National Parks

In response to the Department of the Interior's concerns about foreign ownership of the major concessioner service in Yosemite National Park, the Yosemite Park and Curry Company, owned by a Japanese company, was sold to an American purchaser for $61.5 million. The new concessioner should have enough revenue to pay the promissory note for the purchase price, cover operating expenses, and make a reasonable profit. GAO has not, however, reviewed the assumptions that the Park Service used to calculate its cash flow projections. Although the new concessioner will be required to implement some portion of the 1980 Yosemite General Management Plan, which seeks to reduce congestion in the park, the Park Service has not yet finalized what those requirements or the associated cost will be. Finally, the transfer of interests in the agreement between the Curry Company's parent firm--MCA, Inc.--and the middleman in the sale--the National Park Foundation--does not constitute a gift to the Foundation. Accordingly, the Foundation's participation in the agreement is unauthorized. Additionally, the Foundation's involvement appears to have been unnecessary to completing the transaction, since Interior is authorized to enter into such transactions directly. The Foundation appears to have been acting on Interior's behalf.

GAO found that: (1) the purchase price was negotiated between the Foundation and the parent company and approved by the Secretary of the Interior and the Director of NPS; (2) Interior and Foundation officials reported that the purchase price was not based on any formal appraisals of the concessioner's assets, but rather on the asking price and projected concession cash flow estimates; (3) in a September 1991 amendment to its contract, the concessioner agreed to relinquish its possessory interest upon payment of the purchase price; (4) NPS cash flow projections indicated that the new concessioner would have sufficient revenues to cover operation expenses and note payments and make a reasonable profit; (5) specific requirements that NPS will impose on the new concessioner as part of the General Management Plan and associated costs have not been finalized; (6) the foundation did not have the authority to participate in the transaction; and (7) the transaction does not result in a gift to the Foundation but is instead a complex business transaction in which the Foundation acted on Interior's behalf.