Niagara Gazette

March 4, 2013

Hornblower challenges Maid of the Mist dock decision.

By Mark Scheer
Niagara Gazette

Niagara Gazette — An agreement crafted by New York state officials in an effort to maintain the Maid of the Mist Corp.'s presence in the Niagara region is now facing a legal challenge from another boat tour operator.

The California-based ferry company Hornblower Yachts, LLC on Monday filed a lawsuit in State Supreme Court in Niagara County challenging the state's decision to revise its 2002 agreement with the Maid of the Mist to allow the company to build a new, $32 million storage, maintenance and fueling facility on the American shoreline of the Niagara River.

The lawsuit describes the process leading up to the revisions as a "misguided and inexplicable effort" to enable Maid of the Mist to continue generating boat tour profits without having to engage in a public bidding process for the rights to do so.

Hornblower is asking a judge to void the revised Maid agreement and open up the rights to the American side to competitive bidding. In its court filings, the company argues that revisions made to the 2002 agreement "materially" changed the original "scope and terms," which Hornblower maintains should trigger standard public bidding requirements in this case.

"For reasons that remain unclear, New York State Parks is violating statutory public bidding laws, ignoring its own past practice of requiring public bidding under similar circumstances and disregarding clear Fourth Amendment precedent on public bidding statutes, by arranging a process to award a new and materially different license to MaidCo. without public bidding," the lawsuit reads.

Named as plaintiffs in the filing are state parks Commissioner Rose Harvey, state parks Executive Deputy Commissioner Andy Beers, the state parks office as a whole, Maid of the Mist Corp. and Gil Quiniones, president and chief executive officer of the New York Power Authority.

Among the "material" changes outlined in the lawsuit are reported plans by the power authority to convey 3 acres of public land to the Maid as part of the new storage facility's construction, revisions to the fee schedule for concessions and commitments to new obligations such as creating a water taxi service.

As part of its argument, Hornblower contends that since it has acquired rights to control boat storage and maintenance facilities on the Canadian shoreline, Maid is no longer a "sole source" provider, which the company says "previously formed the basis" for the state's long-held stance that the Maid contract is not subject to competitive bids. The court filing argues that the Maid and the state have "negotiated entirely out of the public view" and asks for a "process by which New York State Parks complies with governing law and opens the new concession to public bidding."

"MaidCo. indisputably is no longer exempt from the public bidding requirements because Hornblower controls the concession on the Canadian side as of 2014," the lawsuit reads. "Indeed, if any company were to be entitled to receive the New York concession without public bidding at this time, it would be Hornblower - based on the very same "sole source" argument that MaidCo. advanced in receiving the 2002 New York license."

Maid of the Mist Corp. has for decades served as the sole provider of boat tours on the Niagara River near Niagara Falls. Last year, following a competitive bidding process, the company lost its exclusive hold on use of an existing boat storage and maintenance facility located on the Canadian side. Officials with the Niagara Parks Commission in Ontario awarded those rights to Hornblower under a multi-year deal set to begin in 2014.

In December, Gov. Andrew Cuomo announced the state, through its parks office, had renegotiated an existing 40-year contract with the Maid, authorizing the construction of a new docking facility on the U.S. side. State officials have argued that the revisions were done legally, saying there was no need to solicit bids for the contract due to the, as Cuomo himself said, "special circumstances" surrounding the boat tour and its long-standing operations in Niagara Falls. Cuomo and other state officials have lauded the new deal as a way to not only protect the brand and history of the Maid of the Mist, but to generate additional revenue from its operations for the state as a whole.

"Maid of the Mist is a New York icon with a three decades left on a 40-year contract with the state," Harvey said in a statement released following the filing of the lawsuit on Monday. "Maid of the Mist will invest $32 million to build a New York-owned and situated facility and increase payments to the state threefold - to a projected $105 million over the remaining 30 years. By having its own docks, the state of New York is protecting our tourism industry in Niagara Falls and ensuring that this unique part of our heritage continues."

In response to requests for comment, a spokesman for the Maid of the Mist issued the following statement: "We followed proper procedures at all times. We are confident that the courts will determine that this lawsuit is without merit."

In its lawsuit, Hornblower contends that it is prepared to offer at least twice the amount Maid of the Mist is reported to have agreed to pay under the proposed new arrangement. Hornblower also says it has guaranteed to the state that there will be no interruption in tour boat services from the New York side of the Falls.