Park Deal Casts Spotlight on Low-Profile Sports Firm : Yosemite: Longtime stadium concessionaire will have to operate under environmental scrutiny.

An Adirondack black bear, now stuffed, greets visitors to the executive offices of Delaware North Cos., the food service conglomerate that recently won a contract to run visitor services at Yosemite National Park.

The once-imposing creature, its fangs bared, is dressed in a hockey T-shirt and shorts. A hockey stick rests beneath one paw.

Painfully aware that preservationists at Yosemite would be horrified, company officials hastily try to explain the animal’s presence.

“The chairman wanted me to tell you that he did not kill it,” said Samuel L. Gifford II, Delaware North’s chief spokesman. “His wife gave it to him as a present a couple of years ago.”

Until Delaware North landed the 15-year Yosemite contract two months ago, the bear might have seemed appropriate. The $1.3-billion conglomerate prospered from sports, making its mark selling hot dogs and beer at baseball games. The bear represents the Boston Bruins, the hockey team owned by Delaware Chairman Jeremy M. Jacobs.

But as the staunchly private, family-owned corporation moves from sports stadiums and racetracks into its first national park, questions have arisen about its ability to operate in an environmentally sensitive and highly visible arena.

At Yosemite, the concessionaire, which operates hotels, restaurants, stores and recreational activities, is held to the highest environmental standards. Zealous preservationists keep careful watch, denouncing any new vending machine or snack bar as commercialization of a national treasure.

“What I would be concerned about if I were a Yosemite visitor or a National Park Service person,” said a competitor of the Buffalo-based company, “is that they seem to have a sports complex mentality, rather than an environmental mentality.”

Delaware North, a mid-size company with a reputation for competence and financial stability, will face a formidable task at Yosemite. It will have to go along with Park Service goals to reduce development, avoid highly publicized confrontations with environmental groups that are critical of the commercial operations, make enough money to pay the $61.5 million for the concession--and still turn a profit.

Congress is expected to hold hearings within six weeks on the still-unsigned agreement, and a losing bidder has filed a lawsuit to block it. Scrutiny of the company also is forcing its officers to once again answer questions about a 20-year-old conviction of a former subsidiary that involved organized crime.

Delaware North’s interests extend beyond the Yosemite concession. With little room left to grow on the sports side, the company hopes to make Yosemite its entree into the park business.

It owns the Boston Garden arena, 11 dog and horse racetracks and a jai alai fronton, and operates concessions at about 20 other racetracks, six major league baseball parks, 40 airports and the Miami Zoo. The company also has hotel and catering operations in Australia and employs about 40,000 full-time and part-time workers in the United States and abroad.

“We don’t want this to be our last national park . . . ,” Delaware President Richard T. Stephens said. “We would like some day to have a parks division.”

Mindful of its new constituency, the company has taken to emphasizing its recycling practices. When it takes over in October, Delaware North plans to put an environmentalist on the concession’s board of directors and environmental experts on an advisory board.

“This contract is very important to us,” Stephens said.

Associates and clients say the company keeps its commitments, heads to the courthouse if its interests are threatened, and, in the words of one disgruntled former business associate, will not part with a dollar “unless it is obligated to do so in writing and unless it is in careful writing.”

Park officials selected Delaware North while the Bush Administration was in power and a congressional source calls it “an open question” whether the contract will go forward after further review. An Interior Department official, however, said it is unlikely the Clinton Administration would throw out the agreement.

The company is considering some tinkering at Yosemite, including substituting a more health-conscious menu at the restaurants, instituting drug testing for new employees and selling a Delaware North snack line called Chompers. But officials say no major changes are anticipated.

The planning for Yosemite is being done in a 12-story glass-and-steel building in Buffalo’s faded downtown near Delaware and North streets, the source of the company’s name.

Offices are comfortable but far from lavish. LeRoy Neiman paintings, mostly of horse racing scenes, decorate the 12th floor, where the bear stands guard.

The headquarters has the feel of a family business, albeit a large one. Jeremy Jacobs and his son, who is being groomed to run the company, move easily among their employees, keeping tabs on the day’s activities.

“You can’t separate the family from the business,” Gifford said.

As a company with one eye on its legacy for the next generation, Delaware North has earned a reputation as being hard-nosed and cost-conscious: workers who stuffed peanuts into bags at ballgames during the company’s early days once were ordered to chew gum so they wouldn’t eat the peanuts.

Former Boston City Councilor Michael McCormack, who negotiated with the company over the Boston Garden and city permit matters, said Delaware North’s Jacobs impressed him as unsentimental--interested in sports and the Bruins only as far as the bottom line.

“The primary focus for (Jacobs) was the concession, how much beer and popcorn he was selling that night,” McCormack said.

A veteran racing labor negotiator had a similar impression. “They don’t care about racing,” he said in a 1989 report to the Birmingham Racing Commission. “Their only interest is in the tube steaks.”

The company also walked away from one deal because the terms were changed.

After being designated by Boston two years ago as the developer of a new Boston Garden, the company announced last week that it will not build the arena because the state Legislature insisted on more costly requirements.

Delaware North’s only park experience consists of running the concessions at six parks in Dade County, Fla., under a 10-year contract with the county’s Department of Parks and Recreation. The venture was a money-loser.

“They were very good to work with,” said Bud Daniels, contract manager for the county’s parks department. “I wouldn’t call them a real imaginative company. They are not like the Walt Disney types that look at ways to create new business. They were just looking to serve the park patrons who were already here.”

He said the company spent $1.2 million upgrading park facilities “in the fashion we mutually agreed to,” served very good food, cooperated fully with park officials and was very conscientious about protecting against fuel spills at the marina and using packaging that would not hurt wildlife.

“They are very solid financially,” Daniels said. “They live up to their word.”

As a competitor, Delaware North is tough.

“They are very sophisticated at knowing who are the key people and how to win them on their side,” said a businessman at a competing company. Company representatives, he added, engage in “aggressive targeted lobbying” and “wining and dining.”

By all accounts, there was no wining and dining by Delaware North at Yosemite.

Delaware officials had their eye on the park the minute they learned that MCA, the parent company of the current concession holder, Yosemite Park & Curry Co., was being sold to a Japanese firm. Former Interior Secretary Manuel Lujan Jr. arranged to have the park concession sold to keep it in American hands.

Executives pored over California newspaper stories to learn about Yosemite, becoming familiar long-distance with the park’s myriad personalities.

Dennis J. Szefel, the vice president of a Delaware North subsidiary responsible for writing the Yosemite bid, studied Park Service literature, read speeches by park officials and strove to figure out what would please those selecting the new concessionaire.

He saw Delaware North as an underdog because of its lack of national park experience and took everything park officials said as gospel. The homework paid off.

Yosemite Supt. Michael V. Finley, who was among those selecting the company, said Delaware North’s bid section on environmental responsibility was better than every other bidder’s, even those written by other national park concessions and one backed by a major environmental group.

In bidding for the contract, Delaware North was the only company not to put a cap on how much it would spend to clean contamination from leaking underground storage tanks, a factor park officials cited in selecting the conglomerate.

Stephens admitted there is risk if the Park Service requires Delaware North to reduce its lodgings, as called for in an environmentalist-backed Park Service plan, before the estimated $16.5-million cleanup is completed.

But being a private company made risk-taking easier, and private Curry Co. records revealed that the concession had been, in Stephens’ words, “extremely profitable.”

Under the contract, park officials said, Delaware North would pay the Park Service 20.2% of its annual gross receipts, generating more than $100 million for Yosemite over 15 years, substantially more than was paid by the Curry Co.

The company will squeak by in the first years of the contract but will earn a reasonable profit over the 15 years, according to a park official.

The Park Service was aware of the 1972 conspiracy conviction and, according to one Park Service source, asked Jack Kemp, a member of the Bush Cabinet and former congressman from Buffalo, to check with the Justice Department to ensure that Delaware North had no current legal problems.

Kemp, who knows Jacobs personally and has received campaign contributions from him, reported that the corporation was clean, according to the source.

Federal law enforcement sources also told The Times they were unaware of any ongoing investigation of the company, which has long been haunted by the conviction.

Emprise, a former subsidiary run by Jeremy Jacobs’ father, was convicted of making fictitious loans in 1967 to reputed Mafia figures attempting to launder organized crime money through a Las Vegas casino-hotel. One of the organized crime figures owned a racetrack in Michigan where Emprise was the concessionaire.

The House Select Committee on Crime reported in 1973 it had no evidence that Emprise “has itself been a part of organized crime.” Rather, it said, Emprise “has done business with individuals designated . . . as organized crime figures” and “knew or should have known that they had been so designated.”

After the corporate conviction, liquor and racing commissions in nearly every state where the company had licenses rushed to investigate it. Four states pulled its liquor licenses temporarily, and some others refused to do business with it.

The loans were made when Louis Jacobs, Jeremy’s father, ran the company. The son of a Polish immigrant tailor, Jacobs had built it from a small operation almost single-handedly, working 15-hour days, seven days a week.

Louis Jacobs died at his desk at 10 o’clock one night in 1968, four years before the scandal broke. It fell to Jeremy to defend his father’s actions.

Jeremy Jacobs ordered a review of all the company’s suppliers, from meat companies to vending machine operators, to ensure that none had links to organized crime. Several did, and suppliers were changed.

In a 1986 interview with a Buffalo newsmagazine, Jacobs estimated that the conviction cost his company $50 million to $100 million in legal fees and lost business.

The reserved, private Jacobs, whose wealth is reported by Forbes magazine as $500 million, rarely talks to the news media, and in a brief interview, avoided discussion of the organized crime allegations during his father’s tenure.

Except for the conviction, the company has maintained a low public profile, even in Buffalo, a posture that Gifford says will have to be abandoned reluctantly now that Yosemite has been added to the portfolio.

To protect its image, the company has filed libel and slander suits against critics who still link it with organized crime, winning a nominal $1 judgment against an Arkansas newspaper in 1973 and a $100,000 settlement from a Massachusetts public official in 1986.

But when Delaware North bids for a public contract, the organized crime allegations resurface.

A competitor tipped Dade County to Delaware North’s past, said Daniels of the county parks department. Daniels said he wrote letters to attorneys general of every state where Delaware North operated, receiving assurances its licenses were not in jeopardy.

To ensure the Yosemite contract survives, Delaware North’s top executives have traveled to Washington to meet with an environmental park watchdog group and are visiting congressional offices in preparation for the hearings.

Although the corporation is not likely to roll over for every future Park Service demand when profits are at stake, executives at this stage appear to be bent on pleasing their new client.

“We will only succeed,” said Szefel, who headed the effort to win Yosemite’s concession, “to the extent we work hand and glove with the Park Service.”

Times staff writer Ronald J. Ostrow contributed to this report from Washington.