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Xanterra Suing NPS Grand Canyon

October 09
13:55 2014

Xanterra Parks and Resorts Logo / Xanterra Parks & Resorts(R) (PRNewsFoto/Xanterra Parks & Resorts)Xanterra, concessioner at Grand Canyon, is suing National Park Service to halt contract solicitation at Grand Canyon that they believe to be noncompliant with the law.  The current contract expires December 31, 2014.  The new contract solicitation imposes a 14% franchise fee (up from the current 3.8%) and redistributes employee housing in favor of a smaller contract that was carved out of Xanterra’s primary contract in 2013.

Xanterra, originally the Fred Harvey Company, began bringing tourists to Grand Canyon by rail in 1905, even before Grand Canyon became a national park in 1917.  They estimate their investment in Grand Canyon to be more than $200 million for lodging, employee housing, roads, trails, utilities, environmental upgrades and other infrastructure.  If Xanterra weren’t operating at Grand Canyon, the National Park Service would have to repay Xanterra for most of these investments.  Xanterra believes the franchise fee hike by NPS will be used to buy down Xanterra’s investment, but the buy down will still result in NPS staff reduction at a number of national parks.

Xanterra maintains that employee housing inside the park has been reassigned in favor of the smaller concession contract of Delaware North.  Xanterra believes that long time Xanterra employees are to be moved to the least favorable homes, dorms, and un-insulated, non-winterized cabins that are normally closed in winter by January 1, 2015, forcing many employees out of their homes over the holidays.  The leverage of housing and short notice are making it impractical and expensive to relocate employees to Flagstaff or to create new housing facilities near the park.  They estimate new housing near the park would cost more than $20 million to meet the NPS requirement that the concessioner provide adequate employee housing.  Xanterra hopes an injunction will halt the eviction of 224 Xanterra employees by National Park Service in Grand Canyon.

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