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Injustice and Glynn's N.Y. lease

May 05, 2009

By Frank Parlato Jr.

In a way you might say it exemplifies everything that's wrong with NEW YORK state government.

The New York State Parks are having their budgets cut.

Some parks will have a shorter season in 2009, and more New York parks, including the Niagara Falls State park, will have reduced services because of the state's financial woes.

But this will not affect Jimmy Glynn. Glynn goes on and on with his Maid of the Mist boat tours.

The highest taxed state can't afford its parks, and, weirdly, Glynn doesn't pay New York rent for his multimillion dollar monopoly in the Niagara Falls State park. He is supposed to pay rent, and on paper it is written he does pay 4 percent of the gross revenues his boat rides makes.

But, certain conditions written into his rather complicated lease actually make it a zero rent lease for an attraction that nets Glynn millions.

He got New York park officials to reduce his rent to zero in 2002 without telling the public or letting anyone one else who might pay more bid on the lease.

On the Canadian side, also, they secretly dropped his rent -- starting next year -- from 15 percent to well under 10 percent, a variable rate that goes down the more Glynn makes.

Much of his Canadian lease will see Glynn paying 5.5 percent.

On the Ontario side, however , there was a Niagara Parks commissioner by the name of Bob Gale -- who broke ranks with his fellow commissioners when he saw the wild swindle of the public's assets going on and he told the public.

It was a "dirty deal," Gale said of reducing of Glynn's rent, while secretly excluding others -- who would have paid more, like Ripley Entertainment -- from bidding.

Gale took the heat and the criticisms and the condemnations of his fellow board members. But he toughed it out.

This resulted in the Ontario Integrity Commission investigation and in its finding that this lease of Glynn's better go back for a second look.

There is a chance now that on the Canadian side -- with the bright glare of media focused upon them -- Glynn may not get his rent reduced and the lease may be put to open, public bidding -- which will undoubtedly raise the rent.

Glynn may lose the Canadian lease.

But there has been no Bob Gale on the American side.

On the New York side, the lease was more than merely lowered.

On the Canadian side, although they stupidly or corruptly lowered his rent, they at least got Glynn to pay something.

On the New York side, we get nothing for one of the most valuable public docks in the world and something that dozens of tour boat operators would almost certainly pay 20 percent or even 25 percent rent to operate.

What makes it so interesting is that what Glynn saves in rent would almost certainly make up the difference in the New York parks regional budget cuts.

Simple math will prove it.

Glynn's rent on the NEW YORK side was reduced from 10 percent to 4 percent in 2002.

Delving deeper into the lease, we find that Glynn doesn't really pay 4 percent. He pays no rent at all. 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.

Maid of the Mist and the observation Tower

Millions pay $1 admission to go to the tower's observation deck, or ride the elevators down to the bottom of the gorge where Glynn's boats are and where, if they want, they can pay Glynn $13.50 to take his 15-minute no-frills boat tour.

Prior to the lease renewal, New York State kept 100 percent of the Observation deck fees. In 2002, it was mysteriously handed over to Glynn when certain park officials secretly renewed his lease.

None of this would have been known except for the Niagara Falls Reporter's expose on the topic.

In 2008, Glynn's tour-boat operation in the NEW YORK State park grossed him $6,393,000.ÊFees from the Observation Tower brought in another $1,124,000.

Last year, Glynn paid the state 4 percent on $6,393,000 in boat rides, or $255,720.

But he got to keep $843,000 from the observation deck.

So instead of paying rent, Glynn got a net check from the state of $586,300.

With the old lease, he would have paid 10 percent rent -- or $639,300.

And the state would have kept the entire $1.124 million for the observation deck.

The state would have received $1,754,000 from the two valuable park attractions: the boats and the observation deck. Instead, it paid Glynn $586,300.

The swing or net loss to the people of New York between the old lease and the new was $2.34 million last year.

The park officials who secretly negotiated Glynn's new lease -- which reduced his rent from 10 percent to 4 percent and turned over the observation tower to him -- must have known the deal was a poor one.

They changed a lease where the tenant paid the landlord to one where the landlord pays the tenant.

Usually you don't make a deal like that -- changing a guy's lease from him payingÊyou toÊyou paying him without some incentive. Even dropping the rent from 10 percent to 4 percent was a bad deal -- without giving Glynn the Observation Tower.

But somehow our stewards, our government officials at the state park secretly, decided that we, the public, the landlord, should pay our tenant -- for one of the most valuable rentals in the world.

Pay him, plus let him run his boat tours rent-free at the world-famous Niagara Falls State park.

The 40-year free lease awarded to GlynnÊwas the longest ever in the history of the parks system here. That in itself tells a story.

The lease, if studied by experts, will not stand scrutiny in New York.

So far, only the Niagara Falls Reporter has reported on this. No other publication -- no other citizen's group or governmental agency -- has yet evaluated the lease.

That day will come.

The lease is published on-line for all to see.

I have heard it on the streets -- yes, Glynn got away with it.

You can't blame him. We'd take it ourselves if we got a deal like that.

But how did it get to be offered?

If it were a fair deal, in the public interest, Glynn would have to compete for the privilege of operating boats in the people's park for what is perhaps the greatest water attraction in the world.

The lease would go to the highest bidder.

Meanwhile, our regional state parks are faced with a $1.1 million budget reduction this year.

Mark W. Thomas, western district director for the Albany-based parks department, said the parks overall face a 15 percent reduction.

In New York, Glynn should have paid 15 percent rent at least.

Seasonal workers budgeting are down 9 percent.

Glynn pays 4 percent.

The Green Thumbs program that helped with landscaping and flower bed planting was phased out.

But Glynn got paid $844,000 to operate elevators to his own attraction.

Cutbacks in the number of park police officers have taken effect.

There will be reduced days and hours of operation for the Cave of the Winds, the Visitor Center, the Park Trolley and the Niagara Gorge Discovery Center at the Niagara Falls State Park.

Glynn doesn't pay a New York rent for an attraction that makes him millions at the Niagara Falls State Park.

The park is losing millions and laying off the hard-working people who toil to maintain the park. More than 50 park employees were laid off and won't be coming back this year.

There were other interested parties who would pay more than Glynn for the boat dock lease.

They weren't allowed to bid on the lease; they were not even told about it.

As Glynn walks around the streets of Lewiston or Niagara Falls, sometimes he will no doubt see some of the people who got laid off at the parks and perhaps knowing them the great man will nod.

Silently. however. the rich man must be thinking -- my wealth was at their expense.

 

 

 
 
 
  Copyright © 2008 Frank Parlato Jr.