Niagara Gazette

April 11, 2013

Hornblower suit arguments heard Thursday

By Justin Sondel
Niagara Gazette

Niagara Gazette — A California cruise boat company will have to wait to hear if it will have an opportunity to compete for the right to operate tour boats at the base of the Falls.

State Supreme Court Justice Catherine Nugent Panepinto said that she would reserve judgement after hearing arguments in a lawsuit brought by Hornblower Cruises against Maid of the Mist Corp. and various New York state agencies. Hornblower contends that the concession services are subject to open bidding and that a recent amendment to Maid of the Mist's contract with the state are grounds for a new bidding process.

Hornblower won the rights to operate the concession on the Canadian side in 2012 as part of a bidding process with the Niagara Parks Commission in Ontario.

Edward G. Kehoe, an attorney from the New York City law firm King & Spalding representing Hornblower in the lawsuit, said the amendment to the contract — which increased Maid of the Mist's payment to the state by $105 million and provided the company with land to build a new storage facility for its boats — should open the concession to bidding.

"The amended license, under any governing law, is a new contract," Kehoe said.

Hornblower attorneys also argued that the New York State Comptroller's Office had issued statements saying that concessions are required to be bid.

"We're asking that the normal bidding process take its course," Kehoe said.

Attorneys representing Maid of the Mist, New York State Office of Parks, Recreation and Historic Preservation and the New York Power Authority argued that the amendments to the contract do not constitute a new agreement.

Brian D. Gwitt, an attorney for Maid of the Mist, said his client continues to operate under the original 40-year contract that the company signed with the state in 2002.

"We're just running the same operation we've always run," Gwitt said.

Gwitt argued that the law on open bidding referenced by Hornblower attorneys was actually part of a procedural matter and not a statute, meaning that the comptroller's office suggests a bidding process in most instances but that it is not a statutory law.

"They want our license to disappear," Gwitt said.

Contact reporter Justin Sondel at 282-2311, ext. 2257