Frank Parlato Jr.
 
 
 
Frank Parlato . Com
Home
Reports
About the Author
Man Making
Niagara Falls
Swami Vivekananda
Contact Frank Parlato Jr.
 
 
With layoffs and budget shortfalls, why did they lower Glynn's rent?

April 21, 2009

By Frank Parlato Jr.

Curious.

What made men fight to cut Jim Glynn's rent for his Maid of the Mist on the Canadian side of the border?

Public men who represent, or are supposed to represent, the people -- they cut his rent rather than raised it.

One of the men who fought hard to lower Glynn's rent for his boat tours on the lower Niagara is Jim Williams, chairman of the Niagara Parks Commission (NPC).

Jim Williams

Funny, too. Since Williams took over in 2004, the NPC went from making a profit of $3.7 million to losing, last year, more than $4.3 million.

The NPC had to lay off more than 500 employees -- a third of its workforce.

Yet Williams fought to take the biggest money-making lease the park has -- the lease for the docks of the Maid of the Mist -- and reduce it.

Unique, too. Previous commissioners raised Glynn's rent. When Glynn first took over in 1971, he paid the park 10 percent commission for his boat rides. When he renewed, he got raised to 12 percent. Commissioners, in 1989, raised him again to 15 percent.

But Williams led the NPC to reduce Glynn's rent.

It is a complicated formula of graduated rent decreases, but, essentially, the way the new lease works is, the more Glynn makes, the less he pays. Much of his rent -- over the 25-year life of the lease, renewed secretly last April, and set to take effect in 2010 (if not legally set aside) -- will be paid at 5.5 percent.

From 15 percent to 5.5 percent, while the NPC is losing millions and laying off the hard-working people who toil to maintain the park.

Curious.

In order to reduce Glynn's rent, Williams had to hide the fact -- from most of the NPC commissioners -- that there were other interested parties that would pay more than Glynn for the boat dock lease.

One commissioner, Bob Gale, accidentally found out and went public, alleging Williams, along with John Kernahan, general manager of the NPC, worked secretly to renew Glynn's lease and exclude world-famous Ripley Entertainment from bidding on the lease.

Ripley's offered to pay more than the 15 percent Glynn was paying before his rent was reduced.

After the story broke, even Ontario's Integrity Commission (IC) could not entirely sweep under the carpet Glynn's rent reduction while another legitimate company wanted to pay a higher rent.

The IC said publicly to Williams "review the Glynn lease renewal," but privately, one suspects, the Liberal Party -- which controls the IC -- hoped the scandal would go away.

To help ensure it did, the Liberal Party's Minister of Tourism, Monique Smith, declined to reappoint Gale to the NPC, so that when Williams "reviewed" the rent-reducing lease, there would be no whistle-blower left on the NPC board.

We are left, therefore, with a puzzling question. What made Williams and Kernahan work so hard for the multimillionaire Glynn?

To hear them tell it, the new lease with Glynn was the best deal the park could make.

Before terms of the secret lease renewal was made public by the Niagara Falls Reporter, Williams told the Toronto Globe and Mail, "It's a significant lease in terms of the revenues it generates, and believe me, we're not unhappy with the terms that we're agreeing to."

When asked whether he could disclose these terms, he answered, "Nope."

Before and after the Reporter broke the news that the rent went down, stories changed.

First, it was no one but Glynn was interested. That was disproved when Ripley's said Williams and Kernahan thwarted its attempt to bid on the lease. Williams then claimed no one could do what Glynn does. Williams compared giving people a boat tour -- which hundreds of boat tour companies do (i.e. put people in a boat and drive them around the water) from the Statue of Liberty to Alcatraz Island -- to a trip to the moon.

He told The New York Times, "There's no other model. You're asking for someone to say, 'We want you to build the space station.' Well, there's only one of a kind."

Glynn's spokesperson, Tim Ruddy, went further, telling the Niagara Falls Review that if Glynn was replaced by another company, new boats would have to be built at the river's edge and would take five years to build. Tourists would be without rides below the falls.

Five years to build a 70-foot steel boat? Odd, the 882-foot Titanic was built in three years.

This claim was further disproved after another company asserted it could lower boats into the water by crane -- and the Reporter printed a photograph of Glynn's company preparing to lower one of their boats by crane into the gorge -- proving that Ruddy was lying about boats having to be constructed on the river banks.

Next, they said that Glynn owned the Maid of the Mist name and loss of name brand would hurt the park since people would not take a generic boat ride.

But the Maid of the Mist lease, paragraph 6.03, states: "Tenant (Glynn) acknowledges that it does not claim any interest in or rights in the words 'Maid of the Mist' and NPC is free to use 'Maid of the Mist' in identification of its structures, retail or promotional material."

Next, Williams told The New York Times that a "clause" in Glynn's lease meant the NPC would run the risk of a lawsuit and "significant financial liability" if it selected another boat operator. When asked to reveal the clause, Williams declined, saying it was "secret."

This, too, the Reporter exposed by publishing the lease. There is nothing in it that requires the NPC to renew with Glynn. In fact, it says if the NPC chooses not to renew, Glynn may not sue the park for any investment he made into structures or improvements on park grounds.

Christopher M. Glynn, president of Maid of the Mist and son of its owner, James Glynn, gave the Times yet another reason. "Everybody wants to own the Maid of the Mist. Who wouldn't? But they don't. I'd like to own the New York Yankees."

But the Yankees are a member of a privately owned sports league. In New York City, they don't even have the exclusive right to have a baseball team. Anyone can set up a team and start selling tickets.

The Maid of the Mist lease, however -- which the Glynns claim should be their family-owned monopoly forever -- is on public land, the people's land, and no one, no family, no company should have a perpetual monopoly on public land. It should be open for public bidding and given to the highest qualified bidder.

Accountant Damian Alksnis of MG Forensics Group in Toronto compared the new Glynn lease to the old. He said the new one would result in Glynn paying $600,000 less to the NPC in its first year alone.

"Under the new lease agreement [the NPC is] worse off, exponentially worse off."

Probably more than $25 million "worse off" over the life of the lease.

You wonder, as Williams and Kernahan looked -- as they must -- at the faces of parks employees who they laid off -- men and women who earn incomes at or near poverty level in a region with the second-highest unemployment rate in Ontario -- did they think about how these people would make ends meet?

Forget that they are making one already-rich man richer. As they looked at the faces of the men and women who they laid off, did they think if not about them, about the park?

The NPC maintains 4,200 acres of parkland.

Everyone knows the parks are deteriorating.

Kernahan himself admits it. "Regrettably, many initiatives will have to be postponed or delayed because of our financial situation," he said earlier this month. "Maintenance projects have and will be delayed throughout many areas of the park this season."

Knowing that other companies would pay more than Glynn.

Knowing Glynn would probably pay at least as much as he was paying -- 15 percent -- they reduced his rent. On public land. For an amazing 25 years.

Secretly.

Tourism experts said competitive bidding may bring as much as $150 million more over the life of the lease.

"Costs continue to rise and revenues drop," Kernahan said. "Such things as training, travel, etc. are all to be limited. There won't be a staff picnic this year; the student awards program will be deferred. We will eliminate the student incentive [program]. A reduction in hours of work [to] 37.5 hours per week for seasonal employees who normally work a 40-hour week or more [is required].

"Identifying other operating efficiencies that will lead to an additional $125,000 in savings [are needed]."

Ironic. They are looking to save $125,000, while they lowered Glynn's rent by $600,000.

"These are difficult times and the plans we have put forward were not taken lightly," Kernahan said. "This plan is not perfect; plans never are."

But the plan, at least for Glynn, was perfect.

His Maid of the Mist generated about $23.3 million last year. Confidential documents presented to the NPC show Glynn personally netted more than $4 million after expenses.

That may be some consolation to the 500 people laid off and the other 500 who got their hours cut.

At least one man won't suffer. In Ontario, Jim Williams and John Kernahan took good care of Lewiston businessman Jimmy Glynn.

Curious indeed.

 

 
 
 
  Copyright © 2008 Frank Parlato Jr.