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A reasonable apprehension of bias toward Glynn in upcoming Maid lease bid

Niagara Falls Repoerter

February 23, 2010

By Frank Parlato Jr.

As boat tour companies across North America wait for the Request For Proposals from the Niagara Parks Commission (NPC) -- granting them the go-ahead to bid on the Maid of the Mist boat tour lease -- several issues of fairness are causing concern.

All of these find Lewiston businessman James V. Glynn smack in the middle.

For one thing, longtime Glynn ally Archie Katzman, acting chairman of the NPC, apparently will preside over the bidding process -- in spite of newly appointed Minister of Tourism Michael Chan's assurance of a fair and impartial bidding process.

Katzman seemingly will not be replaced before the RFP is issued.

Under Ontario law, when there is, to normal thinking people, what is called a "reasonable apprehension of bias" on the part of a public official favoring someone seeking to bid where the public assets are concerned, that official is supposed to step down and not participate in the decision-making process.

But Katzman has stepped up and is openly handling this entire bidding process, leaving the Province of Ontario open to future litigation.

Katzman has made no secret of the fact that he wants his friend Glynn to keep the continent's second most lucrative boat tour concession (behind only the Statue of Liberty).

He has an almost 40-year history with Glynn.

Both of them started in 1971, Katzman first becoming a commissioner and Glynn getting the boat tour lease at the same time.

Through the decades, the two -- who regularly are seen on the golf course together -- have negotiated all their lease terms in secret, granting Glynn the exclusive right to launch tour boats from the public docks just below the falls.

Strangely, too, the Canadian public never knew the terms of the biggest lease the NPC had until last year, when the Niagara Falls Reporter revealed them.

As subsequent analysis came out, it turned out Glynn was paying substantially less in rent than the market would bear -- about $3 million to $4 million less per year.

Katzman also was at the center of what became a national news scandal in Canada. Katzman and two other NPC officials tried to hide the fact from other commissioners that there were companies other than Glynn interested in bidding on the boat tour lease, including entertainment giant Ripley Entertainment.

It was later uncovered by the Reporter that Katzman had actually worked up a plan to secretly reduce Glynn's rent without telling the other, mostly lazy commissioners, who never even once actually looked at the lease before voting on it.

Katzman led the board to reduce Glynn's rent without them even knowing it.

Even after one brave commissioner, Bob Gale, broke rank and went public, even then Katzman tried to elude getting caught in the press crosshairs, while still silently supporting Glynn.

The minister of tourism ordered the NPC to re-review the lease and specifically review other companies' offers. Nevertheless, in the privacy of the NPC's closed-door meetings, Katzman still defiantly led the other commissioners to ignore the tourism minister's recommendation and vote again to allow only Glynn to have the right to provide boat tours in the lower Niagara, and with his rent reduction intact.

This brazen act finally forced the minister of tourism to overrule the NPC, for the first time perhaps in its 125-year history, and order the boat tour lease out to bid on a public tender for the sake of both "fairness" and getting the most money for the public's asset.

Consequently, many are finding it hard not to have a reasonable apprehension of bias, as well as a growing certitude of, if not dishonesty, at least ineptitude, with Katzman at the helm.

Consider: Katzman, 79, declared bankruptcy not long ago. Ironically, this financial loser is running the NPC and controlling its $80 million annual budget.

And like his own rudderless financial mistakes, he seems to be making the same ones for the NPC, which is heading toward bankruptcy. Under Katzman's leadership, the NPC went from a $3.7 million profit in 2004 to a startling $4.3 million loss in 2009.

He was behind most of the boondoggle projects, like the multimillion-dollar loser The Fury, the dismal virtual reality-ride flop, which made some of his friends millions, while losing many more millions for the NPC.

Some of these friends have been quite generous to Katzman, as the public has lately come to learn, but insiders have known for years.

Still, the purpose of opening up the boat tours below Niagara Falls to competitive bidding -- rather than giving them perpetually to businessman Glynn -- was to be fair and to help, not the struggling Katzman, but the NPC get out of debt and hire back some of the park employees laid off in recent years, who are necessary to help maintain the Niagara parks, which by all accounts are in a state of rapid deterioration due to budget cuts.

While the NPC may be going broke, multiple sources suggest that Katzman, although he may never lose an opportunity to stiff a creditor out of a million, always pays back his friends -- with the public's assets.

Katzman, sources insist, always tells his friends -- in a whisper, of course -- who is bidding for certain NPC contracts and what the winning bid should likely be.

And how to get their bids in at the last minute.

For example, the man who gave Katzman a mortgage-free condo, construction company owner Don Ward, got more than $25 million in contracts from the NPC in the last few years.

"That's just the way life is," Ward told Tony Reinhart of the Globe and Mail when Reinhart first exposed the scandalous story.

Katzman told Reinhart that his relationship with Ward should not be mentioned in the press because it "was a personal thing."

Katzman's sons have secured dubious deals -- like parks phone contracts and house wine contracts -- a touching tribute to a father's tender care.

Katzman, also, using his position at the NPC, raises money for various "charities." He rarely discloses where the money goes.

One year, quite laughably for those who wink at Katzman's doings, a whole raft of prizes and gifts provided by the NPC for an event somehow mysteriously disappeared.

Still, it is no joke when it comes to Glynn, where millions are at stake for an ailing parks system.

Just as Katzman worked to get Glynn the secret sweetheart lease that was later overturned by the minister of tourism, Katzman is now trying to help Glynn win the bidding.

For instance, Katzman supports Glynn's probably illegal plan that if he loses the bidding Glynn will demolish a three-story building he built on park property, which houses his administration offices.

And instead of selling his two boats at fair market value, Glynn is now promising to dismantle them and have the pieces hoisted out of the gorge.

Katzman supports this kind of talk -- predicting how hard it will be for anyone to replace Glynn.

Of course this may be just baby twaddle.

There are giants in the field. Ripley Entertainment, Alcatraz Media, CamPark Resorts, Xanterra Resorts, the Windsor Co., Disney, Seneca Gaming Corp. and others are mentioned as potential bidders. Any of these can buy boats, build offices and seamlessly begin Maid of the Mist boat tours in 2011.

But halt! Katzman says a new company cannot use the name "Maid of the Mist."

Sad, really.

Maid of the Mist boat rides existed below the falls for more than 160 years. Operators have changed many times. In fact the name is addressed in the old Glynn lease. Paragraph 6.03 reads, "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.'"

Still Katzman, at the NPC's monthly meeting last week, refused to listen to the citizens group, Preserve Our Parks, who asked to address the NPC on the importance and propriety of preserving the historic name for Canada. Katzman, hoping to scare the public into supporting Glynn, predicts the virtual end of Niagara Falls tourism, saying tourists will not even take a boat tour if it is not called Maid of the Mist, ignoring surveys made last summer that show an overwhelming majority of tourists do not even know the name and invariably ask, generically, for the Niagara Falls "boat ride."

Katzman also supports Glynn's claim to a trademark on the words "Maid of the Mist," choosing to ignore the fact that Glynn clearly lied about having exclusive rights to use the name to the Registrar of Trademarks in both Canada and the USA. Glynn swore to two federal governments in 1993 that "no other entity had the right to use the name in commerce."

Not only did Katzman know that Glynn had a lease which says the NPC has the right to use the name, but more tellingly, he knew that the NPC was operating its own Maid of the Mist souvenir store, showing of course the NPC was (and is) using the name in commerce.

If Katzman were impartial, he would refer this naming controversy to a judge, and based on the lease Glynn signed, presume the NPC owns the name until proven otherwise.

Even the so-called "fairness commissioner" ordered by the minister of tourism to be hired to ensure the NPC conducts a fair and impartial bidding process has not been publicly named, with only weeks or perhaps days before the RFP is announced.

And yes, surely, with Katzman whispering in his ear, Glynn will have an edge.

It may be not quite enough to win against the giant companies now lining up against him.

With them, the public, and the Reporter watching, there is a good chance that Glynn and Katzman might get caught in the crosshairs again.

 

 

 
 
 
  Copyright © 2008 Frank Parlato Jr.