National Park Service: 10th Anniversary of the National Park Service's Independence Visitor Center - Spotlight on Fact that Concessions Award Process is Followed in All Other National Parks Across the U.S., Except in Philadelphia

Wednesday, November 9, 2011

10th Anniversary of the National Park Service's Independence Visitor Center - Spotlight on Fact that Concessions Award Process is Followed in All Other National Parks Across the U.S., Except in Philadelphia

The Independence Visitor Center Corporation's (IVCC) Expenses Have Grown Substantially Over Time, The IVCC's Expenses Have Vastly Exceeded Congressional Budget Office Estimates, and The IVCC Has Failed Over a Prolonged Period of Time to Be Economically Self-Sufficient from Revenue Generating Activities

At the nearly 400 national parks across the country where commercial visitor services occur (i.e., Yellowstone, Yosemite), the concessions award process is followed - however, that is not the case in Philadelphia. As the National Park Service (“NPS”) and Independence Visitor Center Corporation mark the 10th anniversary of the Independence Visitor Center on November 10th, it is time for Congress and the Courts to ensure that all commercial contracts at Independence National Historical Park (“INHP”), including at the Federally owned and funded Independence Visitor Center, are issued fairly, subject to existing laws governing the NPS.

Rather than grant the National Park Service discretion in its dealings with concessioners, Congress established “carefully controlled safeguards against unregulated and indiscriminate use” of the parks in the Omnibus Management Act of 1998, which governs all national park public accommodations, facilities and services, including tours.

The National Park Service and Independence Visitor Center have not followed the Federal laws for awarding concessions contracts at INHP, including at the Independence Visitor Center, which call for transparent processes that are competitive, independent and appealable. In fact, the NPS and Independence Visitor Center have negotiated back-room deals and arbitrarily dictated which vendors can do business at the Independence Visitor Center, thereby suppressing consumer choice and the free market in the pursuit of random and unfair regulation.

The NPS has even argued in Federal Court that “no guided tour has a ‘concession’ contract for use of space within the Independence Visitor Center”. However, a quick look inside the Visitor Center indicates that there are numerous guided tour concessioners which operate and staff their own dedicated ticket sales concessions booths. As an example of the high impact nature of these operations, The Inquirer reported that according to NPS reports, Ride the Ducks takes in more than $4 million annually in Philadelphia.

A concession which sells accommodations, facilities, and services by any other name is still a concession, regardless of how the National Park Service wants to characterize it, classify it or award it. A tour operator which conducts substantial, continuous and high-impact activities in INHP — both inside and outside the Visitor Center — including the soliciting of customers, the advertising of tours, the selling of tickets, and the operation of tours has for all intents and purposes been issued a concessions contract.

While the National Park Service has argued that there are no vendor concession contracts for guided tour operators' use of public space within the Independence Visitor Center, The Inquirer also reported in August 2010 that John Estey, Chairman of the Board of the Independence Visitor Center Corp., said,

“We don’t make public our deals with our vendors [i.e., tour operators], because then we wouldn’t get good deals.”

On April 27, 2009, Congressman Robert Brady wrote to Interior Secretary Ken Salazar,

“[e]qually disturbing is that these [concessions] opportunities have not been offered equally and on reasonable and non-discriminatory terms to other vendors at the IVC [Independence Visitor Center] including The Constitutional [Walking Tour], which conducts its tours in the INHP area.”

In spite of the oversight and the Federal government funding the Independence Visitor Center with about $8.5 million to date in annual appropriations of $850,000.00, the National Park Service and Independence Visitor Center have preferred to keep doing business as usual – clandestinely – in Philadelphia over the past decade.

After seeing past the pomp and circumstance surrounding the Independence Visitor Center’s 10th anniversary, it is instructive to review its financial performance. In 1999, the Congressional Budget Office estimated that it would cost less than $1 million per year to operate the Visitor Center. In November 2001, The Inquirer reported on the grand opening of the NPS’s new $38 million Visitor Center and said that it was expected to become economically self-sufficient in two years from revenue generating activities.

Ten years after its opening, the Independence Visitor Center is not and has not ever been economically self-sufficient from revenue generating activities. From July 1, 2003 to June 30, 2010, the Independence Visitor Center Corporation incurred average annual expenses of about $6.5 million. Had it not been for sizable ongoing government contributions including the $8.5 million from the NPS, the IVCC would have posted about $16 million in cumulative losses from July 1, 2003 through June 30, 2010 (based on the Independence Visitor Center Corporation’s tax returns from 2003, 2004, 2005, 2006, 2007, 2008 and 2009).

Had the National Park Service and Independence Visitor Center followed existing Federal laws with regard to revenue generating opportunities within national parks and the Independence Visitor Center's expenses had not grown out of control, the Independence Visitor Center Corporation might now be economically self-sufficient and not so dependent on taxpayer support with significant and ongoing government contributions.

Jon and Leslie Bari
The Constitutional Walking Tour of Philadelphia
info@theconstitutional.com

Note: More information can be found online at The Constitutional’s blog, http://www.independencepark.blogspot.com/

The Constitutional has a case pending against the National Park Service and Independence Visitor Center Corporation et al. in front of the United States Third Circuit Court of Appeals.

Exhibits
*National Park Service, Sur Reply Brief, United States Third Circuit Court of Appeals, October 27, 2011.

*DiStefano, Joseph N., "Will Ducks, DRPA troubles spark Visitor Center change?", Philadelphia Inquirer, 8-19-10.

*Estimate on Implementing Gateway Visitor Center Authorization Act, Congressional Budget Office (CBO), March 3, 1999.

*Marcia Gelbart. "Long-awaited Visitor Center set for debut: The $38 million building at Independence Mall will open Tuesday. With tourism down, officials expect a slow start." The Philadelphia Inquirer, November 18, 2001.

*Letter from Congressman Robert Brady to Interior Secretary Ken Salazar, April 27, 2009.

*Independence Visitor Center Corporation 990 IRS Form, 2003.

*Independence Visitor Center Corporation 990 IRS Form, 2004.

*Independence Visitor Center Corporation 990 IRS Form, 2005.

*Independence Visitor Center Corporation 990 IRS Form, 2006.

*Independence Visitor Center Corporation 990 IRS Form, 2007.

*Independence Visitor Center Corporation 990 IRS Form, 2008.

*Independence Visitor Center Corporation 990 IRS Form, 2009.

Background on The Constitutional’s disputes with the NPS and Independence Visitor Center

The Constitutional Walking Tour of Philadelphia (“The Constitutional”) offers guided walking tours of the Independence National Historical Park area by providing a primary overview of Independence Park and visiting more than 20 of Independence Park’s most historic sites including the Liberty Bell, Independence Hall, Carpenters’ Hall, Declaration House, etc.

From 2005 to 2010, the Independence Visitor Center Corporation sold tickets for The Constitutional’s various tours only at the IVC’s main information and sales desk. The IVCC has received a 20.0% (twenty percent) sales commission on each ticket that it has sold for The Constitutional (ranging on average in gross price from $12.50 to $17.50). Since 2005, The Constitutional has requested to also license a dedicated ticket sales booth from the National Park Service and IVCC on fair, reasonable and non-discriminatory terms commensurate with Ride the Ducks and Philadelphia Trolley Works, for example. Additionally, since 2005, The Constitutional has requested to also license marketing opportunities and commercial use authorizations from the National Park Service and IVCC on fair, reasonable and non-discriminatory terms.

The Independence Visitor Center (“IVC”) is owned and operated by the United States of America - National Park Service (“NPS”), which then sub-contracts with the Independence Visitor Center Corporation (“IVCC”), a taxpayer supported public charity, to manage the IVC.

The IVCC and NPS have preferenced third parties including Ride the Ducks and Philadelphia Trolley Works, and the IVCC and NPS have discriminated against The Constitutional Walking Tour. The National Park Service has enabled the creation of this unfair business environment. The National Park Service and the IVCC have ignored and circumvented Federal management and concessions laws for the sale of goods and services at Independence National Historical Park that require open, transparent, competitive and appealable processes awarding concessions contracts for the sale of goods and services including tours.

To facilitate the administration of the National Park Service System, the Secretary of the Department of the Interior, acting through the NPS, is authorized under the National Park Service Organic Act (“Organic Act”) to carry out twelve categories of activities, none of which include transferring administrative responsibility to a private party [i.e., IVCC] or engaging in cooperative administration with a private party [i.e., IVCC]. 16 U.S.C. § 1a-2(a)–(l). Rather than grant the NPS discretion in its dealings with park concessioners, Congress established “carefully controlled safeguards against unregulated and indiscriminate use” of the parks in the National Parks Omnibus Management Act of 1998 (“Management Act”), which governs all national park public accommodations, facilities, and services. 16 U.S.C. § 5951 et seq.; see also 36 C.F.R. Part 51.2 (“policy underlying concessions contracts”). The safeguards are not limited to nationwide policy: Congress also manages the parks with significant visitor traffic on a park-by-park basis. See, e.g., 16 U.S.C. §§ 21–40c (Yellowstone), §§ 91–110d (Mount Rainier), §§ 212–218a (Abraham Lincoln’s Birthplace), and §§ 410z–410z-5 (Boston National). One of the dozens of national parks managed by specific statutes is Independence National Historical Park (“INHP”). 16 U.S.C. §407m–407s. As such, compliance here going forward would require the NPS, first, to reassume from the private IVCC the NPS’s duties “to administer, operate, manage, lease, and maintain” properties at INHP pursuant to 16 U.S.C. § 407s; second, to award “all proposed concessions contracts … through a competitive selection process” pursuant to 16 U.S.C. § 5952; and, third, to issue commercial use authorizations in a rational manner pursuant to a reasonable interpretation of 16 U.S.C. § 5966(c).

The IVCC and NPS have arbitrarily and randomly selected business partners in a non-competitive and clandestine manner; as such, the actions of the NPS and IVCC have from an economics perspective stifled competition, innovation and consumer choice. Ultimately the IVCC’s actions have enabled prices to increase for its preferred vendors to strengthen the for-profits’ financial performance. Visitors to Philadelphia will be better served when the IVCC’s management, manners and methods are fundamentally changed. This would include having the National Park Service abide by Federal concessions management laws. Specifically, this will entail only having the NPS award concessions sales contracts and not having the IVCC involved in any of the selecting, awarding, contracting and managing of Independence Park’s third party concessions, including inside the Independence Visitor Center. This is the model that is practiced in virtually every other of the 390 (three hundred ninety) National Park Service units across the United States (in 49 states) including at Yosemite, Yellowstone, Statue of Liberty, etc. Additionally, visitors and all stakeholders will be better served once the operation of the taxpayer funded IVCC is totally transparent and accountable. While part of the issue centers on a publicly funded charity competing against the private sector (i.e., by offering guided tours and services), it more so has to do with the manner in which the IVCC and NPS operate and discriminate against third party concessionaires, tour operators and vendors in a random and arbitrary fashion (i.e., with the licensing and leasing ticket sales kiosks by the IVCC to third party companies, for example).