Demand made that NY State Parks void NY Maid of the Mist Lease

William M. Windsor has sent letters to the Counsel for the New York Office of Parks, Recreation and Historic Preservation (the entity that controls the New York State Parks) and to Mark Thomas of the Niagara Falls State Park.  He has demanded that the Maid of the Mist lease at Niagara Falls State Park in the US be voided and that the lease be tendered for bids. 

Windsor issued this statement: "I did this after spending the day investigating the US and Canadian border.  I spoke with the International Boundary Commission, the International Joint Commission, the Office of Homeland Security, The Niagara Bridge Commission, and the United States Coast Guard to confirm beyond any doubt that the waters of the river below the Falls are shared by the US and Canada by agreement.  This means that the excuse given by Niagara Falls State Park for why the US lease was not tendered for bid was false.  This further means that the policies of the New York Office of Parks, Recreation and Historic Preservation regarding tender of bids for leases such as this were not followed. 

Windsor says he did this investigating because of a July 21, 2008 article in Buffalo News. The article said: “Maid of the Mist’s Canadian contract helped pave the way for the 2002 renewal of its 40-year contract with the New York Office of Parks, Recreation and Historic Preservation. 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, said Angela Berti, a spokeswoman for Niagara Falls State Park.  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.’ http://www.buffalonews.com/cityregion/niagaracounty/story/396402.html 

Windsor has asked counsel for the New York Office of Parks, Recreation and Historic Preservation to advise him if they will tender the lease for bids.  He has further advised them that he will file a legal action in New York, as he has in Ontario, to declare the lease void and to mandate that the published tender process be followed. 

Windsor filed a lawsuit on February 26, 2009 against The Niagara Parks Commission and Maid of the Mist in Ontario. The lawsuit asks the Divisional Court to issue a mandatory order requiring the Niagara Parks Commission to adhere to Corporate Policy CPM-03-02, the Niagara Parks Procurement Policy.  That policy provides specific requirements for seeking competitive bids for goods and services.  

Maid of the Mist was secretly given a 25-year lease that is estimated to generate over $650 million for Maid of the Mist.  It is believed that the lease will pay $97 million to The Niagara Parks Commission, but other parties asked to bid and were denied.  William M. Windsor says he and Alcatraz Media will submit a bid that should pay double - $194 million to The Niagara Parks Commission. 

The New York lease is for a whopping 40 years and is reported to pay only 10%, while the Canadian lease pays 15%.  The New York lease is estimated to generate at least $360 million for Maid of the Mist.  That combines with the 25-year lease in Canada that is expected to generate at least $650 million and gives Maid of the Mist leases that will generate over One Billion Dollars.  Both leases were obtained without any competition or tenders for bids.  The leases give Maid of the Mist a complete monopoly -- total control of the water under the Falls. 

Windsor's lawsuit seeks to have the lease between The Niagara Parks Commission and Maid of the Mist voided because the Procurement Policy was not followed.  But the lawsuit may have much broader impact in addressing issues raised by Bob Gale, Protect Our Parks, OPSEU Local 217, and others saying the Procurement Policy has not been followed on many deals. 

Windsor and Ripley’s Entertainment inquired about bidding on the boat service, but The Niagara Parks Commission told them it was not considering bids.  Windsor began his efforts in August 2005, and Tim Parker of Ripley's began his efforts in January 2008.  In April 2008, The Niagara Parks Commission approved a 25-year lease for Maid of the Mist.  The lease was negotiated secretly, a year and a half before the current lease expires, and there was no tender. 

The lawsuit, a Notice of Application for Judicial Review, was filed February 26, 2009 by Graydon Sheppard, Hamilton, Ontario-based solicitor representing William M. Windsor.  Case # DC 09-105JR is titled William M. Windsor vs. Maid of the Mist Steamboat Company Limited and The Niagara Parks Commission. Affidavits of William M. Windsor and Bob Gale accompanied the filing. This application will be heard by the Divisional Court, which is composed of a panel of three Superior Court judges.

When asked why he filed the lawsuit, Windsor said: “I have hoped that The Niagara Parks Commission would do the right thing, but they haven’t.  I have hoped the Ontario Integrity Commission would rule on Commissioner Bob Gale’s ethics complaint over the way the lease was handled to the exclusion of interested bidders, but nothing has been done yet.  I wrote to Premier McGuinty in hope that he might get involved.  Premier McGuinty wrote me, but he referred me to Minister of Tourism, Monique Smith.  Minister Monique Smith wrote me to say that I needed to take my issues to The Niagara Parks Commission.  Unfortunately, that’s the entity that I have a problem with, and The Niagara Parks Commission has never responded to me on any of my emails, faxes, and calls over the last several months.  So, I feel that this legal action is the best way to ensure that this matter is handled properly and according to the law.” 

When The Honourable Monique Smith wrote to Windsor in December, she advised him that the Niagara Parks Act grants The Niagara Parks Commission the rights relative to leases.  Windsor said: “Based upon my review, the Niagara Parks Act actually seems to be silent as to leases.  Section 4(k) of the Niagara Parks Act does, however, say that the Commission may ‘make agreements with persons with respect to the operation by them of any works or services in connection with the Parks.’ ” 

Under the Niagara Parks Procurement Policy, procurement of services in excess of $100,000 requires tender.  As with the Niagara Parks Act, the Niagara Parks Procurement Policy speaks to agreement for services.  The so-called “lease” to provide boat services is actually a revenue-sharing agreement (percentage of revenues with no fixed or minimum lease amount) for a service offered to visitors to the Niagara Parks.  The 25-year agreement is estimated to generate $97 million for The Niagara Parks Commission, so it dramatically exceeds the $100,000 threshold. 

Windsor says “the policies of the Province of Ontario and State of New York are very clear.  Leases are not to be granted on a secret, private basis."  In my view, the Niagara Parks Commission and Niagara Falls State Park in New York have failed to abide by the published policies.  

Niagara Parks Commissioner Bob Gale objected to the way the Commission handled the Maid of the Mist lease.  He questioned why such an important lease was renewed without finding out who else might be interested in it.  Gale filed a complaint with Ontario’s Integrity Commissioner saying the parks commission erred by not putting the lease out to tender.  Gale provided an affidavit in support of Windsor’s application that is part of the legal filing.

Windsor has been trying since October 2008 to get The Niagara Parks Commission, the government of Ontario, the Minister of Tourism, or the Integrity Commission of Ontario to take action to correct this injustice.  “I finally gave up.  I began to fear that the Integrity Commission might whitewash what happened, and I doubt that the Integrity Commissioner has any actual authority to void the lease.  So, we filed our lawsuit.” 

Boat service has been provided at Niagara Falls since 1846.  The Province of Ontario and the State of New York lease the land to a third party so that boat rides can be offered at Niagara Falls.  Since the boat rides began 162 years ago, only one entity has held the lease rights: Maid of the Mist.  These rights in Canada are granted by The Niagara Parks Commission. This is an exclusive that gives the lessee, Maid of the Mist, an exclusive monopoly with no competition whatsoever. 

There has been no indication that any company other than Maid of the Mist has ever been given the opportunity to bid on the lease rights. 

If the Divisional Court finds in favor of Windsor, the Maid of the Mist lease will be voided, and the lease will be tendered for bid.  Windsor, Ripley’s, Maid of the Mist, and several others are expected to bid. 

Windsor hopes the State of New York will do the right thing and void the lease and tender it for bids.  If the State doesn't, Windsor says he will sue New York.