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.
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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.