Babbitt Urges Review of Yosemite Pact : Environment: New Interior secretary wants Congress to examine the agreement with concessionaire to operate hotels and other tourist services.

WASHINGTON —  Interior Secretary Bruce Babbitt called Wednesday for a congressional review of the lucrative contract awarded last month to a concessionaire based in Buffalo, N.Y., to operate hotels and other tourist services at Yosemite National Park.

While not suggesting improprieties, Babbitt said that the pact between the Interior Department and Delaware North Cos. should be closely examined by a congressional panel--not only because it is the largest such agreement in the national park system but because it will serve as a prototype for similar agreements elsewhere.

He also said he hopes congressional hearings will help clarify which commercial activities are acceptable within park boundaries.

The awarding of the contract to Delaware North in December stirred sharp reactions from some environmentalists, who questioned whether the firm had the appropriate experience to run national park concessions. The firm specializes in operating sports arenas, major league baseball parks and airports. Its contracts also include food concessions at Hollywood Park and Los Alamitos racetracks, as well as the Long Beach, Burbank and Orange County airports.

In his first meeting with reporters since his confirmation, Babbitt said that he already has discussed the possibility of congressional hearings with California Rep. George Miller (D-Martinez), chairman of the House Interior and Insular Affairs Committee, and Sen. Dale Bumpers (D-Ark.), chairman of the Energy and Natural Resources subcommittee on public lands, national parks and forests.

Bumpers and Miller have long pressed for reform of the Interior Department’s policies on awarding concession contracts. Critics contend that, while companies that run the concessions make huge profits, the national parks receive too little financial benefit.

Hoping to correct some inequities, Bumpers reintroduced legislation earlier this week that would ban preferential treatment for existing concessionaires when contracts are renewed. It also would eliminate a lucrative practice under which contractors get significant tax breaks by depreciating facilities that they construct in parks, then sell them for full market value, reaping huge profits.

Babbitt said that his predecessor as interior secretary, Manuel Lujan Jr., had “made a great deal of progress in bringing the economics of concessions into line with reality.”

But he added: “Having said that, I think this (Yosemite contract) calls for intensive review because it will be a prototype for the future.”

The concession contracts erupted into a major issue during the Bush Administration after Japanese interests purchased MCA, the parent company of Yosemite Park & Curry Co., the longtime park concessionaire. As a result, MCA sold Curry’s park assets for $61.5 million.

The department then sought new bids to operate the park’s concessions and awarded a contract to Delaware North, deemed the best of six bidders.

Under the new agreement, the company will pay the park 20% of its gross receipts, far more than was required of Curry. The arrangement is expected to generate more than $100 million in receipts for the park over the contract’s 15-year life.

Long before Babbitt’s call for a review, the contract also had raised questions because of Delaware North’s past. Its corporate predecessor, Emprise Corp., was convicted in Los Angeles federal court of conspiring to conceal its interest in the Frontier casino-hotel in Las Vegas.