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Hornblower Lawsuit May Blow Up Glynn Sweetheart Deal

By Johnny Destino

Maid of the Mist lost their Canadian docks when Hornblower came in $300 million higher than what Glynn had secretly negotiated with Ontario’s Niagara Parks Commissioners. Now Hornblower is suing NY State for the right to pay $100 million more than Glynn in New York. Anywhere else this would be a no-brainer.

In what can only be viewed as a serious setback for the Maid of the Mist Corporation, Hornblower Yachts, LLC has taken their challenge to court, threatening the extremely tight timeline the Glynn family is operating under to construct a new winter storage facility before losing access to the Canadian site at the end of the year.

On March 4, lawyers for Hornblower filed papers in Niagara County Supreme Court commencing an Article 78 proceeding against NY State Parks, Maid of the Mist, and the NY Power Authority, challenging the parties decision to modify the existing 2002 New York license after Glynn lost the rights to the Canadian license instead of following the public bidding process set forth by law.

An Article 78 proceeding allows for challenging the determination of administrative agencies, public bodies or officers and this action has been assigned to Judge Catherine Nugent-Panepinto.

Hornblower states in their petition that “Compliance with the New York public bidding laws is mandatory, and those laws evidence New York’s ‘strong public policy of fostering honest competition’…to ‘guard against favoritism, improvidence, extravagance, fraud and corruption.’”

Hornblower is questioning why State Parks is now choosing to ignore the same public bidding laws that they have required in the past in awarding Maid of the Mist “a new and materially different license…without public bidding.”
In its 35-page petition, Hornblower dismantles the idea that State Parks and Maid of the Mist can unilaterally alter the terms of the New York state license without public bidding by highlighting State Parks own “sole source” provider argument it used to grant the 40-year no-bid contract to Maid of the Mist in the first place.

“In waiving a competitive bidding process for the 2002 New York License, NY State Parks took the position that the concessionaire who held the Canadian concession also should hold the New York concession on a ‘sole source’ basis, as MaidCo was the only offeror capable of providing the necessary docking service and storage facilities – from the Canadian side.”

After Maid of the Mist lost the Canadian license to Hornblower in February 2012 in a public bidding process that was declared by an independent monitor to be “fair, open, and transparent,” State Parks decided to “materially chang[e] the scope and terms of MaidCo’s 2002” license, according to Hornblower, “[i]n a misguided and inexplicable effort to enable MaidCo to continue generating profits for itself – without a public bidding process – to the financial detriment of the people of New York State.”
Hornblower lists “myriad” changes made to the 2002 license that were negotiated behind closed doors “outside public view and without public knowledge” that materially changed the contract and which should have triggered the public bidding requirement of the law.

Governor Cuomo stated the reason State Parks did not hold competitive public bidding was because the Maid of the Mist situation was a “special circumstance” and that all of the state officials “wanted to keep the Maid of the Mist here.”

Hornblower states that “These clandestine negotiations and public statements [made by Gov. Cuomo] are perplexing. MaidCo is a private, for-profit corporation that provides a service for compensation. There is no basis in law, equity, or fundamental fairness for [State Parks Commissioner] Harvey or any other New York State public official to favor one private company over others.”

Lawyers for Hornblower, including among them legendary local litigator John Bartolomei, are asking the court to declare the memorandum of understanding and any other agreement entered into by Maid of the Mist, State Parks or NYPA without competitive bidding to be illegal and void.

On top of the lawsuit against Maid of the Mist, a group of concerned citizens led by area environmentalist Lou Ricciuti, called the Niagara Preservation Coalition (NPC), has filed a motion to intervene in the state Power Authority (NYPA) attempt to get fast-track approval from the Federal Energy Regulatory Commission (FERC) on the Maid of the Mist project.

NPC has filed a protest seeking to force NYPA to submit a full application for approval of the project to FERC, rather than the faster “prior notice” process being pursued by Maid of the Mist.

In its motion, NPC states that “the facility that MaidCo proposes to construct will adversely affect the environment, historical structures, and recreational opportunities at the Project [site] and is inconsistent with the Project license.”



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

Mar05 , 2013