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From the publisher: Bidders revealed in Canadian competition for Maid of the Mist

Niagara Falls Repoerter

January 18, 2011

By Frank Parlato Jr.

The Niagara Falls Reporter's expose on the secret dealings surrounding the Maid of the Mist boat tour lease at the Niagara Parks Commission (NPC) in Ontario was instrumental in leading the minister of Tourism to order the NPC to put that lease out to bid. Subsequently, most of the NPC commissioners were fired.

The deadline for the bids, or "Responses to the Request for Proposals," is 3 p.m., Jan. 31. An award will be made sometime this summer.

It is the first time in history that the famous boat tour, which ferries people past the base of the American Falls and slightly into the mist-drenching center of the Horseshoe Falls, is going out to bid. For 40 years, the tours were operated by Lewiston businessman and philanthropist James V. Glynn. Before Glynn, since 1846, previous operators have used the same "Maid of the Mist" name for similar rides.

This rare bid opportunity has attracted some big names in the boat tour industry. The Maid of the Mist is a lucrative venture. According to published attendance figures, with 1.75 million annual Canadian riders, it is the second most popular boat tour attraction in North America, behind only the Statue of Liberty.

At the NPC, a Fairness Commissioner has been appointed, as well as an almost all-new NPC board, including new Chairwoman Fay Booker of Ottawa, to oversee the bid process and, apparently, to make sure that Glynn, who seemingly held almost hypnotic sway over the old group of commissioners, does not influence new commissioners similarly.

The old, recently fired commissioners were caught red-handed and exposed by this publication for secretly trying to lower Glynn's rent from 15 percent to a sliding-scale rent that bottomed out at 5.5 percent, while simultaneously thwarting attempts of prospective bidders Ripley Entertainment and Atlanta businessman William Windsor.

Since 1989, Glynn had been paying 15 percent of gross sales -- about $3 million per year -- on annual sales of about $20 million. TheReporter revealed that NPC commissioners misled Ripley manager Tim Parker about the process while secretly rushing a new lease with a hidden rent reduction for Glynn.

It backfired. After the Reporter published its findings, the commissioners were ejected -- or, as they say in Canada, "turfed" -- and Glynn for the first time faces competition for the right to operate boat tours on the Ontario side of the Niagara. He still holds a lease to operate tours on the New York side.

Although bidders must sign confidentiality agreements with the NPC, including a prohibition to disclose if they are even bidding, theReporter has learned, though sources, about both the process and who the bidders will be -- an exclusive to our readers.

The 148-page Request for Proposals (RFP) package for the Maid of the Mist lease is complicated and detailed. The bids will be weighted, based on factors that include how much rent will be paid, experience in the boat tour field, creativity, improvement of services and financial strength. The winning bidder will secure a 30-year lease. About 25 percent of the weighted bid will go to the bidder who offers the highest rent.

According to sources familiar with this RFP process, bidders will spend an estimated $100,000 to $250,000 to complete their packages -- on lawyers, marketing, boat and security consultants, accountants, RFP writers, designers, architects, boat builders, as well as travel costs, graphics, procuring of safety records, letters from banks, coast guard reports, financials, logistical reports, etc. Some have had staff working full time on this for more than a year. The bid responses are expected to range from 200 to 300 pages each.

Again, exclusively, the Reporter has learned the identity of the bidders:

  • James V. Glynn, aka Maid of the Mist Steamboat Corp. 
    Glynn, trying to keep his leasehold, will undoubtedly have to bid higher than the 5.5 percent rent he had secretly secured before the Reporter uncovered how he made his deal with the now-fired commissioners.
  • Ripley Entertainment. 
    The operator of 74 attractions in 13 countries, including the Believe It or Not Museums, Louis Tussaud's Wax Museums and the Great Wolf Lodge, Ripley owns the worldwide rights to the Guinness World Records and is a member of the Jim Pattison group in Canada, the world's largest full-service sign company and North America's second largest magazine and newspaper distributor.
  • Hornblower Cruises. 
    Another giant, they currently operate the first and third most popular boat tour attractions in North America: the Statue of Liberty and Alcatraz Island Boat Tours. Hornblower is known for its dinner and moonlight cruises in Los Angeles and San Francisco, leading some to suspect their proposal may include dinner cruises along the lower Niagara. Hornblower CEO Terry MacRae has made several inspections of the site. If Hornblower is successful, it will operate the top three boat tours on this continent and will emerge as the undisputed leader in the industry.
  • Tower Tours and Blue and Gold Fleet. 
    These two big San Francisco companies have partnered to bid. Blue and Gold runs ferries from a half a dozen California municipalities to San Francisco. Tower Tours is the leading bus tour, concierge and limo operator in San Francisco. Its owner, Hagen Choi, owns the master retail lease for Fisherman's Wharf.
  • Alcatraz Media. 
    Owned by Ryan Windsor, Alcatraz is one of the largest online tourism ticket sellers, authorized to sell more than 1,000 boat tours in 500 cities and more than 12,000 tourism activities in 65 countries. They will be partnering with an as yet unnamed boating partner. Alcatraz Media has a contractual relationship with and sells products for every known bidder except for Glynn.
  • An unknown and "anonymous" person(s) or company, registered with only a number. 
    When inspections of the site were made last year, men wearing dark suits were part of the group and, unlike other bidders, would not reveal whom they represented. Sources at the NPC say the numbered bidder is actually a partnership between hotelier Dino A. DiCienzo and Whirlpool Jet Boat Tours, owned by John Kinney and offering rapids tours since 1992. 
    DiCienzo is the owner of Canadian Niagara Hotels. His holdings include the recently purchased 32-story Sheraton Fallsview (assessed at $51 million), the 30-story Marriott Fallsview (assessed at $66 million), the Crowne Plaza and Sheraton on the Falls, and the Skyline Inn and Hampton Inn on Victoria Avenue.

These are the known bidders. All are strong enough financially to succeed Glynn. Glynn has repeatedly claimed that no one could have the combined financial and boating skills to succeed him.

The NPC manages 4,200 acres of parkland and attractions around the falls, including museums, restaurants, golf courses and paid parking lots. By provincial law, the NPC is charged with earning enough money from these attractions to maintain the Niagara parks. Last year, the NPC posted losses of about $4 million, with an approximately $80 million general budget.

The competitive bidding process for the Maid of the Mist is expected to bring rent increases from the present 15 percent to about 30 percent, or from about $3 million to $6 million next year, thus singlehandedly eliminating 75 percent of the NPC's annual losses.

Much better than what was originally planned in secret: to lower Glynn's rent.

During the planned inspection, which saw bidders come from all over North America, Glynn apparently refused to let bidders tour the property and taped off public lands with yellow police tape, hired guards to prevent bidders from inspecting the grounds, and placed cars strategically to block views of the leasehold. Instead of this working to Glynn's advantage, new NPC officials, led by Booker, scheduled another inspection in an effort, sources say, to show that they -- on behalf of the public -- not Glynn, own the park.

A lot has changed since the Reporter first examined these events.

 

 

 
 
 
  Copyright © 2008 Frank Parlato Jr.