Frank Parlato Jr.
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Frank Parlato JR.

A tale of two developers and two mayors

Is there a difference between Anello-Anderson and Dyster-Glynn?

By Frank Parlato Jr.

November 18, 2008

Former Mayor Vince Anello was indicted two weeks ago because, allegedly, he took a “secret” gift of $40,000 from Smokin’ Joe Anderson, then championed Anderson’s development plans in downtown Niagara Falls.
The U.S. attorney charged Anello and Anderson of “scheming to deprive” city taxpayers of “the intangible right of the honest services from a public official,” a felony.
Anderson pleaded guilty. Anello maintains his actions were in the best interests of Niagara Falls.
Recent news reports suggest that James and Christopher Glynn, owners of the Maid of the Mist Steamboat Co., along with others, “secretly” pledged to donate as much as $1 million to enhance the political plans of Mayor Paul Dyster, scheming with the mayor to pay a portion of the salaries of key people in Dyster’s administration.
While Anello took money directly from Joe Anderson and kept it secret, Dyster is taking money indirectly from Glynn and friends — allegedly — for public purposes. Dyster, announcing the money, has insisted on keeping contributors’ names a secret. The money to be filtered through a “charitable” fund called the Building a Better Niagara Fund (BBN).

Niagara Falls Mayor Paul Dyster

Mayor Paul Dyster appears ready to do anything for James Glynn, owner of the Maid of the Mist. Glynn contributed about $4,000 to Dyster’s campaign and, significantly, apparently, funded Dyster’s secret Build A Better Niagara Fund.


As readers know, back in 2004, Vince Anello, after taking $40,000 from Anderson, promoted Anderson’s procuring a 30-year lease for vending rights for the East Pedestrian Mall, a city-owned walkway, which runs between Rainbow Boulevard and Third Street.
Anello didn’t approve the deal but endorsed it. The five-member council approved it without knowledge of Anderson’s gift.
Similarly, Dyster never approved anything directly for Glynn but has endorsed plans that benefit Glynn — ironically, not on the East Pedestrian, but the West Pedestrian Mall, which runs between Rainbow Boulevard and Prospect Street.

Properties owned by James Glynn

(Click here for a larger image)

After Dyster became mayor, Glynn’s Maid of the Mist Co. contracted to purchase the Comfort Inn Hotel and adjacent retail stores that front along the West Pedestrian Mall.
Simultaneously, Mayor Dyster endorsed a plan in August to the City Council to buy out the West Mall lease still under contract with businessman Lou Antonacci.
Antonacci’s lease gave him rights to sub-lease the West Mall to vendors who sell food and souvenirs that compete with the Comfort Inn’s shops and restaurants. The buyout would eliminate Glynn’s main retail competitor.

Comfort Inn

James and Chris Glynn bought the Comfort Inn (above) and before it was announced publicly, Mayor Paul Dyster proceded to pave the way for their success with tax dollars.


At the time Dyster endorsed it, he did not reveal Glynn was buying the Comfort Inn and its stores. Did he know? He hasn't said.
Meanwhile, the secret BBN fund is devised to help pay higher salaries for key appointments of the mayor. Chris Glynn sat in on the hiring process. Dyster, Glynn and other contributors hired Peter Kay for “Economic Development Chief.” About $35,000 of his $100,000 salary will be paid by the BBN.
Glynn and his group also selected and pay part of City Administrator Donna Owens’ salary. ($35,000 of Owens’ $110,000 salary comes from BBN.)
Meanwhile, as the BBN pays government officials’ salaries, Dyster, in turn, partners with USA Niagara — a state agency — designed to help develop Niagara Falls.
As Dyster told the Niagara Gazette in June, “We’re always in close discussion and partnership with USA Niagara.”
Besides supporting the buyout of Glynn’s competition, Dyster, partnering with USA Niagara, will fund the renovation of the poorly-maintained West Pedestrian Mall.
USA Niagara, using public money, is replacing the old, worn, brick walkway with new cobblestone, adding parking, bicycle racks, old-fashioned street lights, benches, and, ironically, for the Maid of the Mist owner, a giant “mist” fountain — all in front of the Glynns’ new investment.
Dyster claims his plan benefits Niagara Falls by creating a pathway between Seneca Niagara Casino and the Niagara Falls State Park. What he didn’t disclose when he championed the plan was that Glynn’s new development was smack in between. Glynn’s plans were announced the following month.
The plan to improve the frontage of Glynn’s development will cost $7.9 million in government money; $1.6 million of it is set aside to buy the historic Wintergarden, a glass building that stands between the East and West malls, owned by Smokin’ Joe Anderson. And ironically, to buy back the vending rights to the East Mall that Anderson bought, which made him a felon.

Wntergarden

Mayor Paul Dyster wanted to save the historic Wintergarden building (above) until his benefactor James Glynn bought a hotel and stores next to it. Now Dyster wants the building torn down.


This purchase by USA Niagara will ensure Anderson will not compete with Glynn by having vendors in the East Mall.
It is also in Glynn’s interest that the Wintergarden be demolished. It could be used to compete against Glynn’s retail enterprises. USA Niagara has dedicated additional money to demolish the Wintergarden.
Additionally, Dyster reportedly supports Glynn’s plan to get his property off the tax rolls with help from the Niagara County IDA. All told, the IDA may gift Glynn with $15 million in tax breaks, gifts and incentives — more than he paid for the property.
Intriguingly, also, of the five major developers surrounding the new Glynn development, the mayor officially refuses to speak to, and has instructed his staff to avoid, three of them, and USA Niagara bought out the other two. Dyster seems deferential to Glynn’s modus operandi.
The Glynns are famous for not liking competition: In absolute secrecy, Glynn has managed to have a monopoly for his Maid of the Mist Co. on both banks of the lower Niagara, getting Park officials to refuse all proposals for competition. By neatly staggering leases on both sides of the border he monopolizes the river and deprives the public of a better attraction on government-owned land.
In 2002, the NY State Parks renewed Glynn’s lease, saying since he had the Canadian side, it made sense to renew it. One thing they failed to disclose is the Canadian lease expires in 2009, but NY Park officials gave Glynn an unprecedented 40-year lease, making it possible for the Canadian side to say, “He has the American lease for 40 years, so how can we give the Canadian side to anyone else?”
World-famous Ripley’s Entertainment, trying to bid for the Canadian lease this year, was rebuffed by the Niagara Parks Commission even though Ripley's' concept included better boats, longer and varied rides, and an interactive pre-boat “wonderland” experience.
Ripley’s offered far more than the “sardine density,” standing only, refreshment-less and bathroom-less, 15-minute boat ride the Glynns offer on their boats as Niagara Falls’ premier attraction.
But we digress: To show how far Dyster will go to help Glynn, consider the proposed demolition of the Wintergarden. Many people oppose it. An architect proved it is cheaper to renovate then demolish. To help quell anti-demolition sentiment, Dyster declared the Wintergarden not repairable. Odd, before Glynn came to develop, Dyster said the Wintergarden was an irreplaceable architectural treasure and an essential part of our cultural heritage.
Meanwhile, as plans move forward, the city will utilize the services of the city administrator and the economic developer (hired and paid by Glynn) to help oversee construction of the West Mall to improve the frontage of Glynn’s investment.
Dyster won’t say who is involved with the secret fund or admit to knowledge of who the donors are. “I don’t know who established the fund,” Dyster said. “I have no direct knowledge of that, nor am I trying to find that out.”
Which last statement is simply ridiculous.
Meanwhile, Smokin’ Joe pleaded guilty in U.S. District Court in Buffalo to scheming with Vince Anello to become a favored developer in Niagara Falls. A federal grand jury indicted Anello.
“It’s very disconcerting that anyone could enter into such arrangements and think that it should not be disclosed to the Council or the public,” U.S. Attorney Terrence Flynn said of Anello’s secret $40,000 fund and his championing of Anderson’s East Mall Plans.
It may be time for Mayor Dyster to say what his involvement is with Glynn on the West Mall.
“If you’re a public official, it makes sense to disclose this kind of information. It’s astounding to me that they would think that it wasn’t appropriate to disclose it,” Flynn said of Anello.
It would seem that Dyster should take heed.
“If you provide money to an elected official with the understanding that you will get a benefit,” Anderson’s attorney Terry Connors said, “you get in trouble.”
I strongly urge Mayor Dyster and the Glynns to step forward to reveal what their involvement is in the secret funds, and with full disclosure to the Council — tell what benefits have been given and received and what was privately discussed and what is expected to be gifted — to the only favored developer in this town — The Glynns, of the monopoly Maid of the Mist.

Frank Parlato Jr. can be reached at frank@frankreport.com.


Coincidences, or secret planning between Dyster and developer Glynn?

By Frank Parlato Jr.

December 02, 2008

You’d have to accept a lot of events as coincidences to believe James Glynn and Mayor Paul Dyster, along with various New York state officials, have not secretly planned for the further enrichment of the Glynn family interests, which already owns the Maid of the Mist Steamboat Co.
Coincidentally or not, the conversion of much of downtown Niagara Falls is being done to benefit, it appears, mainly Glynn, who has now become City Hall’s most favored developer.
Unlike most developers (who spend their own money), all of Glynn’s benefits — in fact, probably James Glynn’s whole development plan — will cost taxpayers money and Glynn little, if anything, at all.
Various aspects of the plan will be paid for by the city and the state. All are championed by Dyster.
Glynn was Dyster’s largest campaign contributor.
From the beginning of his administration, Dyster worked to get Glynn benefits from USA Niagara Development Corp., the state agency charged with developing downtown Niagara Falls.
Coincidentally, Glynn is on the advisory board of USA Niagara, along with Dyster. USA Niagara is funding a $7.9 million plan to renovate the West Mall, which is 420 feet of road frontage along the north border of Glynn’s newly purchased hotel, the Comfort Inn, and its adjacent strip of stores.

Paul Dyster, James Glynn

(Click here for a larger image)

USA Niagara is replacing the old brick walkway in front of Glynn’s complex with new cobblestone, new sidewalks, bicycle racks, old-fashioned street lights, benches and — ironically, for the Maid of the Mist owner — a giant “mist” fountain, which descends over rocks culled from the gorge where the Maid of the Mist boats operate.
Dyster claims everything is being done solely to benefit Niagara Falls by creating a pathway between Seneca Niagara Casino and the state park. What he didn’t disclose when he championed the plan was that Glynn’s new development was smack in between.
Dyster claims this project will restore the walkway as it was when it was Old Falls Street — a conglomeration of individually owned stores and attractions where many city residents earned money from tourism. What he did not say is that Old Falls Street will now be a virtual monopoly given to Glynn.
Meanwhile, as Glynn was securing the Comfort Inn last summer, Dyster and USA Niagara were buying out Glynn’s competitors. Their plan includes $1.6 million of taxpayers’ money to buy the Wintergarden — a historic glass building that stands between the East and West malls and is owned by “Smokin’ Joe” Anderson — and buying back vending rights to the East Mall, which gave Anderson the right to sell retail products outdoors there.
This will ensure Anderson will not compete with Glynn in the East Mall. But the Wintergarden might be used to compete against Glynn’s retail enterprises. Consequently, USA Niagara dedicated money to demolish it. Ironic — when USA Niagara was founded, it developed a master plan. One of its cardinal points was saving the Wintergarden.
In November, a plan to make the Wintergarden an open city center that would house shops and artisan studios drew support for the building’s preservation. Dyster declared it DOA, saying, “The Wintergarden’s time has come.”
Odd, before Glynn came to develop, Dyster said the Wintergarden was an irreplaceable architectural treasure.
Dyster also endorsed a plan to buy the West Mall lease from businessman Lou Antonacci, whose vendors compete with the Comfort Inn’s shops and restaurants. At the time Dyster endorsed it, he did not reveal Glynn was in the process of buying the Comfort Inn complex. Did Glynn or Dyster inform USA Niagara, which will pay Antonacci $310,000 of taxpayers’ money?
Additionally, Dyster supports a plan to get Glynn $15 million in tax breaks — more than he paid for the property — from the Niagara County Industrial Development Agency. Dyster wants to help get the Comfort Inn off the tax rolls — costing the city hundreds of thousands of dollars annually.
Intriguingly, also, of the five major developers surrounding the new Glynn development, the mayor officially refuses to speak to three of them. USA Niagara bought out the other two. But Glynn is used to getting government aid to eliminate competition.
Glynn has had monopoly rights for his Maid of the Mist boats on both banks of the lower Niagara since 1971. In 2002, New York State Parks, without competitive bidding, renewed Glynn’s lease. A spokesperson for the park said that, since Glynn had the lease on the Canadian side, it made sense to renew it.
One thing she failed to disclose is the Canadian lease expires in 2009, but state park officials gave Glynn a 40-year lease — making it possible for the Canadian side to say, “He has the American lease for 40 years. How can we give the Canadian side to anyone else?”
Glynn pays an estimated $700,000 a year to the park, or about 10 percent of reported gross revenues.
On the Canadian side, taxpayers fare better. Glynn pays around $5 million for his monopoly there — about 20 percent of reported sales.
Still, taxpayers there might wonder if park officials are acting in their interest. World-famous Ripley’s Entertainment, trying to bid for the Canadian lease this year, was rebuffed by the Niagara Parks Commission, even though Ripley’s concept included better boats, longer and more varied rides, and an interactive pre-boat “wonderland” experience.
Glynn’s boats have neither seats nor bathrooms. In the height of the season, the antiquated boats are overcrowded and people wait hours to board. They offer only one type of tour — of 15 minutes duration.
But commissioners would not even meet with Ripley executives, causing them to lodge a complaint with the Ontario Cabinet. The chairman of the Niagara Parks Review Committee resigned over it.
Glynn, however, got a new, no-bid, 25-year lease in Canada.
But why does Glynn keep his attraction mediocre?
People are going to visit Niagara Falls anyway. Most will take the boat ride. The less there is to do in Niagara Falls, the more profitable for Glynn.
In fact, a few years ago, Glynn profited from the state park’s elimination of an attraction. Glynn reportedly paid $5 million toward a $25 million state project to “upgrade” the Prospect Point Observation Tower, which served as the launching point for his boats on the American shore. The elevators that led down to his boats were improved, but curiously, elevators that went up to the observation tower — which gave tourists their only aerial view on the American side — were eliminated, along with the tower itself.
The state redesigned an observation deck slightly above ground level. However, people who visit it must exit through the Glynn-owned Maid of the Mist souvenir store.
Speaking of more coincidences: Dyster recently set aside $500,000 of taxpayer money for a defense fund to preserve Seneca rights to run a casino. Dyster wants taxpayers to protect the ultra-rich, tax-free Seneca.
Why? Seneca pays Albany on slot machine revenues. Much of that goes to USA Niagara and is used to improve land near Glynn’s investments. Curiously, USA Niagara lists the Seneca Casino under its projects list on its Web site. Another coincidence: Dyster is pushing a zoning ordinance limiting the height of buildings downtown. Currently, buildings can be 200 feet tall. Under Dyster’s proposal, new construction close to the state park would be limited to 80 feet in height.
Hotel developers may be reluctant to develop if they cannot build high-rises. Until you get higher than 80 feet, you cannot see much of the river. In fact, on the American side, a very tall hotel is needed to see the falls itself — if, and only if, it sits close to the park.
Dyster’s plan to limit buildings near the park will eliminate any chance for any building in Niagara Falls, N.Y., to have an actual view of the falls (other than the 144-foot-tall One Niagara). Coincidentally, while the mayor wants to limit the height of buildings to a maximum of 80 feet, the approximate height of Glynn’s Comfort Inn is 80 feet.
Coincidences continuously abound. Going back to the biggest: Niagara Falls State Park is advertised as being an “Olmsted park.” Frederick Law Olmsted designed the park as an all-green reservation. But, 101 years later, in 1987, Albany felled acres of trees to make a giant parking lot near the Maid of the Mist entrance. Prior to 1987, people visiting Niagara Falls parked in city lots and, consequently, patronized shops there. The state destroyed Olmsted’s plan, and the city lost millions in parking and tourist business. But one man benefited: James Glynn. He had at last a parking lot near his attraction.
Today, the state is again working to aid Glynn, with a proposal by USA Niagara and the State Office of Parks to redesign the Robert Moses Parkway. Sketches show the new parkway design will reroute traffic off the parkway right in front of Glynn’s hotel on the south side.
Eureka! On the north side, a new walkway and fountain; on the south side, a new parkway and much more traffic.
Of 19.58 miles of the Robert Moses Parkway, the state feels the need to change the section in front of Glynn’s hotel “to increase the flow of traffic in the park and to the city.” As for Dyster’s role, the Niagara Gazette criticized him for being secretive and doing little, editorializing, “The mayor’s actions, or lack of them, bring two words to mind: Cautious and secretive.”
They got it only half right.
Dyster has been active, but many of his actions seem to benefit one man -- James Glynn, who seems to have City Hall, the state park and even the Ontario Park by the tail.
And that, my friends, is probably no coincidence.


Glynns may lose Canadian Maid of the Mist lease

Ontario Integrity Commision report due soon

By Frank Parlato Jr.

January 27, 2009

A 15-minute boat ride in the gorge below Niagara Falls, called the Maid of the Mist, is the most lucrative paid attraction in Niagara Falls.

Two exclusive leases for the rights to use the banks of the lower Niagara, with Ontario and New York Parks, for the operation of Maid of the Mist boats generate annual revenues of tens of millions of dollars for the leases' owner, James Glynn. For 38 years, Glynn has held these leases, never having had competition for the rights to operate boats at the base of the Falls. That may change soon.

Last year, events unfolded that could unhinge Glynn's monopoly in Canada this year.

Lynn - Morrison

(Click here for a larger image)

It began in January 2008, when Tim Parker, general manager of Ripley's Entertainment, wrote a letter to the chairman of the Niagara (Ont.) Parks Commission, Jim Williams, expressing an interest in bidding on the boat lease.

Ripley's is a worldwide entertainment company that owns the Believe It or Not Museum, the Moving Theater, Louis Tussaud's Waxworks, the Guinness World Records Museum and the $130 million Great Wolf Lodge in Niagara Falls, Ont.

Parker explained Ripley's Entertainment's interest to the Reporter.

"In this day and age, to be able to get to the bottom of the falls and actually feel the presence and the thunder and roar is an absolute attraction in itself. But how do you deliver the thrill? Do I think delivering that in a 15-minute ride, on a 15-year-old steel boat (as the Glynn's presently do) is the proper way to deliver it?

"In this day and age we have come a long way in attractions, and the way we deliver services to guests. Can it be delivered better? Of course."

Ripley's Entertainment's plan offers better boats, longer and more varied rides, nighttime rides and a pre-boat wonderland experience.

Maid of the Mist offers only one 15-minute ride, during the daytime on older steel boats without seats, bathrooms or refreshments.

Parker's Jan. 25, 2008 letter to Williams read in part, "I would like to know when (the Maid of the Mist) lease is due to be renewed and how another interested party would have the opportunity to bid."

In January, Ripley's filed a freedom of information request for the government's lease with the Maid of the Mist in order to determine how to competitively bid.

A month later, while Ripley's waited for a response, John Kernahan, general manager for the Parks Commission, suddenly started drafting a new lease for Glynn more than a year and a half before it was due. Glynn's lease expires November 2009. Behind the scenes was Archie Katzman. While other parks commissioners have served less than five years, Katzman, the vice chairman, has been on the commission since 1971, the same year the Glynns took over the Maid of the Mist.

Katzman has used his position to feather his family's nest. He procured for one son the contract to sell wines at park restaurants and for his other son the major contract for park cell phones.

In his late 70s, Katzman has had financial difficulties with a number of unsuccessful high-profile ventures, including a hotel, bowling alley and restaurants in St. Catharines, all of which were business failures.

By late February, Ripley's got its response regarding the Maid of the Mist lease. Strangely, the 34-page document had nearly all details -- including the date it was signed and when it will expire -- blacked out.

Ripley's could hardly be expected to bid based on that.

Ripley's appealed the redacted copy and won the right to have an exact copy of the lease. Parker was told it would take until April 17. As Williams and Kernahan worked feverishly readying the new Glynn lease, a scheduled "due diligence" board meeting on the matter was canceled.

Instead, a board meeting was scheduled on April 18 to vote on the Maid of the Mist lease. Behind the scenes, Williams, Katzman and Kernahan were lobbying the other commissioners on how to vote, without telling them of Ripley's interest in bidding.

In mid-April, Parker suspected the commission might act without giving him a chance. In an April 11 letter to Williams, Parker wrote of the difficulty in getting a copy of the lease, adding "we request ... commissioners defer making any decisions on renewing (the) lease ... until we have the opportunity to receive the copy of the lease and respond to the Niagara Parks."

Although never told of Ripley's Entertainment's interest, one commissioner, Bob Gale, sensed something was wrong.

On April 17, the day before the board meeting, he sent e-mails to board members telling them board leaders "were rushing the Glynn renewal ahead of schedule, without the due diligence. Why?"

Later that morning, he got the answer. Parker called Gale and asked if he was aware of his letters to Williams.

"Bingo," Gale said. "Now I knew why they were rushing the Glynn lease."

He immediately e-mailed the board to inform them of Ripley's Entertainment's interest. Members learned of it just hours before they were to vote on the biggest lease in the park.

Gale asked the board to wait for the next meeting to allow Ripley's a chance to compete, but was overruled by Williams, Kernahan and Katzman. Ultimately, a majority voted to renew Glynn's lease for 25 years.

Afterward, Gale resigned his committee chair of marketing and events, but remained as commissioner.

When the story broke, fingers began to point at Kernahan.

Why didn't he inform the board earlier that Ripley's Entertainment was interested? Why were they shut out of the process? Amazingly, Kernahan told the Niagara Falls Review in July, "I have seen no proposal from (Ripley's). I can't comment on a proposal I haven't seen. ... I'd be surprised, quite frankly, if he has one."

Meanwhile, Gale filed a disclosure of wrongdoing with the Integrity Commission of Ontario. The IC investigation, led by chief internal auditor Richard Kennedy, led to a summary report submitted to commissioner Lynn Morrison on Dec. 15. Valerie Jepson, spokesperson for the IC, confirmed the commissioner is reviewing the report.

Also under investigation is that at least one other company also tried to bid on the boat lease, a fact that was again not disclosed to members of the Parks Commission.

Alcatraz Media, one of the largest sellers of tours and tourism activities in the world, attempted in 2005 to be considered for a chance to bid on the Maid of the Mist lease. Alcatraz represents companies who provide more than 800 boat tours around the world.

Alcatraz spokesperson Bill Windsor told the Reporter he was rebuffed by Kernahan.

After having expressed interest three years earlier, Windsor wrote all 12 commissioners on Oct. 31, 2008. "I was not informed (the Maid of the Mist lease was up for renewal). A government entity should have an obligation to allow any interested parties to bid. Maid of the Mist is simply a concessionaire. They own some boats, as do many companies. There is no valid reason for claiming Maid of the Mist should have some kind of special rights."

Companies represented by Alcatraz that might be qualified and interested in offering tours include Hornblower Cruises, operator of the ferryboat services to Alcatraz and the Statue of Liberty; Circle Line Cruises, which operates cruises around Manhattan; and Red & White Fleet, which offers boat tours in San Francisco Bay.

All of these companies, unlike Glynn, have to compete -- often with each other -- for the right to serve the areas they lease. The Executive Council of Ontario is required to approve the lease between Niagara Parks and the Maid of the Mist Corp. In the past, approval has been virtually automatic, but because of the controversy, this year might be the exception, a source said. Right now, the ball is in the court of Integrity Commissioner Lynn Morrison. She can recommend the Ontario government not sign the new lease and put it back for open bidding, or she can do nothing.

The latter may be risky.

For if it turns out that there was collusion or a conspiracy to deprive the public of the best option for the leading attraction for the tourist town of Niagara Falls that resulted in an inferior service being offered, the onus of the mistake will fall upon the Integrity Commission.

On the other hand, simply bringing the process out in the open harms no one. If the Glynns -- who have the lease through 2009 -- have the best proposal, then let that be seen in the sunlight.

If another company can provide a better deal, the public wins.

Meanwhile, Parker confirmed that Ripley's still wants to bid.

"We have a marvelous package that will provide a new level of experience for the tourist ready to go to bid," he said.


Canadian Integrity Commission investigation intensifies

Details of secretive Maid of the Mist leases emerging

By Frank Parlato Jr.

Febuary 03 2009

Canadian Integrity Commission

The Integrity Commission of Ontario last week sent a letter to Ontario Parks Commissioner Bob Gale concerning new information in the investigation into the Maid of the Mist lease renewal on the Canadian side of the Niagara River.

Release of the IC report, which was due on Feb. 1, could determine the future of the Maid of the Mist Steamboat Co. in Canada. On Jan. 26 -- the day the Niagara Falls Reporter published online a blistering expose on seeming irregularities in the lease renewal -- Parks Commissioner Lynn Morrison contacted IC attorney Valerie Jepson with an urgent request for additional information.

The Ontario Parks Commission voted last year to renew a lease to use docks on public land in the park for the Maid of the Mist Steamboat Co. The present Maid of the Mist dock lease expires in November.

The renewal requires approval from the Ontario Cabinet and will be partly based on the impending results of the IC investigation. The investigation focuses on Niagara Ontario Parks commissioners, who by law conduct their meetings secretly.

Last April, two commissioners -- Chairman Jim Williams and Vice Chairman Archie Katzman -- apparently failed to disclose to the other board members that Ripley Entertainment Inc. had made a competing offer for the lease held by the Maid of the Mist.

Williams and Katzman worked behind the scenes to ensure James Glynn, owner of the Maid of the Mist Steamboat Co., renewed his lease at advantageous terms. Other commissioners, without being fully informed, voted on April 18, 2008, to renew Glynn's lease for a whopping 25 years.

But Gale discovered the furtive efforts of Williams and Katzman, and blew the whistle by making a disclosure to the IC.

During winter and spring of 2008, Ripley Entertainment, through their Niagara Falls manager, Tim Parker, attempted to be included in the bidding process for the dock lease, which the Maid of the Mist presently holds. Williams and Katzman withheld that information from the other commissioners, simultaneously working to speed up Glynn's lease renewal.

It is not known why Williams and Katzman -- commissioners appointed to represent the interests of the public -- would seemingly work in effect to help Lewiston businessman Glynn. Commissioners sign a confidentiality agreement that forbids them from telling the public anything that transpires during meetings.

The secrecy and lack of competition may have allowed Glynn to negotiate a lease at terms substantially better than what he would have had to pay if Ripley Entertainment and others had competed.

A second company, Alcatraz Media, has since made a written offer that promises to pay substantially higher lease payments than Glynn's. Alcatraz's original expression of interest predated Ripley Entertainment's and was likewise not made known to the commissioners who were voting on the Glynn lease.

Estimates that the Parks Commission could get $2 million more in rent annually than what Glynn is paying have surfaced. That would mean the park could realize $50 million more in revenue during the term of the unusually long 25-year lease approved for Glynn.

Commission officials frequently talk about the need to increase revenue to help support the parks system and historic sites. Since the investigation, Glynn-friendly commissioners have used three arguments to justify rejecting everyone but Glynn.

1. Glynn is a franchise holder who owns the right morally and legally to forever lease the Niagara for his boat tours.

Legally, however, there is nothing in the lease that guarantees Glynn a perpetual monopoly. In fact, in 1971, Glynn merely bought two steamboats and the rights to two leases. He did not create the attraction, which has been around since 1848.

The leases have expiration dates.

"Glynn should have known from day one, if you rent or lease anything, that when the lease is up, you have a chance to lose it," said Ripley's Parker. "Now if this is private land and the landlord wants to renew a lease without hearing other offers -- fine. But this is public land. The commissioners represent not themselves personally, but the people of Ontario."

2. Glynn's Maid of the Mist lease is so complicated that no one other than Glynn could fulfill the tenuous terms and meet the tremendous needs of the parks.

The actual lease, however, is a standard 34-page operations and land lease. Far from complicated, it is one of the simplest of leases and can be purchased at many stationery stores.

The rent is a flat 20 percent of gross sales. It grants to Glynn, as the "sole commercial entity," exclusive rights to dock his boats on the Canadian side of the gorge beneath the falls.

There is not one complicated or unusual provision in the lease, except that it requires Glynn, as the sole boat owner, to recover dead bodies in the waters below the falls. When told of this condition, Parker said, "Why, I can fish out dead bodies as good as Glynn can."

3. Negotiations had already begun with Glynn before Ripley's asked to bid. If the Parks Commission considered anyone else, Glynn might sue the park for bad faith negotiations.

But until a lease is signed, it is not bad faith to negotiate for better terms or hear other offers. It is not bad faith to take the best offer.

Leases become enforceable after, not before, they are signed.

The Maid of the Mist attraction is presently a 15-minute boat ride in the gorge below Niagara Falls. According to published figures, the Maid delivered 2.5 million rides last season at $12.50 U.S. per adult and $7.50 U.S. per child.

Simple math reveals the lease generates annual revenues of tens of millions of dollars for Glynn.

For 38 years, Glynn has held two leases -- one in Canada and the other in the United States -- giving him total control of the lower river on both sides of the border. One of the prime water attractions in the entire world has been given to one man on public land for 38 years. He has never had to compete for the rights to keep the leases.

Commissioners have zealously worked to keep the terms of his deal secret. If not for the fact that media giant Ripley Entertainment attempted to bid, this latest lease renewal would probably have remained a secret.

To dispel the notion promulgated by some commission members that Ripley Entertainment did not really have a bid, consider that Parker met with and later wrote multiple letters to Jim Williams, chairman of the Niagara Parks Commission, expressing interest in bidding months before the Maid lease was put on the agenda for a vote last April.

Parker told the Reporter, "After meeting with Williams, I suspected he wanted to make sure Ripley's did not get a chance. He would not even tell me when the lease expired. So I filed a Freedom of Information request and followed it up with letters expressing Ripley Entertainment's interest and qualifications."

Ripley's is a worldwide entertainment company that has operated attractions in Niagara Falls since 1962 and recently opened the $130 million Great Wolf Lodge on Victoria Avenue. Among their holdings, Ripley's owns the Guinness Book of World Records.

Although Ripley's expressed interest, Williams would not give them a copy of the lease -- which is necessary for Ripley's to know what they are bidding on.

To get those, Parker had to file two more Freedom of Information requests. Meanwhile, Parker wrote Williams asking that "commissioners defer making any decisions on renewing the said lease with any parties until we have the opportunity to receive the copy of the lease and respond to the Niagara Parks."

While Ripley's was waiting for a response, Williams, Katzman and the general manager for the commission, John Kernahan, rushed to draft and then schedule for a vote the new Glynn lease, without the commissioners having seen the new lease and without telling them about Ripley Entertainment's offer.

Gale became suspicious. Williams seemed to be "prematurely pushing" the renewal of Glynn's lease, he thought.

"The lease was good for another year and a half, and suddenly there was a rush to get Glynn renewed," Gale said. "Something's going on here."

Williams' plan to renew Glynn's lease probably would have worked, except Parker happened to call Gale, ironically, one day before the vote was scheduled on the Glynn lease.

Parker asked Gale if he was aware of his letters to the board.

"I had a sick feeling deep in the pit of my stomach," said Gale of Parker's call and its effect. "Jim Williams hadn't told me about Ripley Entertainment's offer."

Immediately after learning of Ripley Entertainment's interest, Gale e-mailed every commissioner. But now it was only hours before the scheduled vote.

Outside the meeting, Gale made an intelligent and honest suggestion: "Postpone the vote. Give Ripley's 30 days to allow them to compete. The Glynn lease still has a year and a half to go. What's the rush?" Williams refused, and the commission voted to renew Glynn's lease.

"It was a dirty vote and it made the commission seem dirty," Gale said. Shortly afterward, he disclosed the process to the IC.

The IC assigned the investigation to a team under the direction of Richard Kennedy, a chief internal auditor for the Ministry of Finance. Kennedy's team provided a summary report to Commissioner Lynn Morrison on Dec. 15.

Besides Ripley Entertainment, it turned out, another company had tried to bid on the boat lease -- another fact that was not disclosed to members of the Niagara Parks Commission.

Alcatraz Media, which sells more than 800 boat tours of various types around the world, asked to be considered for a chance to bid as far back as 2005.

Alcatraz spokesperson Bill Windsor told the Reporter he was ignored.

After the story broke of the investigation, Commission manager John Kernahan told the Niagara Falls Review that Windsor's proposal was nothing but "hot air."

"I was surprised to find Kernahan accusing me of "hot air," Windsor told the Reporter. "To the best of my knowledge, I have never spoken with John Kernahan in my life. For him to come to that conclusion he must have gotten that from someone, and my guess is he was parroting words told to him by James Glynn." Windsor also suspected murky dealings and bluntly asked the 12 commissioners by letter, "Have (any of) you received any form of gifts or compensation in exchange for any votes from any lessee?"

Other companies that might be qualified and interested are Hornblower Cruises, the operator of the ferry boat service to Alcatraz and the Statue of Liberty; Circle Line Cruises, which operates cruises around Manhattan; and Red & White Fleet, which offers boat tours in San Francisco Bay. The Disney Co. and the Seneca Gaming Corp. have been mentioned as potential bidders.

The U.S. National Park Service never lets any company have secret or perpetual leases. Any qualified bidder may compete in conformity with published terms. The lease is generally for 10 years.

The ball is in Morrison's court. She can recommend the Ontario government not sign the new Glynn lease and send it back to the commissioners for open bidding, or do nothing and in effect allow the lease to have her imprimatur.

But if it turns out later there was collusion or a conspiracy to deprive the public of the best option for the leading attraction for the tourist town of Niagara Falls, which resulted in an inferior service being offered, the onus of the mistake will fall upon the IC.

The investigation into the murky secretive process that led to the renewal of Glynn's Maid of the Mist lease has given impetus to Ontario Provincial Parliament member Kim Craitor -- who represents the district or "riding" that encompasses Niagara Falls, Ont. -- to further push his Transparency in Public Matters Act. Craitor told the Reporter that the lack of accountability not only with the Parks Commission but many Ontario agencies prompted him to sponsor the bill.

If passed this session of Parliament, secret leases such as those made by commissioners with the public's assets, like the Glynn lease, would be a thing of the past.

"I would open (commission) meetings to the public. After all, this is taxpayers' money," said Craitor. "This bill would allow meetings to be attended by the public and filmed for cable television."

So what happened behind closed doors at the Niagara Parks Commission that enabled commissioners to make what might be described as a rather ham-handed attempt to preserve for Glynn his Maid of the Mist lease on public land without allowing competition?

The days when a businessman can have a secret lease on public land for 30, 40 -- or, in Glynn's case, 62 years -- without bidding or public awareness, seems part of an archaic past, although it might survive in New York State Parks, because, unlike Ontario, New York state has no Integrity Commission.

In a deal that makes the Ontario Parks deal seem almost aromatic, New York State Parks in 2002, without competitive bidding, secretly renewed Glynn's lease there at an extremely low rent -- in fact, half what he pays on the Canadian side.

On the New York side, Glynn pays only 10 percent of gross revenues (an estimated $700,000 a year). But on the Canadian side, Glynn pays 20 percent (around $5 million) for his monopoly there. Ontario will likely receive even more than 20 percent if it is open to competitive bidding.

Ironically, Gale might have had every reason to secretly support the Glynn deal like other commissioners did. Gale supplies diesel to the Maid of the Mist.

Gale said he has since been threatened by Glynn employees who said he will lose the contract for providing diesel.

"Sure, I do not want to lose the business," Gale said, "but I was appointed to this board to do the right thing. It is not that I am against Glynn, I am against the process, the secret way the commissioners voted to renew his lease."


Growing chorus of critics demands, send Maid of the Mist lease back for competitive bidding

By Frank Parlato Jr.

February 10, 2009

Since publication of an expose by the Niagara Falls Reporter on the secretive methods that Niagara (Ont.) Parks Commissioners used to renew the dock lease for the Maid of the Mist Steamboat Co., a growing number of Canadians are calling for the lease to be sent back for competitive bidding.

And the Ontario government has assigned a forensic investigation team led by two retired Royal Canadian Mounted Police investigators -- the equivalent of FBI agents here in the United States -- to look into possible illegalities surrounding the lease renewal. The investigators will assist the Ontario Integrity Commission in its probe of what by all accounts was a shady deal.

The parks commission, under Chairman Jim Williams, chose to renew Maid-owner James Glynn's lease for a whopping 25 years, while keeping a competing offer from Ripley Entertainment secret from other commissioners.

If the lease stands, one of the prime water attractions in the entire world will have been given to Glynn on public land for 62 years. He never had to compete for the rights to keep the leases. His present lease expires in November.

The Maid of the Mist, a 15-minute boat ride in the gorge below Niagara Falls, delivered 2.5 million rides last season. Among those calling for the commission to open the bidding process is the citizen's group Preserve Our Parks (POP). Patricia Salci Mangoff, coordinator for the group, told the Reporter that POP sent a letter to Monique Smith, minister of Tourism, in Toronto last week demanding a public tender for the lease of the Maid of the Mist.

Sheila and Monique

At the Liberal Party Policy meeting last weekend, at the Sheraton Fallsview, Monique Smith, Minister of Tourism for Ontario (R), receives  from Sheila Hosking (L), of the powerful activist group, Preserve Our Parks,clippings of the Niagara Falls Reporter's expose on the sordid Maid of the Mist lease renewal, and a letter from the group demanding the lease be re-opened to competitve bidding .

"As an agency of the government that aims for financial self-sufficiency, why would the (parks commission) not allow a competitive bidding process to generate the greatest financial benefit possible?"

In 2005, POP waged a successful campaign to stop commissioners from deploying gondolas in park waters. And when the city planned to gift developer Dino Dicienzo the "Jolly Cut," a popular park next to the Skylon Tower leading down to the Niagara Park, POP waged a campaign that garnered 30,000 signatures. The city bowed to pressure and retained the park.

"It is outrageous that commissioners ignored Ripley and other potential bidders when the need for money is so acute," Mangoff said. "We are completely disgusted."

Meanwhile, members of the Parks Union are shaking their heads.

OPSEU Local 217, which represents park workers, has shown support for reopening bidding. The possibility that the Maid of the Mist lease might cost Parks more than $50 million in lost rent, while park workers are simultaneously facing impending layoffs, prompted OPSEU to post the Reporter's entire 2,900-word expose on the home page of their Web site.

Parks Commission Chairman Jim Williams is sticking by his stance to aid Glynn in keeping his advantageous lease secure from competition.

Williams wrote to the premier of Ontario, Dalton McGuinty, "The legal, financial and business scrutiny for the (Maid of the Mist) lease of these lands is second to none."

Based on facts that have surfaced since the Reporter's expose, the statement is patently false. Even the method used by the Parks Commission in renewing Glynn's lease is in violation of its own Procurement Policy, which states that procurement of "goods and services is to be carried out in accordance with generally accepted procurement principles of competition."

This policy requires competitive bidding for any services valued in excess of $100,000. The Maid of the Mist's 25-year lease -- estimated at $5 million per year and $125 million over 25 years -- may generate as much as a billion dollars for Glynn.

Glynn's lease requires him to pay 20 percent of gross sales. Competitive bidding may bring the rent upward of 33 percent.

Parks Commissioner Bob Gale, who blew the whistle that made the secret Glynn lease public, made a statement this week on the conflict of interest he feels Parks Commission Chairman Williams has, lending credence to the possibility that Williams is deeply conflicted.

Williams owns a consulting firm where he publicizes his role in the commission.

"Williams' consulting firm ... stinks of conflict," Gale said. "An average person would say that he is using his position for personal gain."

Williams' company Web site reads, "(Williams is) the head of one of the Province's most important provincial Tourism agencies ... responsible for the preservation and protection of one of the world's most famous Tourism Icons, Niagara Falls. ... He is also responsible for the leadership over the economic growth and viability of its $80 million annual commercial operations."

The Web site claims that Williams' Palmer Consultants have worked on projects in Jordan, Russia, Macedonia, Lithuania, the Caribbean, South Africa and China.

Under the "projects" section, however, there is nothing listed. Without a single listed project, who is funding the operation? Curiously, Williams' Web site commenced the day before the NPC voted for Glynn's lease renewal, April 17, 2008. Glynn, it seems, knows how to get the best from government officials.

Glynn recently purchased the Comfort Inn Hotel and adjacent retail stores that front along the West Pedestrian Mall next to the Niagara Falls State Park.

USA Niagara, the state agency charged with developing Niagara Falls, is replacing the old, worn brick pedestrian mall with new cobblestone, adding -- ironically, for the Maid of the Mist owner -- a giant "mist" fountain, right in front of Glynn's new investment.

USA Niagara will also spend $310,000 to buy out a vendor lease that competes with Glynn-owed stores. The plan to improve the frontage of Glynn's development will cost taxpayers $7.9 million.

When USA Niagara worked to eliminate Glynn's competition, they failed to inform the public of Glynn's hotel purchase. One might think it a mere coincidence, except that Glynn sits on the USA Niagara advisory board.

In 2002, when the New York State Parks Commission secretly renewed Glynn's lease, state officials gave Glynn an unprecedented 40-year lease, which expires in 2043, giving him 72 years without competition to control the U.S. side of the Niagara.

New York officials negotiated to charge Glynn only 10 percent of gross sales as rent, versus 20 percent on the Canadian side.

A few years ago, Glynn paid $5 million toward a $25 million state project to "upgrade" the Prospect Point Observation Tower in the state park. The elevators leading down to his boats were improved, but the observation tower -- which gave tourists their only aerial view on the American side -- was all but eliminated.

Now people who visit the deck must exit through the Maid of the Mist souvenir store.

The Niagara Falls State Park, as originally designed by Frederick Law Olmsted, was an all-green reservation. For more than a century, people visiting Niagara Falls parked, whether in car or horse and buggy, in the city and patronized shops there.

In 1987, park officials effected a plan to clear -ut hundreds of mature trees to make a giant parking lot near the Maid of the Mist entrance.

The state destroyed Olmsted's plan; the city lost millions in parking and tourist business. The sole beneficiary of the horrendous project was James Glynn -- he had a parking lot built near his attraction.

The Niagara Tourism and Convention Corp. (NTCC) gets 80 percent of bed taxes collected from Niagara Falls hotels. NTCC is a private, "not-for-profit" corporation and is supposed to promote tourism. Its chairwoman, Tricia Mezhir, is an employee of Glynn.

In 2003, when Albany officials created the NTCC, funding was to come in part from a 50-cent surcharge on elevators serving the Maid of the Mist.

James Glynn's son, Chris Glynn, was NTCC's first chairman.

Not surprisingly, rather than collect a surcharge from the Maid of the Mist, it was decided that hotel bed taxes plus casino cash would take care of NTCC funding. Today, NTCC functions largely to promote Glynn's Maid of the Mist with taxpayer money. NTCC publishes a Visitors Guide, which features the Maid of the Mist. And NTCC employees travel worldwide with Chris Glynn promoting his boat ride.

To justify NTCC funding, Niagara University students provided a "study" to demonstrate that NTCC is effective. Glynn is a major contributor to N.U., and his son Chris is a trustee. They established scholarships for the same students who prepared the studies.

In January 2008, Tim Parker, general manager of Ripley Entertainment, wrote to NPC Chairman Williams expressing interest in bidding on the boat lease. Within days, Williams caused his staff to start drafting a new lease for Glynn, more than a year and a half before it was due.

Williams hurriedly scheduled a board meeting on April 18, at which a vote on the Maid of the Mist lease was to be held. The day before the meeting, Parker called Commissioner Bob Gale to ask if he was aware of his letters to Williams. He was not. Gale then asked the board to wait for the next meeting, to allow Ripley's a chance to compete. But Williams refused, and the commission voted to renew Glynn's lease on April 18.

Gale then filed a disclosure of wrongdoing with the Integrity Commission of Ontario.

It was subsequently revealed that Alcatraz Media, one of the largest sellers of tours and tourism activities in the world, also attempted, in 2005, to bid on the lease. This was not disclosed to the board either.

Sensing, perhaps, they might lose the lease, Glynn last week hired high-priced Ontario lobbyist Bob Lopinski to lobby the province on his behalf. Lopinski once served as Ontario Premier Dalton McGuinty's director of issues management and legislative affairs.

Now McGuinty may ultimately have a hand in deciding Glynn's fate.


Company files ethics complaint against Commission in Maid of the Mist scandal

By Frank Parlato Jr.

February 17, 2009

Alcatraz Media, one of the largest sellers of tours and tourist services in the world, has filed an ethics complaint with the Ontario Integrity Commission (IC) against the Niagara Parks Commission (NPC) over their handling of the Maid of the Mist dock lease renewal in the Niagara Provincial Park.

This is the second ethics complaint filed since the NPC secretly renewed the lease for Maid of the Mist Steamboat Co. owner James Glynn for a whopping 25 years -- without competitive bidding or tender process.

Maid of the Mist scandal

The original complaint -- which made public the secretive process by which the NPC renewed Glynn's lease, more than a year and a half before it expired -- came about because one commissioner, Bob Gale, felt the process was slanted to help Glynn and was not in the park's best interests.The Niagara Falls Reporter broke many of the key elements of this burgeoning scandal.

Gale not only filed a disclosure of wrongdoing to the IC, but also -- in a rare move by any park commissioner -- went public with his concerns.

Gale told the Reporter, "The Glynn lease renewal process was the most unfair process I've ever witnessed. Certain park commissioners deliberately withheld information from other commissioners about the interest of potential bidders and secretly moved to rush Glynn's lease ahead of schedule. It was a dirty deal and a dirty vote. It made the NPC look dirty."

Alcatraz Media and Ripley Entertainment were among potential bidders excluded from bidding on the lease. Ripley's is a worldwide entertainment company that has operated attractions in Niagara Falls since 1962 and recently opened the $130 million Great Wolf Lodge on Victoria Avenue. They also own the entertainment and publishing rights to the Guinness Book of World Records.

Alcatraz Media sells more than 800 boat tours of various types around the world and represents, among other companies, Hornblower Cruises, the operator of the ferry boat service to Alcatraz and the Statue of Liberty; Circle Line Cruises, which operates cruises around Manhattan; and Red & White Fleet, which offer boat tours in San Francisco Bay.

Alcatraz has retained Graydon Sheppard, barrister-at-law, of Hamilton, Ont., to file an ethics complaint against the NPC.

Alcatraz's complaint alleges, among other things, that the owner of the Maid of the Mist, James Glynn, has undue influence over the NPC.

"We have deposition testimony, e-mails and other documentation of this," Sheppard said. "How can a private company have so much influence over a government entity to have this happen?"

According to Bill Windsor, spokesperson for Alcatraz, his company is planning to sue the NPC to require them to re-open the bidding, giving Alcatraz and other companies a chance to compete for the lucrative dock lease.

Sheppard last week gave notice to Ontario Minister of Tourism Monique Smith that Alcatraz will "commence an application for judicial review of the decision of The Niagara Parks Commission to renew the existing lease between the Commission and Maid of the Mist."

The Maid of the Mist last year provided 2.5 million boat rides, according to published figures, at $12.50 U.S. for adults and $7.50 U.S. for children, bringing in tens of millions of dollars in gross revenue for Glynn's company. If the 25-year lease renewal stands, it might mean more than half a billion in revenue for Glynn.

The process that led to the renewal of Glynn's lease was conducted in secrecy and in violation of the procurement policy of the NPC, which requires procurement decisions to be preceded by a full call for tenders.

The Reporter obtained a copy of their procurement policy. It reads in part, "The procurement of goods and services by The Niagara Parks Commission (NPC) is to be carried out ... with generally accepted procurement principles of competition and obtaining value for money."

Interestingly, their policy requires a tender process for services valued in excess of $100,000. The Maid of the Mist lease is estimated at $5 million per year.

The NPC procurement policy further states, "The principles of competition or comparative analysis and obtaining value for money are to be applied to all procurement decisions."

By excluding potential bidders from bidding on the lease, the NPC seems in clear violation of its policy.

There is an Exceptions Clause, however. It reads, "From time to time, an exception to the procurement requirements may be required in instances where there are very limited or specialized vendors, suppliers or bidders ... highly specialized knowledge or expertise ... (or when) the preparation of necessary documents is highly cost prohibitive; or there are timing constraints. A direct appointment may apply."

But is this the case for Glynn's boat rides?

Windsor doesn't think so.

"There are no specialized vendors in boat rides. This is a ferry boat operation, a relatively simple business," he said. Windsor should know, since Alcatraz represents companies that deliver more than 800 boat tours around the world. His companies, he adds, have to openly bid for leases to National Park operations, and the leases are for 10 years.

"There are many existing tour companies and boat operators in North America that offer similar services to the Maid of the Mist. There is no highly specialized knowledge or expertise required to operate boats," Windsor added. "It is a standard business."

The NPC dock lease with the Maid of the Mist, the most lucrative the park has, is a simple 34-page operations and dock lease requiring that boats be available during the summer season and that the lessee pay 20 percent of the gross revenues. The Maid of the Mist is estimated to bring in about $5 million per year to the NPC. Uniquely for leases of this kind, the NPC failed to mandate a minimum guarantee of revenue. On the New York side, Glynn pays a flat 10 percent of gross revenues (an estimated $700,000 a year).

Estimates that the park could get $2 million more in rent annually than what Glynn is paying have surfaced and, if true, would mean the park could realize $50 million more in revenue during the term of the unusually long 25-year lease approved for Glynn.

Alcatraz Media has already made a written offer that promises to pay substantially higher lease payments than Glynn. "It is amazing what competition can do in this world of ours," Windsor said.

According to published reports from the Minister of Tourism, since 9/11, Niagara Falls, Ont., has seen the largest decline in tourism of any area in the province. Since 2000, U.S. visitation has fallen by 50 percent. In addition, poor business decisions on the part of the NPC have further drained resources.

The Legends Golf Course, built at a cost of $27 million, has operated in the red since its opening. Its costs escalated dramatically when it was discovered that some of the course was to be built on marshland.

And the Fury, a virtual reality attraction, built at a cost of almost $10 million, has proved a dismal and disappointing attraction, costing the NPC money every year.

In reaction to these and other losses, the NPC has begun layoffs and buyouts of park employees.

Ultimately, the renewal of the lease, although approved by the NPC, is subject to final approval by the Executive Council of the Parliament of Ontario. That approval has not come yet and may not come, in light of the growing number of complaints and the probable opportunity for the NPC to enhance revenues by making the lease subject to competitive bidding.

Experts in the tourism industry say that, even without raising the rent percentage, millions of dollars in annual revenue may be lost simply because the Maid of Mist Co. does not provide enough boats. During the height of the summer season, with three- and four-hour waits in line, many tourists elect not to take the 15-minute boat ride.

Since the boat rides began 163 years ago, only one entity has held the lease rights: Maid of the Mist. Glynn did not invent the attraction or found the company. He purchased the existing company, which consisted of two steamboats and two leases, in 1971. The present Maid of the Mist dock lease expires in November.

The current Maid of the Mist steel boats no longer meet the standards for such an attraction in a world-class destination like Niagara Falls. Glynn's boats have neither seats nor bathrooms. The antiquated boats are overcrowded and offer only one type of tour -- of 15 minutes duration.

While Ripley's general manager, Tim Parker stopped short of telling the Reporter their exact plans to improve the attraction, he intimated that restrooms, seating, weather-protected boats and handicapped access would be added.

Both Ripley's and Alcatraz Media spoke of an extended season. The Maid opens in April or May, depending on ice conditions, but shuts down in October, well before ice conditions require its closure.

"Glynn prefers to close early because it is not so lucrative for his company," Windsor said. "But keeping it open longer would mean the NPC, which is paid on gross revenues, could earn additional revenue. (Glynn) is sort of a fair-weather operator. He takes the good days, but is not particularly interested in the less-profitable days -- even if it means more for the NPC." Asked whether cold weather would make a November ride uncomfortable, Windsor again faulted Glynn's operation.

"That's because Glynn has no weather-protected boats," he said. "Even one weather-protected boat, where the tourist sees the spectacular waterfalls through windows, could extend the season by two months and give tourists an added reason to visit the Falls in late fall and early winter."


Lawsuit sheds light on secretive Niagara Parks Commission

Glynn lease may be stymied by Ontario Superior Court

By Frank Parlato Jr.

March 03 , 2009

A lawsuit filed in Ontario Superior Court last week seeks to nullify the 25-year lease agreement between the Niagara Parks Commission (NPC) and the Maid of the Mist Steamboat Company Ltd., a move that could cost the tour boat operator as much as $400 million over the life of the contract. The Maid of the Mist is a private corporation owned entirely by the family of James Glynn of Lewiston.

Whose side are they on?

(Click here for a larger image)

At the heart of the suit is the claim that the NPC by awarding the lease violated its own procurement policy, which requires competitive bidding for services in excess of $100,000. A three-member panel of judges will hear the case filed by William M. Windsor, a businessman and spokesperson for Alcatraz Media, one of the largest sellers of boat tours and related tourist services in the world.

Windsor said Alcatraz Media was excluded from bidding and has subsequently offered to pay the park at least $3 million more per year than the Maid of the Mist, which currently pays the NPC around $4 million annually.

Last year, the Maid of the Mist provided 2.5 million boat rides, about 1.8 million of which were on the Canadian side, according to published figures. The company pays the NPC 20 percent of gross revenues without minimum guarantees or a requirement to provide sufficient boats to reduce long waiting lines.

Estimates from tourism industry experts indicate the park could get $3 million to $6 million more in rent annually than Glynn is paying, and thus could realize $75 million to $150 million more in revenue during the unusually long term of the lease the NPC approved for the Maid of the Mist.

At least two companies, Alcatraz Media and Ripley Entertainment, were excluded from bidding on the lease by furtive methods employed by NPC Chairman Jim Williams and Vice Chairman Archie Katzman. Most commissioners were not told of the competing companies' interest.

The original complaint -- which made public the secretive process by which the NPC renewed the lease more than a year and a half before it expired -- came because one commissioner, Bob Gale, felt the process was slanted to help Glynn.

Gale is bound by confidentiality agreements he signed before becoming a commissioner, but said these may be voided if he is called to testify.

"If the judge gives me permission to talk about the Niagara Parks meetings," Gale said, "it will become clear that the commission was dirty in the handling of this process."

Since the Niagara Falls Reporter began its series on the Maid of the Mist leases, a number of questionable practices have come to light that may explain why the NPC is staving off bankruptcy while simultaneously granting no-bid leases to Glynn and other vendors in the park.

Among leases that have gone out without competitive bidding are the lucrative currency exchange concession, digital photographs, cell phone contracts and the dock lease presently held by the Maid of the Mist.

According to sources, the NPC favors contractors and lessees with connections to Williams and Katzman.

Williams and Katzman canceled the NPC's February meeting, rescheduled a meeting for March 5, and then rescheduled again for March 20. Commissioners have not met since the Reporter first published its expose in January.

Katzman has pushed for NPC deals that benefited his sons. The Reporter learned that one son got the lucrative cell phone contract.

Katzman has been on the commission since 1971 and was reappointed to his twelfth consecutive three-year term. The next longest tenure is Gary Forest Burroughs, appointed in 1994. The remaining 10 members were appointed since 2000. The lieutenant governor-in-council officially appoints NPC members. As a practical matter, however, most are appointed because of recommendations of local Parliament members.

Katzman is a major fund raiser for conservatives and liberals alike, and has raised money for longtime member of Ontario Parliament Jim Bradley, who represents the riding where Katzman lives. Bradley is extremely influential in provincial politics and was formerly minister of tourism.

Katzman is nicknamed "Mr. St. Catharines" for his local charity fund raising and is manager of the St. Catharines Club. He had several high-profile failures in the hotel and restaurant business.

NPC members receive a $135 monthly stipend and must follow a conflict-of-interest policy that requires a member to recuse himself from voting on issues he may profit from. This does not prevent a member from working behind the scenes, since the NPC operates in secrecy.

When Mike Weir Wines recently unveiled plans to open a winery on a 15-acre parcel of parkland owned by the NPC, adjacent to the Whirlpool Golf Course, many in the wine industry objected and wondered how one vintner got exclusive rights to valuable public property in a region where there are 67 other wineries.

The answer was pretty simple: Katzman's son, Barry, is president of Mike Weir Wines.

Meanwhile, as the Alcatraz lawsuit is pending and the Ontario Integrity Commission (IC) is investigating ethics complaints filed by Gale concerning the Maid of the Mist lease, the president of the parks employees union, OPSEU Local 217, Bill Rudd, has now publicly said he is concerned about serious financial difficulties facing the NPC.

"The conditions of the park have deteriorated over the last few years, and employment has fallen significantly," he said. "Families who depend on park employment have been devastated."

Park employment has fallen from 750 to under 500 during the last few years, Rudd added.

Not long ago, the NPC enjoyed a large surplus. Now, after unwise schemes, nepotism, non-tendering and other questionable decisions, it is in severe deficit.

The Legends Golf Course, sprawled over a thousand acres, was originally estimated to cost $27 million, but wound up costing more than $40 million. Katzman, chairman of the golf committee of the NPC, uses Niagara Parks courses for fund raising, and former NPC chairman Brian Merrett, who owned land adjacent to the course and built a house there, spearheaded the drive to get the Legends course built.

Katzman's longtime business friend, Donald Ward of Charter Builders, got the lucrative contract to build the lavish clubhouse.

Meanwhile, as Katzman and Williams fight to keep Glynn's lease lower than what others would pay the park, Legends -- which loses millions annually -- is not expected to break even for operational expenditures any time in the foreseeable future, not to mention pay back any of the $40 million used to build it.

Another Katzman pet project, the $40 million Table Rock improvement, includes the dismal virtual reality flop "Fury." That contract also went to Katzman's friend Don Ward.

Fury did so poorly that projections Katzman used to justify the enormous expenditure were off by 99 percent. The attraction is an educational ride that barely moves, but it is marketed with the slogan "Will you survive the Fury?" -- scaring off seniors and parents of small children who might mistakenly think it is a thrill ride.

A sad joke current among park employees facing layoffs because of NPC boondoggles is "Will you survive the Niagara Parks Commission?"

For more than a century, the NPC has conducted itself in secrecy. When conflicts of interest were discovered, they were usually politically assuaged.

In the 1950s, 50 acres of parkland was sold to Arthur Schmon, a friend of then-chairman Charles Daley. Three years later, Schmon sold the land back to Daley, who made it into a farm and, while using labor from NPC, grew and sold produce to the NPC.

After this was exposed, Premier Leslie Frost, Daley's political ally, referred the investigation to a Royal Commission headed by another Daley ally, Judge lan M. MacDonnell, who concluded there was no conflict of interest.

Current Premier Dalton McGuinty has strong political ties to Katzman ally Jim Bradley. Additionally, the Maid of the Mist Steamboat Co. hired Bob Lopinski, a licensed lobbyist and former McGuinty aide. Lopinski was hired to lobby McGuinty to make sure the dock lease is held securely and cheaply for Glynn.

Lopinski has several billion-dollar clients, including Merck, the German drug company that patented the recreational drug now referred to as Ecstasy. He also represented the Ontario Lottery Commission in the so-called Lottogate Scandal, an alleged coverup of an attempt to deprive an 84-year-old man of his lottery winnings.

Lopinski and McGuinty were at a Liberal Party meeting in Niagara Falls recently. McGuinty, questioned about the Maid of the Mist lease, told a reporter, "I think the matter is before the Integrity Commissioner. I think that's a good place for it to be."

One hopes McGuinty's Integrity Commission will not be too eerily similar to Frost's Royal Commission.


Maid of the Mist comes up with new excuse;

dutiful cub reporter writes what he's told

By Frank Parlato Jr.

March 10, 2009

A fanciful article that appeared in the Niagara Falls (Ont.) Review last week shows just how desperate Maid of the Mist Steamboat Company officials have become since the Reporter began its series on the secretive process employed to renew their dock lease with the Niagara Parks Commission (NPC).

The article, written by Corey Larocque, mainly quotes Maid of the Mist Vice President Tim Ruddy, who wrote a letter to the Ontario government. It contains no independent attempt to determine whether claims contained in Ruddy's letter are true or not.

"Swapping the Maid of the Mist for a newcomer would cause at least a five-year disruption in the (boat) service ... in Niagara Falls," Larocque tells his readers.

But numerous maritime brokers and shipbuilders contacted by the Reporter over the weekend stated categorically that many excursion vessels in the 300-passenger class are currently on the market. Furthermore, additional boats could easily be built.

Maid of the Mist being hauled

FALSE CLAIM BY MAID OF THE MIST EXECUTIVE? Maid of the Mist Vice President Tim Ruddy told the Niagara Falls Review that, if a company other than Maid of the Mist provides boat tours below the Falls, their boats would have to be assembled at water's edge - which would cause a disruption in boat service. While the Review's reporter did not bother to investigate this claim, he might have checked his own newspaper files. Here is a picture from the Review - taken on June 8, 1983, showing the arrival of one of the Maid of the Mist's present fleet "inching its way along River Road before being carefully lowered into the river using special cranes." Another boat tour company could do the same thing, obviously, but the Review article scrupulously avoids mentioning that.

 

Shipbuilders contacted by the Reporter said that a 72-foot, 74-ton vessel with twin 250-horsepower diesel engines and space for 300 standing passengers, all steel, a standard double-deck sightseeing boat, exactly comparable to 300-passenger Maid of the Mist boats, could be built at their shipyard within eight months and transported intact to Niagara Falls, then lowered approximately 165 feet by crane into the water as early as 10 days after completion.

One boat broker, Capt. Laz Mouriz of Key West, Fla., said he could deliver a special glass-bottomed boat in the same time frame.

Mike Grysko of Rio Marine said there may be no need to build new boats.

"There are boats" better and newer than (the Maid of the Mist's 30-year-old steel boats) for sale at 50 to 60 cents on the dollar, he said.

Another broker sent the Reporter 17 offerings.

A search of the Web and calls to national boat liquidators revealed numerous steel boats similar to the Maid of the Mist at asking prices ranging from $275,000 to $750,000.

The whole bogus scare-argument voiced by Ruddy and faithfully transcribed by Larocque centers on whether a new company would want to use 600-passenger boats. The Maid of the Mist fleet consists of two 600-passenger vessels and two that carry 300 passengers.

Since the 600-passenger boats are much wider and since there is standing room only on Maid of the Mist boats, most people get stuck in the middle -- far away from the outside of the boat, where there are the best views.

Six-hundred-passenger boats also take longer to load and unload, and the customer experience is possibly not improved with double the crowd.

In fact, a number of tourism experts are convinced boat-ride figures would be higher if Maid of the Mist owner James Glynn had more and smaller boats on the Canadian side.

A new company could conceivably replicate Glynn's Canadian capacity using 300-passenger boats, and improve the service as well.

The youthful Larocque continues, almost as though he were auditioning for a spot in the Maid of the Mist's public relations department:

"Ruddy's letter said the river's geography creates unique challenges for launching boats on the lower river. Waterfalls at the south and rapids at the north make it impossible to bring new vessels from Lake Erie or Lake Ontario."

The idea of sailing vessels in from one of the Great Lakes is preposterous on its face and had not previously been mentioned by anyone. Here, Larocque allows Ruddy to introduce a red herring clearly meant to distract from the issue of why the NPC granted Maid of the Mist an exclusive 25-year lease worth as much as $500 million without competitive bidding, in direct violation of the agency's own written policy.

Larocque goes on to accuse Ripley Entertainment and Alcatraz Media of "trying to undo an arrangement" Maid of the Mist has with the NPC. He fails to mention that the "arrangement" was a secretive and possibly illegal process whereby NPC Chairman Jim Williams and General Manager John Kernahan excluded other companies from bidding and failed to inform the decision-making commissioners of interest by anyone other than Maid of the Mist in the lease.

This "arrangement" currently is the subject of both an Ontario Integrity Commission investigation and a lawsuit before Ontario Superior Court.

Ruddy goes on fantastically, his nose growing slightly longer with each new dire prognostication, as the eager cub reporter continues to quote him:

"It would take three to four years to build the boats, bring them to the falls and assemble them on site ...

"'There's only enough room on the landing to re-assemble one boat at a time. And it's not safe to do the work during the winter,' (Ruddy said)."

Naturally, this sequence of fact presentation -- especially the laughable too dangerous in winter -- might lead the casual reader to believe that only 600-passenger boats, too large to lower by crane, can be used by the competition.

The facts are simply these: 1,200-passenger boat capacity is what is used now to deliver the attraction in Canada.

And 300-passenger, 72-ton boats can be lowered by crane into the river.

The probable cost to replace Glynn's Canadian fleet might be under $2 million.

The time frame to replace two 600-passenger boats with four 300-passenger boats appears to be eight months, not -- as Ruddy told the gullible Review reporter -- five years.

It stands to reason then that, with only a $2 million boat investment for a lease that generates tens of millions per year for the operator, the NPC could probably do better than the 20 percent of gross revenues Glynn pays, if it were open to competitive bidding.

The credulous Review reporter also might have looked into how large tenders are done. For instance, when a call for tenders is issued, it generally requires service be assumed on a specific date. Anyone bidding usually has to guarantee they will have everything ready, or suffer financial penalties.

This was done with major competitive undertakings, such as when the U.S. National Park Service put boat services out to bid at the Statue of Liberty and Alcatraz Island.

Also, ridiculously, NPC's Williams and Kernahan told Larocque, who by then was functioning mainly as a stenographer, that Ripley's and Alcatraz Media "didn't show any serious interest, have never offered a business plan and don't own any boats."

Ripley Entertainment's interest might be observed in their repeated written requests to be included in the bidding process, which Williams and Kernahan consistently thwarted.

And Alcatraz Media's interest might be seen in their lawsuit filed against the NPC before the Ontario Superior Court, which seeks to have the lease opened to competitive bidding.

Alcatraz's interest might also be observed in the fact that they offered to pay the park at least $3 million more than Glynn.

This money might be handy, since the NPC has lost so much money lately they had to lay off a third of their workforce.

In fact, estimates from tourism industry experts indicate the park could get anywhere from $3 million to $6 million more in rent annually than Glynn is paying. The NPC posted a loss of about $4 million last year.

The boat-tour business is highly competitive, as is shown by the large number of bidders for the Statue of Liberty, Ellis Island Cruises and Alcatraz Island.

The list included 16 national tour-boat companies, resulting in a far higher price and better service for these National Parks attractions.

If half of these companies bid, one imagines the NPC may earn enough to go into the black.

Their latest excuse is that no one in the world can get boats into the water.

It is false.

Let's see what excuse Williams, Kernahan, Ruddy or Glynn come up with next.

Almost certainly they will call upon the Review's Corey Larocque, who will publish it no matter how fanciful or desperate it is.


Secret Maid of the Mist lease rent goes down, not up !

By Frank Parlato Jr.

Marh 17, 2009

The only question now, perhaps, is why?

The process that led to the secret 25-year renewal of James Glynn's Maid of the Mist lease with the Niagara Parks Commission (NPC) also led, amazingly, to a reduction in his rent.

The secret lease, renewed on April 18, 2008, dropped Glynn's lease payments from a flat 15 percent of sales to a "sliding scale" lease that reduces the percentage of rent as Glynn makes more money.

The more he makes, the more the rent goes down. It drops as low as 5.5 percent.

People packed like Sardines in the Maid of the Mist tour

Packed like sardines on Glynn's 15-minute tour.

The Reporter broke many elements of this burgeoning scandal, and last week news of it ignited throughout Canada as the prestigious Globe and Mail -- after the Reporter's series -- began a series of their own, publishing four major stories.

The Hamilton Spectator, the Niagara Falls Review, Niagara This Week, the St. Catharines Standard and other Canadian publications also came out with stories.

The New York Times is expected to publish a story this week.

The "secret lease" scandal is taking a life of its own.

The Ontario Public Service Employees Union called upon the minister of tourism to dissolve the NPC. Union president Warren "Smokey" Thomas said the parks are "deteriorating while the commission makes irresponsible spending decisions," like its "decision to renew the lease of the Maid of the Mist without going to tender."

The powerful activist group Preserve Our Parks wrote to the premier, Integrity Commissioner and minister of tourism "demanding" the lease be sent back for competitive bidding.

Alcatraz Media spokesperson Bill Windsor filed suit with the Ontario Superior Court seeking to set aside Glynn's lease and let other companies, including his own, bid on it.

Kim Craitor, a liberal member of Parliament whose Niagara Falls riding takes in all NPC parklands, announced plans to reintroduce a bill requiring openness from provincial agencies. The secret no-bid lease renewal, Craitor said, "doesn't shine a positive light on the parks commission. (The Niagara parks are) the jewel of our community. These types of things start to tarnish that jewel."

NPC Commissioner Bob Gale, who owns a chain of gas stations in Ontario, was the whistle-blowing commissioner who went public, alleging that Chairman Jim Williams, Vice Chairman Archie Katzman and NPC General Manager John Kernahan worked furtively to ensure that world-famous Ripley Entertainment -- which expressed interest in bidding on the lease -- was excluded, while simultaneously neglecting to tell other commissioners about Ripley's interest.

"Williams, Katzman and some commissioners who look dirty will be exposed when I give evidence," said Gale, referring to Windsor's lawsuit.

Asked if he is concerned about Gale's allegations, Williams told the Globe and Mail, "Absolutely not." The majority of commissioners approved Glynn's lease and "these are very accomplished politicians and businessmen and lawyers who serve our board," he said. "So the fact that you've got one individual who runs a string of gas bars disagreeing with the majority of board members, I mean, is simply that."

Williams also wrote, in a letter to Premier of Ontario Dalton McGuinty, "The legal, financial and business scrutiny for the (Maid of the Mist) lease of these lands is second to none."

It had been assumed that, with this "business scrutiny," the NPC renewed Glynn's rent at his previous rate of 15 percent.

But according to minutes of the NPC board meeting, instead of charging Glynn a flat 15 percent, the rent starts at 17.5 percent, then goes down after sales reach a certain benchmark. Williams, Katzman and Kernahan chose a benchmark that, they may have argued, was a typical season. The year selected was 2003.

"This would establish a base threshold payment at about a 2003 level and gives incentive to the (Maid of the Mist) to perform at higher levels," Kernahan wrote in a report to commissioners.

What Kernahan apparently failed to disclose to the part-time commissioners was that 2003 was the year of the pandemic scare of SARS (Severe Acute Respiratory Syndrome). Niagara Falls tourism was off by 28 percent in 2003.

The lease was structured so Glynn would pay slightly more until he reaches the sales level of the SARS year, then it goes down to 12.5 percent, then 8.5 percent, then 6.25 percent, to 5.5 percent, according to how much money he makes.

While "negotiating" the lease, Kernahan reported to commissioners that "discussions (with Glynn) to date have been amicable and staff is confident that a new agreement will be achieved in short order."

Discussions should be amicable when the topic is lowering one's rent.

Perhaps, however, the amicable Kernahan forgot to mention to commissioners that the "incentive," or rather rent reduction, is based on Glynn's worst year. In 2003, Glynn grossed $11.5 million.

During 2000-02 and 2004-05 Glynn averaged around $16 million.

During 2006-08, he averaged $20 million.

In the early 2000s, Glynn charged $10 for adult tickets. He now charges $14.50.

But according to Kernahan's report, the lease fails to factor in inflation.

If true, then the figure of $11.5 million (from 2003) remains a constant benchmark for 25 years.

One source said the NPC added a provision to increase the percentage after five years, but that was not reflected in information presented to commissioners. Even if there is an adjustment, that number is less than what is expected during even modest inflationary periods.

Absurdly then, for the next 25 years Glynn -- winning through inflation -- pays lower rent once his sales reach the low SARS-year benchmark of $11.5 million, either in present dollars, or at best in insufficient increments meant to replicate 2003 dollars.

If the new SARS-year-based lease had been in place last year, Glynn would have paid an estimated $682,000 less in rent than the $3.2 million he reportedly paid.

Before the Reporter broke the story of the rent reduction, Williams told the 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 the terms of the deal, he answered, "Nope."

Not unhappy? What would or what did make Williams happy?

Comparing the old lease to the new, if Glynn's number of boat rides sold (about 1.8 million) remains constant, the NPC will lose between $17 million (presuming zero inflation) to more than $200 million (assuming inflation continues at what it averaged in Canada during the last 25 years -- 3.7 percent per year).

It's hard to fathom why the NPC switched from a straight and sure percentage lease, or why they needed to reduce his rent -- as Kernahan wrote -- to give Glynn an incentive to make more money.

Making more is still more even at a flat rate of 15 percent.

Meanwhile, both Ripley Entertainment and Alcatraz Media said they would pay more and improve on Glynn's boat tours.

Glynn's tour is rather primitive, conducted in older steel boats without air conditioning or heat. Glynn provides only one tour -- a 15-minute, packed-like-sardines standing tour during limited daytime hours, which makes a brief run along the American Falls and slightly into the heavy mist of the Horseshoe Falls.

Because he is "grandfathered" in, Glynn does not have to meet newer Coast Guard standards as to seating capacity -- for there are no seats. Or handicapped access to bathrooms. In fact, he doesn't have bathrooms.

The company provides a flimsy, blue garbage bag for raincoats. In the height of summer, the mist can be refreshing, but in early and late season, tourists get drenched and cold.

Ripley and Alcatraz spoke of covered boats, downriver tours beyond the Rainbow Bridge, wedding and dinner cruises, night tours when the falls illumination can be seen, and a pre-boat wonderland experience.

Glynn takes no reservations. In the height of the season -- because Glynn has few boats -- tourists wait hours for the 15-minute ride.

It is believed that the competitive boat-tour industry -- which saw dozens of prominent companies bid for the Statue of Liberty and Alcatraz Island boat tours -- will prompt bidders to drive the rent up for the NPC, plus lessen waiting times and expand tours.

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

Conservative businessman Gale estimated, "There's $100 million more, at least, on the table here that the taxpayers are going to have."

Trembling with debt, burdened with boondoggle projects like the $40 million Legends golf course and the $40 million Table Rock improvement, the NPC is floundering. The NPC pays more than $1 million in debt payments each year. Since 2004, when Williams took over as chairman, the NPC plunged from a $3.7 million profit to a $4.3 million loss last year.

The NPC has laid off a third of its workforce, devastating many local families.

The waters in the lower Niagara pool are deep and safe. New boats can be lowered by crane. Glynn does it; other major companies can do it. The lease itself grants the operator air-space rights to install 130-foot-tall cranes to lower boats. If another company wins the bid, Glynn may, in fact, choose to sell his boats rather than have them hoisted and trucked away. Sinking them out of spite is -- as the Coast Guard will confirm -- impermissible.

In the end, Glynn has provided the cheapest, least attractive, least creative experience.

His famous 15-minute attraction, as far as what he himself put into it -- as opposed to what the falls themselves already give us -- is insufficient.

One is reluctant to conclude it, but it seems this new lease was done deliberately to favor Glynn.

So why did Williams, Katzman and Kernahan reduce his rent?


Members of Parliament demanding open bid on Maid of the Mist lease

Forensic auditor blows lid off secretive sweetheart deal

By Frank Parlato Jr.

March 24, 2009

The lease to operate the Maid of the Mist boat service, launched from publicly owned docks in Niagara Falls, Ont., will likely be put out for competitive bidding, numerous Canadian government sources told the Niagara Falls Reporter this week.

This means the 38-year monopoly enjoyed by the present Maid of the Mist boat operator, James Glynn, may soon end.

Glynn has operated boats from dock leases on both sides of the Niagara since 1971, giving him exclusive rights for every boat tour run under the falls since that time.

Despite the fact that the current lease for use of the docks doesn't expire until November, the Niagara Parks Commission (NPC) secretly approved a new 25-year lease last April for Glynn's company.

NPC Chairman Jim Williams and General Manager John Kernahan neglected to inform the other commissioners voting on the deal that two other companies, Ripley Entertainment and Alcatraz Media, had expressed an interest in bidding.

And although Alcatraz and Ripley's officials have repeatedly stated they are willing to pay the parks commission up to twice as much as Glynn, the lease awarded last April actually lowers Glynn's rent.

Glynn's reign would have remained unchallenged for another 25 years, but for NPC board member and Ontario businessman Bob Gale, who saw NPC Chairman Williams and General Manager Kernahan working, he thought, a little too feverishly to get Glynn's new lease approved a year-and-a-half before it expired. Gale complained to the Ontario Integrity Commission.

It turned out that the feverish rush may have been caused by the fact that world-famous Ripley Entertainment had asked to bid on the lease. It came as a shock to Gale, since both Williams and Kernahan declined to tell the part-time commissioners about Ripley's interest. For the first time, the terms of Glynn's leases received a liberal dose of sunshine when the Reporter began a series of investigative articles last July.

Williams criticized the Niagara Falls Reporter for its coverage. "We are being attacked," he said in interviews. "Under siege" was the phrase he used in an e-mail to other commissioners.

"This keeps getting bandied about like it's an important news story. The reality is, it's only important to a couple of people in the community." Williams said.

Last week, the Integrity Commission issued its report on this allegedly unimportant story. Besides demanding an audit of the NPC that will result in a careful review of all their leases, the Integrity Commission recommended that "in the course of the Ministry review of the (Maid of the Mist) lease renewal, the Ministry provide the Board the opportunity to review its decision ... with full knowledge of all the expressions of interest received (from Ripley's and others)."

And the NPC is required "to weigh numerous business and legal issues ... with full knowledge of the expectations of the public and ... in relation to sound agency governance and Revenue Generating Opportunities."

Published policy on revenue-generating opportunities in Ontario is well established, which is to "advertise and tender."

Ontario Tourism Minister Monique Smith said, however, that the NPC reviewing their decision won't necessarily have to mean the lease has to go to tender.

"We'll provide them with that opportunity to go back and look at the process they used. We'll provide them with some information on governance and accountability," she said.

Williams said the review could lead to the same decision. "Nothing has changed from what the board considered on April 18," he said.

But members of Parliament, who ultimately have to approve the lease, are taking a different view.

Kim Craitor, who represents Niagara Falls, Tim Hudak, MPP for Niagara West-Glanbrook, and Peter Kormos, who represents Welland, have all gone on record demanding the lease be put out to bid.

"A request for proposals will clear the air and maintain the public's trust in the NPC. Taxpayers deserve no less." Hudak said.

"We have an expectation it's going to be looked at in a different way since it's being sent back," Craitor said. Craitor said the NPC should scrap its current lease and start over with a competitive bidding process, and added that he was prepared to override any decision Smith might make about the handling of the process.

"If there's a disagreement with the Minister of Tourism, it's going to be what I think it is," Craitor told the local press.

Simply put, when the commissioners voted for the lease, they were not given information business people normally need to make an important lease decision.

The NPC is losing money. To stem losses, they have been laying off staff and shortening their season. The NPC is deeply in debt.

Before Williams became chairman, the NPC earned a profit of $3.7 million in 2004.

They lost $4.3 million in 2008.

While neglecting to tell commissioners about Ripley's interest, Kernahan nevertheless reported that a change in operator would cause the NPC to lose the name "Maid of the Mist." This was either a grossly mistaken impression on his part or a bald-faced lie.

The Glynn corporation -- which calls itself "Maid of the Mist Steamboat Co. Ltd." -- has been in existence only since the 1970s. The name existed for 125 years before he came along. And according to the lease, the name

"Maid of the Mist" can be retained by a new operator.

Paragraph 6.03 states:

"Tenant (Glynn) acknowledges that it does not claim any interest in or rights in the words 'Maid of the Mist' except in its company name and the name of its motor vessels and NPC is free to use 'Maid of the Mist' in identification of its structures, retail or promotional material."

Kernahan proceeds with what could at best generously be called a lie by omission.

He reported, "The current agreement (lease) is 'landlord friendly.' By not renegotiating ... the agreement with the Maid of the Mist, we had hoped to avoid weakening the original agreement."

But while Kernahan has told anyone who would listen that Glynn's rent was increased under the new lease, a forensic auditor hired by the Toronto Globe and Mail to review the agreement concluded exactly the opposite.

Damian Alksnis, a partner at MG Forensics Group in Toronto, found that while the new lease raises the rent by 2.5 percent on the lowest $11.5 million Glynn makes, it drops the rent by 9.5 percent on every million above $17 million.

Glynn made $17 million in 2005. Since then, he has earned well over $20 million per year.

On a handout they gave commissioners, Williams and Kernahan tried to show the NPC would get more rent -- but, curiously, they showed numbers only from 2001 to 2005, rather than more recent years.

The information presented to the commissioners for their review was two-and-a-half to seven-and-a-half years old. It included no numbers for 2006 or 2007.

Rates have increased since 2005 by an average of 94 cents per passenger.

In reports when presenting numbers for a future income-based percentage lease, the standard practice is to project into the future rather than use past years without factoring for inflation.

The losses to the NPC from the new Glynn lease will be an estimated $626,700 in the first year alone, and possibly $25 million over the 25-year term of the lease.

The NPC is believed to have budgeted revenue of $3.5 million from Maid of the Mist for 2009. Under the new lease, starting in 2010, it if it is not reviewed and redone, NPC should start budgeting about $1 million less per year.

Like Kernahan, Jim Williams claimed the lease was better for the NPC -- before he knew the Reporter had obtained a copy of it.

"When all the factors were considered in total, this was a good lease and a good business decision," Williams said. On March 6, Williams told the Globe, "Our revenue will increase through the extension of this lease."

"If I were picking one, I'd go with the old lease," said the Globe's forensic accountant Alksnis.

Alksnis concluded the parks commission will make less money "by a significant margin, over the next 25 years, given inflation and fare increases that have already taken place."

This year alone, he said, the boat tour will bring in $24.2 million, if it can attract the same number of passengers it did in the first half of this decade. Under the old lease, the parks commission would be entitled to $3.6 million of that, but under the new one, it would earn just over $2.9 million.

"So they're worse off ... under the new lease agreement," Alksnis told the Globe. "Once you hit ($17 million), you're worse off, and you're exponentially worse off."

Christopher M. Glynn, president of Maid of the Mist Steamboat Co., said the documents obtained by the Reporter and the Globe were incomplete.

"I'm not able to comment on what's in there, but I can tell you that you have a critical omission there," he said.

Glynn refused to provide details or documents.

"To suggest that there's no adjustment for ticket-price increases over the period of the lease is incorrect," he said.

But the secretive Glynn did not go as far as saying the new lease is better.

The Reporter obtained the so-called "critical omission," and frankly it doesn't change much at all.

It is this:

"Re-negotiation of the rental rate ... will be allowed every five years commencing in year 10. ... if agreement can not be reached it would be subject to arbitration with the proviso that no arbitration judgment shall be for less than the existing percentage rents. Arbitration will be in Niagara Falls by a sole arbitrator appointed under the provisions of the Ontario Arbitration Act 1991."

In other words, the critical information is that Maid of the Mist gets a lower rent for at least 10 years, and then they get to negotiate on a rent increase. If they do not agree to a rent increase, then it goes to arbitration.

Can you imagine renting a government locale to a tenant and not having the power to raise the rent unless he agrees?

Kernahan then threatened the commissioners.

"There is also the question of lease renewal and damages. ... It is expected that the Maid of the Mist would make a case for damages, if any, based on the difficulty on relocating their business, the value of the boats, etc. The exact extent of these damages would have to be determined by a court."

Of course, this is preposterous.

A lease with an expiration date has no mandate for renewal.

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

That by itself might cure the problems for the NPC.

We'll be awaiting the results of the NPC review.


Canadian troubles could hurt Glynn's standing on the U.S. side, Windsor says

New York contract hinges on agreement with Canada

By Frank Parlato Jr.

24 March 2009

Just for the record, the Maid of the Mist Steamboat Co. pays the Niagara Parks Commission 15 percent of gross receipts on its boat tours in the Niagara Falls Provincial Park in Ontario, and 10 percent or less on the New York side. The New York lease was secretly renewed in 2002 for 40 years, and is the longest lease agreement ever given by state parks.

Bill Windsor, of Alcatraz Media, filed a "contract protest" with the New York State Comptroller's Office on March 4, objecting to the Maid of the Mist's insanely long, 40-year, no-bid agreement.

Windsor questioned why "one businessman should have the exclusive rights to one of the premier water attractions in the world on government land."

Alcatraz Media had tried to bid on the Ontario lease, and filed a lawsuit in February with the Ontario Superior Court to have the Ontario lease declared illegal.

Windsor hopes to bid on the New York state lease as well.

His New York protest could result in a cancellation of the 40-year contract that Maid of the Mist Corp. obtained in 2002, and the contract could ultimately be open for bids, if the state comptroller's office rules that the procurement was entered into illegally.

The Maid of the Mist Corp. of New York responded to Windsor's protest on March 11.

The response by attorney Marc Brown, of Phillips Lytle in Buffalo, was filed with the New York State Comptroller's Bureau of Contracts.

At the heart of the dispute is that the New York State Parks Office failed to advertise or tender the New York Maid of the Mist contract for bids, violating their procurement policy.

Angela Berti, spokeswoman for Niagara Falls State Park, told the Buffalo News in 2008 that "no bids were taken and no public hearing was held because the Canadian agreement gives the company exclusive access to the river below the falls, making it a 'sole source' provider."

But Berti was wrong.

Canada does not control the water beneath the falls. The waters of the Niagara River are jointly used by both Canada and the United States by long-established agreement.

Nevertheless, Maid of the Mist lawyer Brown had a argument for the defense of his client.

He said that under New York state finance law, a "sole source procurement for services" may be made without a formal competitive process when there is no other bidder that could possibly provide the service.

Brown claimed that Maid of the Mist is the only one who could provide the service, because its lease, under its Canadian corporation, with the Niagara Parks Commission "allows (the New York) Maid of the Mist Corporation to dock its boats on the Canadian side."

Maid of the Mist boats parked on the Canadian side

Glynn stores his four boats on the Canadian side. This was used as an excuse to give him a 40-year no-bid lease by N.Y. State Parks, in violation of state finance law, and costing the Parks perhaps more than $50 million in lost revenue. For the money at stake, the N.Y. Parks could have built 10 docks and still made a profit. Glynn's low-rent lease is now being challenged.

In short, without the Canadian lease, there will be no place to store the boats in New York, hence requiring New York State Parks to give the lease to Glynn, since he has the Canadian lease.

Actually, there is no provision in the Canadian lease giving the rights to the U.S. Maid of the Mist Corp. to dock its boats on the Canadian side. But since Glynn has both leases, he can presumably legally dock his boats, and in fact does, on the Canadian side.

But there is a larger problem with this argument.

One which unhinges it altogether.

New York State Parks were required to give Glynn the lease since he controlled the Canadian side?

This was their justification for naming Maid of the Mist a "sole source provider," according to Brown.

But Glynn's Canadian lease expires this coming November.

When the parks service gave Glynn his 40-year New York lease in 2002, they had no assurance that Glynn's Maid of the Mist Corp. could perform on the contract beyond the expiration of his Canadian lease.

The state gave Glynn his lease on the New York side for 33 years beyond the expiration of his Canadian lease (to 2042).

If, as Berti told the News, there was a need for sole source -- since whoever has the Canadian side has to have the U.S. side -- then why didn't New York make the two leases synchronous?

According to Section 163 of the New York State Finance Law, "procurements shall be competitive, and state agencies shall conduct formal competitive procurements to the maximum extent practicable."

The Maid of the Mist defense is that the New York State Parks determined that the docking of boats in another country justified the parks office to designate Maid of the Mist Corp. as the "sole source" for this service.

Section 163 says: "State agencies shall minimize the use of single source procurements and shall use single source procurements only when a formal competitive process is not feasible."

Section 163 also says: "The term of a single source procurement contract shall be limited to the minimum period of time necessary to ameliorate the circumstances which created the material and substantial reasons for the single source award."

What was the basis then for a 40-year contract, when the alleged reason for the sole source provider designation could not be assured past November 2009?

New York State Parks entered into a contract for 33 years beyond that date.

The Maid of the Mist lease in this state describes the company as the "sole commercial entity with rights of access to provide scenic boat excursions from landings both on the American and Canadian sides of the lower Niagara pool."

Since Glynn's Canadian Maid of the Mist Corp. might lose the Canadian lease when it expires in November 2009, then Glynn may also lose the New York lease, if it were true that one is dependent on the other.

Brown claims docking boats on the Canadian side is an unusual circumstance justifying sole source status, because there is insufficient room to dock boats on the U.S. side of the river.

Of course, this is not true.

There are many ways that Maid of the Mist Corp. or another operator could dock or store its U.S. boats other than depend on the Canadian side.

All the parks service had to do was add a requirement that any bidder had to obtain dock space somewhere other than at Niagara Falls State Park.

The New York State Comptroller's Office is expected to render a decision in this matter fairly soon.

If it goes out to bid, New York state, now hard pressed for money, will likely receive substantially more than the measly 10 percent it currently gets.

A recent award by the National Park Service of the Statue of Liberty and Ellis Island ferry contract is an example of how it should be done.

The boat contract, which was for 10 years, was published widely, and its terms were known. It had many major boat-tour bidders, including Hornblower Cruises, Circle Line, Circle Line 42, New York Waterway, New York Water Taxi, Entertainment Cruises, and others.

These companies also are expected to bid on the Maid of the Mist lease, along with Alcatraz and Ripley Entertainment, and to drive the rent way up for New York.

Tourism experts say that the rent could exceed 25 percent. With substantial layoffs in the parks, this may be welcome news.


Glynn's New York lease has state actually paying him to run boats

Paltry 4 percent overshadowed by 75 percent take at Observation Tower

By Frank Parlato Jr.

April 07, 2009

A copy of the secret 2002 lease agreement between the New York State Parks Commission and the Maid of the Mist Corp. shows that the state is essentially paying Maid of the Mist owner James Glynn for the privilege of using its docks to run his popular boat ride.

The landlord is paying the tenant, in other words.

The 56-page agreement, which had previously been the target of numerous Freedom of Information Act requests, was given to the Niagara Falls Reporter by a confidential source late last week. A quick glance at the document -- read it yourself at www.niagarafallsreporter.com/2002lease.pdf -- clearly shows why the Parks Commission wanted to keep it under wraps.

While the Canadian Parliament is demanding an explanation as to why the Ontario Parks Commission is only getting 15 percent of Glynn's take for providing dock space and access to the Niagara River gorge, on this side of the river he pays just 4 percent, the document shows.

If gross revenues were the same, Canada would receive $58.3 million over the life of the contract, New York state would get $42.5 million less -- just $15.8 million -- over the same period, based on Glynn's own revenue projections.

But it doesn't stop there. Delving deeper into the agreement, it turns out that Glynn doesn't really pay 4 percent, he pays no rent at all. In fact, the state pays him.

NY Deal with Maid of the Mist exposed

That's because he also gets to keep 75 percent of the revenue generated through admission fees to the park's Observation Tower, totally rebuilt in 2002 at a cost to New York taxpayers of $20 million.

Millions of people pay $1 admission to go up to the tower's observation deck, or down to the bottom of the gorge, where stairs that lead up alongside the American Falls provide a spectacular close-up view.

Glynn's projections show that, in 2008, his tour-boat operation in the state park grossed $6,393,000. Sales at the souvenir store brought in another $1,592,000, and fees from the Observation Tower brought in another $1,124,000, for a total of $9,109,000.

He paid the state 4 percent on the boat rides -- $255,720 -- and 11 percent, or $175,120, on the souvenir sales, a total of $430,840.

So while Glynn paid $430,840 in rent for his boat ride and souvenir store, the state allowed him to keep $843,000 in elevator/observation deck fees. As a result, the state paid James Glynn $412,160 in 2008 just to be their tenant.

Over the course of the 40-year lease, Glynn will pay the state $17,233,600 in rents for his boat tours and for the Maid of the Mist souvenir store. During the same time period, he will earn $33,720,000 on the elevator and observation deck, according to projections filed with the state.

When Glynn's take from the Observation Tower is weighed against the rent he pays to use the state's dock, he comes out $16,486,400 ahead, even before he takes in anything on his boat ride.

Prior to 2002, when the lease agreement was signed, the state collected and kept 100 percent of the revenue from the tower. Also, Glynn paid 10 percent of the Maid of the Mist's take, instead of the 4 percent he pays now.

Repeated requests for comment from Parks Commission spokeswoman Angela Berti went unanswered last week. Like Tim Ruddy, vice president in charge of marketing for the Maid of the Mist Corp., Berti believes that when it comes to the outrageous lease agreement, the less said the better.

The 40-year lease is unprecedented, the longest ever awarded in the history of the parks system here. Like the Maid of the Mist contract with the Ontario Parks Commission, its particulars have been shrouded in secrecy since it was signed in 2002.

Before Glynn gained control of the Observation Tower, it stood 82 feet above the observation deck, and people could use the elevators to go up to the top, as well as go down to Glynn's boats. Those who could not afford to take the Maid of the Mist or preferred not to take the boat ride could pay the admission and go up by elevator to the top of the tower for a panoramic view of the falls, the rapids, the river and the city.

That all changed in 2002, when the state entered into partnership with Glynn.

Together, they determined to spend $25 million to improve the elevators, cut off the tower above the observation deck -- so that the elevators only went directly down to Glynn's boats, thus eliminating the only panoramic view of the falls on the American side -- improve all of Glynn's buildings, and build Glynn a souvenir store.

Taxpayers paid $20 million, and Glynn contributed $5 million.

It was perhaps the best $5 million he ever spent.

Besides removing the tower, they built Glynn a 5,000-square-foot souvenir store and rerouted people who went on either his boat ride or the observation deck through his newly built Maid of the Mist souvenir store. If you ride the boat or go on the observation deck, you are forced to exit through Glynn's store.

Glynn's $5 million essentially paid for the removal of the tower that led up, away from his boats, and built his souvenir store.

With the rest of the $20 million, taxpayers built for Glynn luxurious, high-speed, air-conditioned elevators that go down 200 feet to his boats, fixed up the deck, fixed up his buildings and restrooms, and improved or provided other amenities for him.

Then they lowered his rent to 4 percent.

The state handed control of one attraction to Glynn, the observation deck, eliminated another attraction, the tower, and gave Glynn a souvenir store, along with a 40-year lease.

Not bad for $5 million.

The state, after taxpayers spent $20 million to build and fix it, pays Glynn 75 percent of the observation deck and elevator fees and keeps only 25 percent for taxpayers.

The no-bid lease agreement is seemingly at odds with the state's procurement policies, which require competitive bidding on large contracts. The Parks Commission has maintained that, because Glynn's Canadian contract gives him exclusive access to the river below the falls, the Maid of the Mist is a "sole source provider." But legal challenges on both sides of the Niagara -- and an official probe by the Canadian government -- may well put the lie to this absurd position.

There seems little doubt that, since Glynn pays 15 percent on the Canadian side, he would pay at least that much here to preserve his monopoly for what is potentially the greatest water attraction in the world.

In 2008, Glynn would have paid more than $950,000 in rent for the boats alone if he paid the same rent as he does in Canada. And the state could have kept the entire $1,124,000 in observation deck and elevator fees.

Consequently, there was more than a million and a half lost by the state parks by this curious lease in 2008.

That's as much as the state earned in parking revenue at the state park's three lots.

That's more than the total salaries and benefits of all the park employees who were laid off this year because of the state's economic woes.

The multi-millionaire Glynn may be the world's best negotiator.

Or something.


With layoffs and budget shortfalls, why did they lower Glynn's rent?

By Frank Parlato Jr.

April 21, 2009

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.


Injustice and Glynn's N.Y. lease

By Frank Parlato Jr.

May 05, 2009

In a way you might say it exemplifies everything that's wrong with NEW YORK state government.

The New York State Parks are having their budgets cut.

Some parks will have a shorter season in 2009, and more New York parks, including the Niagara Falls State park, will have reduced services because of the state's financial woes.

But this will not affect Jimmy Glynn. Glynn goes on and on with his Maid of the Mist boat tours.

The highest taxed state can't afford its parks, and, weirdly, Glynn doesn't pay New York rent for his multimillion dollar monopoly in the Niagara Falls State park. He is supposed to pay rent, and on paper it is written he does pay 4 percent of the gross revenues his boat rides makes.

But, certain conditions written into his rather complicated lease actually make it a zero rent lease for an attraction that nets Glynn millions.

He got New York park officials to reduce his rent to zero in 2002 without telling the public or letting anyone one else who might pay more bid on the lease.

On the Canadian side, also, they secretly dropped his rent -- starting next year -- from 15 percent to well under 10 percent, a variable rate that goes down the more Glynn makes.

Much of his Canadian lease will see Glynn paying 5.5 percent.

On the Ontario side, however , there was a Niagara Parks commissioner by the name of Bob Gale -- who broke ranks with his fellow commissioners when he saw the wild swindle of the public's assets going on and he told the public.

It was a "dirty deal," Gale said of reducing of Glynn's rent, while secretly excluding others -- who would have paid more, like Ripley Entertainment -- from bidding.

Gale took the heat and the criticisms and the condemnations of his fellow board members. But he toughed it out.

This resulted in the Ontario Integrity Commission investigation and in its finding that this lease of Glynn's better go back for a second look.

There is a chance now that on the Canadian side -- with the bright glare of media focused upon them -- Glynn may not get his rent reduced and the lease may be put to open, public bidding -- which will undoubtedly raise the rent.

Glynn may lose the Canadian lease.

But there has been no Bob Gale on the American side.

On the New York side, the lease was more than merely lowered.

On the Canadian side, although they stupidly or corruptly lowered his rent, they at least got Glynn to pay something.

On the New York side, we get nothing for one of the most valuable public docks in the world and something that dozens of tour boat operators would almost certainly pay 20 percent or even 25 percent rent to operate.

What makes it so interesting is that what Glynn saves in rent would almost certainly make up the difference in the New York parks regional budget cuts.

Simple math will prove it.

Glynn's rent on the NEW YORK side was reduced from 10 percent to 4 percent in 2002.

Delving deeper into the lease, we find that Glynn doesn't really pay 4 percent. He pays no rent at all. In fact, the state pays him.

That's because he gets to keep 75 percent of the revenue generated through admission fees to the park's Observation Tower.

Maid of the Mist and Observation Tower

Millions pay $1 admission to go to the tower's observation deck, or ride the elevators down to the bottom of the gorge where Glynn's boats are and where, if they want, they can pay Glynn $13.50 to take his 15-minute no-frills boat tour.

Prior to the lease renewal, New York State kept 100 percent of the Observation deck fees. In 2002, it was mysteriously handed over to Glynn when certain park officials secretly renewed his lease.

None of this would have been known except for the Niagara Falls Reporter's expose on the topic.

In 2008, Glynn's tour-boat operation in the NEW YORK State park grossed him $6,393,000.ÊFees from the Observation Tower brought in another $1,124,000.

Last year, Glynn paid the state 4 percent on $6,393,000 in boat rides, or $255,720.

But he got to keep $843,000 from the observation deck.

So instead of paying rent, Glynn got a net check from the state of $586,300.

With the old lease, he would have paid 10 percent rent -- or $639,300.

And the state would have kept the entire $1.124 million for the observation deck.

The state would have received $1,754,000 from the two valuable park attractions: the boats and the observation deck. Instead, it paid Glynn $586,300.

The swing or net loss to the people of New York between the old lease and the new was $2.34 million last year.

The park officials who secretly negotiated Glynn's new lease -- which reduced his rent from 10 percent to 4 percent and turned over the observation tower to him -- must have known the deal was a poor one.

They changed a lease where the tenant paid the landlord to one where the landlord pays the tenant.

Usually you don't make a deal like that -- changing a guy's lease from him payingÊyou toÊyou paying him without some incentive. Even dropping the rent from 10 percent to 4 percent was a bad deal -- without giving Glynn the Observation Tower.

But somehow our stewards, our government officials at the state park secretly, decided that we, the public, the landlord, should pay our tenant -- for one of the most valuable rentals in the world.

Pay him, plus let him run his boat tours rent-free at the world-famous Niagara Falls State park.

The 40-year free lease awarded to GlynnÊwas the longest ever in the history of the parks system here. That in itself tells a story.

The lease, if studied by experts, will not stand scrutiny in New York.

So far, only the Niagara Falls Reporter has reported on this. No other publication -- no other citizen's group or governmental agency -- has yet evaluated the lease.

That day will come.

The lease is published on-line for all to see.

I have heard it on the streets -- yes, Glynn got away with it.

You can't blame him. We'd take it ourselves if we got a deal like that.

But how did it get to be offered?

If it were a fair deal, in the public interest, Glynn would have to compete for the privilege of operating boats in the people's park for what is perhaps the greatest water attraction in the world.

The lease would go to the highest bidder.

Meanwhile, our regional state parks are faced with a $1.1 million budget reduction this year.

Mark W. Thomas, western district director for the Albany-based parks department, said the parks overall face a 15 percent reduction.

In New York, Glynn should have paid 15 percent rent at least.

Seasonal workers budgeting are down 9 percent.

Glynn pays 4 percent.

The Green Thumbs program that helped with landscaping and flower bed planting was phased out.

But Glynn got paid $844,000 to operate elevators to his own attraction.

Cutbacks in the number of park police officers have taken effect.

There will be reduced days and hours of operation for the Cave of the Winds, the Visitor Center, the Park Trolley and the Niagara Gorge Discovery Center at the Niagara Falls State Park.

Glynn doesn't pay a New York rent for an attraction that makes him millions at the Niagara Falls State Park.

The park is losing millions and laying off the hard-working people who toil to maintain the park. More than 50 park employees were laid off and won't be coming back this year.

There were other interested parties who would pay more than Glynn for the boat dock lease.

They weren't allowed to bid on the lease; they were not even told about it.

As Glynn walks around the streets of Lewiston or Niagara Falls, sometimes he will no doubt see some of the people who got laid off at the parks and perhaps knowing them the great man will nod.

Silently. however. the rich man must be thinking -- my wealth was at their expense.


In spite of silence, secret Glynn Canadian lease remains unsigned

By Frank Parlato Jr.

June 16, 2009

Silence is golden — at least for Maid of the Mist owner James Glynn.
In spite of the fact that the Niagara Falls Reporter exposed the rather shocking truth that Glynn had his rent secretly reduced, at the public’s expense — nothing happened.
Just silence.
Glynn has two leases, by the way, on public land, for boat docks, one in New York, one in Ontario, which gives him the exclusive right to conduct boat tours in the lower Niagara, just below the falls.
The story is fascinating and says more about our culture than it does about Glynn, the entrepreneur who holds sway over the two parks that encompass Niagara Falls.
Our story today is about the Canadian half of Glynn’s stranglehold leases — one that expires for Glynn this November, and of a secret renewal, which, as the Reporter exposed, reduces his rent.
Amidst the stench of the affair is one good man, Bob Gale, a former Niagara parks commissioner, who originally blew the whistle on Glynn.

Jim Williams,  Bob Gale and James Glynn

He was one of 12 commissioners who manage the parklands around Niagara Falls. Gale was the only one to challenge the Glynn lease renewal. Eleven of 12 commissioners on the NPC board either sat silently or actively participated in a plan to lower Glynn’s rent, while ignoring other companies that were willing to pay more.
At first, when the Reporter’s stories broke, it caused shock waves. Newspapers reported it throughout Canada. Citizen groups called for action. The biggest union in the nation called for dismantling the NPC. Members of Parliament demanded action.
Today, only Gale continues to speak out — even though the Minister of Tourism failed to renew his seat on the commission. The whistle blower was punished.
Still, Gale will survive. He is a wealthy owner of a chain of gas stations and does not need the notoriety he’s gotten for bucking the NPC’s handling of this lease. Known for his charitable contributions, he recently donated $1 million to construct the Niagara Falls civic arena. On June 2, Gale wrote to Ontario Premier Dalton McGuinty about “the wrongful business practices” of the NPC and asked him to “send back the Maid of the Mist (lease) for proper tender.”
That letter was unanswered.


He sent letters to Monique Smith, the Minister of Tourism — all of which have gone unanswered
At his expense, Gale retained Niagara Falls solicitor Andrew Henderson to determine if it was true that Glynn could sue the NPC if his lease was not renewed, something NPC Chairman Jim Williams told NPC commissioners in order to persuade them to renew with Glynn.
Henderson, of the firm of McBurney, Durban, Henderson and Corbett, concluded that Glynn probably cannot sue since the new lease — although approved by the NPC — is lacking Parliament approval.
Henderson advised Premier McGuinty, in a letter last week, that while the new “lease purports to extend an existing lease ... for a further period of 25 years, the extension of the lease is conditional upon receipt of the approval of the Lieutenant Governor in Council.
“The agreement has not been approved by the Lieutenant Governor in Council (hence) there is no valid agreement ... There would seem to have been no legal validity for the Chairman of The Niagara Parks Commission to (state that Glynn could sue).”
Glynn could conceivably lose his lease.
To o bad for Glynn there wasn’t silence from the beginning. The story originally leaked out like this: In January 2008, Tim Parker, general manager of Ripley Entertainment, wrote to NPC Chairman Williams, expressing interest in bidding on the Maid of the Mist lease.
Ripley’s is a billion-dollar, worldwide entertainment company and its plan offered better boats, longer and more varied rides, nighttime rides and a pre-boat wonderland experience.
Maid of the Mist offers only one 15-minute ride, during the daytime, on older steel boats without seats, bathrooms or refreshments.
Ripley’s also filed a Freedom of Information request for the Maid of the Mist lease in order to determine how to competitively bid.
While Ripley’s waited for a response, John Kernahan, general manager for the NPC, suddenly started drafting a new lease for Glynn more than a year and a half before it was due. Glynn’s lease expires November 2009.
By late February 2008, Ripley’s got a copy of the lease. Strangely, the 34-page document had nearly all details -— including the rent and the date it was signed and when it expires — blacked out. Ripley’s could hardly be expected to bid based on that.
Appealing the redacted copy, Ripley’s won the right to have an exact copy of the lease. Parker was told it would take until April 17.
Meanwhile, Williams and Kernahan worked feverishly readying a new lease, and included in it a complicated formula that actually reduced Glynn’s rent. They then scheduled the required “due diligence” board meeting on the matter.
All of the commissioners are part time and most of them are busy men with outside careers. They generally meet once a month. None of them were too concerned perhaps when Williams canceled the due diligence meeting, and, instead, scheduled to vote directly on the Maid of the Mist lease on April 18.
Parker, however, suspected the commission might act without giving his company an opportunity to bid. On April 11 , he wrote to Williams about the difficulty in getting a copy of the lease, requesting “commissioners defer making any decisions on renewing (the) lease ... until (Ripley’s has) the opportunity to receive the copy of the lease and respond to the Niagara Parks.”
Although never told of Ripley’s interest, Gale, however, smelled something was up. On April 17, the day before the vote, Gale sent e-mails to board members saying the chairman seemed to be “rushing the Glynn lease way ahead of schedule, without due diligence. Why?”
Later that morning, he got the answer. Parker called Gale and asked if he was aware of his letters to Williams.
“Bingo,” Gale said. “Now I knew why they were rushing the Glynn lease.”
He immediately e-mailed the board to inform them of Ripley’s interest. Members learned of it just hours before they were to vote on the biggest lease in the park.
Gale asked the board to wait for the next meeting to allow Ripley’s a chance to compete, but Williams told the board that Glynn would sue if they did not immediately approve Glynn’s lease.
Williams, however, did not tell the board that the rent was being reduced. Most board members did not read the complicated lease, but only notes drawn up for them — written by Kernahan — summarizing the new lease, which, frankly, dishonestly characterized it as a rent increase.
The board voted to renew Glynn’s lease for 25 years.
Afterward, Gale, disturbed by the fact that Ripley was denied an opportunity to make an offer, filed a disclosure of wrongdoing with the Ontario Integrity Commission and told his story to the media.
It also became public that Alcatraz Media, one of the largest sellers of tourism activities in the world, attempted, in 2005, to get a chance to bid on the Maid of the Mist lease. Williams and Kernahan also kept this a secret from the NPC board.
Ironically, Alcatraz offered to pay the park $3 million more per year than the Maid of the Mist’s lease — before the rent reduction.
The new lease — which NPC commissioners voted on apparently without understanding it — dropped Glynn’s rent from a flat 15 percent of sales to a “sliding scale” lease that drops to 5.5 percent.
The Integrity Commission after reviewing Gale’s complaint recommended the NPC “review its decision ... with full knowledge of all the expressions of interest received (from Ripley’s and others).”
But Ontario Tourism Minister Smith said that the NPC, in reviewing its decision, won’t have to allow the lease to go to tender. NPC Chairman Williams admitted the review might lead to the same decision. “Nothing has changed from what the board considered on April 18, 2008,” he said.
Oddly, too, the Liberal Party’s Tourism Minister, Smith, recently declined to reappoint Gale to the NPC, leaving the position vacant - so that when Williams “reviewed” the rent-reducing lease, there would be no whistle-blower left on the NPC board.
Damian Alksnis, a partner at MG Forensics Group in Toronto, confirmed that the loss to the NPC from the new Glynn lease vs. the old one will mean an estimated $626,700 loss in the first year alone, and possibly $25 million over the 25-year term of the lease. “Under the new lease agreement,” Alksnis told the Toronto Globe and Mail, “(the NPC is) exponentially worse off.”
Meanwhile, Kernahan, who engineered Glynn’s rent reduction, admits the NPC is maintaining acres of deteriorating parkland.
“Regrettably, many initiatives will have to be postponed or delayed because of our financial situation,” he said in April. “Maintenance projects will be delayed throughout the park.”
Costs continue to rise and revenues drop. Such things as training, travel, etc. are all to be limited. There won’t be a staff picnic this year ... 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].
“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.”
Glynn’s 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.
His rent was decreased.
Who says plans aren’t perfect?
And that silence isn’t golden?
And with a $25 million rent reduction, Glynn’s hair, if you happen to notice, is turning pure gold from absolute gladness.


Frank Parlato Jr. can be reached at frank@frankreport.com.


Maid of the Mist lease awaits rent reduction as Ontario parks fall into decline

By Frank Parlato Jr.

June 30, 2009

Preserve our Parks (POP), the powerful citizens' activist group in Niagara Falls, Ont., is taking their case to the city council this week.

Their claim: Maid of the Mist owner, James Glynn, and the Niagara Parks Commission are hurting the famed Niagara Parks.

Because of the low rent Glynn pays and the crazed plan -- exposed by the Niagara Falls Reporter -- to reduce his rent, secretly negotiated last year, but awaiting Parliament approval, the Niagara Parks are being deprived of money for basic maintenance.

POP is distributing pictures to the council of the sorry shape the once pristine Niagara Parks are in since layoffs have reduced maintenance staff by more than a third.

Five hundred employees were laid off. One thousand full-time seasonal workers had their hours slashed by 6.25 per cent.

Besides layoffs the NPC has deferred maintenance, closed services, cut investment and even canceled minuscule expenditures, like the employee staff picnic.

NPC manages 4,200 acres of parkland, including museums, restaurants, golf courses, rides and other attractions.

Around the parks, lampposts rust, paint peels, debris is left for months, vacant buildings need repair or demolition, light fixtures are broken, roofs need repair, including even the famous Spanish aerocar entrance's roof, tree wells are overgrown with weeds, parking lot asphalt is worn and missing -- all this and more make the parks seem in places rather shabby.

(Click here for a larger image)

Essential services are also being slashed.

The NPC had to close the snack bars in Queenston Heights and Kings Bridge Park -- giving a bizarre and uninviting look to these tourist areas. They closed the store and the botanical house at the Floral Showhouse, choosing to purchase plants instead of growing them. They reduced the hours of operation at the Table Rock Complex. And the ground maintenance crew at the mammoth Legends Golf Course went from 60 to 15 workers.

So why does POP think the decline in the parks is somehow the fault of Maid of the Mist, James Glynn and the NPC, particularly its chairman, Jim Williams?

After all, the Ontario Minister of Tourism reported that USA visitation is off by 50 percent and NPC Chairman Williams warned that parks are facing severe economic times because of the worldwide economy.

Yet Williams -- a former federal government official, now in private consulting -- knew the NPC was faced with an operating deficit of more than $4 million. He knew he had to increase income or make cuts as the chief steward of these public lands.

He made the cuts, but astonishingly, instead of trying to increase income on the biggest lease the park has, he and Glynn secretly negotiated to reduce the Maid of the Mist rent by more than a $1 million per year.

The secretive Lewiston businessman has held the lucrative dock leases for the Maid of the Mist boats on both sides of the Niagara since 1971. Until the Reporter published the leases, the public never knew what rent they were getting on their own land.

By an archaic quirk of law, the NPC is allowed to operate in secrecy -- a patent recipe for corruption.

After the secret negotiations took place with Glynn, Williams led the part-time commissioners at the NPC to again secretly vote to lower lease payments, while ignoring other companies' willingness to pay more.

It is hard to fathom why, when faced with the layoff of workers whose task it is to maintain the parks, Williams would lead the NPC to reduce Glynn's payments from a flat 15 percent of sales to a sliding-scale lease that sees most of Glynn's rent -- if the new lease stands -- paid at 5.5 percent.

As the Reporter revealed, the billion-dollar Ripley Entertainment Company of Canada proposed to pay $2 million more per year than Glynn was paying before the reduction.

Had Ripley's been allowed to bid, the NPC would see a rent increase that would singlehandedly cover half the shortfall the entire park system is facing.

But, and this is curious, Williams refused to allow Ripley's to bid and, even kept Ripley's interest a secret from other commissioners.

Also, astonishingly, Williams failed to tell the part-time NPC commissioners that the new lease actually reduced Glynn's rent. Most commissioners never saw the lease or knew about competing offers when they voted.

Alcatraz Media of Atlanta, which represents boat tour companies that deliver boat tours at Alcatraz Island and the Statue of Liberty, also offered $96 million more over the 25-year life of the proposed new Glynn lease.

Alcatraz also was excluded from bidding and is suing the NPC in Ontario Superior Court.

Last month, hard-hit Niagara Parks employees marched en masse to the falls to protest the cutting of their wages.

Last year, Williams managed to cut Glynn's rent.

One cut helped millionaire Glynn. The other hurt poverty-threshold workers.

But Williams has other concerns. He chastised the Reporter for its relentless coverage, telling anyone who would listen that the NPC is "under siege."

But what else can you expect when you refuse to consider competing offers that would bring millions more per year, when the grass isn't being cut regularly, gardens aren't being tended properly, and lampposts are rusting for lack of resources in one of the most famous parks in the world?

Parliament needs to approve the rent-reduced lease. Glynn recently hired high-priced Toronto lobbyist Bob Lopinski -- a former aid to Premier Dalton McGuinty, who heads the Liberal party, which controls Parliament -- to help persuade Parliament that Glynn should get his rent reduced.

Glynn's monopoly generated, according to records, about $23 million last year for Glynn. If the proposed rent-reduced lease is approved, his rent will go down from the already under market $3.2 million to about $2.3 million in 2010.

Ripley's and Alcatraz have offered to pay upwards of $5 million.

With such evidence before us and the hurtful deprivation of park employees and the parks themselves, you have to wonder why the Glynn reduction is even still in question.


Famed park run solely for the benefit of one man

By Frank Parlato Jr.

July 28 , 2009

It's a big story we broke in April. A giant story.

So far met with -- silence.

The story: The landlord is paying the tenant rent.

You can read it yourself -- the lease where the landlord pays the tenant -- the 56-page Maid of the Mist lease between the NYS Office of Parks, Recreation and Historic Preservation and Lewiston businessman James Glynn -- online at www.niagarafallsreporter.com/2002lease.pdf.

After you read it, you will understand why the N.Y. Parks wanted to keep it a secret. It would be a secret today had the Niagara Falls Reporter not gotten hold of it.

Maybe because it is a complicated story, or maybe because some think the Maid of the Mist rather more an institution than a simple, for-profit boat tour business, there has been only silence.

Nevertheless, we, the people, the collective owners of the Niagara Falls State Park, pay our tenant, Glynn, of the Maid of the Mist boat ride, and souvenir store and operator of the N.Y. State Park Observation deck.

I know it sounds crazy. You think perhaps I am making this up.

But study the lease.

Instead of getting rent for these valuable attractions on almost hallowed public grounds -- we get no rent, but rather pay Glynn.

On paper, it does say Glynn pays 4 percent of gross sales for his boat tours.

James Glynn

Maid of the Mist businessman James Glynn's projections show that, in 2008, his tour-boat operations in the N.Y.State Park grossed him $6,393,000.

Across the river, he pays 15 percent for the same tours to the smarter Canadians. But even 15 percent is low. Other companies, such as Ripley Entertainment and Alcatraz Media, are trying to get the right to bid and are ready to pay 20 percent or more.

In New York, the lease reads, Glynn pays 4 percent.

In reality, he pays nothing at all.

We pay him.

Our stewards at the park gave our boat docks away to Glynn. Gave him a souvenir store. And gave him our observation deck, too.

The Observation Deck is how he got to be rent-free. About a million people a year pay $1 to go out on the Observation Deck to see the falls, or down elevators to the bottom of the gorge, where Glynn's boats launch.

Glynn gets to keep 75 percent of the Observation Deck money, which more than triple offsets his 4 percent rent.

Glynn's projections show that, in 2008, his tour-boat operations in the N.Y. State Park grossed him $6,393,000. Sales at Glynn's souvenir store grossed him $1,592,000, and fees from the Observation Deck brought in $1,124,000, for a total of $9,109,000 for Glynn.

Yes, he paid the state 4 percent on boat rides -- $255,720.

Sure, he paid 11 percent, or $175,120, on souvenir sales, for a total of $430,840. But the state allowed him to keep $843,000 of our Observation Deck fees.

As a result, the park in effect paid Glynn $412,160 to be our tenant.

It's a microcosm of everything that is wrong with New York State: One man gets almost the whole financial benefit in the most famous park in the world -- the Niagara Falls State Park; it was done secretly. As usual, we are apathetic.

Over the 40-year life of the lease, tenant Glynn stands to make more than $376 million. While we, the people, pay $16 million for him to be our tenant.

I know you could spin it otherwise: park officials could say, "We get 4 percent from boats; 11 percent for the souvenir store and 25 percent from the observation deck -- equaling maybe $700,000 per year." (As Glynn makes $9 million).

The rebuttal is we own the Observation Deck. We should get 100 percent -- not 25 percent. And 4 percent is low. Even by conservative standards, it should be 15 percent, like he pays in Canada.

On top of that, the no-bid, 40-year lease is unprecedented -- the longest ever awarded in the history of the parks system.

Prior to 2002, when the secret lease was signed, we kept 100 percent of revenue from the Observation Deck. And Glynn paid 10 percent of the Maid of the Mist's take then, instead of 4 percent.

In 2002, the state entered into partnership with Glynn and invested $25 million into Glynn's businesses. Taxpayers paid $20 million. Glynn contributed $5 million. it was perhaps the smartest $5 million Glynn ever invested.

The first thing the state/Glynn partnership did was "improve" the Observation Deck. Before it was "improved," it had a tower that stood 82 feet above the deck. People could go up the elevator for the only panoramic view of the falls on the American side.

Glynn and the state cut off the 82 foot tower above the deck so that elevators only went down -- to Glynn's boats.

Next, they built a new souvenir store, which people exit through. If you ride the boat or go on the Observation Deck, you are forced to exit through Glynn's souvenir store.

They also built for Glynn luxurious, high-speed, air-conditioned elevators that go down 200 feet to his boats, fixed up the deck, fixed up his buildings and restrooms, and improved or provided other amenities for Glynn.

Then they lowered his rent from 10 to 4 percent. Then handed control of the Observation Deck to Glynn with a 40-year, rent-free lease.

We lose more than $2 million a year, compared to what we could earn if the New York lease with Glynn was comparable to the Canadian lease.

That's more than the state earned at the park's three parking lots. More than the salaries and benefits of local park employees laid off this year because of state budget woes.

For $5 million -- which the state certainly could have come up with, and which only went into Glynn's attractions, anyway, our stewards, middle-income, government officials, decided that we, the public, the landlord, should pay our ultra-rich tenant -- for one of the most valuable rentals in the world -- for 40 years.

Our regional parks are faced with a $1.1 million budget reduction this year. Seasonal workers were cut 9 percent. Cutbacks in park police are in effect. There are reduced days and hours of operation for the Cave of the Winds, the Visitor Center, the Park Trolley and the Niagara Gorge Discovery Center.

More than 50 park employees were laid off and won't be coming back this year.

Yet the boat-tour industry is highly competitive, as is shown by the large number of bidders for National Parks boat tour attractions such as the Statue of Liberty and Alcatraz Island.

Estimates from tourism industry experts suggest the park could get $2 million to $3 million more annually if Glynn's lease were open to competition.

But New York Parks failed to open theÊcontract for bids, violating section 163 of the N.Y. State Finance Law, which reads: "state agencies shall conduct formal competitive procurements to the maximum extent practicable."

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."

Under section 163, a "sole source provider" is permitted, eliminatingÊformal, competitive bidding only when no one else could provide the service.

Berti said Glynn is the only one who could provide the boat tour, because he has a lease on the Canadian side that "allows (the New York) Maid of the Mist Corporation to dock its boats on the Canadian side."

There is no place to store boats in New York, she said. New York had to give the lease to Glynn.

There no places to dock boats on the New York side?

Some companies insist there are. It is the subject of at least one lawsuit. The evidence submitted is that boats were originally lowered by crane. They can be lifted by crane, too, and docked in numbers of places. Indeed, for the money New York is losing because they claim they need Canadian docks, docks could be built in the park.

Even if it is true there is no place in America where boats could be docked in winter and lowered again in spring, we uncovered a "gotcha," the sure proof that Berti was at best misinformed.

Glynn's Canadian lease expires in November.

Berti claims section 163 as the legal reason for giving the lease to Glynn.

Section 163 also reads: "The term of a single source procurement contract shall be limited to the minimum period of time necessary to ameliorate the circumstances which created the material and substantial reasons for the single source award."

What, then, was the basis for a 40-year contract, granted in 2002, when Glynn's Canadian lease expires in November 2009?

Why would the New York parks allow his lease to run 33 years beyond the expiration of the Canadian lease if sole source procurement is "limited to the minimum period of time necessary"?

On that point alone, it seems the Glynn lease is illegal.


Glynn's tower is for the birds

By Frank Parlato Jr.

September 15, 2009

Lord bless them.

On a plaque outside the Niagara Falls State Park's Observation Deck, they speak of birds.

Of saving birds.

Of how and why they rebuilt the observation deck in 2003.

With birds in mind.

The state rebuilt the deck and removed with it the 90-foot-tall glass tower at the end of it, along with other improvements, at a cost to taxpayers of $20 million.

In a secret arrangement, park officials then handed control of the observation deck to James Glynn of Lewiston, longtime concessionaire of the Maid of the Mist boat tours in the park with a sweetheart 40-year lease.

The rebuilt observation deck, like the old one, protrudes from the walls of the gorge about 200 feet into the middle of the gorge, providing a unique and marvelous view of the falls.

Before they rebuilt the deck, the tower loomed at the end of the deck. Elevators went to the top, where tourists were afforded the only aerial view of the falls in Niagara Falls, N.Y.

The plaque says they removed the tower so birds would not fly accidentally into it and die.

Glynn's tower for the birds

Glynn's gaining control of the observation deck, as exposed by the Niagara Falls Reporter, was part of a threefold arrangement that included getting his rent reduced on his Maid of the Mist boat tours from 10 percent to 4 percent, and taxpayers building him a souvenir store inside the park. Glynn also gets to keep 75 percent of the money he collects at the observation tower.

More than a million people paid him a dollar admission last year.

Interestingly, when you add up what he pays at 4 percent for boat tours and subtract the 75 percent he keeps from the observation tower, it turns out taxpayers pay him more than half a million per year for two of the most valuable attractions in the park.

Prior to 2003, New York state kept 100 percent of the observation deck and tower fees.

With the rebuilt deck came another change.

Tourists who go out on the deck must now exit through Glynn's souvenir store.

Funny, too, since Glynn took over the deck is open for limited hours. It closes when his souvenir store is closed, often before dark -- a significant deprivation for tourists since the deck provides the only comparatively full view of the falls illumination on the U.S. side. Tourists consequently have to leave for Canada to see it.

Meanwhile, Glynn has had his boat ride monopoly since 1971, and his lease runs until 2042 without ever having to bid against competitors. He presently operates two older steel boats on the New York side, with 300-person standing capacity on each.

Unfortunately for tourists, he has limited seasonal hours, seemingly coinciding with peak profitability. The ride itself, a short run from our public docks to the beginning of the Horseshoe Falls and back, is only 15 minutes.

He should do night tours. He could do longer tours, a mile downriver along the spectacular lower river gorge. He could have covered boats, which would extend the season. And dinner cruises. He should have seats and bathrooms.

All of this would be done if a first-class operator like Disney, Ripley Entertainment, Alcatraz Media, or any number of companies had a chance to bid on one of the most lucrative boat tour contracts in the world.

Almost everyone who comes to Niagara Falls wants to go on a boat ride below the falls. Not because of Glynn's primitive boats, but because the best way to see the falls up close is on a boat at the base of the falls. It is the No. 1 attraction.

I have seen it many times, after his early closing hour, when tens of thousands are in the park looking for something to do. His maximum profit hour passed and he closed. And they leave, perhaps for Canada.

This past Labor Day weekend, he closed his gates two hours before his last scheduled boat tour, with thousands waiting in line.

Thousands turned away.

People had to wait up to three hours to get on his boats. Then they took his 15-minute boat ride, standing, packed like sardines. After they got off, they had to wait over an hour to get to the elevators.

Part of the slowdown was caused by people being forcibly herded through the narrow doors of Glynn's souvenir store.

People were depressed and angry to be trapped at the bottom of the gorge, waiting in line to get out. Once at the bottom, unless you can scale steep rock, you are trapped.

Moods went from anticipation to boredom, disdain, and sometimes horror as they wasted several hours to take a 15-minute boat ride.

Had we gone around that day with attorney general complaint forms, we could have garnered 5,000 complaints that weekend.

Glynn runs the observation deck much like he runs his boats.

Before Glynn controlled the deck, it had both deck and tower. After Glynn got control, they removed the tower.

To save, as the plaque says, birds.

A former park employee told the Reporter he never observed birds flying fatally into the tower. He did remember the Maid of the Mist manager repeatedly yelling at him for taking people up to the tower because it hogged the elevators that also led down to the boats.

Down, not up, the man said.

So they took down the tower.

They did it, the plaque explains touchingly, because "up to a billion" birds die flying into manmade objects, particularly glass objects, around the world.

As many as "90 birds might die in a single foggy night" flying into the tower, the plaque says.

The generous-hearted Glynn took away the only aerial view of the falls on the U.S. side -- which, coincidentally, sometimes led tourists away from his boats -- to save birds from dying.

No wonder Dyster -- who claims to be the green mayor, in spite of driving an un-green SUV and fighting for plans that will take down mature trees in Jayne Park and on Lewiston Road -- loves to help Glynn.

He has collected lots of green from Glynn.

Glynn was Dyster's largest campaign contributor.

Glynn contributed green in other ways, too, as the Reporter exposed, through a secret donors' fund called "Building a Better Niagara."

Had the Reporter not exposed it, which caused it to implode, it would have undoubtedly "built a better Niagara" -- for Glynn and Dyster at least.

Dyster is expected to advise the state to seize One Niagara, the nine-story, all-glass building next to the state park.

This writer is managing member of the LLC that owns it.

Dyster identified One Niagara as the preferred location for the Niagara Experience Center, a proposed government-funded attraction for Niagara Falls.

Dyster is chairman of the committee to design it.

It is widely speculated that if the property is seized through eminent domain, Dyster and the state will arrange to hand over the management contract to Glynn.

You know, nice people don't think it's corruption to do favors for your friends when you are in government.

Like the mayor arranging to remove street vendors from sidewalks in front of his largest campaign contributor.

Or trying to move the entrance of the Niagara Falls State Park to where Glynn just bought a hotel.

Or reconfigure the Robert Moses Parkway to direct traffic in front of Glynn's new retail stores, or using the power of the office of mayor to fight tax reductions for a competing hotel while supporting those same tax reductions for your largest campaign contributor's hotel.

Or trying to limit the height of downtown properties to the same height as Glynn's downtown hotel so no one can build a competing property higher than his.

Nice people don't think Glynn's son sitting in on the hiring of key Dyster aides, who later were found working hard to aid his father, is corruption.

They don't think that Dyster and Glynn sitting on the advisory board of USA Niagara, a government agency that expended money to buy out Glynn's competitors and spent millions fixing up property around Glynn's investments, is corruption.

Or Dyster supporting a master plan that directs downtown traffic and public monies toward Glynn's properties and away from his competitors.

Nice people think that because the mayor has a father who is a kindly, old doctor and because Glynn's name does not end in a vowel that it cannot be corruption.

But it is.

If they seize One Niagara and give the contract to Glynn, without bidding, there should be a plaque: "Done by, for and of Glynn, with Glynn the main beneficiary, along with Dyster and a few other officials who will benefit in ways the public will never know."

If they seize the property and demolish it, perhaps, since One Niagara is made of glass, they will instead say they did it to save birds.

Somehow I suspect the plaque will say they did it for the birds.

Lord bless them all.


Amid half truths and bald lies, it's up to Parliament:

Will Glynn's Canadian lease be extended / reduced without competitive bidding?

By Frank Parlato Jr.

October 13, 2009

Of course, for readers of the Reporter, the secretive doings of park officials on both sides of the Niagara, meant to favor Lewiston businessman James Glynn, are well known.

In New York, parks officials gave Glynn what may one day be iconic of 21st-century corruption -- the sweetest of leases -- where the public pays Glynn, the tenant, for his right to use public docks to operate his lucrative Maid of the Mist boat rides.

It is mildly comforting to know then that the Niagara Parks Commission (NPC) is not far behind in ineptitude or corruption.

The NPC commissioners, who normally operate in secret, reaffirmed on Sept. 25 their earlier decision to extend Glynn's lease by 25 years and throw in this sweetener: Reduce his rent.

They had been "ordered" by Ontario Minister of Tourism, Monique Smith, who many allege is deeply buried inside Glynn's capacious pocket, to re-review and make sure the lease was the best one the government could get.

Smith's signals behind the scenes seemingly show she wants to help Glynn and the re-review was a formality meant to help quell the public outcry started when former NPC commissioner Bob Gale broke ranks with other commissioners and exposed what he called the "dirty" Glynn deal.

Smith now will have to decide whether she will recommend to Ontario's Parliament, headed by Premier Dalton McGuinty, what the NPC's approved-- extending Glynn's lease and reducing his rent without seeking competitive bids.

Curiously, the NPC, in their re-review of the lease, chose not to contact any of multiple parties who expressed interest in bidding. Smith did not require them to do so.

Alcatraz Media offered to pay almost $100 million more than Glynn over the life of the lease. Ripley Entertainment offered more than $25 million more.

Seneca Gaming, CamPark Resorts, and Entertainment Cruises also expressed interest in bidding.

NPC Chairman James Williams and General Manager John Kernahan -- both whom have been accused of being so helpful to Glynn that, if they are not on his payroll, they should be -- have made multiple arguments why Glynn should be the only one considered.

One is that Glynn owns the name "Maid of the Mist," and loss of that name would hurt business.

The Reporter, however, uncovered the 1989 lease between the NPC and Glynn. It was kept secret from the public based on archaic Ontario confidentiality laws. The Reporter, being American, chose to publish the lease online.

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

Williams, foiled then attempting to make Glynn seem an institution, said, "This is a unique lease, given that the business relationship between the parties has existed for over 100 years."

Untrue. Glynn's corporation -- the "Maid of the Mist Steamboat Co. Ltd." -- has been in existence only since 1971, when Glynn bought the "assets" of a former, similarly named Maid of the Mist Steamboat Company. As an asset purchase, rather than a stock purchase, his boat tour operation has legally existed only 38 years.

Sure, boat rides existed below the falls for more than 100 years. But operators changed many times. Glynn has no family ties to anyone involved with the boat service from its inception in 1818 until 1971.

Glynn didn't operate the business for the first 153 years. He didn't conceive of the idea of having boat rides under the falls. That was done by Christian Schultz in 1807.

Glynn has a 38-year, not 100-year relationship with the park.

The next fallacy Williams offered was that no one but Glynn is capable of providing a boat ride under the falls. Williams 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."

History, however, reveals there have been many operators of boat rides under the falls, ever since William Forsyth and Parkhurst Whitney began the first rowboat ferry service in 1818. At one time, 40 different companies ran rowboat ferries.

In 1846, the Niagara Falls Ferry Association launched the first steamship christened "Maid of the Mist." In 1885, R.F. Carter and Frank LeBlond launched a "Maid of the Mist" oak steamer that got closer to the Horseshoe Falls. Using the same name, this is the same tour Glynn offers.

Still, there is nothing "unique" or "impossible" about offering a 15-minute ferry ride. What is unique is the setting -- the amazing Niagara Falls.

Many boats are suitable to provide this service. Experienced captains and crews are available. Other companies could procure boats and lower them by crane as Glynn has done with most of his fleet since 1971.

Then, before Jim Williams knew we had a copy of the 1989 lease, he told the press that a "clause" in it meant Glynn would sue, causing the NPC "significant financial liability," if the NPC selected another boat operator. One reporter asked him to reveal the clause. Williams declined, saying it was "secret."

We checked the lease. There is nothing in it that indicates Glynn can sue if it is not renewed. In fact, it has an expiration date, which means it was expected it would end.

Paragraph 5.06 of the 1989 lease states that the tenant "shall deliver the Demised Premises, building and equipment located thereon, to the Landlord at the expiration of the Lease in a state of repair equivalent to that required to be maintained by it during the Term."

The real issue, however, is not what NPC officials say, but whether this lease is the best possible deal for the public.

The NPC's approval of a 25-year lease extension has been reported extensively throughout Canada. The media focused on the fact that, in spite of established companies trying to get a shot at the lucrative contract and willing to pay more than Glynn, the NPC chose not to listen to other offers.

The Canadian media failed to report one other significant issue: The NPC Web site says, "The lease will provide increased rental payments to NPC."

Like almost everything else, this is not true.

The present lease has Glynn paying a flat 15 percent of gross sales.

The NPC Web site states, "The existing flat rate paid to the NPC ... has been replaced with a sliding scale rate starting at a higher level and declining incrementally as new revenue targets are achieved.

"This is designed to protect NPC revenue streams during years in which visitation is down and provides incentives to MOM to perform at levels that exceed previous historic highs. ...

"The base amounts upon which the rental rate is applied is tied to 2009 fares."

What Williams doesn't say is that the "target level" where rent rates start going down is based on 2003 levels. Buried beneath terms like "incentives," "revenue targets" and "protect revenue streams" is that the rent goes down "incrementally" after sales reach the "revenue target."

Williams and Kernahan chose a "revenue target" that, they may have argued, "exceeded previous historic highs," but in reality was set "at about a 2003 level," according to Kernahan's report to commissioners.

2003 was the year of the SARS (Severe Acute Respiratory Syndrome) scare. Tourism was off by 28 percent.

Some revenue target.

During 2004-08, Glynn averaged $19 million. In 2003, he grossed $11.5 million.

In the last decade, Glynn averaged 1,854,632 Canadian riders annually -- except for 2003, when he had only 1,249,773. The lease was structured so that Glynn would pay slightly more rent (17.5 percent) until he reaches the gross dollars of the SARS year, then it goes down rapidly to 12.5 percent, 8.5 percent, 6.25 percent, and finally 5.5 percent.

Once he hits $17 million, his effective rent becomes less than 15 percent. Every additional dollar is paid at 5.5 percent. If the proposed lease had been in place in 2008, when Glynn grossed more than $23 million, he would have paid $682,000 less rent, compared to the present rate of 15 percent.

Williams said this sliding scale was devised for "revenue stream protection," since it raises the first $11.5 million of Glynn sales by 2.5 percent -- about $300,000.

So NPC makes $300,000 more if Glynn has a SARS-like year.

And loses more than $600,000 when he has a typical year.

Revenues in 2007 and 2008 exceeded $20 million.

The NPC would have gotten only 14.4 percent if they had had this new formula in effect in 2005. In 2008, it would have been less than 12 percent.

Using projected rate increases for the next 25 years, the NPC will lose on average a million or more per year. This new lease was clearly done to reduce the rent of the current operator. Parliament should have experts look closely at this. Meanwhile, the NPC manages 4,200 acres of public parkland. They lost $4.3 million in 2008. Park employment has fallen from 750 to under 500 during the last few years.

"Maintenance projects have and will be delayed throughout many areas of the park this season," Kernahan said last April. "Costs continue to rise and revenues drop. ... A reduction in hours of work (to) 37.5 hours per week for seasonal employees who normally work a 40-hour week or more (was required)."

The NPC deferred maintenance, closed services and cut investment. Some places in the parks look shabby.

They can't pay their bills. They could not even make their annual $1 million payment in lieu of taxes to the city of Niagara Falls. They can't conduct normal maintenance, are slashing the hours of the lowest-paid employees, and lost $4.3 million.

But they lowered Glynn's rent, when others, probably Glynn himself, would have paid substantially more.

It's up to Premier Dalton McGuinty's cabinet to approve or reject the lease. And for Monique Smith to recommend the lease or say the deal is a stinker.

So why would McGuinty and Smith reduce Glynn's rent?

Why would anyone?


Maid of the Mist Lease Ordered Reopened

Ontario calls for end of monopoly on dubious Glynn lease

By Frank Parlato Jr.

November 03, 2009

After a year and a half of the Niagara Falls Reporter pounding out stories, Ontario's tourism minister Monique Smith last week ordered the Niagara Parks Commission (NPC) to put the Canadian concession lease for the Maid of the Mist -- presently held by Lewiston businessman James Glynn -- out to bid.

This means for the first time Glynn will be facing competition for the right to offer boat tours in the lower Niagara River just under the falls. He has held a monopoly to provide boat tours on both the American and Canadian sides of the lower Niagara pool -- one of the premier water attractions in the world -- for 38 years.

Maid of the Mist Lease sunk

Despite the fact that his boat docks are located on public land belonging to the people of Ontario and New York state, Glynn has never had to bid on the concessions and has personally raked in hundreds of millions of dollars under the sweetheart deals.

While opening the process to competitive bidding will generate millions more for the Canadian public, the potential loss of the Canadian lease will be costly for the wealthy Glynn, whose Maid of the Mist boats attracted 2.2 million riders last year. Glynn grossed about $23 million. Confidential documents submitted to the NPC show Glynn netted more than $5 million on the Canadian side alone. He paid the NPC about $3.1 million in rent.

News of the opportunity to bid has attracted a cadre of potential bidders.

Ripley Entertainment, Alcatraz Media, CamPark Resorts, Xanterra Resorts and Entertainment Cruises have all expressed interest.

Hornblower Cruises, Circle Line, Circle Line 42, New York Waterway, New York Water Taxi, and Red and White are also expected to bid, while Disney and the Seneca Gaming Corp. have been mentioned as possible bidders.

The rent, tour boat experts say, is likely to double to $6 million annually or more when the competition for this lucrative attraction is awarded to the highest bidder.

Much of this news came as a shock to local people who consider Glynn's Maid of the Mist a kind of institution with perpetual rights to control the public waterway below the falls.

Glynn has done much to foster this thinking locally. Since 1971, he has operated in secret, and the public never knew, either in Canada or New York, what it was getting for rent on its own land, the public docks that gave the only access to waters directly below Niagara Falls. Glynn held the monopoly, but the terms were shrouded in mystery. During the last year, the Reporter made both leases public, publishing them in full online.

Once exposed to sunshine and evaluated, they revealed that Glynn's lease on the Canadian side was quite low, and it was even worse on the New York side.

Other factors triggered the competition as well.

A scandal that erupted in Ontario over revelations concerning an agency called eHealth, which awarded a billion dollars' worth of no-bid contracts just as two private concerns were complaining about their inability to bid on the Maid of the Mist lease, made the timing right.

And there was whistle-blowing NPC commissioner Bob Gale, who risked his reputation by going public with charges that the Glynn contract was a "dirty deal." He said it so often and so loudly that it threatened to become another scandal for the Liberal government.

Glynn's Maid of the Mist Corp. is, of course, unhappy. Spokesman Tim Ruddy vowed the company would take "whatever actions are necessary" to protect its position as the provider of boat tours.

"All options will be under consideration," he said in a tone implying litigation.

And NPC Chairman Jim Williams and General Manager John Kernahan, who fought diligently to preserve Glynn's lease even when it was clear others would pay far more, are expected to make the bid terms as difficult as possible for anyone but Glynn.

While Smith has ordered that "all interested parties get the opportunity to submit proposals in a fair and open competition," many feel Williams and Kernahan will not be fair in creating terms for the bidding, and instead will issue specifications that favor Glynn. The bidding is on a fast timeline and is supposed to be completed by this spring.

The Ontario government, Smith said, might appoint a "fairness commissioner" to work with the NPC to alleviate concerns of Glynn-bias.

It might be necessary since, wherever Glynn goes, secret things generally happen with various government officials, things that somehow benefit him rather than the public.

DYSTER AND GLYNN

In Niagara Falls, N.Y., for instance, Glynn secretly pledged to donate a substantial amount money to a fund set up to enhance the political plans of Mayor Paul Dyster by paying a portion of the salaries of key people in Dyster's administration.

The deal imploded when the Reporter revealed that Glynn was behind the questionable plan of having private citizens anonymously donate to pay a portion of government appointees' salaries. But it did not stop Dyster from hiring two key aides in his administration while Glynn and others secretly paid part of their first year's salaries.

Meanwhile, Glynn quietly contracted to purchase the Comfort Inn Hotel and adjacent retail stores along the West Pedestrian Mall. Before the public learned of it, Dyster asked the City Council to cancel and permit the state to buy out the existing West Mall sidewalk-vending lease. The buyout eliminated Glynn's main retail competitor.

Then USA Niagara -- a state agency created to help develop Niagara Falls -- authorized the spending of $7.9 million in renovations to the former commercial strip, replacing the old walkway with new cobblestone and other amenities in front of Glynn's hotel and stores. Both Glynn and Dyster sit on the USA Niagara advisory board.

It is unclear, with the potential loss of the Maid of the Mist lease in Canada looming, whether Glynn will still be interested in trying to seize more of downtown. Without control of the boat attraction, will he really want to run a shabby hotel and mediocre strip mall in the decaying heart of a city that is also home to the glamorous hotel and glittering stores of the tax-free Seneca Nation?

And with the shocking effect of sunlight on his formerly secretive doings, can state park officials still get away with their proposal to cut down trees and move the entrance of the Niagara Falls State Park right to the front of Glynn's new hotel?

In light of the revelations in Canada showing Canadian officials favoring Glynn over the public interest, the plan to move the park entrance will face even more scrutiny. Are New York park officials scheming to deprive the public for the welfare of one man, or does it simply look that way?

Moving the park entrance promises to be a real controversy if it goes forward. But then again, park officials have long been willing to do almost anything for Glynn.

Indeed it was for Glynn that they actually ended the Olmsted vision in Niagara Falls State Park. Frederick Law Olmsted designed the park as an all-green reservation in 1886.

In 1987, Glynn persuaded park officials to fell trees to make a giant parking lot near the Maid of the Mist entrance. The city lost millions in parking and local tourist business.

But Glynn got a parking built lot near his attraction. And from that point on, the Niagara Falls State Park became not Olmsted but big business, centered around Glynn's boat tour, a Glynn-owned souvenir store, corporate restaurants with paid parking, and a water attraction. The park saw itself in competition with the city -- a change ruinous to tourism in Niagara Falls.

HOW HE LOST THE LEASE

So how did it happen that the secretive Glynn finally got to be treated like any other individual who deals with public assets? It began in January 2008, when Tim Parker, general manager of Ripley Entertainment, repeatedly expressed an interest to NPC Chairman Jim Williams in bidding on the Canadian boat lease. Williams, claiming confidentiality, refused to tell Parker anything. So Parker filed a freedom of information request.

John Kernahan, general manager for the NPC, suddenly started drafting a new lease for Glynn, more than a year and a half before it was due. Williams and Kernahan then hurriedly scheduled a "due diligence" meeting, canceling it almost immediately and scheduling a vote to renew Glynn's lease instead. Williams and Kernahan declined to tell other commissioners about Ripley's interest.

One commissioner, Bob Gale, sensed something was wrong. The day before the board was to vote, he sent e-mails to other board members telling them, "We're rushing the Glynn renewal way ahead of schedule. Why?"

Later that morning, Ripley's Tim Parker called Gale and asked if he was aware of his interest in bidding on the lease.

"Bingo," said Gale. "Now I knew why they were rushing the Glynn lease."

Gale asked the board to wait for the next meeting to allow Ripley's a chance to compete, and Williams became enraged. Kernahan said a delay might cost the NPC a lawsuit or a disruption of boat service. The commissioners -- without knowing the full terms or seeing the actual lease -- voted to renew Glynn's lease on April 18, 2008, for 25 years, and left it to Kernahan and Williams to work out the details.

Gale filed a disclosure of wrongdoing with the Integrity Commission of Ontario and told the press it was a "dirty deal." It was soon discovered that Alcatraz Media had attempted in 2005 to be considered for a chance to bid on the Maid of the Mist lease, a fact not disclosed to other members of the NPC.

The NPC vote to renew Glynn's lease, however, did not constitute legal renewal. The Ontario Cabinet had to sign off. And Parliament held back while the investigation of the Integrity Commission was conducted.

THE SCANDAL GROWS

Meanwhile, the Reporter exposed the details of the hidden machinations of the NPC for the first time and began covering the burgeoning scandal. Soon after, Bill Windsor of Alcatraz Media sued the Canadian government. And things began to heat up.

A growing number of Canadians now began to call for the lease to be sent back for bidding, including the powerful citizen's group Preserve Our Parks, whose members regularly distributed the Reporter in Ontario.

A few members of Parliament, including Kim Craitor of Niagara Falls, said the lease should go to bid. The Niagara Falls city council passed a resolution supporting the same.

After all, why wouldn't you try to get the most you can. The NPC was losing money.

Since 2004, when Williams took over as chairman, the NPC plunged from a $3.7 million profit to a $4.3 million loss last year. The NPC laid off a third of its workforce and cut back the hours of those workers who remained, devastating local families.

The scandal grew. The president of the Parks Union (OPSEU Local 217), Bill Rudd, took a bold and controversial step. He officially called for a tender. And the Niagara Parks employees marched en masse to the falls to protest the NPC.

Then, in a striking event, after posting the Reporter's articles on the home page of union Web sites, the mammoth Ontario Public Service Employees Union called upon the minister of tourism to dissolve the NPC. Union president Warren "Smokey" Thomas said the parks are "deteriorating while the commission (decides) to renew the lease of the Maid of the Mist without going to tender."

In time, other newspapers began to cover the story. News of the Glynn controversy ignited throughout Canada as the Globe and Mail -- after the Reporter's series -- began a series of its own. The Hamilton Spectator, the Niagara Falls Review, Niagara This Week, the St. Catharines Standard, the Toronto Star and other Canadian publications came out with stories. As did The New York Times.

THE RENT WAS SECRETLY REDUCED

Then the bombshell exploded. The Reporter discovered that not only did the NPC refuse to allow other bidders, but they actually dropped Glynn's rent. It went from a flat 15 percent to a "sliding scale" that reduces the percentage as Glynn makes more money. It drops as low as 5.5 percent.

Williams and Kernahan at first tried to say Glynn's rent was increased. But the Reporter got hold of the secret term sheet of the new lease, and gave it to other media. Damian Alksnis, a forensic accountant for the Globe, concluded the NPC is "worse off ... under the new lease agreement -- exponentially worse off." In the first year alone, $626,700 worse off.

Why would you drop his rent?

The Integrity Commission issued its report, recommending a review of the Maid of the Mist lease renewal. Smith told the NPC to "go back and look at the process."

Williams said, "Nothing has changed from what the board (previously) considered," but he and his commission went through the motions and met again this last September, voting again to renew the Glynn lease with the rent reduction.

Now it was up to the minister of tourism. Williams and some of the liberals in her party were pushing her to sweep this under the carpet. Glynn had hired high-priced lobbyist Bob Lopinski -- who was a liberal darling and worked for Premier McGuinty.

Smith was under intense political pressure. And for a while she gave no signal of what she would do. Public opinion was against the NPC.

LIES OF JIM WILLIAMS

Kernahan and Williams seemed desperate to help Glynn. They began their own public relations campaign. They insisted that a change might cause the NPC to lose the brand name "Maid of the Mist."

The Reporter took on the task of repudiating each and every lie.

The Glynn corporation -- which calls itself "Maid of the Mist Steamboat Co. Ltd." -- has been in existence since 1971. But according to the lease, (6.03): "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.'"

Next, Williams claimed no one could do what Glynn does. He compared giving people a boat tour to a trip to the moon.

"There's no other model," he told The New York Times. "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, 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.

But Ruddy was lying about boats having to be constructed on the riverbanks. In fact, Glynn lowered most of his boats by crane.

Williams then tried to make Glynn an institution.

"This is a unique lease, given that the business relationship between the parties has existed for over 100 years," he said.

Sure, boat rides existed below the falls for more than 100 years. But operators changed many times. Glynn has only been around since 1971. He has no family ties to anyone involved with the Maid of the Mist from its inception in 1818 until 1971. He certainly didn't conceive of having boat rides under the falls. Christian Schultz did that in 1807.

There is nothing "unique" about offering a 15-minute ferry ride. What is unique is the setting -- the amazing Niagara Falls. But there have been many operators of boat rides under the falls. And there will be many more. At one time, 40 different companies ran rowboat ferries.

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

But there is nothing in the lease that requires renewal. In fact, it says Glynn may not sue the park for any investment made into structures or improvements.

A NEW AND BETTER TOUR

Finally, after the hullabaloo, Smith ordered the NPC last week to put the lease out to bid. Putting it to bid will not only increase revenues but also improve the service.

The tour could be so much better. Competitive bidding may bring more than mere revenue enhancement, but promote imaginative ideas for tourism.

Glynn's tour is primitive, to say the least. Glynn provides only one type of tour -- 15 minutes packed like sardines while standing on the deck of an old steel boat making a brief run along the American Falls and slightly into the mist of the Horseshoe Falls.

The current Maid of the Mist boats do not have seats or bathrooms. The company provides a blue garbage bag for raincoats. In summer, the mist can be refreshing, but in early and late season, tourists get drenched and cold.

Both Ripley and Alcatraz spoke of covered boats, downriver tours to the Whirlpool Rapids, wedding and dinner cruises, and night tours when the falls illumination can be seen.

Part of the bid terms should include the possibility of extending the season. There should also be a plan to eliminate long waiting lines. Glynn takes no reservations. In the height of the season, tourists wait hours for the 15-minute ride.

Meanwhile, estimates from tourism industry experts indicate the park will likely get at least $3 million and as much as $6 million more in rent than what Glynn is paying.

The NPC posted an operating loss of about $4 million last year, which means it could solve its financial problems just by putting the lease out to bid.

NEW YORK LEASE ALSO ILLEGAL?

Even though state parks in New York face severe shortfalls, Glynn managed to get park officials here to secretly reduce his rent from 10 percent to 4 percent in 2002 without letting anyone else bid.

Delving into the lease, we find Glynn doesn't even pay 4 percent. He pays no rent. In fact, the state pays him.

That's because he gets to keep 75 percent of the revenue generated through admission fees to the park's Observation Tower. Glynn got a check last year from the state for $586,300 in addition to the millions in profit his rent-free boat tours make. The unprecedented 40-year, no-bid lease awarded to Glynn was the longest ever in the history of the parks system.

Angela Berti, spokeswoman for the state park, said "no bids were taken because the Canadian agreement gives (Glynn) exclusive access to the river below the falls, making (him) a 'sole source' provider."

Berti said Glynn is the only one who could provide the boat tour, because he has a lease on the Canadian side that "allows (N.Y.) Maid of the Mist Corporation to dock its boats on the Canadian side."

But now he is likely to lose the Canadian lease.

Berti claims Section 163 of the New York State Finance Law as the legal reason for giving the lease only to Glynn.

But Section 163 reads: "The term of a single source procurement contract shall be limited to the minimum period of time necessary to ameliorate the circumstances which created the material and substantial reasons for the single source award."

Glynn's Canadian lease expires in November 2009.

What was the basis then for a 40-year contract, granted in 2002, when Glynn's Canadian lease expires in 2009? Why would the state parks allow his lease to run 33 years beyond the expiration of the Canadian lease if sole source procurement is "limited to the minimum period of time necessary"?

If you need the Canadian lease to operate the New York lease, then Glynn's New York lease should have only gone to November 2009. Using Berti's own argument, Glynn's lease in New York should become null and void this month.


Glynn's house of cards collapses with Canadian report, U.S. lawsuit

By Frank Parlato Jr.

December 01, 2009

Maid of the Mist owner Jimmy Glynn got smacked with a double whammy last week, with the release of a secret investigative report in Ontario and a massive lawsuit in New York state that may serve to undo the stranglehold he's held on Niagara Falls tour boat operations for the past 38 years.

For all that time, Glynn has been awarded no-bid leases on both sides of the border and has never faced competition despite the fact that numerous would-be competitors have offered the New York and Ontario governments far more for the concession.

But after the Niagara Falls Reporter revealed that Ontario's Niagara Parks Commission (NPC) secretly voted to extend Glynn's monopoly for 25 years while dropping his rent, Minister of Tourism Monique Smith ordered the commission to put an end to Glynn's Maid of the Mist monopoly and open the concession to competitive bidding.

Bad News for Jimmy GLynn

Glynn will face Ripley Entertainment, Alcatraz Media, Campark, Xanterra, and possibly Disney and the Seneca Nation of Indians for the right to conduct boat tours under the falls. Competition should boost NPC revenues and make for a more modern and pleasant tourism experience at the same time.

Meanwhile, Ontario's government, catching a whiff of the decaying-odor-from-the-back-door-of-your-outhouse kind of NPC dealings, ordered a probe by Canadian auditing firm KMPG, a document that was kept secret until last week when it was obtained via Freedom of Information requests. The auditor's probe uncovered what the Reporter long asserted: The Glynn affair was only the tip of NPC's dirty iceberg.

The audit found "ethical breaches," "gaps in record-keeping," "missing documents" and "conflicts of interests" between commissioners and businesses that provide park services.

Still, the big story is Glynn, who grossed hundreds of millions over nearly four decades by a peculiar brand of secrecy and getting public servants to become his servants.

On this side of the river, Bill Windsor of Alcatraz Media -- one of the potential bidders spurned by parks agencies in Ontario and New York -- last week sued the New York State Parks, state Comptroller Tom DiNapoli, state Attorney General Andrew Cuomo, Gov. David Paterson, former state parks commissioner Ed Rutkowski and Maid of the Mist owner James Glynn and his son Chris for what he says have been fraudulent dealings in awarding the no-bid Maid of the Mist contract here.

When New York State Parks renewed Glynn's lease in 2002, his rent was secretly reduced from 10 percent to 4 percent because of a sweet add-on: Under the new agreement, 75 cents of every dollar generated by the observation deck goes directly into Glynn's pocket. Do the math and you'll discover that New York taxpayers actually pay him.

New York State Parks estimates Glynn's lease will gross $389.9 million from boat ride sales during its 40-year term. Glynn would pay the state $15.8 million in rent at 4 percent.

Glynn currently pays 15 percent in Ontario, or $58.3 million in rent for the same revenues. New York signed a lease for $42.5 million less rent than Ontario for the same revenues for the same boat ride. You can see why there are laws requiring competitive bidding.

Totals for 40 years indicate Glynn will receive $57.4 million for the observation deck while paying just $39.1 million in rent for all his ventures in the park -- observation deck, souvenir store and boat ride. In other words, the state will pay $18.3 million to Glynn. And Glynn gets to keep all of the $389 million he earns from his boat rides without paying the state one thin dime.

The Alcatraz lawsuit seeks to void Glynn's lease and open it to competitive bidding.

It will be heard in state Supreme Court in Albany on Jan. 6.

The suit alleges that state parks are subject to New York Finance Law, which requires "formal competitive procurements to the maximum extent practicable."

But when the state gave Glynn his lease in 2002, competitive bidding was ruled out. Former parks commissioner Ed Rutkowski designated Glynn a "sole source" provider, and claimed Glynn's was the sole company in the world that could provide New York boat service because Glynn had the Ontario lease. Rutkowski and other park officials asserted that whoever has the Ontario boat lease controls the waters under the falls.

Parks spokeswoman Angela Berti said Glynn was designated "sole source" because his Canadian Maid of the Mist lease gave "the Canadian lessee (Glynn) full control of the waters of the Niagara River."

Harold H. Hagemann Jr., New York 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," he wrote.

And Marc Brown, an attorney for Glynn, later claimed another "sole source" excuse: Whoever has the Canadian lease must have the New York lease because there's no room to dock boats on the New York side. In winter Glynn dry docks his New York boats on the Ontario side.

But Glynn no longer holds the Canadian lease. And New York officials have been strangely silent about how that affects his future here.

One thing did crop up that bears further investigation. Glynn may have provided New York officials with the wrong Ontario lease when they were "negotiating" in 2002. In response to Freedom of Information requests, New York State Parks disclosed they had the then-obsolete 1982 Ontario lease in their files when Glynn's New York lease renewal took place.

The obsolete lease had terms that might give the impression Glynn might have rights to control the water. It refers to Glynn having the right to use that "portion of the Niagara River known as the Maid of the Mist pool."

But a 1989 lease, the one in force in Ontario with Glynn when the state and Glynn signed their lease in 2002, refers to where boat tours are conducted as "the lower Niagara pool" and makes no mention of any water rights. Why did New York State Parks have the wrong lease in their file?

New York 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 the problem that restricted the contract to (bidding by) only one company."

Glynn's Ontario lease expired in 2009. Why would New York grant Glynn an unprecedented 40-year lease in 2002, one that runs 33 years beyond the expiry of his Ontario lease, when "sole source" is supposed to be "limited to the minimum period of time"?

New York State Parks' Hagemann claimed the commission "verified with the Niagara Parks Commission its intent to renegotiate the Maid of the Mist contract on the Canadian side." But NPC commissioners are appointed. Between 2002 and 2007, nine of 12 commissioners were replaced. Whatever NPC commissioners "intended" in 2002 was meaningless by 2009 when 75 percent of the decision-makers were new.

Besides, the NPC does not have authority to renew leases. Approval comes from the premier of Ontario and a council comprised of elected members of Parliament.

In 2002, the Progressive Conservatives controlled Parliament. In 2003, Liberals took control. There is no way to "verify" future "intent" from a changing elected or appointed body.

Why would New York state officials go to such extraordinary lengths to benefit Jimmy Glynn by dispensing with the time-honored American tradition of competitive bidding?

With his lawsuit, Alcatraz Media's Bill Windsor intends to find out.


In wake of Glynn scandal, NPC Chairman resigns as American Glynn snatches Canada's Maid of the Mist name

By Frank Parlato Jr.

December 22, 2009

Another strange chapter.

The chairman of the Niagara Parks Commission (NPC), James Williams, resigned recently amid the growing scandal surrounding Lewiston businessman James Glynn's Maid of the Mist Canadian boat tour lease.

Williams gave a number of reasons for quitting, all centered on Glynn and on Ontario Minister of Tourism Monique Smith's decision to put the Maid of the Mist boat tour out to bid for the first time ever.

It seems to have upset Williams that Glynn might lose the lease he held for 38 years.

James Williams

James Williams

Lately, Chairman Williams and Tourism Minister Smith have been at odds.

After ordering the bid contest, Smith said she wanted the winning bidder announced by June 2010. Williams proposed a June 2011 deadline.

Due diligence in preparing bid specifications, evaluating bids and selecting a winner will take longer than a few months, Williams said. "If it gets done by June of 2010, then it's because there were some shortcuts," he said.

Smith overruled him.

"Not only was it not discussed, it was summarily dismissed," Williams told the Globe and Mail. "That signaled to me that this minister was more about political expediency," suggesting Smith wanted the Glynn scandal put to bed before the next election.

Smith's tight timeline is not without precedent. The U.S. National Park Service in 2007 announced a tender and awarded the winning bidder for the Statue of Liberty Boat tours within five months. More than a dozen operators bid.

Conversely, there is no need to rush. Although Glynn's lease expired Nov. 20, 2009, the terms allow him to stay as a "holdover" tenant on a month-to-month basis, which Glynn is expected to do during the 2010 tourist season, since a new operator can't be in place by next season.

Glynn's Canadian Maid of the Mist Steamboat Co. generated $23.3 million last year. Confidential documents presented to the NPC show Glynn netted more than $4.4 million after expenses. The Maid of the Mist provides about 1.8 million boat rides annually in Canada -- making it, along with the Statue of Liberty and Alcatraz, one of the three most frequented excursion boat operations in the world.

This means it will likely attract a lot of bidders. Already Ripley Entertainment, Alcatraz Media, Campark and Xanterra have expressed interest in bidding. Disney and the Seneca Nation have been mentioned. Against these giant companies, Glynn may lose his long-held lease.

When Williams was appointed chairman in 2004, the 124-year-old NPC shifted from its traditional history of making a profit to losing money. The NPC lost more than $4.3 million last year and had to lay off more than 500 employees -- a third of its workforce.

Oddly, too, Williams led the NPC to secretly vote in 2008 to reduce Glynn's rent for his Canadian boat tours while excluding at least two other companies who offered to pay more.

The Niagara Falls Reporter broke that story and subsequently revealed estimates from tourism industry experts that said the NPC could get $3 million to $6 million more in rent annually than what Glynn was paying -- suggesting the NPC might solve its financial problems simply by putting the Maid of the Mist lease out to bid.

Williams fought this and, as the story escalated into Canadian national news, critics accused Williams of being secretly on Glynn's payroll.

After the Reporter's expose and increasing national coverage on Glynn's sweetheart -- and now no longer "secret" -- lease, combined with spending scandals erupting in Ontario's Liberal government, including eHealth and the Ontario Lottery and Gaming Corp., Smith ordered the NPC to open the boat tour lease to competitive bidding in October over Williams' objection.

With his resignation, Williams blamed the Reporter for helping to put his chairmanship "under siege." He cited Smith's "unwillingness" to defend him as a signal reason for his resignation.

"Given ... your unwillingness to defend this commission against the false accusations levied against us, I can only conclude that I no longer have your confidence in this matter," Williams wrote.

One week before resigning, Williams made a surprising request, which showed perhaps how tired he was of being made a media scapegoat. He recommended to the highly politicized Liberal Party's tourism minister that since she was going to allow bidding on the boat tour, then do it honestly and openly.

He suggested Smith hold a public meeting about the bidding process, form a "blue-ribbon panel" to review the bids, hire an expert manager to oversee the process and make sure all the boat tour bids are made public afterward -- both the winner and losers. And lastly -- take the decision away from him and the NPC.

In a Nov. 30 memo, he explained that, since the NPC voted twice -- in April 2008 and September 2009 -- to renew the lease with Glynn instead of inviting bids, the public's perception is that the NPC favors Glynn in any bidding process. The only way to remove that perception, Williams said, is to make this process more open than most government tenders.

Smith refused, saying she wanted to keep much of the bidding process secret, get it done fast and keep Williams in charge. Williams perhaps suspected what many already suspect: Smith is an elected politician, and secrecy allows the Liberal Party to award the bid not necessarily to the highest bidder to the public -- but the highest bidder for the Liberal Party. The Tories will want to watch this one closely.

Still, with Smith's ordering secrecy on the bids, Williams knew that even if following an honest (but secret) tendering process, if Glynn had the best offer, if Williams led the NPC to choose Glynn, there would be a hue and cry by the public, and accusations of favoritism or worse heaped on him.

Williams tried to get an impartial panel to handle the bid. Smith's actions suggest the "fix is in" and that she expected Williams, like a good party Liberal, to follow orders and take the brunt of it. So he quit.

On his way out, he threw a school of red herrings into the waters, meant to help Glynn.

Among these, Williams supports Glynn's twin claims of ownership of the "Maid of the Mist" name and that loss of the name brand in Canada will hurt the park.

Williams wrote, somewhat fantastically, "The Maid of the Mist (name) is almost as well known as the Falls themselves. The loss of the brand name ... will have a devastating impact on ... the entire tourism economy of the region."

Williams said tourists will leave Canada and hazard customs inspections to go to the United States where Glynn operates competing Maid of the Mist boat tours -- because of the name -- rather than take an equal or better boat ride in Canada.

Even if it were true that a boat's name is more important than the ride itself, the name "Maid of the Mist" has been in use at the Niagara Parks since 1885, long before Glynn came and started using it in 1971.

The recently expired Maid of the Mist lease, which Glynn signed in 1989, states in paragraph 6.03: "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."

Glynn claims, however, he snatched the name away from Canada.

"We have both United States and Canadian trademark registrations for Maid of the Mist," said Tim Ruddy, Glynn's marketing vice president, suggesting the NPC can no longer use a name they have used for 124 years, should Glynn not win the bid.

Something here bears investigation.

On May 21, 1993, four years after he signed the Canadian lease saying he "does not claim any interest in or rights in the words 'Maid of the Mist,'" Glynn registered with the U.S. Patent and Trademark Office for trademark on the words "Maid of the Mist" under "sightseeing boat services."

Glynn admits "the mark was first used with the services as early as June 1885," long before he was born. Then he did something daring.

"Being duly warned that willful false statements made in this application are punishable by fine or imprisonment, or both, under Section 1001 of Title 18 of the United States Code," Glynn declared, "Applicant (is) the owner of the mark sought to be registered; that, to the best of his knowledge and belief, no other person, firm, corporation, association or other juristic entity has the right to use the mark in commerce."

Glynn made this sworn statement in 1993, knowing that in 1989 he signed a lease acknowledging that he "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.'"

Under penalty of perjury, Glynn swore he not only exclusively owned the name, but was the only entity using the name, even though the NPC was using it at that time for their "Maid of the Mist" store and other promotional venues.

After Glynn obtained the U.S. trademark, he went to the Registrar of Trademarks in Ottawa, Canada. Swearing he had lawfully obtained the U.S. trademark for the words "Maid of the Mist," he neglected to inform the Canadian government about his 1989 lease, in which he acknowledged he did not have "rights in the words 'Maid of the Mist.'"

An American, James V. Glynn, trying to snatch the name away from Canada, attested to the Registrar, "The trademark has been duly registered by the applicant in the United States of America, the country of origin of the applicant (Glynn), on March 29, 1994. ... The applicant has used the trade-mark in ... the United States of America, and the applicant requests registration of the trademark (in Canada)."

Glynn used his U.S. trademark to get the trademark for Canada in April 1994. Now, curiously, Williams, a Canadian, is supporting the theft by the American Glynn of the historic and iconic name "Maid of the Mist" from the nation of Canada.


Katzman the 'Kat' bodes ill for fairness in Niagara Parks Commission - Glynn bidding

By Frank Parlato Jr.

January 26 , 2010

Happy sailing. That's what they say.

In the wake of the Niagara Falls Reporter's expose, Niagara Parks Commission (NPC) Chairman Jim Williams resigned late last year in protest over the decision to put the Maid of the Mist out to bid. Then in January, Tourism Minister Monique Smith asked to be transferred. Perhaps she had had enough controversy over the Maid of the Mist.

Now Archie Katzman is acting chairman of the NPC.

Katzman, 79, has had his share of experiences. He's owned hotels, restaurants and a bowling alley. They are gone, and Katzman, or, as he likes to be called, "Kat," forgot nothing but to say goodbye to his creditors. When he declared bankruptcy in 1996, at age 67, he left his creditors -- with $7 million of bad paper.

Archie Katzman

Archie "The Kat" Katzman

He is now the man in charge of running the NPC, that $80 million, part public stewardship -- part business enterprise -- encompassing 4,200 acres of parkland around Niagara Falls.

Although he declared poverty and works at a modest-paying job as manager of the St. Catharines club, Katzman drives a new Cadillac and sports a Rolex wrist watch and gold jewelry valued in the tens of thousands.

Katzman also acquired a condo in St. Catharines. Within three years, he or someone else paid off the mortgage.

The NPC was established by the Ontario Provincial government in 1885 to protect Niagara Falls from unscrupulous mercenaries who acted to enrich themselves without regard for the public's interest.

To manage the parks, a politically appointed board of commissioners, 10 to 12 in number, works part-time, for prestige and honor, getting only a $135 monthly stipend.

Katzman, its chief, has been on the commission for 39 years. Most NPC commissioners have served less than seven years.

"Maybe it's because I do a good job," Katzman said.

Katzman attends golf tournaments, political dinners and so-called charity auctions, hosting the annual St. Catharines Mayor's Golf Tourney. He charges an entrance fee of $300. Each player gets a free round of golf at the NPC-owned Legends Golf course. No one knows exactly where the money winds up. Katzman, as chairman of the golf committee, takes, at NPC's expense, golf trips to check out how other golf courses operate.

Somehow these trips happen to coincide with the time and places where PGA tournaments are occurring. Katzman also takes care of his friends.

For instance, provincial records show that Donald Ward, a builder in St Catharines, on Sept. 3, 1999, gave Katzman an interest-free mortgage of $208,450 for a brand-new condo in St. Catharines, $30,000 more than the purchase price of $177,567. Less than a year later, Ward's Charter Building Company won a $5.7-million public tender to build the clubhouse at the NPC's new Legends golf complex.

Ward later discharged the mortgage, leaving Archie with a brand new, paid in full Condo.

Again, in 2007, Charter won a $20.5-million contract to overhaul the main tourist building at the brink of the Horseshoe Falls.

Katzman, who both lobbied and sponsored the motion to pass both deals, claims, since they were publicly tendered, "I am so squeaky clean on that."

"It was a public tender...a tender's a tender. You either win it or you don't. The guy just happens to be a friend of mine, who won the contract," Katzman said.

Ward said it is OK to get multimillion-dollar contracts recommended by a commissioner whom he gifted hundreds of thousand of dollars to.

"That's just the way life is," Ward said, "and to me that's private between individuals."

Katzman said he paid Ward back but refused to produce the checks.

Katzman also gave "friendship" to Ward's son, Rob, getting him the prestigious golf pro gig at a commission-owned Whirlpool golf course. Katzman helps his own sons, too. Both of Katzman's sons have been the recipients of advantages.

"What's important to me is my wife and family," Katzman said, "and I know I'm as clean as a whistle."

His son, Steve, owner of a telecom franchise, got the contract for services for the parks staff's mobile phone system. Katzman insisted he had no role in his son's lucrative deal.

"I defy anyone -- anyone -- to say I was any part of those things," Archie says. "I've been around too long to know better than that."

The younger Katzman, his nose growing, competing with his father in elongation, claimed his father wasn't even aware of his cell phone deal with the parks until after it was signed.

In 2005, Canadian pro golfer Mike Weir launched a line of Niagara wines. Weir has no winery, but partnered with vintners such as Chateau des Charmes Winery in St. Davids to make wines and put Weir's name on the label.

Weir, in what some might describe as a left handed swing, hired Barry -- Archie's eldest son. When Barry worked for Creekside Wines and Wines of Wood's End respectively, both wineries happened to win the tender to be the house pour wine at NPC restaurants. According to sources, Wines of Wood's End's bid was won under interesting circumstances. When Barry came in late -- - just after Archie had seen all the bids -- his bid was just a hair lower than the lowest bidder.

Now Weir and Barry Katzman have plans to build a winery on a 15-acre parcel of land next to the Whirlpool Golf Course -- which just happens to be owned by the NPC.

The shovels were expected to be in the ground last summer. But when the Niagara Falls Reporter published its series on the corrupt doings at the NPC, things got derailed.

There are 67 vintners in Niagara Falls, Ont. Why should one pseudo winery get the exclusive right to operate on public land? Instead of promoting only Weir wines -- which does not even grow its own grapes -- the NPC should promote the entire region's elegant wines.

And Archie takes care of himself. One of our sources -- who is married to an elected official in Canada and worked at the NPC -- said a number of people quit the NPC because they were put into compromising positions over "Archie Contracts" -- deals Archie made without commission approval.

One man said, "Archie sent him" and demanded a check for $5,000. Katzman was called, and, according to our source, Katzman said, "Just give him $5,000 and write up a general contract for services." They never saw the man again after he left with $5,000.

On a bigger scale, the Legends Golf Course was originally estimated by Katzman to cost $27 million, but wound up costing more than $40 million. Katzman lined up "friends" who got paid to build the escalating course.

Katzman also led the charge to build the $40 million Table Rock improvement with the virtual reality ride "fury." That contract went also to Katzman friends. The Fury did so poorly that projections Katzman used to justify the enormous expenditure at Table Rock were off by 99 percent.

Consequently, the NPC began layoffs. Park employment fell from 750 to under 500 during the last few years.

Astonishingly, in the midst of this, instead of trying to increase income on the biggest lease the park has, Katzman secretly negotiated with businessman James Glynn to reduce Glynn's rent on the Maid of the Mist lease.

Indeed it was this secret scheme that put unwelcome light on Katzman, as commissioner Bob Gale broke ranks and complained that Katzman quietly brokered the Maid deal then sprung it on the full board for a vote, without disclosing competitors' interest in bidding.

After the Niagara Falls Reporter's expose, Minister of Tourism Smith ordered the commission to tender the Maid boat tours.

Katzman now openly supports Glynn's recent scare tactic campaign.

According to financial statements given to Commissioners in March 2008, Maid of the Mist spent $16 million on fixed assets since 1972. Their investment is less than a half a million per year on an operation that makes 20 plus million per year.

Nonetheless, Glynn threatened to demolish the three-story administration building they built on park property, a marine workshop and rails and shuttles that move boats out of the water rather than let a newcomer use it for the public good.

Katzman supports Glynn's plans to destroy fixtures on public land.

But the expired Glynn lease required that Glynn build his own buildings and "deliver the Demised Premises, building and equipment located thereon, to the Landlord at the expiration of this Lease."

If Glynn thinks that destroying his measly $16 million investment will be a barrier to someone bidding for an $800 million deal, he is indeed na•ve.

Ripley Entertainment, Alcatraz Media, CamPark Resorts, Xanterra Resorts and Entertainment Cruises have all expressed interest in bidding. Disney and the Seneca Gaming Corp. have also been mentioned as possible bidders.

Katzman also supports the treasonous concept that Glynn, not the Niagara Parks Commission, owns the name Maid of the Mist.

The name belongs in the public domain.

The lease he signed attests to it. 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'."

The reason Katzman supports the idea of an American stealing the heritage name Maid of the Mist from Canada is so he can give weight in the RFP to Glynn owning the name.

That's what friends are for.

Using the public's assets instead of your own, as the Kat knows, makes lots of friends.

Happy sailing.


Glynn the competitor hopes to scare competition away

By Frank Parlato Jr.

February 02, 2010

James Glynn of the Maid of the Mist boat tours is probably batting under .200 just now. And he's not being a good sport about it, either.

For 39 years, Glynn held an exclusive lease on public land, never having to face competition for the right to operate boat tours at the base of the Falls.

Last year, the Ontario Minister of Tourism ordered that the boat tour concession be let out for competitive bidding.

It has been estimated that the Niagara Parks Commission (NPC) of Ontario stands to gain more than $100 million more in revenues during the 25-year term of a future lease by improved rent percentage and improved services.

Since the NPC has posted losses in recent years of $4 million annually, the increase in rent could singlehandedly eliminate the NPC's budget deficit.

One would hope -- if Glynn can't provide the best boat tour with the best terms for the public in an open and fair competition, then he would realize he doesn't deserve to have it.

But it is becoming apparent that the Lewiston businessman who has kept his Maid of the Mist deal secret -- by hook and quite possibly slightly more by crook -- will do anything to keep his lucrative boat tour concession in the Niagara Falls Ontario park regardless of whether he can provide the best services or not.

Jimmy Glynn

If he loses his boat tour bid, Jim Glynn threatens to destroy buildings and fixtures at the bottom of the gorge.

While boat tour companies from all over the northern hemisphere anxiously await the Niagara Park Commission's Request for Proposals (RFP), Glynn's has launched a campaign calculated to discourage bidders and scare the public.

Whether Glynn's campaign can really scare away big-time bidders such as Ripley Entertainment, Alcatraz Media, CamPark Resorts, Xanterra Resorts, Entertainment Cruises, Hornblower Cruises, Disney or the Seneca Gaming Corp. is anybody's guess.

Glynn's campaign consists of two basic concepts.

  • 1. That no one else will be able to provide boat tours at the base of the falls for years since Glynn built the equipment and buildings on the public land where the boats are launched.

Glynn said he plans to destroy it all if he loses the bid.

  • 2. Glynn claims he owns the historic name "Maid of the Mist" and a new company not being able to use "his" name will cause loss of brand recognition.

Glynn claims tourists will not take the boat ride if it is not named Maid of the Mist. Additionally, since Glynn can use the name Maid of the Mist on his New York-based boat tours, tourists in Canada will cross the border to take Glynn's N.Y. Maid of the Mist rather than take a boat tour provided by -- say Disney, or Ripley Entertainment -- that is named something else.

Now, as for the first scary concept: Over the last 30 years, Glynn has built simple rails and shuttles to move boats out of the water, a three-story administration building and a marine workshop.

Glynn said he will demolish, dismantle or scrap these rather than let a newcomer use them for the public good.

His son, Chris Glynn, told the press, "It could take years, we believe, to replicate what we have down here."

The concept of destroying buildings and equipment says more about Glynn than it does about the reality of a new operator really needing them. The infrastructure needed by another operator could probably be assembled fairly quickly. A new operator would have about a year to complete the work because a new operator will not start until 2011.

Boats are the main thing and these can be lowered by crane.

Besides, when someone leases land, it usually includes an agreement that addresses what happens to "improvements" such as buildings and other "fixtures" built on the land when the tenant leaves.

Naturally, Glynn never thought he would leave. His buildings and fixtures are permanent.

Glynn will not be legally able to destroy these. His lease says in Para 5.06: "That the Tenant (Glynn) shall deliver the Demised Premises, building and equipment located thereon, to the Landlord at the expiration of this Lease in a state of repair equivalent to that required to be maintained by it during the term."

Bill Windsor of Atlanta, who plans to bid on the boat tours, had this reaction when presented with the possibility that Glynn might destroy the buildings: "If the Glynns are allowed to remove the leasehold improvements they [have] made, we will simply replace what we need."

The other half of Glynn's scare tactic campaign involves a deceit that borders on fraud. A treasonous concept fostered by Glynn and supported by NPC Commissioners Archie Katzman and Vince Kerrio is that the American Glynn has the right to steal the public domain name "Maid of the Mist" from Canada.

Most noteworthy is the fact that the recently expired Maid of the Mist lease, which Glynn signed in 1989, states in paragraph 6.03: "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."

But Glynn claims he snatched the name away from Canada. Here's how: "We have both United States and Canadian trademark registrations for Maid of the Mist," said Tim Ruddy, Glynn's marketing vice president.

But the trademarks were obtained under false pretenses.

On May 21, 1993, four years after he signed the Canadian lease saying he "does not claim any interest in or rights in the words 'Maid of the Mist,' " Glynn secretly made a claim for the U.S. rights while the Canadian lease was still in effect.

He registered with the U.S. Patent and Trademark Office for trademark for the words "Maid of the Mist." Glynn swore, "Applicant (is) the owner of the mark sought to be registered; that, to the best of his knowledge and belief, no other person, firm, corporation, association or other juristic entity has the right to use the mark in commerce."

Glynn made this sworn statement in 1993, knowing that in 1989 he signed a lease acknowledging that "NPC is free to use 'Maid of the Mist.' "

After Glynn falsely obtained the U.S. trademark, he went to the Registrar of Trademarks in Ottawa, Canada. Swearing falsely that he had lawfully obtained the U.S. trademark for the words "Maid of the Mist," he failed to inform the Canadian government about his 1989 lease where he acknowledged he did not have "rights in the words 'Maid of the Mist.' "

The NPC has used the name for 125 years, almost 100 years before Glynn came to use it. Still, if it is somehow conceded that Glynn can steal the historic name from Canada, if he loses the bid, Glynn hopes that friendly commissioner such as Katzman and Kerrio will give points or weight in the RFP to Glynn for owning the name.

In any event, last week, as part of the scare campaign, Glynn hired telephone callers to conduct a push poll.

A push poll, as readers know, is a deceptive telephone calling technique in which someone pretends to be conducting a poll to gather information but instead attempts, by the questions they ask, to alter the view of the people being called. It is a form of propaganda or rumor mongering masquerading as a poll.

Here are some of the questions in the telephone "poll" now being conducted by Glynn:

-- If the Maid of the Mist stopped operating in Niagara Falls, Ontario, and there was no replacement boat tour, would you say the impact this would have on tourism in Niagara Falls Ontario during that time would be ... very negative?

-- If the Maid of the Mist boat tour was replaced by a new boat tour with a different operator and name, would you say the impact this would have on tourism in Niagara Falls, Ontario, would be very negative?

-- If the Maid of the Mist began operating only from the U.S. side of Niagara Falls, and a new boat service with a new name operated on the Canadian side of Niagara Falls, would you say the impact this would have on tourism in Niagara Falls, Ontario, would be very negative?

-- To what extent do you support or not support the idea of a new boat tour with a new operator and new name replacing the Maid of the Mist in Niagara Falls, Ontario, if this meant there would be an extended service interruption of boat tour service?

Windsor, a Glynn competitor for the tour operation, provided the Reporter with alternative questions:

-- If the existing boat operator at Niagara Falls (Glynn) causes a disruption in the service in an effort to hinder the efforts of competitors to win the rights to offer the service through competitive bidding, would you find the existing operators' efforts to be ... very negative?

-- If the government of Ontario allowed a private company to claim rights to the words "Maid of the Mist" when there is a contract between the government and the private company that states the private company does not own any rights to the words, would you find that to be very negative?

-- If the existing boat operator in Niagara Falls is replaced by a new boat operator who pays $100 million more for the rights to offer the service and gets The Niagara Parks Commission out of debt, would you find this to be ... very positive?

-- To what extent do you support a new boat tour operator at Niagara Falls if it generates a better service, more tourism in Ontario, pays an additional $100 million to the government and the operator was chosen in competitive bidding rather than a secret backroom deal?

In 1941, baseball player Ted Williams entered the last day of the season with a batting average of .400, making him the first man to hit .400 since 1930. Williams had the option of sitting it out but opted to play in the last day's doubleheader although he risked falling short of the elusive 400. He explained that, "If I can't hit .400 all the way, I don't deserve it."

Williams went 6 for 8 that day, boosting his final average to .406.

No player has hit .400 in a season since Williams.

As for Glynn, his batting average is heading lower every day.


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

By Frank Parlato Jr.

February 23, 2010

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.


Absent Glynn-Bias, competitive bidding may make Maid of the Mist tours better in Canada

By Frank Parlato Jr.

March 02, 2010

Stand on guard.

Oh Canada.

For somehow they always seem to negotiate a sweetheart deal with an American businessman, James V. Glynn.

For decades, the Ontario-controlled Niagara Parks Commission (NPC) has leased the public's boat docks in the lower Niagara just below the falls at a cheaper price than what the public should get.

They have done it for Glynn.

Visitors from around the world are deprived so that the favored Glynn gets the boating monopoly on the lower river from the falls to the Whirlpool Rapids.

While the quid pro quo for this favored status is not yet known, it is a fact that Glynn pays about $4 million less per year than what other companies have offered after learning of the secret terms of his low-rent lease when they were exposed for the first time by the Niagara Falls Reporter.

Other entertainment and boat tour companies will now get a chance to bid because the Ontario government has ordered the NPC to put Glynn's boat tour lease out to bid.

It may mean big financial gains for the NPC.

According to sources in the boat tour industry, Glynn's rent, which is presently 15 percent of gross sales, should be more than double that.

On top of that, the total number of tours sold each year may wind up much higher than the 1.8 million tours Glynn reports.

While Glynn's numbers may be accurate, insiders say he may max out at 1.8 million riders, since he operates only during limited hours with only two boats.

Glynn pays about $3 million in rent.

Doubling the rent to a more competitive 30 percent, and presuming the same number of riders, would add $3 million to the NPC coffers. That would cure 75 percent of the parks system's annual $4 million deficit.

Upping the number of riders to 2.5 million -- which insiders suggest is a probable minimum if there were more boats and longer hours -- would bring in another $2 million, which would bring the NPC out of the red and into the black.

Strangely, NPC officials, such as NPC Chairman Archie Katzman, have made it obvious they would prefer to see Glynn keep his low-rent lease rather than see another company pay millions more.

No one has done more for Glynn than Katzman.

Two years ago, Katzman failed to tell most of the NPC commissioners that there were other bidders willing to pay more than Glynn. Katzman also led the charge to secretly reduce Glynn's rent by more than $1 million per year. It was going to drop from 15 percent to a sliding scale going down to 5.5 percent, while the NPC was (and is) losing millions and had to lay off a third of its workforce.

One-time Glynn ally Jim Williams, the former NPC chairman who resigned in January, said the Glynn-biased bidding process the NPC is conducting does not pass the smell test.

Before he resigned, he asked then-minister of tourism Monique Smith to take the boat tour bid decision away from the NPC and give it to an impartial panel. Smith refused. Williams quit.

A week or so later, Smith herself was transferred and became minister of intergovernmental affairs. New Tourism Minister Michael Chan knows little or nothing of Niagara Falls or the Glynn dealings.

With the boat tour bidding process ordered by Smith to be accomplished by June, Chan can claim plausible deniability, leaving it all to Katzman and the NPC to conduct what he "assumes" will be a "fair" process, saying that was Smith's plan, after all.

These clever ladies and gents even appointed -- in what is perhaps an Orwellian twist -- a "fairness commissioner," one Howard Grant, who apparently is not allowed to talk to the press and has virtually no authority.

Besides Katzman's overt pronouncements and back-door dealings, NPC General Manager John Kernahan said on CKTB radio that Glynn is the right choice. And NPC commissioner Vince Kerrio, suddenly emerging as a Glynn cheerleader, campaigned to have Bill Windsor of Atlanta -- Glynn's fiercest competitor and critic -- disqualified.

Meanwhile, one of the main points being overlooked in all this is that if the NPC designs the Request For Proposals to merely replicate Glynn's present boat tour, it will not only give Glynn an edge, but there will be little chance at improving Glynn's mediocre and self-serving tours.

Glynn provides the public with only one type of tour -- a standing-only, 15-minute tour alongside the American Falls and slightly into the mist of the Horseshoe Falls.

Glynn's "fleet," consisting of two 600-capacity boats, does not have seats, handicap access or bathrooms.

From the middle of the boats, where most passengers stand, if any of them happen to be shorter than six-foot-four they will see very little of the shoreline and can only look up and see a portion of the falls. Their main view is the back of someone's head.

Smaller boats with seats would give tourists a better view and a more elegant ride.

Additionally, Glynn operates only open-deck boats. Tourists, provided with flimsy, disposable raincoats, get soaked by the mist when they approach the Horseshoe Falls. In May and October, many tourists choose not to take the drenching ride.

At least one enclosed boat would enhance the Niagara Falls experience, increase bottom-line revenues for the NPC and extend the season.

Also, unlike most boat tour operators, Glynn takes no reservations. Tourists wait in line for a 15-minute boat ride, sometimes for hours.

Potential bidder Bill Windsor explained that people in town for a limited time should not have to waste precious time in a long line.

Windsor said, "The fact that (through our planned reservation system) we will eliminate waiting in line for hours should receive a standing ovation from every merchant in Niagara Falls."

For nearly 40 years, Glynn has had a monopoly on boating in the lower river from the falls to the beginning of the Whirlpool Rapids -- about three miles of river. But Glynn only takes tourists on about a half-mile journey, going south from the docks to the nearby falls and back, ignoring the two-and-a-half miles of navigable water north of his docks.

An hour-long, downriver tour, heading true north, as the lordly river flows, traversing beneath shining skies the whole three miles of navigable river, is possible. Under the Rainbow Bridge, along the gorge, in deep, safe navigable waters, along the shore, some of the oldest botanicals in the northeast can be seen, along with some of the best examples of the geological history of the world -- 425 million years of layered bedrock on the steep sides of the gorge.

Heading true north, under a canopy of ancient red oaks, hemlock and 800-year-old dwarf cedars, one sees a startling and changing view of the Niagara as it goes from deep, slow water to the shallow, fierce Whirlpool Rapids, and then to the deep, swirling whirlpool itself -- the largest in the world -- beyond where the Maid of the Mist boats could travel.

Additionally, along the gorge are hiking trails. These trails wind at the bottom of the gorge, allowing tourists to walk along the lower river where giant pines and maples grow. These wide, easy-to-walk trails are largely unused because they are hard to access at the bottom of the gorge. With the simple construction of floating docks, tourists could have the option of being dropped off at the trail's head and could walk along the Whirlpool Rapids and back and catch another Maid of the Mist boat back later. The lower river exploration tour could reap millions for the NPC and enhance the tourist's broad domain of experiences.

Under Glynn's monopolistic control, however, not only is walking these trails out of the question, but there isn't even a boat ride that explores any of the beautiful lower river north of his docks.

Another concept wholly ignored is night tours. Glynn claims the lowering of the river by the water's diversion into turbines at night for hydroelectric generation makes it impossible to launch boats at night. The water is lowered, of course, but the change in water elevation is not more than changes at high and low tides in the ocean. The lower Niagara is more than 150 feet deep where Glynn docks after nighttime water diversion. Night tours with proper lighting and an experienced captain would not only enhance NPC revenues but encourage overnight hotel stays. Imagine the beauty and sublimity of a tour by the illuminated falls and then, under moonlight, along the winding, lordly river, below the gorge, beneath bending skies, on a soft, warm summer night.

But Glynn prefers to close early.

Part of the reason Glynn does not want to stay open later -- when crowds thin -- is that he might not be able to fill his 600-capacity boats and doesn't want a "skinny" tour. Still, why shouldn't 100 tourists, or even 50, get a chance to see the lower river at 7 p.m. in September?

If the monopoly weren't so lucrative for Glynn -- with his low rent and low costs, with his literally tens of millions of revenue coming in during a two-and-a-half month peak season -- he or any normal boat tour operator would be glad to take 50 paying customers on a boat tour almost anytime.

Glynn has gotten used to taking only the fat of the land. What we have is a kind of primitive boat service born of monopoly, with new ideas easily discarded.

As potential bidder Tim Parker of Ripley Entertainment said, "In this day and age, to be able to get to the bottom of the falls and actually feel the presence and the thunder and the roar is an absolute attraction in itself. But how do you deliver the thrill? Do I think delivering that in a 15-minute ride, on a 15-year-old steel boat is the proper way to deliver it? In this day and age, we have come a long way in attractions, and the way we deliver services to guests. Can it be delivered better? Of course."

This concept -- which would bring Niagara Falls boat tours into the modern age -- should be reflected in the NPC's request for proposals.

Because of Glynn-bias, there is a good chance it will not.


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

By Frank Parlato Jr.

March 16, 2010

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.


Disney entering Maid of the Mist fray as competition grows fierce

Thirteen companies seeking lucrative Canadian concession

By Frank Parlato Jr. and Mike Hudson

March 30, 2010

The list of 13 bidders now standing in line to take over the concession to operate sightseeing boats below Niagara Falls from public docks on the Ontario side of the river reads like a who's who of international tourism superstars.

And two independent sources with direct knowledge of the bidding process told the Niagara Falls Reporter last week that Disney Cruise Lines, a subsidiary of one of the richest and most renowned entertainment companies on earth, is the early favorite in a field containing any number of household names.

Three different Disney press spokespeople told the Reporter that company policy forbids discussion of deals that have yet to be consummated, and the Ontario provincial government has refused to provide the names of any of the potential bidders to the public. But Disney representatives will be among those to conduct an inspection of the Canadian dock site next month, the independent sources confirmed.

The Walt Disney Company has based its wide appeal on family-friendly entertainment that has included classic films, television programs, fabulous theme park resorts and, more recently, Disney Cruise Lines, which owns and operates a private Caribbean island and offers destinations from Alaska to the Mexican Riviera and Europe.

Since 1971, the Niagara Falls tour boat concession has been run by the Maid of the Mist Co., a local, privately held corporation founded by James Glynn, who has received a series of secret and highly lucrative no-bid contracts from both the Ontario and New York governments that have allowed him to continue unmolested. Glynn's tour is rather primitive, conducted in older steel boats without air conditioning or heat.

Glynn provides only one tour: a 15-minute, packed-like-sardines standing-room affair during limited daytime hours, which makes a brief run along the American Falls and slightly into the heavy mist of the Horseshoe Falls. Because the Maid of the Mist is "grandfathered" in, Glynn does not have to meet newer Coast Guard standards as to seating capacity. In fact, there are no seats, nor handicapped access to bathrooms. In fact, none of the boats in Glynn's tiny fleet even have bathrooms.

And those wanting an up-close and personal look at the colossal cataracts must wait in line, often for two hours and more, to buy their $14.50 tickets, since Glynn has steadfastly refused to sell ducats over newfangled inventions like the telephone and the computer.

Outrage erupted in the Canadian provincial Parliament following publication of the secret contracts by the Reporter in 2008. Ultimately, the scandal prompted the Ontario minister of tourism to order the Niagara Parks Commission to put the Maid boat-tour lease out to bid.

No such outrage has occurred has occurred on this side of the river, where Glynn and his company routinely pad the pockets of our less-than-honorable political class. Even in New York, no-bid multimillion-dollar contracts have largely gone the way of smoking cigarettes in saloons, but Glynn's peculiar political proficiency has allowed his to remain the exception. The colossal cheesiness of Glynn's operation stands in stark contrast to state-of-the-art boat tours offered elsewhere. If you've ever sailed on board one of the Circle Line cruises around Manhattan, or gone to the Statue of Liberty or Alcatraz Island aboard one of the vessels operated by Hornblower Yachts, the differences are quickly apparent.

The Alcatraz Island cruise, for example, can last anywhere from two to four hours, complete with a gourmet buffet and cash bar. The Hornblower fleet consists of 29 vessels of various sizes, offering accommodations for between 50 and 2,000 guests. Evening dinner cruises and a host of special events cruises on Mother's Day, Easter and other occasions are offered in addition to the standard transport fare.

The three-hour Circle Line tours of Manhattan are likewise far more appealing than what is offered here, and include a catering menu, beverage service and amenities other than blue plastic rain ponchos made to resemble garbage bags. The Hornblower and Circle Line offerings are of interest, because both companies are also on the list of bidders for the Ontario concession, which also includes the largest hospitality cruise company in Canada, Mariposa Cruises, and Ripley Entertainment, the world-famous company owned by Canadian billionaire Jim Pattison, who owns 31 radio and TV stations in Canada.

Ripley's has had a rich presence in Niagara Falls, Ont., since the early 1960s and recently constructed the $130 million Great Wolf Lodge. Internationally, the company owns the Ripley's Believe It or Not museums, various aquariums, Haunted Adventures, mini-golf and arcades, movie theaters, sight-seeing trains, Louis Tussaud's Wax Works, and the worldwide rights to the Guinness Book of Records.

Also among the 13 bidders, William M. Windsor of Atlanta deserves honorable mention. A former top executive for a Goldman Sachs company, and a project developer, Windsor has launched more than 50 companies. More significantly, Windsor has done immense service to the people of Ontario by repeatedly exposing evidence of what appears to be shady dealings between the Canadians and Glynn, and making it public. He has also spent tens of thousands of his own money pursuing lawsuits challenging the process that led to Glynn getting monopoly rights to the public docks. But for Windsor, it is possible that none of the other bidders would be here today.

The likelihood of Glynn losing his Ontario lease may have a tremendous impact on this side of the river as well, since the fact he had the Canadian concession was central to the state Parks Commission decision to award him an unprecedented 40-year pact in 2002. Angela Berti, spokeswoman for Niagara Falls State Park, told the Buffalo News in 2008 that "no bids were taken and no public hearing was held because the Canadian agreement gives the company exclusive access to the river below the falls, making it a 'sole source' provider."

That excuse, as poor as it was at the time, becomes absolutely meaningless in the face of competitive bidding by the Canadians.

Certainly, should a company with the glitz and glamour of Disney, Ripley's, Circle Line or Hornblower win the bid, it will provide yet another reason for millions of tourists from around the world to skip New York and head straight into Canada when visiting the falls.

Why would anyone stand in line for two hours for a 15-minute ride aboard a tawdry and antiquated tour boat when, only a few hundred yards across the river, they could enjoy the world-class attraction from reserved seats purchased online or over the phone before they even left home?

In head-to-head competition with an actual hospitality cruise line, Glynn's tacky attraction will wind up catering to the bleacher bums of the tourism world from his American base. Niagara Falls, Canada, will become even more attractive, while its New York counterpart will remain desperately clinging to a past that fewer and fewer people can even remember.


USA Niagara flops on Italian pavers for Glynn

July 06, 2010

You know, it's just not fair to Jimmy Glynn.

You know the guy.

He runs the Maid of the Mist boat tours and, some say, City Hall.

Mayor Paul Dyster's largest campaign contributor.

The guy behind the scenes in the now-defunct Building a Better Niagara fund that was designed to pay a portion of the salaries of the mayor's top-notch, out-of-town staff: City Administrator Donna Owens of Atlanta ($110,000 annually), Economic Chief Peter Kay of Ohio ($100,000), and Corporation Counsel Craig Johnson of Buffalo ($93,000). And also an engineer from Los Angeles ($90,000) who got fired shortly after it was discovered by theNiagara Falls Reporter that he did not have an engineering license.

The mayor's brightest and best, all from out of town, and Jimmy Glynn wanted to pay part of their salaries -- secretly, anonymously -- until the Reporter found e-mails suggesting he would not only pay them, but have his son sit in on the hiring process, too.

Was Glynn to both choose and pay the people who worked at Dyster's City Hall?

Ultimately, these revelations caused the secret fund to implode.

And city taxpayers got stuck paying the highest salaries in Niagara Falls history for their out-of-town public servants.

Jimmy Glynn is also the guy whom the Reporter exposed for paying zero rent to New York state for his Maid of the Mist boat contract in the state park.

The state pays him about $600,000 annually to control not only the $7 million annual boat concession (Glynn keeps all the profits), but also, bizarrely, Glynn gets 75 percent of the admission money to the public observation deck. On top of that, in 2002, the state paid millions in taxpayer money to redesign the observation deck so that people who pay private businessman Glynn to visit the observation deck must exit through Glynn's souvenir store.

And Glynn is the guy whom the Reporter caught working secretly with certain Niagara Parks commissioners in Ontario to lower Glynn's rent for his Ontario Maid of the Mist boat tour concession from 15 percent to 5.5 percent (when other companies were willing to pay more and were secretly excluded from having a chance to bid), and yes, we caught him, and yes, it made national news in Canada, and yes, the Ontario government was forced to put the contract out to bid.

Now Glynn has to compete with Disney Cruise Lines, Ripley Entertainment, Xantium, Mariposa, Circle Line and others for the right to operate the Maid of the Mist boat tour on the Canadian side.

The bidding is expected to commence in Ontario this summer. The rent is expected to go above 25 percent, making it true that theReporter's expose was at least partially responsible for what will be as much $100 million more in revenue for the Niagara Parks Commission.

New York officials also secretly negotiated a deal with Glynn in 2003 that dropped his rent from him paying the taxpayers 10 percent to the taxpayers paying him. When we exposed it, unlike in Ontario, there was no public outrage. If Glynn paid fair market rent, it would singlehandedly fill the budget shortfalls for New York parks in the western region -- more than $1.5 million.

This is the same Jimmy Glynn who sat on the advisory board of taxpayer-funded USA Niagara when they decided to spend $7.9 million on fixing the street in front of the Comfort Inn hotel, which Glynn just happened to be in the process of quietly buying.

Glynn bought the hotel and a 27,000-square-foot strip mall that fronts on Old Falls Street. USA Niagara transformed the street with new Italian pavers, sidewalks, bicycle racks, old-fashioned streetlights, benches and a "mist" fountain.

Funny, too: As Glynn was quietly securing the Comfort Inn, USA Niagara was quietly buying out Glynn's competitors, paying almost $2 million of taxpayers' money to eliminate three potential threats to Glynn's retail enterprises.

Dyster personally endorsed one of these to the Council: the plan to buy out businessman Lou Antonacci's street-vending lease, which gave Antonacci the right to set up street carts directly in front of the Comfort Inn's shops and restaurants. At the time Dyster endorsed it, he did not disclose that his largest campaign contributor was in the process of buying the Comfort Inn complex -- something he almost certainly knew.

USA Niagara paid Antonacci $310,000 of taxpayers' money for a lease that Antonacci was paying only $7,500 a year for and that had only four years to expiry.

Certain state officials also cooked up a plan to "reconstruct" the Robert Moses Parkway. By doing so, they would just happen to have to move the state park's entranceway from where it is presently to right in front of Glynn's new hotel and stores -- at a cost of about $13 million in taxpayer money.

Coincidences, you say?

Government would never go to such lengths just to help one private businessman.

Or would it?

Glynn has a long history of coincidences.

Consider: Niagara Falls State Park is advertised as being an "Olmsted park." Frederick Law Olmsted designed the park as an all-green reservation. But in 1987, park officials felled acres of trees to make a giant parking lot near the Maid of the Mist entrance. Prior to 1987, people visiting Niagara Falls parked in city lots and, consequently, patronized shops there. The state destroyed Olmsted's plan, and the city lost millions in parking and tourist business.

But one man benefited: James Glynn. He had a parking lot built near his attraction.

Perhaps it was mere coincidence -- like the fact that Dyster tried to impose a zoning ordinance that would limit the height of all new downtown buildings to 80 feet, which just happens to be the height of Glynn's hotel.

If it hadn't been for the fact that the state is out of money and that Glynn is occupied in fighting to keep his Maid of the Mist lease in Ontario, there is little doubt in some minds that the conversion of all of downtown, as well as much of the state park, for the benefit of James Glynn would have been accomplished already.

Adding insult to injury, Glynn should never have allowed USA Niagara to handle the road improvement in front of his hotel.

Consider their shabby "improvement" of nearby Third Street.

Broken sign posts are in the ground. Decorative grates around tree bases rusted and were removed by the city. The wood-paneled garbage cans and benches are rotting. The pavers in the crosswalks are sinking.

Officials at USA Niagara, sources say, are annoyed at the city for putting asphalt over their beautiful pavers, but city officials told theReporter that they have no choice, since the street is becoming a series of bumps and sink holes.

Some city officials are recommending that all pavers on Third Street be removed and replaced with blacktop.

Then there are the Third street "cut-outs" -- the hallmark of USA Niagara's streetscape project. The cut-outs are enlarged areas of sidewalk that intrude to where the road would otherwise be, and the road is narrowed to the point that cars have a difficult time going in opposite directions.

The street cut-outs are a nuisance for plows, cause traffic congestion and increase the possibility of accidents. Aside from the problem of maintaining an irregular road that narrows at inconvenient intervals, it is uninviting to motorists who don't like traveling on a road without room to pull over and park. Businesses on Third Street have nowhere to park. Maybe that is why there are more vacant buildings than occupied ones there today.

According to sources, the city would like to remove all Third Street cut-outs and restore the road to what it was before USA Niagara spent $2.5 million there.

That brings us back to Glynn.

USA Niagara's other streetscape project was the remodeling of Old Falls Street in front of Glynn's hotel. USA Niagara decided to pave the street with expensive pavers imported from Italy.

Funny: Just like the fact that all our top City Hall officials come from out of town for fancy salaries, USA Niagara did not use local masonry products, but fancy pavers from Italy. Locally produced, decorative concrete would have saved hundreds of thousands of our dollars.

Italian bricks had to be laid with special tools by experienced craftsmen, and are not well suited for this climate.

Still, it is funny.

The city whose streets are pocked with dangerous potholes did, while Glynn sat on the advisory board of USA Niagara, pave the street in front of Glynn's hotel with Italian pavers.

Maybe only Glynn cares about well-paved streets.

Dyster redirected up to $3 million meant to pave Buffalo Avenue -- a pothole-laden disgrace -- for his planned train station.

The money for paving Buffalo Avenue was to come through the Greater Buffalo Niagara Regional Transportation Council. Dyster quietly told the council to apply it to the train station instead. And as you read this, Wendel Engineering is drawing on $8 million of city funds to do paperwork and engineering, planning a station for an obsolete method of travel -- trains -- while we fail to pave our main streets leading into town.

But getting back to Old Falls Street: After only one year, the pavers are settling poorly.

According to sources, USA Niagara flew the owner of the Italian paver company from Rome to look at the problem. While he cannot say exactly why the bumps occurred, the problem can't be fixed until the tourist season ends. It will take 30 days. The road must be closed in the meantime.

When we look at the sinking pavers over on Third Street, we are peering into the future. Four years from now, Old Falls Street will likely be a series of collapsing bricks, dappled with blacktop patchwork. In several locations, they already put blacktop over Italian pavers.

It is sad when gifted businessmen like Glynn get government officials to do expensive, taxpayer-funded jobs to improve their private investments, and government doesn't get it right.

Why didn't they just give the $7.9 million directly to Glynn and let him build his own road and pocket the difference?

You can bet Glynn wouldn't waste any of his own money on extravagant pavers from Rome.

 


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