services?"
Once you allow that level of development, all bets are off. Employees will be subject to furlough just like in a city, and yes, some might lose their homes.
I sympathize, but the point remains. The model for a national park is all wrong. The South Rim is horribly overdeveloped in the interest of providing many things having nothing to do with preservation. And now there is the wind farm between Williams and the South Rim reminding us what global warming portends. Less development? No, even more of it. We Americans just can't get enough of the argument that we need more jobs and growth.
In that case, bring in the lawyers. As John Muir said, they are the last to divide up the spoils. But don't make this a victim issue. The only victim here is the park--what it was supposed to be and then never became once the developers got control of it.
ec - re: Lee's question about how much of this problem "can be traced directly back to Congress...."
An earlier story on this topic in the Traveler noted, "Sixteen years ago Congress, through its Concessions Management Improvement Act, basically handed the Park Service the tab for repaying concessionaires for the improvements they had made by requiring the agency to advertise concession contracts for open competition for the first time."
A second recent story noted, "....the predicament... can be traced to both the Concessions Management Improvement Act of 1998 and the somewhat limited number of concessionaires capable of managing operations as large as those in the Grand Canyon."
I don't have the time to try to analyze this Act or it's implications, but it seems possible this is at least part of the explanation for how the park got into the current problem.
Ya, get rid of all those dispicable Mary Jane Elizabeth Colter eyesores throughout the Park via the Fred Harvey Company. Kolb Studio and any reference to those rascally brothers that have so demeaned your utopian wilderness with no mention or connection to humanity and our history that deserves to be preserved and not just guided by pop culture emotion. Don't forget the El Tovar. I can hear the screams of "No, not the El Tovar" by the elites throughout NPS and partners. Ya, go for it.
The debate about how much development is appropriate for places like the South Rim will go on as long as there's a park there. I suspect most people would agree a view of the Grand Canyon is worth experiencing; if so, given the distance from the nearest towns of Williams and Flagstaff, and the limits placed by the lack of water on development closer to but outside the park, the challenge is how to accommodate visitors - and employees - at this park.
I've been fortunate to see the canyon a number of times, and due to the angle of the sun, the view is definitely at its best early and late in the day. Should we remove development from the S. Rim and either deprive visitors the chance to enjoy that experience, or tell them it's okay to enjoy the sunset, but then count on a 90 minute drive or more back to their room in Flagstaff?
In parks like Grand Teton, Great Smokies and Rocky Mountain, it's easy to put most of the "tourist development" outside the park. At Grand Canyon, the situation is a lot more difficult.