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Delaware North holds fast in legal battle as Yosemite renaming stirs up storm

Delaware North isn’t backing down in the face of the bitter criticism stirred up by the National Park Service’s decision to rename some of the high-profile attractions at Yosemite National Park in California.

Despite headlines and editorials in Western newspapers and an avalanche of nasty commentary on social media, Delaware North executives say they aren’t worried about permanent damage to the company’s reputation. They see the conflict as a legal matter that they insist they must fight because to walk away would render the company’s contracts meaningless.

“This is a contract dispute. It’s the terms of a contract that we are in disagreement about. If we don’t vigorously defend our position and the letter of that contract, then none of our other contracts would be worth anything,” Jeremy M. Jacobs Jr., co-CEO of Delaware North, said in an interview with his brother and co-CEO, Louis M. Jacobs.

The Park Service’s renaming announcement last week was the latest salvo in a high-profile legal and public relations fight between the Buffalo-based tourism and hospitality giant and the federal government over Yosemite, one of the country’s most visited national parks, where Delaware North has held the lucrative concessions contract since 1993.

Delaware North contends in a lawsuit that it is owed up to $51 million for the trademarks on the Ahwahnee Hotel, Curry Village and other properties at the park, among other intellectual property. The Park Service has refused to order Aramark, Delaware North’s successor as concessionaire, to reimburse the company, and has set a far lower value of $3.5 million on the trademarks and other properties.

With the sides so far apart, the Park Service announced that it would rename the attractions by March 1, when Aramark takes over at Yosemite, a move that Delaware North called a bargaining ploy.

But public opinion largely has pinned the blame on the company, with feelings running particularly hot in California.

“It is petty that having already made billions of dollars from selling food, merchandise, and lodging at our national parks to millions of visitors, Delaware North is essentially extorting taxpayers to allow Americans to keep what we already own,” Dan Chu wrote in an opinion article for Outside magazine.

The company says it was required, when it took over the contract, to buy the rights to the names of several well-known properties at the park – the Ahwahnee Hotel, the Wawona Hotel, Badger Pass Ski Area, Curry Village – from the company that had managed operations at the park for more than 100 years. The cost, according to the company, was the equivalent of $115 million in today’s dollars.

“They required us to buy these assets. And the way they got us to do that is to say, ‘Don’t worry, at the end, you’ll be bought out, the successor will buy these assets from you,’ ” Louis Jacobs said.

Last year, Aramark won the bidding on a new Yosemite contract that is worth $2 billion over 15 years.

The Jacobs brothers said they don’t understand why the Park Service isn’t enforcing Delaware North’s contractual rights and is taking Aramark’s side in this conflict. Delaware North’s fight isn’t with the Park Service, or with the American taxpayer, but with Aramark, and any payment would come from Aramark, they said.

“It’s a commercial dispute between two large companies,” Louis Jacobs said.

Delaware North filed its lawsuit against the Park Service in September in the U.S. Court of Federal Claims seeking enforcement of the contract. The Justice Department earlier this month filed its response to the suit, accusing the company of putting a grossly exaggerated value on the trademarks.

The company offered the Park Service use of the trademarks, for free, while the court case continued, an offer that the service rejected. Instead, the Park Service announced Thursday that it would rename the attractions by March 1.

“It is unfortunate that we must take this action,” Don Neubacher, Yosemite’s superintendent, said in a statement. “Yosemite National Park belongs to the American people.”

The new names are:

• Yosemite Lodge at the Falls will become Yosemite Valley Lodge.

• The Ahwahnee will be renamed the Majestic Yosemite Hotel.

• Curry Village will be called Half Dome Village.

• The Wawona Hotel will become Big Trees Lodge.

• Badger Pass Ski Area will become Yosemite Ski & Snowboard Area.

Reaction, up and down the California coast, was fierce.

The headline in the San Diego Reader, was succinct: “Delaware North to California: Drop dead.”

Amplify media called it a “PR disaster” for the company.

In the Los Angeles Times, readers reacted Sunday with dismay. “You cannot purchase history and hold it hostage,” wrote Carol Karas of Camarillo, Calif.

On Twitter, users employed terms such as “pure evil,” “abusive,” “shame,” and “#corporategreed.” One wag, @debrajsaunders, quipped, “Maybe Delaware can sue Delaware North for trademark infringement?”

Some users are calling for boycotts of Delaware North properties, or posting online petitions opposing the renaming, with the Sierra Club trying to leverage its 179,000 Twitter followers to “#SaveYosemiteNames.”

The Jacobs brothers said they believe that Delaware North will be able to weather the storm of negative attention and won’t see long-term harm to its concessions business, even those contracts it holds with the federal government.

“The facts are the facts, and they will prevail. And over time, the story will get clearer as to what’s happening and why,” Jeremy Jacobs Jr. said. “Those (names) reside in the park, and they will reside in the park, and we’re not trying to take them out of the park. It’s the Park Service that’s using this as a ploy.”

However, companies that are facing the kind of backlash that Delaware North is enduring over a court case can’t just argue the merits of a technical legal matter, said Earl V. Wells III, president of e3communications, a public affairs and public relations agency.

“You lose people. It’s too complicated. They don’t get it. They don’t want legalese,” Wells said.

For now, the Park Service has outflanked Delaware North by taking the fight into the court of public opinion, said Robert P. Carr, president of Carr Marketing Communications.

“They’ve gone on the offensive,” Carr said.

Delaware North isn’t in a public relations crisis, Carr said, because the worst of the reaction is centered in California and it has not yet reached the national media or the late-night talk shows. That could change March 1 if the renaming goes through, he said.

And if the name change happens, it’s damaging for Delaware North’s legal case, because it devalues their trademarks, and it would harm the Park Service, Aramark and park visitors by dismantling a piece of Yosemite’s heritage, said Mark Bartholomew, a University at Buffalo law professor who teaches about trademark law and has studied the park system’s history.

“If they go through with it,” he said, “both sides lose.”

email: swatson@buffnews.com