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May 27 - JUNE 03, 2014

Politicos Here Love Maid of the Mist Deal That Cost Taxpayers Millions in Revenue

By Mike Hudson

May 27, 2014

The Maid of the Mist boats are based on designs dating back to 1972 when Chuck Berry's toe tapping "My Ding-a-Ling" was topping the Bill- board charts.

How did the taxpayers of the State of New York, and the people of Niagara Falls in particular, get socked into a 30-year deal for the Maid of the Mist that will cost them $100 million in lost revenue?

Gov. Andrew Cuomo rejected 40-years' worth of state policy that dictated that, whatever company had the Canadian license to operate the tour boat business in the Niagara Falls Basin must, necessarily, also hold the American contract.

This "sole source" status dates back at least to 1972, when Jimmy Glynn secured control of the Maid of the Mist operation.

But as soon as the longstanding policy came to endanger the Glynn operation, Cuomo abandoned the sole source policy.

That moment came when, following an investigation by the Canadian Integrity Commission, spurred on by a series of articles in the Niagara Falls Reporter, into Ontario's Niagara Parks Commission's dealings with Glynn.

The scandal that resulted after it was learned that Glynn's no-bid Canadian contracts had been the result of backroom dealings meant to ensure that no one else could bid on the Canadian lease reverberated to the highest levels of the Canadian government and resulted in the resignations of 11 Canadian Niagara Parks commissioners and senior management staff.

In Canada, the contract to run the tour boat concession beneath the falls was thrown open to public bidding, and an American company, Hornblower Niagara, offered to pay the Ontario government $500 million over 30 years — $300 million more than Glynn proposed in the Maid of the Mist's original deal.

Politicians in New York were now faced with a dilemma.

From Niagara Falls Mayor Paul Dyster to state Sen. George Maziarz and former state Rep. Francine DelMonte, to Gov. Cuomo, former United States Congressman Tom Reynolds and U.S. Senators Kristen Gillibrand and Charles Schumer, each of them who had taken money from Glynn, rallied to his side.

Gov. Cuomo simply decided to give the deal to Glynn without competitive bidding.

When he announced the deal with Glynn, Dyster was elated.

"It predates Olmsted. It's part of our history here," Mayor Paul A. Dyster said, inaccurately, for Glynn was not born during Olmsted's founding of the park in 1885. "You have to make long-term decisions. You want to do this once and do this right."

Dyster said the main concern was the possibility of a service interruption if another company took over.

"This is not an inconsequential interest to us," Dyster said. "Outside the falls, this is the premier attraction. This could do a long-term damage to our side."

A statement issued by Maziarz could have been written by the Maid of the Mist's public relations department.

"I want to thank Governor Cuomo for his partnership in securing this agreement to ensure the world-famous Western New York business – the Maid of the Mist – remains a viable tourism attraction for many years to come," the statement said. "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, while also requiring capital improvements and expanded recreational opportunities to benefit our community. This is a win for everyone."

Cuomo himself hailed the giveaway as a great victory.

"The Maid of the Mist tours by the world-famous Niagara Falls waterfalls and of the Niagara River Gorge are a signature tourism attraction of Western New York," he said.

Cuomo not only handed over a no-bid contract, but a chunk of land owned by the New York Power Authority on which Glynn could build winter drydock facilities.

With Schumer and Gillibrand on board – they'd written letters asking the Canadian government to forgo its future relationship with Hornblower and its $300 million in extra revenue to their parks, and ensure that Glynn could continue to use the Canadian docks – Cuomo's decision was not a difficult one.

Hornblower, through open bidding on the Canadian side, will pay about 25 percent of gross boat tour revenues. Glynn, with his no-bid contract with the governor, will pay eight percent.

"Niagara Falls is a jewel," Cuomo said. "A jewel that we haven't invested in, a jewel that we haven't given the attention that it deserves, in my mind. But, it has phenomenal potential, not just for the region but for the entire state."

When asked why the contract was not put out to bid, Cuomo said that it was a special circumstance.

"We value Maid of the Mist. We wanted to keep Maid of the Mist here," Cuomo said. "We had a parcel (the old power plant site) that we felt could be better utilized for tourism and we put the two together."

Glynn's son, Chris Glynn, summed it up in a nutshell.

"She was in trouble, but he saved her. We are profoundly thankful that he was there when it counted," the younger Glynn said. "It boils down to this, Governor Cuomo has saved the Maid of the Mist."

Once the Glynns received their taxpayer funded gift and began construction of their new drydocks on the land where the Schoellkopf Power Plant once stood, Hornblower filed suit in March 2012. It was thrown out five months later by State Supreme Court Justice Catherine Nugent-Panepinto.

In her ruling, Nugent-Panepinto said she had to defer to the state agencies' conclusions that no public bidding was required because it was only an "amendment" to a 2002 deal.

Dyster's reaction to the Nugent-Panepinto decision bordered on ecstatic, saying it brought a sense of "elation and relief" to the Glynn family and the people who view the Maid as an icon of Niagara Falls.

Hornblower spokesmen did not share the elation.

The company's CEO, Terry MacRae said he was shocked at the loyalty people here seem to have to the Maid of the Mist.

"Fear of change is what public policy [has become] in Niagara Falls, N.Y.," MacRae said. "Maybe they should examine that and see how successful it's been over many years. Maybe there's a reason why there's a lot more people going to Canada."

The Hornblower attorney who argued the case, Richard Jacobs, said Nugent-Panepinto made a "$100 million mistake" in throwing out the suit.

Hornblower offered to pay $100 million more for the lease than what Glynn will pay New York.

"There is no basis in law, equity or fundamental fairness for the state to favor one private company over others," Jacobs said. "This is exactly what the public bidding laws are designed to guard against."





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