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Maid of Mist No Lock To Live Up to New Deal

By Johnny Destino

Hornblower’s Terry MacRae.
Maid of the Mist’s James V. Glynn.
Maid of the Mist boats may have to be hoisted out of the lower Niagara when Hornblower takes over on the Canadian side.
“Let it be set down as an established principle, then, that what is morally wrong can never be expedient – not even when one secures by means of it that which one thinks expedient; for the mere act of thinking a course expedient, when it is morally wrong, is demoralizing.” Marcus Tullius Cicero, De Officiis.

Before we know it, the beginning of the 2013 tourist season will be upon us and James Glynn’s Maid of the Mist will begin its final year of operating the Canadian boat tours.

Politicians across New York State worked hard last year to save the Maid of the Mist Company, leading many to (wrongly) believe that the future of the ride itself was in jeopardy on the American side, as a result of the Glynn family losing its Ontario license in open bidding to Hornblower Cruises of San Francisco.

U.S. Sens. Chuck Schumer and Kirsten Gillibrand weighed in on the matter just as it was beginning to look darkest for Glynn, asking Ontario’s Niagara Parks Commission to protect Maid of the Mist’s access to Canadian facilities for its American fleet should the license be awarded to another company.

“Maid of the Mist would no longer have the ability to ensure space for American boats to be docked and serviced on the Canadian side, putting the American-side tours in jeopardy,” said Schumer.

Gov. Cuomo wasn’t about to let that happen on his watch, and in December he announced a deal had been struck to save the historic Glynn family business. “We value Maid of the Mist. We wanted to keep Maid of the Mist here,” Cuomo said during his only trip to Niagara Falls since being elected governor in 2010. Cuomo saved the Maid of the Mist because, reportedly, he views it as a “special circumstance.”

Cuomo must have missed the lesson on expediency that another Italian lawyer, Cicero, gave to us so long ago, warning that very little good comes from it.

Many people could be forgiven for believing that if Cuomo didn’t work out a deal giving Glynn access to the former Schoellkopf Power Station site to construct winter storage facilities for his boats, Americans would be without boat tours at the end of this season.

Even our local and state politicians appear to have bought into it. “I couldn’t be more pleased we were able to work out an arrangement with this local company to keep their magnificent boat tour of the Falls operational,” State Sen. George D. Maziarz said.

Rarely do we get to see such quick action in such matters that will end up costing the state in lost revenue.

Cuomo’s decision to save the Glynn family may wind up costing the taxpayers of New York at least $100 million in lost revenues over the next 30 years, as representatives from Hornblower have repeatedly stated, in writing, that they are prepared to offer at least double what the Glynn family will be paying under their renegotiated contract.

The Reporter has finally received a copy of the Memorandum of Understanding (MOU) between Maid of the Mist, State Parks, and New York Power Authority (NYPA) outlining the scope of the project to construct the new winter storage facility. The costs of the $32 million project are included in a detailed estimate put together by LP Ciminelli dated Sept. 13, 2012.
Under a section labeled “Requirements for Expanded Premises Capital Improvement Project,” Maid of the Mist is being given until September 1, 2014 to complete the project.

This simple fact raises the question of whether or not Maid of the Mist will be able to provide the uninterrupted service that Gov. Cuomo and Niagara Falls Mayor Paul Dyster have cited as a chief motivation for saving the company and foregoing a competitive bidding process.

Mayor Dyster recently told Buffalo News reporter Charlie Specht that his main concern was the possibility of a service interruption if another company took over, thus causing “long-term damage to our side.” These fears seem to be misplaced and it now appears that New York’s decision to try and build new facilities before Hornblower takes possession of the Canadian site at the beginning of 2014 may lead to just such a disaster for the city.

According to their Dec. 19, 2012 letter to New York State Parks Commissioner Rose Harvey, which now seems prescient given the deadline granted to Maid of the Mist, Hornblower states that his firm (Hornblower) is now the only entity that “can guarantee there will be no interruption in tour boat service from the New York side of the Falls.”

It hasn’t been reported yet where Maid of the Mist will store its boats at the end of the 2013 season, but come Jan. 1, 2014, it will no longer be in control of the Canadian facility. It is highly unlikely that New York can complete the necessary and proper environmental review process and finish construction on the site before the end of 2013.

Under the terms of the MOU, Maid of the Mist must guarantee “uninterrupted service,” which is defined as not being out of service for more than 10 calendar days during their normal operating season. If they are unable to, then the state has the absolute right to terminate the license. That right is not exercised automatically, however, and the state and Glynn could agree to modify or revise the contract as necessary.

Hornblower is still asking New York State to put the U.S. license up for competitive bidding because it believes it is “in the best interest of New York and its citizens.”

The revised terms for Maid of the Mist detailed in the new MOU seem to bolster Hornblower's claim that taxpayers have the most to gain from open and fair competitive bidding.

New York has already been forced to concede that they weren’t getting market rate rents for the boat tour concession.
Prior to 2002, the Glynn’s operated on both sides of the gorge under separate no-bid contracts as the sole-source provider, paying New York State 10 percent of its gross receipts from American boat tours as its fee. Under its Canadian license agreement, Maid of the Mist was paying the Ontario government 15 percent.

In 2002, however, Maid of the Mist and New York State negotiated a new 40-year deal, despite having only nine years left on its Canadian license, cutting its fee from 10 percent to 4 percent as a result of their monopoly control over the only winter storage facility available. Now that Glynn is no longer in control of the Canadian attraction, he agreed to pay NYS 8 percent of Maid of the Mist boat tour revenues as part of the renegotiation, saving his company.

Hornblower still maintains that New York is leaving money on the table. Indeed a 100 percent increase is now being offered by Glynn to fend off the prospect of an open and fair bidding process.

Hornblower CEO, Terry MacRae, doesn't believe all is lost and isn't giving up on the firm's pursuit for a chance to bid on the American license. And he may be right.

The MOU is non-binding and if Maid of the Mist is unable to perform under their existing license, or if the proposed expansion site receives a positive declaration that building upon it will cause a significant environmental impact, then New York has very few options to insure the concession continues.

Entering into a license agreement with Hornblower, as the sole-source provider to insure uninterrupted service on the American side, would ultimately have the same revenue depressing effect that Glynn’s no-bid contract did.

Putting the license out to bid, allowing a fair and open competition to determine what the revenue to NYS will be for the next 30 years is the morally (and legally) right thing to do. It just wasn’t expedient.



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

Feb 05 , 2013