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."
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Comments
ec--While the purpose of business is not to provide jobs (a debatable point), it certainly does not restrain them from promising local communities from which they are seeking tax credits or other special treatment for locating new factories or industriess in desirable locations to trumpet the number of new jobs that will be created in the local area.
Rick
Yes Trail, businesses should respect their employees. However, they shouldn't put that "respect" ahead of what is good for the business (or NPS). If the business suffers while "respecting" its employees but not minding its bottom line it won't be good for anyone.
For Rick - I would like to hear your "debate" on how you conclude that the purpose of businesses is to provide jobs. From where does that obligation eminate?
Like I said ec, "You take care of your cows and they will take care of you." Every business has a choice according their own ideas on what level and type of success they desire. Some businesses recognize that one can't give their best (seriously best) for any length of time without reward that supports their effort. If the best isn't really required, yes, move on to the next sap and their customer contact accordingly.
Personally, i'm all for less mule rides down into the canyon. After an experience where I hiked down the bright angel in a rainstorm and walked back up only to encounter a nasty stream of mule waste running downhill to the colorado river, i'm for limiting the mule traffic. Just for the environmental reasons it was a smart move. There were too many mules on the trail during the last decade. If there is even a 1/4 of the traffic, then that's a good thing. These mule trains don't bury their waste and have created a sewage pit. Backpackers are supposed to bury their droppings, so the mule trains should be required to do a cleanup too.
Isn't there at least a moral responsibility for any employer to regard employees as more than mere chattel? Is it not true that it is the employees, and not the owner alone, who either makes a business a success or failure? Who is really the one feeling entitled in cases in which owners regard the labor of their employees without value and without the valuing the people who make their success possible? Is it not true that companies with the highest productivity -- and usually, profitabilitiy -- are those with deservedly high employee morale?
The Great American Entitlement Mentality exists in more than just the lower levels. In fact, I submit that it is at its greatest near the top of the economic stratosphere.
Unfortunately, the entire syndrome is a concept almost completely lost upon those who cling most tightly to their feelings of entitlement regardless of where they stand on the comparative scale.
Trail - I agree with you 100% that a company is best served by treating its employees well. But it has no obligation, and in fact it is doing itself and its remaining employees a disservice to keep someone employed or pursue unwise business arrangements merely for the sake of giving somebody a job. A business has no more moral obligation to provide a job than do you or I.
So, what could be the reasoning (really) that NPS's growing dissatisfaction with Xanterra has gotten us to this point? NPS have any culpability? What is the remedy? What's best served for the public?
So you have repeatedly claimed without substantiation. Could you provide some examples of where those "near the top of the economic stratosphere" have indicated they are "entitled" to anything beyond the liberties and protections guaranteed by the Constitution.
Trail - I don't know that the NPS has had a "growing dissatisfaction" with Xanterra. I think they are following the appropriate mandate to have competition for the concession business. The problem seems to lie in the structure of the LSI. It would seem to me that those that conceived and approved that structure are most culpable for the current fiasco.
I beleive the public is best served by competition and would be best served if the LSI formulation were reworked. The public would not be served by having Xantarra or anyother operator make a bad business deal solely to employ folks.
"The purpose of a business or the NPS is not to provide jobs. Providing jobs is necessary to obtain their purpose." There's certainly truth to that, although it would be interesting to hear ec's ideas about the "purpose of a business."
One key contributor to the nation's recent economic woes was business decisions based soley on improving profits for stockholders and top executives - even if that meant undue risks in financial decisions. The "bailout" of some banks and Wall Street and the housing market crash was the result, and lots of employees and average citizens took their lumps, while some of those top execs got bonuses or "golden parachutes..." There's an example of an "entitlement attitude."
Another comment above touched on the fact that businesses (and sometimes politicians) use the "number of jobs they will create" as a justification for tax breaks, etc., so those companies at least want the public to believe the "purpose of business is to create jobs."
In the long run, one would hope that companies that treat employees well will see improved customer service, and therefore an improved bottom line. I certainly tend to give repeat business to places where I am helped by employees who are both pleasant and efficient.
Excellent points, JThomas, and spot on.
Thank you also JThomas. A previous comment stating that "employees are an expendable resource" is truly troubling. Shades of "Let them eat cake". The comment deserves no further discussion at least in my view. It is a tragic situation that the vast majority of dedicated and competent employees for the concessionaire at Grand Canyon are the pawns of this litigation. Shame on both sides.
It is bad enough that natural resources - like entire mountain tops, in mining - are considered disposable, expendable, consumable, pick your term. The soulless Randian inclusion of human resources in this are not what I want my nation to stand for.
JThomas - your representation of the economic collapse is so eroneous it is laughable. The collapse was caused by government intervention in the markets and the Wall Street and bank "bailout" is pure fiction. Wall Street and the banks in the aggregate have paid back more than 100% of what was loaned and or invested in them.
And while all you my lament that businesses are in business for the business and not for their employees, I don't see any of you giving jobs to people solely for the purpose of creating a job. Your socialist mindthink doesn't work in the real world.
I agree, Rick. There's a nice national narrative of the parks and their relation to the human framed along those lines. A nice piece of American exceptionalism.
JThomas...
Agreed. It is nearly universally agreed on the causes of the economic collapse, other than those who are have their pound of flesh invested deeply in Wall Street.
Isn't it amazing how those who made such a bumper sticker talking point out of being "job creators" now decry that as having anything to do with them.
Yes, and anyone that has any knowledge of the events knows it was government intervention. Look up the CRA or try reading "The Great Bank Robbery".
Really? where did anyone do that? More empty accusations.
"Wall Street and the banks in the aggregate have paid back more than 100% of what was loaned and or invested in them."
As well they should have! The point is what would have happened to some of those banks, big insurance companies, auto companies and others if there had been no bailout to keep them afloat, in the aftermath of poor business decisions designed to maximize profits at the expense of employees.
Just one example of the impact of bad decisions: AIG cut 20,000 jobs in 2009 as a result in part of "The derivatives unit that brought AIG to the brink of collapse with bets on mortgages."
I've not suggested that people should be "given" a job if it's not needed by a company. The original discussion was whether employees are valuable resources and should be treated as such in company decisions vs. being regarded as merely "expendable."
In the case at hand, that view of employees as valuable resources ought to be considered by a concessioner as part of the decision on a contract bid. Is Xanterra "playing chicken" with the NPS in the contract dispute in order to increase their profit margin, or could they in fact not turn a reasonable profit under the NPS proposal? I have no idea, but if they're playing hardball just to push up profits, and employees end up getting pink slips as a result, that would be an example of what some comments on this thread have criticized.
JT- do you know why those derivatives brought them to the bring of collapse? Because the government was forcing the banks to make the loans and then providing "guarantees". The government was then reselling the loans to the banks to be tranched into derivitive securities. Had the government not been involved, there would not have been a Fannie Mae or Freddie Mac, there would not have been government guarantees and there would not have been the derivitives market that collapsed.
Yes, the banks made mistakes and some went out of business for it but loans and investments aren't bailouts. They are loans and investments. And while Wall Street and the banks paid it back in full, others - like GM - haven't.
As to Xantarra "profits", why shouldn't they attempt to push up profits? What level of profit is appropriate and who should determine that? In the capatilist system - its the market that makes that determination. The business has no obligation to lose profits to keep someone employed.
Looks like Xanterra and NPS may have worked something out.
http://www.kpho.com/story/27649830/grand-canyon-concessionaire-nearing-s...
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