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Wasteful spending, uncertain results:

Is Percy's NTCC a useless organization?

April 14, 2009

By Frank Parlato Jr.

Some assume it is a government agency. It is not.

The Niagara Tourism & Convention Corp. (NTCC) is a private corporation, a secretive, private, "not for profit" corporation.

By law this does not mean they do not make a profit, it only means they must distribute their profits in salaries and benefits, not in dividends. By contract, the NTCC receives about $2 million every year from the city of Niagara Falls -- allegedly to promote tourism and conventions here.

John Percy of NTCC

The NTCC's John Percy

The NTCC may not be responsible however for a single tourist coming here.

Last fall, the Niagara Falls Reporter has obtained the NTCC's tax returns from 2003-2007. The financial information contained in them had been a closely guarded secret.

NTCC President John Percy claimed that what the NTCC does with public money is confidential since the NTCC is after all a private corporation.

The NTCC tax returns give a clear indication of waste and mismanagement -- revealing the NTCC squanders taxpayers' money on salaries, benefits, perks, entertainment and travel. One can see why Percy wanted to keep it a secret.

The tax returns, and other documents obtained by the Reporter, show the NTCC makes money in myriad ways, acting like a for-profit business, while at the same time taking advantage of its status as the "official" tourism organization for Niagara Falls.

The NTCC gets about a million inÊhotel bed taxes, through a contract with Niagara Falls. Four percent of every hotel room rented in the Falls goes to the NTCC. Another million comes from the city's share of the Seneca-Niagara Casino revenue.

Everything they do seems self-serving.

For instance, the NTCC is constructing, with public money, a $2.4 million "Official Visitor Center" that will allegedly serve as "a hub for information" "showcasing countywide attractions." But the NTCC plans to hire salespeople to sell tours and charge tour companies 40 percent of sales. They will splitÊwith their salespeople, giving them an incentive to sell tours instead of dispense information at the "Official Visitor Center."

As the NTCC devours bed taxes on overtaxed Niagara Falls hotels, it plans to charge these same hotels another 10 percent -- whenever salespeople book rooms. And on top of that, the NTCC will sell souvenirs.

Competing souvenir stores complained. But Percy said his souvenirs were "one of a kind."

"We will not be selling any competing products whatsoever. Our agency is not here to compete with other businesses," he said.

This statement, like many Percy makes, are what we call "Percy-speak."

Sure, his souvenirs are different. Yet, the NTCC is still competing against taxpaying businesses for Niagara Falls souvenir dollars.

One of the few products the NTCC produces is an "Official Visitor Guide." In Percy-speak, it is "the main comprehensive piece to promote the area."

"Our staff works very hard to try and update the guide every year with the latest information," he said.

Approximately 750,000 copies were, in Percy-speak, "distributed," which means only that they were printed. Factually, it is an advertising booklet. At $3,000 for an eighth of a page ad, the 60-page "Official Visitor Guide" appears to have about $250,000 in advertisements paid by the people the NTCC is getting tax dollars to represent. Percy and his "hard-working" staff failed to include a single attraction outside the state park in the area map of Niagara Falls -- the most important map in the Visitors Guide.

The Niagara Falls map in what Percy calls the "main comprehensive promotional piece" includes no markings for the Third Street entertainment district or Pine Avenue's Little Italy district. And logos are used on the map to inform tourists of food and parking areas. None of the logos are placed outside of the state park's property.

"It's not a perfect science, unfortunately," Percy explained. "We depend on the community to get updates."

He needed the community to tell him there was, for instance, a single restaurant outside the state park in Niagara Falls?

Percy said the omissions of attractions outside of the state park were a mistake on the part of NTCC. In Percy-speak: "Do we do everything perfect? No, but we're willing to take suggestions. Maybe there are things we need to clean up and take a harder look at."

There's only one problem with this excuse: This is the third year in a row he forgot to include attractions outside the park. Perhaps Percy really didn't know there were restaurants outside the park. He is away from Niagara Falls most of the time, taking more than 40 trips last year.

He admitted to spending $14,000 in January to attend an American Bus Association conference in Charlotte where he got a resume-building honorary position as chairman of the event -- at taxpayer's cost.

He jetted off to India in March. The five-day "promotional" trip included banquets held in Mumbai and New Delhi. When pressed, Percy admitted the banquets cost taxpayers $7,000.

There apparently was a fair amount of alcohol consumed, since Percy admitted Bacardi paid for the booze -- saving taxpayers about $6,000.

Percy declined to provide copies of receipts for the trip, including what is believed to be $4,695 for his first-class air ticket and $634 per night for five-star hotel rooms.

"I've been hired to produce positive results for this destination and want to do that effectively," he said. "I don't need to be criticized by every little receipt that is provided."

Coming to Percy's defense is hotel owner Frank Strangio, who used to be critical of Percy.

When Percy placed Strangio on the NTCC board and more significantly started sending Strangio banquet business at his Antonio's Banquet hall, Strangio became a convert.

"We have a tendency to nitpick different things," Strangio told The Buffalo News, "but at the end of the day, we have to look at, does this agency bring people to Niagara Falls?"

Not much, according to Councilman Sam Fruscione, who has introduced a measure that would take $800,000 of the NTCC's annual $1 million casino payment away and use it for street repairs.

In Percy-speak, casino funds are spent on marketing and advertising, not salaries. But, according to NTCC tax returns, casino cash and hotel bed taxes go into the same NTCC general budget -- out of which salaries are paid.

Percy pleaded, exaggerating wildly, "Don't use our (meager $1 million) of casino funds, and kill tourism É just for the sake of road improvements."

Everything about the NTCC is misleading, even its name -- which suggests it promotes conventions. Percy admits the NTCC rarely pitches conventions.

He blames this on the shabby hotels he represents.

Only the Seneca Niagara Casino's hotel -- Percy said -- which pays no bed taxes (or any taxes) is good enough for conventions. But that cannot be used since it doesn't allow for advanced bookings.

The lack of "quality hotel rooms has turned a lot of business away," Percy said.

The hotels, which the NTCC pockets an average $3.60 in bed taxes for every room rented, do not meet the standards of their promoter, John Percy.

According to Smith Travel Research, in 2008, the average hotel room in Niagara Falls was $87.52. The receipts are kept secret (to avoid nitpicking) but, according to sources, Percy's average hotel bills when he travels are $350 per night.

The only reporting requirement the NTCC has to provide to Niagara Falls is to somehow prove it brings enough tourists here to spend $15 for every $1 taxpayers' invest. The method of proof is up to the NTCC.

Percy presented to the City Council, last year, a "study," developed by Niagara University, which "proved" the NTCC's 15-1 worth.

The study worked like this: Over the course of the year, people contact the NTCC -- by e-mail or phone. If an NTCC representative happens to give information -- even answers the phone, and says "hello, yes Niagara Falls still exists," orÊif information is sent via e-mail automatically, the person receiving the information is counted as "serviced."

The NTCC claims it "serviced" 146,027 people last year.

The study assumes that 66 percent of these unverified, "serviced" people will travel with their families to Niagara Falls -- making a total of 240,944 people who will come to Niagara Falls -- the study assumes -- because they contacted the NTCC by e-mail or phone. It assumes that none of these 240,944 people would have gone to Niagara Falls had they not called the NTCC or received an e-mail.

On top of that, the NTCC study assumes that these 240,944 people who are absolutely unverified and nameless -- spent -- get ready for this: more than $40 million here.

"These findings are not just pulled out of the sky," Percy told the Council. "They are factual and solid numbers."

In 2007, Percy's salary was $121,600. With his expense account, travel and benefits, he probably costs taxpayers more than $350,000 per year and possibly never paid for a single meal during the course of the year.

Not for profit?

Percy puffing said the NTCC will spend more on promoting the area to potential tourists this year than ever before. "This is the year to be out there more than ever," he said.

A little known provision in the contract is that the city can cancel with six months notice.

In non-Percy speak, it may be time to send them out there more than ever right now.



  Copyright © 2008 Frank Parlato Jr.