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An investigation into Glynn's N.Y. Maid lease is warranted

Niagara Falls Repoerter

March 16, 2010

By Frank Parlato Jr.

As readers know, James Glynn pays no rent for his Maid of the Mist boat tours in the Niagara Falls State Park.

He makes millions and pays nothing.

In fact the taxpayers pay him.

Meanwhile, ironically, the New York's State parks system, with its 213 parks and historic sites, is facing funding cuts that will likely result in the first budget-related closures in its 125-year history.

That's funny, too, since the N.Y. Parks announced they are staging a series of events "celebrating" their 125 years of operation.

A tepid celebration one suspects is in the offing since 41 parks and 14 historic sites are expected to close.

Last month N.Y. Parks officials said the Niagara Falls State Park might be among the parks that close.

This, if nothing else, brought to light the curious anomaly that the highest taxed state in the USA cannot afford its parks.

But saying Niagara Falls might close was only meant to scare the public. To bring attention to the plight of parks.

With a $9 billion statewide deficit -- there has to be cuts somewhere.

N.Y. parks were ordered to cut $20 million from their $155 million budget.

Besides the closure of less-used parks such as the Joseph Davis State Park, many parks will reduce programs and hours of operations. Statewide, parks will operate with 1,100 fewer people.

But a greater question arises from these events: Is corruption endemic in N.Y. parks like it is in Albany?

Consider: The entire N.Y. park system generated only $85 million in revenue last year through user fees, admissions, concession contracts, leases and other sources, accounting for 50 percent of its budget.

The Niagara Parks Commission (NPC) in Ontario -- with only 4,200 acres, 1/80th of the size of NY Parks, and which operates only around Niagara Falls -- produced nearly the same revenue, $80 million.

Their parks pay for themselves -- relieving taxpayers of the burden of paying for their parks.

Unlike N.Y. Parks, the NPC charges businessmen who profit from their parks. Take, for example -- Glynn.

He has the same attraction, the same kind of boats. The same tour in Ontario that he has in New York.

In Canada, Glynn pays millions.

In New York, we pay him.

A copy of the formerly secret 2002 lease between N.Y. Parks and the Maid of the Mist Corp. (http://www.niagarafallsreporter.com/2002lease.pdf) reveals that Glynn pays 4 percent of sales on his boat tours -- far less than the 15 percent he pays in Ontario.

But how's this for a sweetener? N.Y. Park officials secretly added to the deal that Glynn keeps 75 percent of the annual $1.6 million from admission fees to the state-owned Observation Deck.

In 2009, Glynn grossed $6.5 million in boat tours. He paid $258,311 in rent. The state grossed $1.6 million in Observation Deck fees but gave Glynn $1,154,000 for simply collecting the money, which quadruple offset his rent. As a result, N.Y. state paid Glynn $896,000.

Plus he kept all the profits from his boat tours.

If the rental rate for his N.Y. boat tour was the same as in Ontario, Glynn would pay around $1 million annually to New York. If N.Y. Parks resumed operation of the Observation Deck, it would mean an additional $1.1 million. N.Y. Parks would be $2.1 million ahead.

That would cure 10 percent of the whole state-wide park budget shortfall.

Presently, William Windsor of Atlanta is suing Albany for the right to offer boat tours in New York. Windsor's case devolves around the probability that Glynn and N.Y. Parks officials committed fraud. Last week, his case was dismissed in State Supreme Court on a technicality. It seems headed for the Appellate division.

For the sake of disclosure, we have reported many of Windsor's findings of alleged fraud concerning Glynn in the past. Windsor in turn has used discoveries in the Reporter's investigative series and, additionally, an affidavit from this writer in support of his lawsuit. Glynn's N.Y. lease does, clearly, seem to have been obtained illegally.

Section 163 of the N.Y. State Finance Law requires competitive bidding on all leases of public lands unless there is an absolute reason why no one else could provide the service. Yet Glynn got a 40-year lease -- negotiated in secret -- without competitive bidding.

N.Y. Parks officials were asked why.

Angela Berti, spokeswoman for Niagara Falls State Park, told The Buffalo News that "no bids were taken because the Canadian agreement gives (Glynn) exclusive access to the river below the falls, making (him) a 'sole source' provider."

Harold H. Hagemann Jr., N.Y. Parks director of concessions, concurred: "The Niagara Parks Commission contract with the Canadian operator of the Maid of the Mist boat ride (Glynn) gives (Glynn) control of the basin in which the tour boats operate."

Strange answers.

Canada cannot grant control of the Niagara River. By treaty, America and Canada share the waters.

Was there some clause in Glynn's Canadian lease that bargained away N.Y.'s "riparian" or river rights?

More strangely: Both Berti and Hagemann were referring to the wrong Canadian lease.

In response to Freedom of Information (FOI) requests, N.Y. Parks disclosed, albeit inadvertently, that they had the wrong Canadian lease when they determined Glynn qualified for sole source status.

The wrong lease was sent to N.Y. Parks by an NPC employee from Ontario by the name of Robert Brooker. Brooker, now retired, was in charge of the NPC finance department. He reported directly to Glynn-ally Archie Katzman, the disgraced, former NPC chairman who was caught red-handed trying to secretly lower Glynn's rent in Ontario while excluding other companies from paying more.

Katzman's action, exposed by the Reporter, caused the Ontario government to order the boat tour lease out to bid. Canadians now expect to get more than a mere 15 percent for their boat tour lease.

But why did Brooker send the wrong lease?

Here are the facts: In 1982, Glynn signed a 25-year lease with the NPC for his Canadian boat tours at 12 percent rent. In 1989 -- seven years into the 25-year lease -- the 1982 lease was voided. A new lease was signed. The rent was raised to 15 percent and Glynn got various concessions from the NPC. The 1989 lease expired in 2009.

On paper, however, the voided 1982 Ontario lease would appear to be in effect in 2002 when Glynn's N.Y. lease was renewed -- if no one knew about the 1989 lease.

Glynn and the people he was dealing with from N.Y. Parks needed to show the N.Y. State Comptroller that no one else could operate boat tours in New York.

And Brooker, from Ontario, sent the wrong lease.

But why? The voided 1982 lease had verbiage in it that might give the impression Glynn had rights to control the water below the falls.

In the voided 1982 Canadian lease a clause refers to Glynn having the "right to use" that "portion of the Niagara River known as the Maid of the Mist pool." The 1982 lease could be construed to mean that Glynn had the exclusive "right to use" the "Maid of the Mist pool."

The valid 1989 lease has different language. It refers to these same waters, where boat tours are conducted, as "the lower Niagara pool" and makes no mention of water rights whatsoever.

Glynn, Brooker and Katzman must have known that New York had no means to independently verify leases since the NPC keeps all their contracts secret.

Was this really an attempt to deceive the N.Y. State Comptroller?

N.Y. Parks' Berti and Hagemann either feigned or had real ignorance of riparian rights in their own parks.

It does not explain, however, N.Y.'s decision to give Glynn a no-bid lease for 40 years.

N.Y. State Finance Law, Article XI, Paragraph 10.b.(ii) says, "Sole Source Procurement ... shall be limited to the minimum period of time necessary to 'ameliorate' (i.e improve/resolve) the problem that restricted the contract to (bidding by) only one company."

Even if N.Y. Parks' officials ignorantly believed Canada "controls" the waters, the N.Y. lease should have run only until 2007 when the presumptive Canadian lease expired -- not 35 years beyond.

After the Reporter exposed to the public the shady details of the Glynn N.Y. lease, Hagemann, defending the preposterous notion of giving Glynn the exclusive use of public assets rent free for 40 years, claimed N.Y. Parks "verified" with the NPC its "intent to renegotiate the Maid of the Mist contract on the Canadian side."

An FOI request revealed this was true, but at the same time -- factually, utterly false.

Prior to approving Glynn's lease in 2002, J. Dennis Hanrahan of N.Y. Parks wrote to Douglas Boettner of the N.Y. State Comptroller's office that N.Y. Parks officials spoke with the NPC's Brooker, who advised N.Y. Parks that the NPC "will be renegotiating their agreement with Maid of the Mist Corporation rather than bidding it when it expires in 2007."

Park officials then presented two falsehoods to the Comptroller: that Canada controls the waters, and that the NPC was going to renew Glynn's lease.

A gullible Comptroller's office accepted this report and Glynn got a 40-year no-bid, rent-free lease.

If the Comptroller's office had made a simple study of the NPC by-laws, it would have realized that neither Brooker -- a mere bookkeeper -- nor anyone else could guarantee that Glynn would get his lease renegotiated when the lease expired.

Even if all 12 NPC commissioners said they were going to renew Glynn's Canadian lease their authority for such a statement is nil.

NPC Commissioners are appointed to three-year terms. Between 2002 and 2007, nine of 12 Commissioners terms expired and were replaced.

Whatever NPC commissioners "intended" in 2002 was meaningless by 2007 when 75 percent of the decision-makers were new.

And factually what Brooker said about NPC's "intent" to renegotiate was false. The Canadian lease is going out to bid this year and by all accounts Glynn is likely to lose the lease.

An investigation into this matter is clearly warranted.

 

 

 
 
 
  Copyright © 2008 Frank Parlato Jr.