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Jacobs family laments departure from Yosemite

When Jeremy M. Jacobs Sr., and his wife, Margaret, took their annual vacation to Yosemite National Park in central California this summer, it was just after his company, Delaware North, learned that it had lost the contract to operate hotels, restaurants, stores and other services at the park after 22 years.

As the couple walked into Yosemite’s Ahwahnee Hotel, managers and workers lined the walkway to greet them. The employees, from management to kitchen staff and housekeepers, applauded the couple. Some shook their hands; others broke from the line to hug them.

“For my father and my mother, it was very emotional,” said Jeremy Jacobs Jr., co-CEO of Delaware North, where his father remains chairman. “These are people who have probably spent their entire careers working for us.”

In their first interview since the National Park Service announced that a rival concessions conglomerate had won the new Yosemite contract, Jeremy Jacobs Jr. and his brother, co-CEO Louis M. Jacobs, talked about how losing Yosemite wasn’t just a financial loss, but also a personal blow.

Yosemite was the first national park contract for Delaware North, the global hospitality and food services giant that has called Buffalo home for all of its 100 years and that is now building a new downtown headquarters.

It is the most valuable contract in the national parks, earning the company $146 million in revenue last year. And it was Yosemite that opened the door to the system for Delaware North, which operates in six other national parks today.

But Yosemite wasn’t just a financial transaction for Delaware North and its owners. Since 1993, the Jacobs family formed deep ties through numerous visits to the park.

The parents visit every year, not just to examine the operations, but to hike and climb in the Yosemite Valley and the High Sierra. Margaret Jacobs, an amateur photographer, takes pictures of the breathtaking scenery.

The sons visit as much as once or twice a year, as well, during peak and off-peak seasons, bringing their children from the time they were babies. They throw themselves into park activities, with Louis Jacobs even taking part one year in the park’s traditional Bracebridge dinner festival, playing the role of the squire.

“It was about more than business to us,” Louis Jacobs said.

Still, the company remains engaged in a multimillion-dollar dispute over the rights to the names of Ahwahnee Hotel, Curry Village and other prominent park attractions.

Delaware North contends that Aramark must buy the trademark rights from the Buffalo company.

However, Delaware North, Aramark and Park Service officials have no talks planned, and Delaware North officials say they don’t know what will happen if the dispute isn’t resolved by March 1, when the new concessionaire takes over.

“Then we’ve got a big problem,” Jeremy Jacobs Jr. said.

Land set aside by Lincoln

Delaware North has served customers at ballparks, airports, race tracks and other venues for decades, but Yosemite was different.

The park in central California is 1,169 square miles, roughly the size of Rhode Island, and it is a crown jewel in the national park system. Land for Yosemite, which joined the national system in 1890, was set aside by President Abraham Lincoln in 1864.

Four million people visit the park each year to see its massive Half Dome and El Capitan granite formations, soaring Sequoia trees, majestic waterfalls and, if they’re lucky, watch a meteor shower dance across the sparkling night sky.

It’s also a mecca for campers, hikers, whitewater rafters, rock climbers and extreme-sports BASE jumpers.

“It was like lying in a great solemn cathedral, far vaster and more beautiful than any built by the hand of man,” Theodore Roosevelt wrote after camping in the park.

Delaware North won the Yosemite contract in December 1992, in the last weeks of the first Bush administration. It was the company’s largest-ever contract at the time, worth an estimated $1.5 billion over 15 years.

The decision initially drew a backlash from some critics, including members of Congress, who argued that the Park Service acted hastily in awarding the contract just weeks after bidding ended. Park service officials said Delaware North was the only company that met all of the bidding specifications, but the political tensions unsettled the Buffalo company.

Jeremy Jacobs Jr. recalled introducing himself in early 1993 to the new secretary of the interior, Bruce E. Babbitt, at a function in Washington, D.C. Jacobs said he was with Delaware North, the company that had recently won the Yosemite contract.

“You haven’t won it yet,” Babbitt replied curtly. However, the administration of President Bill Clinton ultimately declined to reopen the bidding.

Winning the contract gave Delaware North an opening into the concessions business at national parks. The company has since expanded its portfolio to include Sequoia, Kings Canyon, Yellowstone, Grand Canyon, Shenandoah and Olympic national parks, with several coming in the last few years.

Yosemite was the first, however, and the Jacobs family has forged strong connections to the park over the decades.

Jeremy Jacobs Sr., whom Forbes magazine lists as one of the wealthiest Americans with net worth of about $3.6 billion and who could choose to vacation anywhere in the world, has called Yosemite his favorite place to visit. He kept a pillow embroidered with Yosemite attractions in his office, and his wife’s photos of park features adorn Delaware North properties.

The close attention to Yosemite continues back in Buffalo. When a visitor sends a letter of praise, or complaint, that reaches the senior Jacobs’ desk at Delaware North, he reads the note.

“And then he sends it Lou and me, and then he sends it to everyone else. And then the next day he calls around to see what we’ve done about it,” Jeremy Jacobs Jr. said.

Since 1993, Delaware North has spent about $100 million in improvements to its properties at the park. That investment won praise from the Yosemite Conservancy, the park’s philanthropic arm.

“Delaware North has been a fabulous partner and steward of Yosemite over the years, and a wonderful park partner with the Conservancy. We expect a similar relationship with Aramark going forward,” Jennifer Miller, a spokeswoman for the group, said by email.

Delaware North’s Yosemite contract has been the most valuable in the Park Service. That’s because while different vendors split up the contracts for food, lodging and other services at most national parks, Delaware North handles everything at Yosemite except camping, the Ansel Adams attraction and a small market on the grounds.

Delaware North employs 1,650 full- and part-time workers in the peak summer season and 1,100 in the winter off-season.

‘Reasons other than money’

The company’s original, 15-year contract was extended several times before the Park Service put it up for bid again last year, issuing a request for responses known as a prospectus.

Delaware North did bid to keep the contract, estimated to be worth up to $2 billion in revenues over 15 years. But the Jacobs brothers said the new Yosemite contract would be far less profitable because of changes made by the Park Service to fees and activities allowed within the park.

“This was not a lucrative business deal by any stretch of the imagination,” Louis Jacobs said. “We bid it for reasons other than money.”

Delaware North officials say they haven’t been told why the Park Service selected Aramark’s bid over their own, a decision that took senior company officials by surprise.

The company said losing the contract isn’t a huge blow to its bottom line. Delaware North today has annual revenues of about $3 billion, or triple the $1 billion that the company was bringing in back when it started at Yosemite.

But Jacobs family members say they worry about how well Aramark will care for the park because, they contend, sentiment takes a back seat to profits at large, publicly traded companies.

“It’s like our baby is now being cared for by somebody who doesn’t quite have the same passion,” Jeremy Jacobs Jr. said.

In response, Aramark spokesman David Freireich said the company recognizes the responsibility it will take on at Yosemite.

“We are honored the NPS has selected us to serve as concessionaire for Yosemite National Park and look forward to serving as a steward of Yosemite’s rich history and helping shape its legacy moving forward,” Freireich said in an email.

There’s no end in sight to the Yosemite trademark dispute that began between Delaware North and the Park Service and now includes Aramark, the $15 billion industry giant.

The issue traces back to Delaware North’s purchase of Curry, the company that previously operated concessions at Yosemite, and its assets, as required under the terms of Delaware North’s original contract with the Park Service.

Curry owned outright a number of park structures that Delaware North transferred to the Park Service. However, Delaware North retained other assets and trademarks from Curry that, according to the company, include the names of the Ahwahnee Hotel, Curry Village and other well-known properties, as well as the “Go Climb a Rock” marketing slogan.

The company insists that the new concessionaire is required under Delaware North’s contract to purchase the trademarks.

“We have to sell it, and you have to buy it,” Jeremy Jacobs Jr. said.

Park Service officials agree that the contract with Delaware North covers some assets, but they believe the names of the attractions are part of the park’s heritage and belong to the American people.

The Park Service and Delaware North also disagree over how much the trademarks and other intangible assets are worth. Delaware North previously said an analysis that it commissioned put a value of up to $51 million on the assets.

The national park system was born out of an “anti-commercial experiment” meant to protect the properties from exploitation or over-development, said Mark Bartholomew, a University at Buffalo law professor who teaches about trademark law and advertising law and has studied the park system’s history.

“So it seems strange now to have a private business come in and manage these places and also say, ‘Oh, yeah, by the way, these particular words or place names, we own them and we can prevent other people from using them,’ at least in another commercial way,” he said.

After Aramark won the bidding process, the Park Service said the dispute now was between Delaware North and Aramark to resolve. Delaware North, however, insists that the Park Service is obligated to play a role in bringing an end to the trademark fight.

Trying to protect the brand

This week, Scott Gediman, a Park Service spokesman based at Yosemite, said, “We will closely monitor the talks.”

The March 1 deadline looms. Will Delaware North seek to strip the names from the attractions if a deal isn’t reached before Aramark takes over park operations? The company isn’t suggesting it will do that, but says it doesn’t yet know what it will do.

“How do you protect those names? If somebody else starts using them, do they ruin the brand, do they damage them? I don’t know,” Jeremy Jacobs Jr. said.

Philadelphia-based Aramark said that it doesn’t believe the dispute is between the two companies directly.

“What I can tell you is, we will be working with the various parties to address this as part of the transition,” said Freireich, the Aramark spokesman.

Even though Delaware North is leaving Yosemite, it will retain a strong presence in the area. The company will continue to invest in and operate its Tenaya Lodge at Yosemite, located just outside the park’s South Gate.

Back inside the park, as the Ahwahnee Hotel employees greeted the Jacobses during their visit earlier this summer, one of them took the chance to share a message with Margaret Jacobs.

“She said to her, ‘You get Yosemite,’ ” Louis Jacobs said. “It was, I think, a pretty revealing statement saying an awful lot.”