$57 Million Lawsuit filed against State of NY & Maid of the Mist

November 20, 2009

On Friday, November 20, 2009, William M. Windsor filed a lawsuit in Albany New York against the State of New York, the Office of Parks Recreation and Historic Preservation, the New York State Office of the State Comptroller, the Attorney General, the governor, present and former agency commissioners, Maid of the Mist Corporation (“Maid”), James V. Glynn, Christopher Glynn, Edward J. Rutkowski, and Christopher Pushkarsh.

Windsor noted: “This date was specifically chosen for the legal filing because November 20, 2009 is the date on which the 1989 Lease between Maid of the Mist Steamboat Company Limited and The Niagara Parks Commission expired.  As there is no long-term lease in place in Canada, the expiration of the lease removes the very basis upon which New York claimed it could call Maid a ‘sole source provider.’  So, I filed suit on the day that the New York License is, in my opinion, in default.”

This lawsuit is a combination of two types of legal proceedings.  It combines a Verified Complaint, which is a traditional type of lawsuit, with a Verified Petition pursuant to Article 78 of the New York Civil Practice Law and Rules.  An “Article 78 Proceeding” is a special proceeding that takes place quickly.  The Article 78 Hearing will be in the New York Supreme Court on January 8, 2010.

Article 78 is where one sues the State and state agencies for illegal acts.  The basic relief Windsor is seeking in the Article 78 Proceeding is to have the actions of the Office of Parks Recreation and Historic Preservation (“OPRHP”), the New York State Office of the State Comptroller (“NYSOSC”), and the Attorney General (“NYAG”) declared illegal and thus have the License issued to Maid by OPRHP declared void.  This will cause a tender for competitive bids.

The 2002 NY License for 40 years was arranged between Maid and OPRHP, signed by Edward J. Rutkowski for OPRHP, and then approved by both the New York State Comptroller and the Attorney General.

On September 10, 2002, James V. Glynn signed the contract and claimed that “Maid of the Mist Corporation is the sole commercial entity with rights of access to provide scenic boat excursions from landings on both the American and Canadian sides….”

Windsor says this is false.  Maid of the Mist Corporation, a U.S. corporation, has no rights whatsoever in Canada.  A different Canadian company has those rights in Canada — Maid of the Mist Steamboat Company, Limited.  While both legal entities have Glynn ownership, this is irrelevant with a legal agreement.  The U.S. entity has zero rights in Canada.  The Canadian legal entity cannot be sued for breach of contract by the State of New York, and vice-versa.

Windsor believes this was intentional.  His lawsuit says the way to avoid a tender and competitive bids for this half a billion dollar 40-year monopoly was by claiming to be a “sole source provider” – the only company in the world that could provide the service.

James V. Glynn and Edward J. Rutkowski signed this contract indicating that “Maid of the Mist Corporation” was the “sole commercial entity with rights of access….”  Windsor says Mr. Glynn obviously knew this was false, and Mr. Rutkowski certainly should have known this was false.

The original claim made by Angela Berti of New York State Parks was that the Canadian Maid of the Mist lease gave the Canadian lessee full control of the waters of the Niagara River.  That claim has been proven to be false.  The Canadian lease provides nothing but the rights to land on the Ontario side.  The waters of the Niagara River are jointly shared by the U.S. and Canada.  And now the Canadian lease does not belong to Glynn’s Canadian company.  No one knows who will win the bid, but many believe the odds are that Glynn’s company will not get it when faced with as many as a dozen aggressive bidders willing to pay much more.

Harold H. Hagemann, Jr., Director of Concessions Management Bureau for New York State Office of Parks, Recreation and Historic Preservation, sent a letter to Windsor in April once again making this false claim that Angela Berti had made.  Mr. Hagemann wrote “The Niagara Parks Commission contract with the Canadian operator of the Maid of the Mist boat ride gives the Canadian operator control of the basin in which the tour boats operate.”  This is false as is proven by the terms of the written contract that is now available for all to see.

Mr. Marc Brown, attorney for Maid of the Mist Corporation, came up with yet a completely different explanation for why Maid of the Mist Corporation was named “sole source provider” in New York.  He claimed that docking boats on the Canadian side is an unusual circumstance because he claims there is insufficient room to dock boats on the United States side of the river.  This is false.  Boats are docked in the U.S. during the season, and there are a number of ways that this can be handled during the winter.

Windsor’s lawsuit documents how the License between Maid and OPRHP violates several New York Laws.

The 2002 NY License was executed pursuant to the New York State Parks, Recreation and Historic Preservation Law as stated in the contract.  (2002 NY License, Page 1, first WHEREAS.)   This law requires competitive bidding,  Title B, Article 3, Section 3.09, Subdivisions 2-a and 2-d of PRHPL: “The bid prospectus submitted to prospective bidders shall contain specific information concerning the nature of the capital improvements or equipment to be provided by the successful bidder.”  But there was no Bid Prospectus issued, and there were no bids — just a secret deal between OPRHP and Glynn.

Second, “procurement” contracts require competitive bidding.  The State may try to claim that a License is not Procurement, BUT case law indicates that this License should be categorized at least in part as “procurement,” because OPRHP pays Maid 75 cents of every dollar for running their elevator.  In addition, OPRHP spent $20 million to improve the facilities available to Maid, so there is significant expense to NY State.  New York State Finance Law (“NYSFL”) Section 163 states: “…procurements shall be competitive, and state agencies shall conduct formal competitive procurements to the maximum extent practicable.”

Then State may try to claim the License is a “revenue contract.” This has been one of the excuses NPC has used.  BUT, the government authority on New York State contracts is the NYSOSC, and the NYSOSC has ruled that “…the Comptroller in fulfilling his statutory duty of assuring that the State contracts are awarded in the best interest of the State, requires competition for all revenue contracts susceptible to bidding over $10,000, pursuant to a fair and impartial process.  There must still be a reasonable and fair process which assures a level playing field for all bidders and the evaluation process must still comply with the RFP.”  (In the Matter of the Bid Protest filed with respect to the provision of FBO Service at Republic Airport, State Finance Law opinion SF-19990045, P 8, 2nd paragraph.)

The NYSOSC has also ruled this: “…the most prudent course of action when conducting any procurement that involves services being provided to the State, or any consideration flowing to the vendor from any source, in a reasonably estimated amount that exceeds the statutory threshold set forth in Article 11 ($10,000), is to comply with the requirements of Section 163 – even when the resulting agreement does not involve the direct or indirect expenditure of State money.” (Contracts not involving the expenditure of state money, SF-20020062, P 2, 2nd paragraph.)

The basic purposes of New York’s procurement statutes and competitive bidding statutes are prudent use of public money and “to guard against favoritism, improvidence, extravagance, fraud and corruption….”  (Matter of Signancon Controls, Inc v. Mulroy, as County Executive of the County of Orondaga, 32 NY2d 410 (1973).)

Any way you look at it, this License seems to be illegal.  If it is called “procurement,” it is illegal.  If it is called a “revenue contract,” it is illegal.  Competitive bidding was law in New York as early as 1850, just four years after New York State began licensing the Niagara Falls boat rides.  It has been law ever since, but the law has been violated at Niagara Falls.

If the State tries to claim Maid is a “sole source provider,” that argument fails.  When you then factor in that Glynn no longer has a Canadian contract, the argument totally disappears.

The legal issue seems clear in New York.  The License was issued illegally.  Windsor says: “I do not see how a judge can do anything but rule in my favor based upon the facts and the law.”

Windsor has also accused Mr. James V. Glynn of misrepresentation and fraud.

Why would a government official give Glynn a 4% commission payment on boat rides in New York when Glynn was paying 15% in Canada?  On the $389.9 million in revenue from boat rides over the 40 year term, New York State was to receive $15.8 million in commission payments from Glynn.  At the 15% rate that Glynn pays in Canada, $389.9 million generates $58,350,000 for the landlord.  New York State gets $42.5 million LESS than Ontario gets at the same level of revenues.  How exactly do you get a deal with the government that’s $42.5 million below market value?

The picture is actually even worse than this.  When you look carefully, the State is paying Glynn!  Glynn pockets 75 cents from every dollar generated by the State’s elevator.  When you look at the totals for the 40-year license, Glynn takes in $57.4 million on the elevator and only pays the State $39.1 million in total commissions for everything.  Glynn gets a $523 million contract for an exclusive monopoly, and the State of New York pays him.

And the picture is EVEN WORSE.  The State of New York spent $20 million to build elaborate elevators and other infrastructure for MOTM.  If you total all of this up, the State paid Glynn $57.4 million for elevator service and spent $20 million to improve Glynn’s facilities.  $77.4 million out and only $39.1 million in.

Windsor is seeking $57,834,674 in damages, representing the projected EBITDA (profit) to be generated by Maid from the 40-year License.  His position is that since he was illegally denied the ability to bid, he was illegally denied the ability to earn what Maid said they would earn.  He believes he actually would have earned much more by enhancing the business.  Windsor’s primary goal is to have the License declared illegal, and have the Supreme Court force the State to tender the opportunity for bids.

Windsor is an Atlanta, Georgia businessman.  He filed a similar lawsuit in Ontario, and the government recently announced that the lease for the boat service at Niagara Falls in Canada is being tendered for bids.  Windsor and his son’s company, Alcatraz Media, will be one of the bidders.  The Maid of the Mist scandal in Canada has been major national news there with hundreds of newspaper articles.  Windsor has many of these stories linked on his web site – www.NiagaraFallsBid.net.

Probes uncover ethical breaches at Niagara Parks Commission

Numerous failings include untendered 25-year lease for Maid of the Mist boat tours

By Anthony Reinhart
From Saturday’s Globe and Mail

November 20, 2009

The Ontario government must act “decisively” to restore public confidence and rectify problems at the
Niagara Parks Commission, according to a governance review that uncovered ethical breaches,
perceived conflicts of interest and other questionable practices at the provincial agency.
A second, parallel probe of the commission’s procurement and leasing activities revealed further
problems, including gaps in record-keeping, inconsistent tendering of contracts and opaque decisionmaking.
Detailed findings of the two investigations were obtained by The Globe and Mail through a Freedom of
Information request, after they were initially withheld by the Ministry of Tourism.
KPMG governance review of the Niagara Parks Commission
The ministry ordered the probes earlier this year amid growing complaints about the commission,
including its decision to grant an untendered new 25-year lease to the Maid of the Mist tour-boat
operation.
The documents refer to failings more numerous and serious than the government has previously
acknowledged and they are more pointed in tone than recent government statements about the
commission.
Auditing firm KPMG, which conducted the governance review, found that violations of the
commission’s code of conduct – including confidentiality breaches, leaking of documents and “potential
perceived conflicts” among commissioners, staff and suppliers – have led to a drop in public confidence
in the agency.
This has been exacerbated, the authors wrote, by “less than timely transparency and accountability”
from a group whose members sometimes discuss business privately with each other or with outside
parties, and who, unlike boards of public companies, do not hold an annual public meeting.
The commissioners, all of them political appointees, are seen by many as part of an aloof and
imperious “old boys club” who gather at the agency’s stately Oak Hall administrative offices, where
employees treat them “as if they are royalty,” the authors wrote. In turn, some commissioners meddle in
“employee-related matters” beyond their mandate as governors.
All but one of the 11 commissioners are men, there are no limits on their terms (one has served since
1971), and all are from the Niagara area, despite the commission’s provincial mandate.
Among dozens of recommendations, KPMG calls on the province to tighten the appointments process.
“Commissioner appointments are the responsibility of the minister” and should follow “a strictly
competency-based” screening process instead of a political or geographical one, the authors wrote.
“As a result of our analysis and extensive experience with board governance, the Province, Ministry
and NPC must act to change NPC – the status quo is not a satisfactory long-term option,” they wrote.
“Tinkering or maintaining the status quo is unlikely to lead to a satisfactory resolution. …”
The report from the second probe, conducted by the government’s internal audit division, is worded
more gently, but nonetheless points out serious problems.
When auditors pulled files related to procurement, leasing and revenue-generating contracts, key
paperwork was missing, leaving the commission officials “at risk that they will not be able to fully
support the rationale behind their business decisions.”
They found some records had gone missing when employees left the commission. Also, unsolicited
proposals from people wanting to do business with the commission went undocumented.
Despite the tens of millions of dollars involved in leases such as Maid of the Mist’s to use commission
property, “a specific policy for leasing/revenue generating opportunities does not exist at NPC,” the
auditors wrote.
When buying goods and services, the commission rarely invites proposals through advertising. Instead,
it seeks out suppliers and gives them tender information, which “may be limiting its opportunities to
improve services at better returns,” the report says. “NPC may also be perceived as not being open to
competitive bidding – which should be a regular part of their business as an agency of the Province.”
The audit’s two dozen recommendations are all aimed at the commission and make no suggestions for
improvements in government oversight of the agency.

Alcatraz Media and William M. Windsor Take Legal Action in Attempt to Obtain Billion Dollar Contract for Boat Rides under Niagara Falls

Atlanta-based Alcatraz Media and businessman William M. Windsor are jointly attempting to obtain the billion dollar contract for boat rides under Niagara Falls. The boat rides began in 1846, and there has never been an opportunity for anyone to bid to offer the service until Windsor took legal action against the Province of Ontario and the State of New York. This case is currently being handled by the Ontario Superior Court of Justice under case number DC 09-105JR.

The governments of Ontario and New York lease the park land on each side of the Niagara River to a third party so that boat rides can be offered. These rights in Ontario, Canada are granted by The Niagara Parks Commission, and these rights in New York are granted by the New York State Office of Parks, Recreation and Historic Preservation.

The boat rides at Niagara Falls are one of the biggest tourist attractions in North America. Hundreds of millions of people have taken rides on the “Maid of the Mist” since 1846 and 2,500,000 people currently ride the boat each year. When Alcatraz Media discovered in October that the rights to operate these services on government-owned land had been given to profit-making companies for 163 years without ever giving anyone the opportunity to bid, Alcatraz and Windsor cried foul.

Windsor and Alcatraz Media originally asked for the opportunity to bid in 2005, but attempts were quickly rejected. Ripley’s Entertainment asked for the opportunity to bid in 2008, and their efforts were similarly dismissed. One of the Niagara Parks Commissioners, Bob Gale, filed a complaint about the secret process with the Ontario government. When Alcatraz and Windsor learned of this, they began working full-time to build public support against secret practices such as this since governments are expected to be fair, open, and to allow competition for such lucrative opportunities.

Windsor says, “Our calculations showed that these contracts will generate over $1 billion in revenues at a very high margin of profit for the lucky operator given this exclusive monopoly at one of the wonders of the world. I asked ‘how in the world does one company get the rights to such a pot of gold from two governments in two states in two countries with no competition and no concerns about competitive bidding?’ This simply isn’t the way governments are supposed to operate.”

When turned away again in October, Windsor launched a campaign using his web site www.NiagaraFallsBid.com. He has campaigned for openness in government dealings and adherence to the law ever since.

The lawsuit in Canada asks the court to void the lease and mandate a public tender because the policies of government entity The Niagara Parks Commission require advertising and a public invitation for anyone to bid on all contracts over $100,000. Maid of the Mist Steamboat Company Limited was awarded a 25-year contract in April under very secret, controversial circumstances, which goes against the aforementioned policy.

Last week, the Ontario Integrity Commissioner, Lynn Morrison, issued a ruling that indicates the bid of Alcatraz Media and Windsor is to be considered.

The legal action in New York is based on a similar New York State Finance Law that requires advertising and a public invitation for anyone to bid on all contracts such as this. Maid of the Mist Corporation was given a 40-year contract in 2002. “No bids were taken and no public hearing was held because the Canadian agreement gives the company exclusive access to the river below the Falls, making it a ‘sole source’ provider,” said Angela Berti, a spokeswoman for Niagara Falls State Park in a statement to the Buffalo News in 2008.

When Windsor became aware of this statement in a newspaper article, he began investigating. He first contacted all government authorities in Canada and the United States to determine if there could be any validity to a claim that Canada controls the water beneath the Falls. The response was unanimous: The waters of the Niagara River are jointly used by both Canada and the United States by a long-established agreement. Windsor then obtained a copy of the lease between The Niagara Parks Commission and Maid of the Mist Steamboat Company Limited, the Canadian legal entity owned by James V. Glynn of Lewiston, New York. The Canadian lease contains no such provision.

Windsor feels his legal action should result in a cancellation of the 40-year contract that Maid of the Mist Corporation obtained in 2002, and that the contract should be tendered for bids. A decision in the New York action could come any day.

While Alcatraz Media is the largest business in North America, selling destination tours and activities including over 800 boat tours of various types, this is a David and Goliath story with relatively tiny Alcatraz Media and Windsor suing two governments in two countries.

Ryan Windsor, CEO of Alcatraz Media, said, “When we started this effort, everyone said there was absolutely no chance that we would succeed. Those people don’t know my Dad. When he grabs a hold of something, he doesn’t let go. His efforts have resulted in hundreds of newspaper stories about this. The union of the government employees in Ontario has publicly demanded that competitive bids be taken and that the group of people who approved this secret deal be removed. The three members of Parliament from the Niagara Falls, Ontario area have all made public statements supporting our attempts. Dad has rallied the troops in Niagara Falls with a never-ending barrage of emails, faxes, and letters. Dad has become kind of a folk hero in Niagara Falls. It has truly been a grassroots effort. Alcatraz Media is overjoyed that we have a real shot at winning this billion dollar business.”

Because of the secrecy of The Niagara Parks Commission, including a secrecy oath taken by the government employee Commissioners, one of the battles has been that absolutely no information on the dealings has been made publicly available. Windsor reports, “Our attempts to obtain the documents needed were ignored. Employees of The Niagara Parks Commission were afraid to speak out over fear of losing their jobs. Then I received an anonymous email with a copy of the Procurement Policy of The Niagara Parks Commission with a note about other alleged violations. I believe I am now up to five ‘Deep Throats’ who have anonymously sent me government records that have enabled us to expose what has happened. The Globe and Mail in Canada, comparable to The New 1b70 York Times, hired a forensic accountant to review the terms of the secret new deal, and he reported that the government would receive substantially less from this deal. I publicly announced that we will pay double what the current operator pays.” Ryan Windsor said, “We believe The Niagara Parks Commission will realize as much as $100 million more by accepting competitive bids. Since they lost $4.3 million last year, competitive bids on this contract should erase the losses.”

For more details on this story, visit www.NiagaraFallsBid.com.

Alcatraz Media is the world’s largest provider of tours and activities, welcoming over a million visitors per month. They provide reservations for more than 10,000 tours, attractions and activities in over 400 destinations and 60 countries. The business was formed in 1999 in San Francisco, California and is now headquartered in Atlanta, Georgia.

William M. Windsor is an entrepreneur who has started over 50 companies during his career.

For more information, please contact Bill Windsor by phone at 770-578-1094 or email.

Author Information

Bill Windsor
Alcatraz Media

Controversy is great, but that’s just my opinion

Posted By COREY LAROCQUE

 

It’s important that newspaper readers don’t confuse opinion columnists with Moses.

Writing a column isn’t exactly coming down from the mountain with stone tablets. It’s often the ramblings of someone who knows a little about a lot of things.

Last week’s column about the risks of the province’s plan to hold a competitive bid to run Niagara River boat tours touched a nerve with a lot of readers. Reaction ranged from “common sense” to “rubbish,” with an equal number on each side.

Some critics went straight to the boss, Review publisher Dave Martineau, to plead their case – “How dare he write that! Dave, you’ve got to rein him in.”

They grossly underestimated how much Martineau likes to stir things up.

As a veteran newspaperman, he understands the value of a little bit of controversy.

Last year, he suggested I write a column on reasons not to visit St. Catharines. It was a parody of a news story about Australia putting Canada on a list of countries where Aussies should exercise caution.

It irked St. Catharines Mayor Brian McMullan enough to lash out during a council meeting.

Martineau treated me to dinner at the posh St. Catharines Club, in the heart of enemy territory, as a reward.

Some suggested the boat-tour column took a “pro-Glynn” (the family that owns the Maid of the Mist company) or “pro-Niagara Parks Commission” stance, an idea that is simply laughable.

For those who divide the world, like Karl Marx, “into two great classes directly facing each other,” it’s an easy, closed-minded conclusion. A closer read shows it was critical of Premier Dalton McGuinty’s government for ordering a bidding process that could lead to a new company replacing the storied Maid of the Mist.

If the government screws it up, it could put Niagara’s tourism industry in jeopardy.

(A letter to the editor suggested it was so supportive of the Maid of the Mist I must have taken a job in their public relations department. Fear not -like Mark Twain, rumours of my demise are greatly exaggerated.)

Readers don’t have to agree with a newspaper columnist. In fact, it’s better when they don’t. An opinion column is supposed to stimulate debate about public issues.

The city’s chief librarian, Monika Seymour, said she agrees with about 75 per cent of what she reads in this space. That’s a pretty good batting average.

How boring would life be if everyone always agreed? Thank goodness, there’s room for dissent.

My column began about five years ago when The Review changed both its appearance and its content. Overall, reader response has been fantastic.

In 2004, a local opinion columnist was something The Review was missing.

Lou Clancy, then a vice-president of Osprey Media, the company that owned the paper at the time, suggested we add one.

A highly regarded veteran of Toronto’s newspaper wars, he advised writing it would be like wearing two different hats. One day, it would be a reporter’s hat. The next, a columnist’s.

It’s kind of like a lawyer who gets a client out on bail, writes a will and closes a real estate deal in the afternoon. It’s all legal work. Just different aspects of the profession.

Same thing with news writing and column writing.

When Martineau became publisher, he increased the frequency to twice a week and gave the green light to be controversial. To press readers’ buttons. To occasionally piss them off.

There are different types of columns. Opinion writing is a well-established part of Canadian journalism. Tony Ricciuto writes a column, too, where he tries to fix problems readers have. Advocacy journalism is another tradition in newspapers.

The Review has a stable of columnists. Some are staff writers. Others are freelancers like historian Sherman Zavtiz, or Rev. John James, who writes a religion column, Nancy Reynolds a retired reporter who writes her own observations about people in the community, or financial adviser John Beyer who writes about financial issues.

Our editors differentiate columns from news stories by using the writer’s picture. It symbolizes the fact the writers are bringing something personal to what you’re about to read, like when Zavitz draws on his own knowledge of the city’s past or Beyer applies his professional experience to a subject.

Because a column is a more personal type of writing, there are going to be people who disagree with it. But as long as it’s an opinion a reasonable person could reach based on the facts available, everything’s good. Disagreement comes with the territory. After all, it’s just one guy’s point of view.

Beware of cash cows and misty waterfalls

Posted By GARY HOWARD

The Daily Observer

 

A story on these pages by Sun Media columnist Christina Blizzard regarding the plight of the Maid of the Mist operation in Niagara Falls caught my eye recently.

In her column, Blizzard delved into questionable practices on the part of the Niagara Parks Commission (NPC) in extending the lease of the Maid of the Mist without exploring interest from other competitors in a bidding process. After several reviews, the upshot was that there were no improprieties on the part of NPC although it was concluded that a more transparent

approach could have been used before granting a 25-year extension, which is still to be approved by the provincial cabinet.

It was also pointed out that the NPC is losing money and should have looked for the best deal possible. Many of us who have been to Niagara Falls will greet this revelation with some surprise, since it was always assumed that attractions in and around the falls were natural money makers. In fact, there are many cash cows in ‘The Falls.’

On a recent trip, we found everything in the city to be quite pricey. And while we’ve been there, done that in the past, on this visit we were scrambling to buy an affordable t-shirt.

Niagara Falls is one of those cities we all keep going back to and it’s become apparent that each return visit doesn’t get any cheaper. But it’s a recyclable vacation spot insofar as you may have spent your honeymoon there, returned a decade later with the kids and several decades later with some of the grandkids. Seems no one ever gets tired of visiting the falls or trudging through Marineland.

But it also seems you’re constantly digging into your purse (my wife’s) or your wallet (mine) as you make your way through the city. And while it has a world class attraction, it is far from being a world class city. But everything comes with a hefty price tag today, especially if you’re a tourist.

If you think there is an overemphasis on paid parking in our city, you should spend a few days in the Niagara area to get a reality check on the joys of feeding money to ever-present parking meters.

One-legged bandits sprout up like bad weeds wherever you go and there are very few places where you can park for free. Certainly not close to the falls, where parking in a lot will cost you $18 or a little less elsewhere at a considerable distance from the cascading water.

Parking at the major hotels close to The Falls will run you $20 per day and if you want to breakfast in a hotel dining room overlooking the falls, expect to pay at least $38 and that doesn’t include steak with your eggs.

The Falls has held an attraction for many visitors for a lifetime. Even Hollywood got into the act in the 1950s with a potboiler titled Niagara with Marilyn Monroe. Then there are those foolhardy souls who they keep fishing out of the Niagara River after some stunt or another has gone awry. The brave and foolhardy have even tried going over the falls in a barrel, many unsuccessful.

But at one time or another we’ve all been put over a barrel with hefty prices and now with two casinos in town, it’s a whole new adventure. Even if you outfox those one-legged bandits on the street you’re not likely to enjoy much success with the one-armed bandits in the casinos. The city is now a gambling hotbed catering to those who prefer the click of the slots to the roar of the falls.

While it’s not difficult to get around in city traffic, if you prefer leaving your car at the hotel, $9 will get you passage on a shuttle to the key locations for the duration of your stay. I should point out that an adventure pass for multiple attractions will save you a few dollars.

It doesn’t get any cheaper if you head for Niagara-on-the- Lake. Remember that old Goldie Hawn movie, Butterflies Are Free? Not so at the Butterfly Conservatory, where paid admission is required to view thousands of tropical butterflies in a rain forest setting. Even a relaxing tour of the wineries will cost you a few bucks but if you want to come home with some ice wine, remember to bring your credit card as a bottle or two will run you into the hundreds of dollars.

Parking meters surround Niagara- on-the-Lake like the walls encompass Fort George, and it’s an adventure in itself to find a place to park for free and go to one of the theatres at the Shaw Festival.

Meanwhile back in the city, money is flowing like the majestic falls. One Conservative MPP noted that if the Niagara Parks Commission is losing money, it was all the more reason to engage in a competitive bidding process to get the best possible deal for the service now offered by Maid of the Mist. Sounds like good advice to me, especially coming from a politician.

We also used some financial discretion as we skipped the magic show in the downtown core on this visit. We concluded that our money was disappearing fast enough into the magical mist of the thundering falls.

 

Casino lease extension makes sense: Premier

…….That would be consistent with Liberal Tourism Minister Monique Smith’s decision last week to force the Niagara Parks Commission to run a bidding process to find a company to provide boat tours on the Niagara River, Hudak said.

A competitive bidding process could lead to some other company replacing the Maid of the Mist as the provider of boat tours on the Niagara River. Officials with the Maid company say they’ll take whatever actions are necessary to prevent the government from giving that lease to someone else.

After a “great chat” about the Maid of the Mist lease at a cabinet meeting, McGuinty’s government decided the parks commission should invite companies to bid on the right to lease the property historically used by the Maid of the Mist Steamboat Co., as its base to run its Canadian operations.

“We came ultimately to the conclusion this is not a monopoly. It’s time for us to open up the process … for the very first time,” McGuinty said.

McGuinty has been pushing new rules requiring more government business to be done through competitive bids after his government was embarrassed in June by the revelation millions of dollars in contracts had been issued at eHealth Ontario, an agency that digitizes health records, without going to tender.

The government would ensure whoever wins the Maid of the Mist lease continues to provide a popular attraction.

“Whoever wins this can maintain the broad appeal that this operation holds for tourism in southern Ontario. It’s a very important feature for this part of the province,” McGuinty said……..

 

Statement by the Maid of the Mist Steamboat Company

AGARA FALLS, ON, Oct. 28 /PRNewswire/ – The Maid of the Mist Steamboat Company today issued the following statement:

“The Maid of the Mist Steamboat Company is very disappointed that the Ontario government has placed its longstanding and mutually beneficial working relationship with the Niagara Parks Commission in jeopardy.

“The decision of the Ontario Cabinet to open up the agreement comes despite a unanimous recommendation of the Niagara Parks Commission and follows positive reviews of the agreement undertaken by the province’s Integrity Commissioner, the government’s forensic auditors and outside consultants.

“In addition to its Canadian operation, the Maid of the Mist is contracted with New York State Parks through 2042 to provide services on the American side of the border.

“The Maid of the Mist will take whatever actions are necessary to enable it to continue its operation of the iconic Maid of the Mist boat tours for the enjoyment of visitors from around the world. All options will be under consideration.

“For the immediate future, the Maid of the Mist will continue working with the Niagara Parks Commission under the existing lease according to its terms.”

SOURCE Maid of the Mist

Reopening boat lease fraught with danger

Premier Dalton McGuinty sailed into uncharted waters, forcing the Niagara Parks Commission to put its lease with the Maid of the Mist out to tender. If he doesn’t navigate carefully, he risks steering the Niagara Falls tourism industry right onto the rocks.

Jaws dropped in Niagara Falls last Wednesday when Ontario Tourism Minister Monique Smith announced she was “requesting” the Niagara Parks Commission hold a competitive bidding process to find a company to run boat tours in the Niagara gorge. Right now, the Maid of the Mist Steamboat Co., a private company, pays rent to the parks commission for the use of government land to run the Canadian part of its business.

Some expected the government to rubber-stamp the recommendation from its own commissioners to renew its lease with the Maid of the Mist.

Open government is a noble goal. But when managing a public trust, it can’t always be about the lowest bid. Why not issue tenders for everything – hospitals, schools, museums, the military, and the U. S. space program?

On routine business, issuing tenders is a fair way for governments to do business. As long as all the companies are equally qualified to provide the service, it makes sense to take the low bid.

But running boat tours in the Niagara River is not like buying a new fleet of pickup trucks.

In a lot of ways, the Maid of the Mist is the “goose that lays the golden eggs” for Niagara’s tourism industry.

Operators await that day each spring when the boats go in the water.

Symbolically, it’s the launch of the tourism season.

The McGuinty government seems ready to sacrifice that golden goose at the altar of open government.

It’s all about politics.

Ontario’s Liberals are still reeling from the scandal at eHealth Ontario. It’s the agency created to digitize Ontarians health records, an idea the premier championed as a way of making health files easier to move around. The agency spent close to $1 billion, but there was nothing to show for it.

When eHealth’s cover was blown, an embarrassed McGuinty announced new rules that make just about all government contracts be subject to an open bidding process.

This is a knee-jerk reaction by a government now eager to appear squeaky-clean on openness.

This is about money. The reason to put it out to tender is to see if another company might pay the Niagara Parks Commission more money than Maid of the Mist pays now.

This is a gamble. By putting this lease out to tender, Liberals are gambling with the future of Niagara’s tourism industry. Some other company could do a better job than the Maid of the Mist. Likewise, it’s equally possible some new company would do a whole lot worse.

When the province held a competitive bid to find a company to build and operate the Fallsview Casino, bidding was never wide open to anyone with a card table and stack of poker chips. Companies wanting to get in on the casino action in 1997 had to prove they had what it takes to run a credible business. In the end, only four were deemed qualified to submit a bit.

Same thing when the city and Niagara Parks Commission were looking for companies to build a people mover system. They spelled out what they were looking for in a mass transit system and asked companies to express their interest. They considered the would-be bidders’ experience, financial backing, reputation, and deemed three to be solid enough to bid. The bidding process has to consider a new company’s financial resources, experience, safety record, marketability, suitability to work with the rest of the tourism industry and its ability to provide a service that’s going to encourage people to come to Niagara Falls and stay.

Just because the government has ordered an open-bidding process doesn’t mean anybody with a houseboat and a captain’s hat should be allowed to bid.

McGuinty has set a new course for Niagara Falls at a time when his Liberals haven’t given a lot of reasons to have confidence in the folks at the helm. This government has been plagued with a record $24-billion deficit, bungling at eHealth, watching Ontario Lottery and Gaming run amok with expenses and introducing a new harmonized sales tax.

Ontario’s Liberals have every right to chart whatever course they want for Niagara River boat tours. But the waters are fraught with danger. They had better know what they’re doing. Opening up the lease, only to get a bad boat tour operator could ultimately sink the region’s tourism industry.

MAID OF THE MIST LEASE ORDERED REOPENED: Ontario calls for end of monopoly on dubious Glynn lease

ANALYSIS By Frank Parlato Jr.

November 3 2009

After a year and a half of the Niagara Falls Reporter pounding out stories, Ontario’s tourism minister Monique Smith last week ordered the Niagara Parks Commission (NPC) to put the Canadian concession lease for the Maid of the Mist — presently held by Lewiston businessman James Glynn — out to bid.

This means for the first time Glynn will be facing competition for the right to offer boat tours in the lower Niagara River just under the falls. He has held a monopoly to provide boat tours on both the American and Canadian sides of the lower Niagara pool — one of the premier water attractions in the world — for 38 years.

Despite the fact that his boat docks are located on public land belonging to the people of Ontario and New York state, Glynn has never had to bid on the concessions and has personally raked in hundreds of millions of dollars under the sweetheart deals.

While opening the process to competitive bidding will generate millions more for the Canadian public, the potential loss of the Canadian lease will be costly for the wealthy Glynn, whose Maid of the Mist boats attracted 2.2 million riders last year. Glynn grossed about $23 million. Confidential documents submitted to the NPC show Glynn netted more than $5 million on the Canadian side alone. He paid the NPC about $3.1 million in rent.

News of the opportunity to bid has attracted a cadre of potential bidders.

Ripley Entertainment, Alcatraz Media, CamPark Resorts, Xanterra Resorts and Entertainment Cruises have all expressed interest.

Hornblower Cruises, Circle Line, Circle Line 42, New York Waterway, New York Water Taxi, and Red and White are also expected to bid, while Disney and the Seneca Gaming Corp. have been mentioned as possible bidders.

The rent, tour boat experts say, is likely to double to $6 million annually or more when the competition for this lucrative attraction is awarded to the highest bidder.

Much of this news came as a shock to local people who consider Glynn’s Maid of the Mist a kind of institution with perpetual rights to control the public waterway below the falls.

Glynn has done much to foster this thinking locally. Since 1971, he has operated in secret, and the public never knew, either in Canada or New York, what it was getting for rent on its own land, the public docks that gave the only access to waters directly below Niagara Falls. Glynn held the monopoly, but the terms were shrouded in mystery. During the last year, the Reporter made both leases public, publishing them in full online.

Once exposed to sunshine and evaluated, they revealed that Glynn’s lease on the Canadian side was quite low, and it was even worse on the New York side.

Other factors triggered the competition as well.

A scandal that erupted in Ontario over revelations concerning an agency called eHealth, which awarded a billion dollars’ worth of no-bid contracts just as two private concerns were complaining about their inability to bid on the Maid of the Mist lease, made the timing right.

And there was whistle-blowing NPC commissioner Bob Gale, who risked his reputation by going public with charges that the Glynn contract was a “dirty deal.” He said it so often and so loudly that it threatened to become another scandal for the Liberal government.

Glynn’s Maid of the Mist Corp. is, of course, unhappy. Spokesman Tim Ruddy vowed the company would take “whatever actions are necessary” to protect its position as the provider of boat tours.

“All options will be under consideration,” he said in a tone implying litigation.

And NPC Chairman Jim Williams and General Manager John Kernahan, who fought diligently to preserve Glynn’s lease even when it was clear others would pay far more, are expected to make the bid terms as difficult as possible for anyone but Glynn.

While Smith has ordered that “all interested parties get the opportunity to submit proposals in a fair and open competition,” many feel Williams and Kernahan will not be fair in creating terms for the bidding, and instead will issue specifications that favor Glynn. The bidding is on a fast timeline and is supposed to be completed by this spring.

The Ontario government, Smith said, might appoint a “fairness commissioner” to work with the NPC to alleviate concerns of Glynn-bias.

It might be necessary since, wherever Glynn goes, secret things generally happen with various government officials, things that somehow benefit him rather than the public.

DYSTER AND GLYNN

In Niagara Falls, N.Y., for instance, Glynn secretly pledged to donate a substantial amount money to a fund set up to enhance the political plans of Mayor Paul Dyster by paying a portion of the salaries of key people in Dyster’s administration.

The deal imploded when the Reporter revealed that Glynn was behind the questionable plan of having private citizens anonymously donate to pay a portion of government appointees’ salaries. But it did not stop Dyster from hiring two key aides in his administration while Glynn and others secretly paid part of their first year’s salaries.

Meanwhile, Glynn quietly contracted to purchase the Comfort Inn Hotel and adjacent retail stores along the West Pedestrian Mall. Before the public learned of it, Dyster asked the City Council to cancel and permit the state to buy out the existing West Mall sidewalk-vending lease. The buyout eliminated Glynn’s main retail competitor.

Then USA Niagara — a state agency created to help develop Niagara Falls — authorized the spending of $7.9 million in renovations to the former commercial strip, replacing the old walkway with new cobblestone and other amenities in front of Glynn’s hotel and stores. Both Glynn and Dyster sit on the USA Niagara advisory board.

It is unclear, with the potential loss of the Maid of the Mist lease in Canada looming, whether Glynn will still be interested in trying to seize more of downtown. Without control of the boat attraction, will he really want to run a shabby hotel and mediocre strip mall in the decaying heart of a city that is also home to the glamorous hotel and glittering stores of the tax-free Seneca Nation?

And with the shocking effect of sunlight on his formerly secretive doings, can state park officials still get away with their proposal to cut down trees and move the entrance of the Niagara Falls State Park right to the front of Glynn’s new hotel?

In light of the revelations in Canada showing Canadian officials favoring Glynn over the public interest, the plan to move the park entrance will face even more scrutiny. Are New York park officials scheming to deprive the public for the welfare of one man, or does it simply look that way?

Moving the park entrance promises to be a real controversy if it goes forward. But then again, park officials have long been willing to do almost anything for Glynn.

Indeed it was for Glynn that they actually ended the Olmsted vision in Niagara Falls State Park. Frederick Law Olmsted designed the park as an all-green reservation in 1886.

In 1987, Glynn persuaded park officials to fell trees to make a giant parking lot near the Maid of the Mist entrance. The city lost millions in parking and local tourist business.

But Glynn got a parking built lot near his attraction. And from that point on, the Niagara Falls State Park became not Olmsted but big business, centered around Glynn’s boat tour, a Glynn-owned souvenir store, corporate restaurants with paid parking, and a water attraction. The park saw itself in competition with the city — a change ruinous to tourism in Niagara Falls.

HOW HE LOST THE LEASE

So how did it happen that the secretive Glynn finally got to be treated like any other individual who deals with public assets? It began in January 2008, when Tim Parker, general manager of Ripley Entertainment, repeatedly expressed an interest to NPC Chairman Jim Williams in bidding on the Canadian boat lease. Williams, claiming confidentiality, refused to tell Parker anything. So Parker filed a freedom of information request.

John Kernahan, general manager for the NPC, suddenly started drafting a new lease for Glynn, more than a year and a half before it was due. Williams and Kernahan then hurriedly scheduled a “due diligence” meeting, canceling it almost immediately and scheduling a vote to renew Glynn’s lease instead. Williams and Kernahan declined to tell other commissioners about Ripley’s interest.

One commissioner, Bob Gale, sensed something was wrong. The day before the board was to vote, he sent e-mails to other board members telling them, “We’re rushing the Glynn renewal way ahead of schedule. Why?”

Later that morning, Ripley’s Tim Parker called Gale and asked if he was aware of his interest in bidding on the lease.

“Bingo,” said Gale. “Now I knew why they were rushing the Glynn lease.”

Gale asked the board to wait for the next meeting to allow Ripley’s a chance to compete, and Williams became enraged. Kernahan said a delay might cost the NPC a lawsuit or a disruption of boat service. The commissioners — without knowing the full terms or seeing the actual lease — voted to renew Glynn’s lease on April 18, 2008, for 25 years, and left it to Kernahan and Williams to work out the details.

Gale filed a disclosure of wrongdoing with the Integrity Commission of Ontario and told the press it was a “dirty deal.” It was soon discovered that Alcatraz Media had attempted in 2005 to be considered for a chance to bid on the Maid of the Mist lease, a fact not disclosed to other members of the NPC.

The NPC vote to renew Glynn’s lease, however, did not constitute legal renewal. The Ontario Cabinet had to sign off. And Parliament held back while the investigation of the Integrity Commission was conducted.

THE SCANDAL GROWS

Meanwhile, the Reporter exposed the details of the hidden machinations of the NPC for the first time and began covering the burgeoning scandal. Soon after, Bill Windsor of Alcatraz Media sued the Canadian government. And things began to heat up.

A growing number of Canadians now began to call for the lease to be sent back for bidding, including the powerful citizen’s group Preserve Our Parks, whose members regularly distributed the Reporter in Ontario.

A few members of Parliament, including Kim Craitor of Niagara Falls, said the lease should go to bid. The Niagara Falls city council passed a resolution supporting the same.

After all, why wouldn’t you try to get the most you can. The NPC was losing money.

Since 2004, when Williams took over as chairman, the NPC plunged from a $3.7 million profit to a $4.3 million loss last year. The NPC laid off a third of its workforce and cut back the hours of those workers who remained, devastating local families.

The scandal grew. The president of the Parks Union (OPSEU Local 217), Bill Rudd, took a bold and controversial step. He officially called for a tender. And the Niagara Parks employees marched en masse to the falls to protest the NPC.

Then, in a striking event, after posting the Reporter’s articles on the home page of union Web sites, the mammoth Ontario Public Service Employees Union called upon the minister of tourism to dissolve the NPC. Union president Warren “Smokey” Thomas said the parks are “deteriorating while the commission (decides) to renew the lease of the Maid of the Mist without going to tender.”

In time, other newspapers began to cover the story. News of the Glynn controversy ignited throughout Canada as the Globe and Mail — after the Reporter’s series — began a series of its own. The Hamilton Spectator, the Niagara Falls Review, Niagara This Week, the St. Catharines Standard, the Toronto Star and other Canadian publications came out with stories. As did The New York Times.

THE RENT WAS SECRETLY REDUCED

Then the bombshell exploded. The Reporter discovered that not only did the NPC refuse to allow other bidders, but they actually dropped Glynn’s rent. It went from a flat 15 percent to a “sliding scale” that reduces the percentage as Glynn makes more money. It drops as low as 5.5 percent.

Williams and Kernahan at first tried to say Glynn’s rent was increased. But the Reporter got hold of the secret term sheet of the new lease, and gave it to other media. Damian Alksnis, a forensic accountant for the Globe, concluded the NPC is “worse off … under the new lease agreement — exponentially worse off.” In the first year alone, $626,700 worse off.

Why would you drop his rent?

The Integrity Commission issued its report, recommending a review of the Maid of the Mist lease renewal. Smith told the NPC to “go back and look at the process.”

Williams said, “Nothing has changed from what the board (previously) considered,” but he and his commission went through the motions and met again this last September, voting again to renew the Glynn lease with the rent reduction.

Now it was up to the minister of tourism. Williams and some of the liberals in her party were pushing her to sweep this under the carpet. Glynn had hired high-priced lobbyist Bob Lopinski — who was a liberal darling and worked for Premier McGuinty.

Smith was under intense political pressure. And for a while she gave no signal of what she would do. Public opinion was against the NPC.

LIES OF JIM WILLIAMS

Kernahan and Williams seemed desperate to help Glynn. They began their own public relations campaign. They insisted that a change might cause the NPC to lose the brand name “Maid of the Mist.”

The Reporter took on the task of repudiating each and every lie.

The Glynn corporation — which calls itself “Maid of the Mist Steamboat Co. Ltd.” — has been in existence since 1971. But according to the lease, (6.03): “Tenant (Glynn) acknowledges that it does not claim any interest in or rights in the words ‘Maid of the Mist’ … and NPC is free to use ‘Maid of the Mist.’”

Next, Williams claimed no one could do what Glynn does. He compared giving people a boat tour to a trip to the moon.

“There’s no other model,” he told The New York Times. “You’re asking for someone to say, ‘We want you to build the space station.’ Well, there’s only one of a kind.”

Glynn’s spokesperson, Tim Ruddy, went further, telling the Niagara Falls Review that if Glynn was replaced, new boats would have to be built at the river’s edge and would take five years to build. Tourists would be without rides below the falls. Five years to build a 70-foot steel boat? Odd, the 882-foot Titanic was built in three years.

But Ruddy was lying about boats having to be constructed on the riverbanks. In fact, Glynn lowered most of his boats by crane.

Williams then tried to make Glynn an institution.

“This is a unique lease, given that the business relationship between the parties has existed for over 100 years,” he said.

Sure, boat rides existed below the falls for more than 100 years. But operators changed many times. Glynn has only been around since 1971. He has no family ties to anyone involved with the Maid of the Mist from its inception in 1818 until 1971. He certainly didn’t conceive of having boat rides under the falls. Christian Schultz did that in 1807.

There is nothing “unique” about offering a 15-minute ferry ride. What is unique is the setting — the amazing Niagara Falls. But there have been many operators of boat rides under the falls. And there will be many more. At one time, 40 different companies ran rowboat ferries.

Williams told The New York Times that a “clause” in Glynn’s lease meant the NPC would run the risk of a lawsuit if it selected another operator. When asked to reveal the clause, Williams declined, saying it was “secret.”

But there is nothing in the lease that requires renewal. In fact, it says Glynn may not sue the park for any investment made into structures or improvements.

A NEW AND BETTER TOUR

Finally, after the hullabaloo, Smith ordered the NPC last week to put the lease out to bid. Putting it to bid will not only increase revenues but also improve the service.

The tour could be so much better. Competitive bidding may bring more than mere revenue enhancement, but promote imaginative ideas for tourism.

Glynn’s tour is primitive, to say the least. Glynn provides only one type of tour — 15 minutes packed like sardines while standing on the deck of an old steel boat making a brief run along the American Falls and slightly into the mist of the Horseshoe Falls.

The current Maid of the Mist boats do not have seats or bathrooms. The company provides a blue garbage bag for raincoats. In summer, the mist can be refreshing, but in early and late season, tourists get drenched and cold.

Both Ripley and Alcatraz spoke of covered boats, downriver tours to the Whirlpool Rapids, wedding and dinner cruises, and night tours when the falls illumination can be seen.

Part of the bid terms should include the possibility of extending the season. There should also be a plan to eliminate long waiting lines. Glynn takes no reservations. In the height of the season, tourists wait hours for the 15-minute ride.

Meanwhile, estimates from tourism industry experts indicate the park will likely get at least $3 million and as much as $6 million more in rent than what Glynn is paying.

The NPC posted an operating loss of about $4 million last year, which means it could solve its financial problems just by putting the lease out to bid.

NEW YORK LEASE ALSO ILLEGAL?

Even though state parks in New York face severe shortfalls, Glynn managed to get park officials here to secretly reduce his rent from 10 percent to 4 percent in 2002 without letting anyone else bid.

Delving into the lease, we find Glynn doesn’t even pay 4 percent. He pays no rent. In fact, the state pays him.

That’s because he gets to keep 75 percent of the revenue generated through admission fees to the park’s Observation Tower. Glynn got a check last year from the state for $586,300 in addition to the millions in profit his rent-free boat tours make. The unprecedented 40-year, no-bid lease awarded to Glynn was the longest ever in the history of the parks system.

Angela Berti, spokeswoman for the state park, said “no bids were taken because the Canadian agreement gives (Glynn) exclusive access to the river below the falls, making (him) a ’sole source’ provider.”

Berti said Glynn is the only one who could provide the boat tour, because he has a lease on the Canadian side that “allows (N.Y.) Maid of the Mist Corporation to dock its boats on the Canadian side.”

But now he is likely to lose the Canadian lease.

Berti claims Section 163 of the New York State Finance Law as the legal reason for giving the lease only to Glynn.

But Section 163 reads: “The term of a single source procurement contract shall be limited to the minimum period of time necessary to ameliorate the circumstances which created the material and substantial reasons for the single source award.”

Glynn’s Canadian lease expires in November 2009.

What was the basis then for a 40-year contract, granted in 2002, when Glynn’s Canadian lease expires in 2009? Why would the state parks allow his lease to run 33 years beyond the expiration of the Canadian lease if sole source procurement is “limited to the minimum period of time necessary”?

If you need the Canadian lease to operate the New York lease, then Glynn’s New York lease should have only gone to November 2009. Using Berti’s own argument, Glynn’s lease in New York should become null and void this month.