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Growing chorus of critics demands, send Maid of the Mist lease back for competitive bidding

February 10, 2009

By Frank Parlato Jr.

Since publication of an expose by the Niagara Falls Reporter on the secretive methods that Niagara (Ont.) Parks Commissioners used to renew the dock lease for the Maid of the Mist Steamboat Co., a growing number of Canadians are calling for the lease to be sent back for competitive bidding.

And the Ontario government has assigned a forensic investigation team led by two retired Royal Canadian Mounted Police investigators -- the equivalent of FBI agents here in the United States -- to look into possible illegalities surrounding the lease renewal. The investigators will assist the Ontario Integrity Commission in its probe of what by all accounts was a shady deal.

The parks commission, under Chairman Jim Williams, chose to renew Maid-owner James Glynn's lease for a whopping 25 years, while keeping a competing offer from Ripley Entertainment secret from other commissioners.

If the lease stands, one of the prime water attractions in the entire world will have been given to Glynn on public land for 62 years. He never had to compete for the rights to keep the leases. His present lease expires in November.

The Maid of the Mist, a 15-minute boat ride in the gorge below Niagara Falls, delivered 2.5 million rides last season. Among those calling for the commission to open the bidding process is the citizen's group Preserve Our Parks (POP). Patricia Salci Mangoff, coordinator for the group, told the Reporter that POP sent a letter to Monique Smith, minister of Tourism, in Toronto last week demanding a public tender for the lease of the Maid of the Mist.

Monique Smith and Sheila  Hosking

At the Liberal Party Policy meeting last weekend, at the Sheraton Fallsview, Monique Smith, Minister of Tourism for Ontario (R), receives  from Sheila Hosking (L), of the powerful activist group, Preserve Our Parks,clippings of the Niagara Falls Reporter's expose on the sordid Maid of the Mist lease renewal, and a letter from the group demanding the lease be re-opened to competitve bidding .

"As an agency of the government that aims for financial self-sufficiency, why would the (parks commission) not allow a competitive bidding process to generate the greatest financial benefit possible?"

In 2005, POP waged a successful campaign to stop commissioners from deploying gondolas in park waters. And when the city planned to gift developer Dino Dicienzo the "Jolly Cut," a popular park next to the Skylon Tower leading down to the Niagara Park, POP waged a campaign that garnered 30,000 signatures. The city bowed to pressure and retained the park.

"It is outrageous that commissioners ignored Ripley and other potential bidders when the need for money is so acute," Mangoff said. "We are completely disgusted."

Meanwhile, members of the Parks Union are shaking their heads.

OPSEU Local 217, which represents park workers, has shown support for reopening bidding. The possibility that the Maid of the Mist lease might cost Parks more than $50 million in lost rent, while park workers are simultaneously facing impending layoffs, prompted OPSEU to post the Reporter's entire 2,900-word expose on the home page of their Web site.

Parks Commission Chairman Jim Williams is sticking by his stance to aid Glynn in keeping his advantageous lease secure from competition.

Williams wrote to the premier of Ontario, Dalton McGuinty, "The legal, financial and business scrutiny for the (Maid of the Mist) lease of these lands is second to none."

Based on facts that have surfaced since the Reporter's expose, the statement is patently false. Even the method used by the Parks Commission in renewing Glynn's lease is in violation of its own Procurement Policy, which states that procurement of "goods and services is to be carried out in accordance with generally accepted procurement principles of competition."

This policy requires competitive bidding for any services valued in excess of $100,000. The Maid of the Mist's 25-year lease -- estimated at $5 million per year and $125 million over 25 years -- may generate as much as a billion dollars for Glynn.

Glynn's lease requires him to pay 20 percent of gross sales. Competitive bidding may bring the rent upward of 33 percent.

Parks Commissioner Bob Gale, who blew the whistle that made the secret Glynn lease public, made a statement this week on the conflict of interest he feels Parks Commission Chairman Williams has, lending credence to the possibility that Williams is deeply conflicted.

Williams owns a consulting firm where he publicizes his role in the commission.

"Williams' consulting firm ... stinks of conflict," Gale said. "An average person would say that he is using his position for personal gain."

Williams' company Web site reads, "(Williams is) the head of one of the Province's most important provincial Tourism agencies ... responsible for the preservation and protection of one of the world's most famous Tourism Icons, Niagara Falls. ... He is also responsible for the leadership over the economic growth and viability of its $80 million annual commercial operations."

The Web site claims that Williams' Palmer Consultants have worked on projects in Jordan, Russia, Macedonia, Lithuania, the Caribbean, South Africa and China.

Under the "projects" section, however, there is nothing listed. Without a single listed project, who is funding the operation? Curiously, Williams' Web site commenced the day before the NPC voted for Glynn's lease renewal, April 17, 2008. Glynn, it seems, knows how to get the best from government officials.

Glynn recently purchased the Comfort Inn Hotel and adjacent retail stores that front along the West Pedestrian Mall next to the Niagara Falls State Park.

USA Niagara, the state agency charged with developing Niagara Falls, is replacing the old, worn brick pedestrian mall with new cobblestone, adding -- ironically, for the Maid of the Mist owner -- a giant "mist" fountain, right in front of Glynn's new investment.

USA Niagara will also spend $310,000 to buy out a vendor lease that competes with Glynn-owed stores. The plan to improve the frontage of Glynn's development will cost taxpayers $7.9 million.

When USA Niagara worked to eliminate Glynn's competition, they failed to inform the public of Glynn's hotel purchase. One might think it a mere coincidence, except that Glynn sits on the USA Niagara advisory board.

In 2002, when the New York State Parks Commission secretly renewed Glynn's lease, state officials gave Glynn an unprecedented 40-year lease, which expires in 2043, giving him 72 years without competition to control the U.S. side of the Niagara.

New York officials negotiated to charge Glynn only 10 percent of gross sales as rent, versus 20 percent on the Canadian side.

A few years ago, Glynn paid $5 million toward a $25 million state project to "upgrade" the Prospect Point Observation Tower in the state park. The elevators leading down to his boats were improved, but the observation tower -- which gave tourists their only aerial view on the American side -- was all but eliminated.

Now people who visit the deck must exit through the Maid of the Mist souvenir store.

The Niagara Falls State Park, as originally designed by Frederick Law Olmsted, was an all-green reservation. For more than a century, people visiting Niagara Falls parked, whether in car or horse and buggy, in the city and patronized shops there.

In 1987, park officials effected a plan to clear -ut hundreds of mature trees to make a giant parking lot near the Maid of the Mist entrance.

The state destroyed Olmsted's plan; the city lost millions in parking and tourist business. The sole beneficiary of the horrendous project was James Glynn -- he had a parking lot built near his attraction.

The Niagara Tourism and Convention Corp. (NTCC) gets 80 percent of bed taxes collected from Niagara Falls hotels. NTCC is a private, "not-for-profit" corporation and is supposed to promote tourism. Its chairwoman, Tricia Mezhir, is an employee of Glynn.

In 2003, when Albany officials created the NTCC, funding was to come in part from a 50-cent surcharge on elevators serving the Maid of the Mist.

James Glynn's son, Chris Glynn, was NTCC's first chairman.

Not surprisingly, rather than collect a surcharge from the Maid of the Mist, it was decided that hotel bed taxes plus casino cash would take care of NTCC funding. Today, NTCC functions largely to promote Glynn's Maid of the Mist with taxpayer money. NTCC publishes a Visitors Guide, which features the Maid of the Mist. And NTCC employees travel worldwide with Chris Glynn promoting his boat ride.

To justify NTCC funding, Niagara University students provided a "study" to demonstrate that NTCC is effective. Glynn is a major contributor to N.U., and his son Chris is a trustee. They established scholarships for the same students who prepared the studies.

In January 2008, Tim Parker, general manager of Ripley Entertainment, wrote to NPC Chairman Williams expressing interest in bidding on the boat lease. Within days, Williams caused his staff to start drafting a new lease for Glynn, more than a year and a half before it was due.

Williams hurriedly scheduled a board meeting on April 18, at which a vote on the Maid of the Mist lease was to be held. The day before the meeting, Parker called Commissioner Bob Gale to ask if he was aware of his letters to Williams. He was not. Gale then asked the board to wait for the next meeting, to allow Ripley's a chance to compete. But Williams refused, and the commission voted to renew Glynn's lease on April 18.

Gale then filed a disclosure of wrongdoing with the Integrity Commission of Ontario.

It was subsequently revealed that Alcatraz Media, one of the largest sellers of tours and tourism activities in the world, also attempted, in 2005, to bid on the lease. This was not disclosed to the board either.

Sensing, perhaps, they might lose the lease, Glynn last week hired high-priced Ontario lobbyist Bob Lopinski to lobby the province on his behalf. Lopinski once served as Ontario Premier Dalton McGuinty's director of issues management and legislative affairs.

Now McGuinty may ultimately have a hand in deciding Glynn's fate.

 

 

 
 
 
  Copyright © 2008 Frank Parlato Jr.