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Maid of Mist Fight Far From Over Appeal Reversal May See New York Get $100 million More for State Parks

By Mike Hudson

Despite Hornblower cruises offering $100 million more, Gov. Andrew Cuomo cuirously gave James V. Glynn a sweetheart deal. That is a one hun- dred million dollar handshake.

Officials with the San Francisco-based tour boat operator that sought open bidding on the Maid of the Mist boat concession awarded by New York state are girding for another round in their legal battle, setting the stage for a possible reversal of the judge who recently ruled in favor of the Maid of the Mist Corp.

Hornblower Cruises General Counsel Richard Jacobs said he has already directed legal staff to prepare for an appeal of the ruling by Supreme Court Judge Catherine Nugent Panepinto, that endorsed New York state’s sidestepping of open-bidding requirements, allowing Maid of the Mist to construct a $32 million storage and maintenance facility on the U.S. side of the Niagara River.

Previously, state officials justified Glynn’s no-bid contracts by saying he was a “sole source provider,” meaning since he had the contract on the Canadian side, where winter storage docks were located, he had to have the New York concession since no one else could provide the boat tours.

But that all changed last year when - following an investigation by this newspaper and the government of Ontario - the franchise was opened up for competitive bidding.

Hornblower Yachts, the largest operator of ferry boats in North America, won the Ontario license for the boat tour operation after the Ontario Parks Commission concluded that the procurement process was “significantly impacted by politics [and] external influences.”

Hornblower won the bid and agreed to a deal that will pay the Ontario government $500 million over the next 30 years to operate the famed boat tour, a whopping $300 million more than the terms contained in the secret lease Glynn cooked up with Niagara Parks Commissioners in Ontario.

After the Reporter obtained a leaked copy of the lease and published its terms, it made national news and resulted in Glynn losing his Ontario lease and nearly one dozen Niagara Parks Commissioners were fired.

Curiously, in New York, Glynn seems to be exercising the same kind of political influences that got him sweetheart deals for decades.

Despite the fact that he no longer has the Canadian docks, and that other companies by law must have the right to bid, Cuomo gave Glynn a sweetheart deal and the people of New York were shorted by at least $100 million.

Then a State judge agrees to the no-bid deal. In her ruling, Panepinto threw out the language of New York state law and the original contract, saying that it was her court’s position to "exercise a high degree of judicial deference to the involved state agencies."

In other words she wants to defer to the people who made the sweetheart deal for Glynn.

“We are going to appeal, and we are confident going forward,” Jacobs said, noting Panepinto’s record on the bench makes a reversal likely.

“Judge Panepinto is the most-reversed judge on the Niagara Falls bench,” Jacobs said. “We fully expect that this is going to add to her total.”

Hornblower, which runs boat concessions that visit both Alcatraz and the Statue of Liberty, is the largest privately-held passenger boat operator in North America.

Last year, Hornblower made a public offer, first reported in this newspaper, that the company was ready to pay $100 million more for the U.S. contract over the next 30 years than the $105 million the state is scheduled to get under the new sweetheart deal Cuomo made with Glynn last December.

“That’s $100 million that could have gone into the budget of New York State Parks,” Jacobs said. “On the Canadian side, when they finally opened the bidding up to competition, we were able to set the stage to eliminate a $5 million annual deficit in the Niagara Parks Commission’s budget.”

Jacobs said he and Hornblower leadership expect to win a reversal at the state court’s Appellate Division Fourth Department.

“The state law is clear. Any company that proceeds on an award granted without public bidding does so at their own risk,” Jacobs said. “Maid of the Mist’s construction of that repair and storage facility-a $32 million project-is at their own risk.”



Niagara Falls Reporter - Publisher Frank Parlato Jr. www.niagarafallsreporter.com

SEP 10, 2013