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Outgoing Yosemite Concessionaire Clarifies Case To NPS

Yosemite, CA — In its dwindling hours as concessionaire at Yosemite National Park, Delaware North Companies moved to clarify the legal case over its retention of iconic Yosemite trademarks with the CFO of the National Park Service.

In a letter shared with Clarke Broadcasting, dated Monday, February 29, Delaware North Companies Executive Vice President/CEO Rick Abramson claimed to National Park Service CFO Lena McDowall that his company was unable to fulfill a final clause in their contract when incoming concessioner Aramark declined to purchase certain assets at “fair value” — and when the National Parks Service (NPS) did not subsequently mandate Aramark to do so. Among these assets are the disputed Yosemite-related trademarks and related inventory. Delaware North noted that Aramark furthermore rejected its offer to transfer to them the trademarks for use, pending the outcome of Delaware North’s related lawsuit.

In the letter, Delaware North further posed its willingness to transfer the marks to the National Park Service, either directly or through an escrow. The company also made it clear that, as it makes its formal exit, it is not abandoning other unresolved assets that remain at the park. In a subsequent media release, Delaware North stated that, with that offer, the fate of the historic names is now fully within the control of the National Park Service.

The full text of the emailed letter is provided below:

National Park Service

February 29, 2016

United States Department of the Interior
National Park Service 1849 C Street, N.W.
Washington, D.C. 20240

Attn: Ms. Lena McDowall, Chief Financial Officer

Re: Concession Contract No. YOSE004-93

Dear Lena:

As you know, today is the final day that DNC Parks & Resorts at Yosemite, Inc. (“DNCY”) will perform concession services at Yosemite National Park under its contract with the National Park Service (“NPS”), i.e., Concession Contract No. YOSE004-93 (the “Contract”). I thus write to inform you of the status of the parties’ performance of their obligations under Section 13 of the Contract.

Section 13 of the Contract requires DNCY to sell and transfer to a successor concessioner all of the Possessory Interest and other property DNCY uses or holds for use in connection with its Yosemite operations, and obligates NPS to require the successor concessioner to purchase and pay fair value for that property. As of this writing, DNCY has sold and transferred to the successor concessioner (Aramark) all of the property subject to Section 13 except for four categories of property that DNCY has offered to sell and transfer to Aramark but which Aramark to date has declined to purchase for fair value. DNCY maintains that NPS has breached Section 13 of the Contract by failing to require Aramark to purchase at fair value these four remaining categories of assets. These four categories of assets therefore remain subject to the lawsuit pending before the United States Court of Federal Claims, DNC Parks & Resorts at Yosemite, Inc. v. United States, No. 1:15-cv-91934-PEC (Fed. Cl.) (the “Litigation”).

The four categories of property remaining to be purchased by Aramark and subject to the Litigation are (1) DNCY’s Yosemite-related trade names, trademarks, and service marks (the “Marks”), (2) all inventory and items such as plates at The Ahwahnee displaying the Marks (the “Branded Inventory and Assets”), (3) capital improvements to real property at Yosemite (the “Real Property Capital Improvements”), and (4) trade fixtures at Yosemite, including without limitation range hoods and the structural components of tents and tent cabins (“Personal Property Capital Improvements,” and together with the Real Property Capital Improvements, the “Capital Improvements”). Aramark has refused to purchase the Marks because DNCY and NPS dispute their fair value. Further, Aramark has refused to purchase the Branded Inventory and Assets until the dispute regarding the Marks is resolved. Aramark and NPS contend Aramark is not required to purchase the Capital Improvements.

To comply with its contractual obligation to NPS to sell and transfer this property to Aramark, DNCY has offered to transfer the Marks, Branded Inventory and Assets and Capital Improvements to Aramark, with the amount of compensation to which DNCY is entitled for the property to be determined either by subsequent negotiation or in the Litigation. This would fulfill the intent of the Contract that the new concessioner has all of the property needed to run the Yosemite operations with the same excellence with which DNCY has done so for the past 23 years, and that DNCY receive fair value for its property. DNCY has forwarded a trademark assignment to Aramark, and Aramark has not accepted this offer.

As you know, DNCY has been attempting since 2014 to ensure that these transition issues were fully resolved if and when a new contractor took over concession operations in Yosemite. Unfortunately, NPS did not reciprocate and it is now apparent that Aramark will begin operations without having acquired all of the necessary property. Most importantly, by refusing to acquire or take assignment of the Marks, Aramark will begin operations without ownership of the famous, iconic names associated with the concessions at Yosemite. This is obviously contrary not only to the plain language and intent of Section 13 of the Contract, but also to the interest of the public and its deep affection for the Marks.

In light of Aramark’s refusal to accept the Marks, DNCY is willing to transfer the Marks directly to NPS, so long as DNCY’s right to continue to seek fair value for its property is not diminished. We do not perceive any reason for NPS to decline this offer, especially in light of the fact that NPS intends to become the owner of these Marks eventually pursuant to the provision in Aramark’s contract requiring the transfer of any Yosemite-related trademarks to NPS. Nonetheless, if NPS is for some reason unwilling to take ownership of the Marks in a direct transfer from DNCY, DNCY would be willing to place the Marks in escrow under the control of NPS until the respective rights and obligations of DNCY, NPS and Aramark are resolved through the Litigation or otherwise.

In any event, because NPS is expected to be the ultimate owner of the Marks, it is important for NPS to be aware that important rights with respect to the Marks could be affected by action or inaction of NPS, Aramark, or an escrow agent with respect to protecting the Marks after today, including maintaining their registrations at the United States Patent and Trademark Office.

Furthermore, DNCY is seeking damages and other relief in the Litigation for NPS’s failure to require Aramark to purchase for fair value the Capital Improvements. To remove all doubt, DNCY is not abandoning this property, but instead is leaving it in the Park for Aramark’s use pursuant to DNCY’s obligations under Section 13 of the Contract, and is pursuing in the Litigation the compensation NPS should have made Aramark pay for this property under Section 13. We hereby provide notice to NPS that it is obligated to preserve and maintain the Capital Improvements after the Contract expires and refrain from taking any action, directly or indirectly, to waste or diminish their value until the Litigation is resolved.

Please contact me if you would like to discuss this matter or have any questions.

Sincerely,

Rick Abramson
Executive Vice President and Chief Operating Officer
Delaware North Companies, Inc.