Niagara Gazette

January 4, 2012

City and state officials wait to see how Niagara Holiday Market performed

By Mark Scheer
Niagara Gazette

NIAGARA FALLS — With the Christmas season at an end, city and state officials will turn their attention to reviewing the performance of the inaugural Niagara Holiday Market.

Despite a contract that already calls for it, City Council Chairman Sam Fruscione has asked City Controller Maria Brown and Corporation Counsel Craig Johnson to assist him in crafting a letter requesting a detailed account of the use of city funds for the Niagara Holiday Market, the 36-day outdoor event that wrapped up on New Year’s Day. The city provided $225,000 in support of the project which was overseen by Idaho-based developer Mark Rivers.

City officials allocated the money under an understanding with the state-run USA Niagara Development Corp. that all transactions would be monitored by Global Spectrum, the company that runs Conference Center Niagara Falls and is responsible for coordinating activities along Old Falls Street. Fruscione said the letter will call upon officials at Global Spectrum and Rivers to turn over any pertinent financial information from the event.

“We want to make sure everything is on the up-and-up and everything was done according to the contract,” Fruscione said.

Rivers said it has been “the intent since day one” to provide a final financial report once it is completed. He also noted that all dollars provided by the city, the state and private sponsors were paid into a Global Spectrum account and no dollars were ever provided to him, his company or any entity representing him.

 “We've always said that we'll provide a complete report of the financials, as well as the activities and positive impact of the market,” Rivers said.  

Mayor Paul Dyster, a supporter of the market concept, also acknowledged the final accounting is covered in the market agreement. He said he is not anticipating any issues regarding the use of city funds, saying he believes the partnership with Global Spectrum ensured there was a “very strong financial review process” in place.

“There needs to be a formal process and clearly that includes looking at the finances,” he said.

According to the contract, Global Spectrum and Rivers are required to produce an accounting of the event, with or without a letter from the council chairman.

The city and USA Niagara agreed to supply the market with $450,000 in public funding as part of a reported total market budget of $900,000. Rivers’ contribution through his firm, Brix and Co., were to include private sponsorships, staff and other in-kind contributions. Under the city’s agreement with USA Niagara, Global Spectrum is responsible for project oversight, including verification that Rivers’ firm met its obligations and that all public dollars were spent appropriately.

The formal agreement specifically states that Global Spectrum will provide the city, USA Niagara and Brix with a “full and complete” accounting of the event and that Rivers’ firm will assist Global in the accounting and providing all relevant information. According to the agreement, the accounting is to be done within 120 days of the conclusion of the market. In the event of a surplus, the “entire balance” is to be maintained by Global and applied to the “implementation and development of a 2012 market,” if the city and USA Niagara agree to hold one.

In the event there is no agreement for a 2012 market, all surpluses are to be divided between the city, USA Niagara and Global in proportion to their respective contributions. The agreement also notes that Brix “shall not share in any profits from the market, nor earn any fee from developing, managing and implementing the market,” although the company is entitled to “reimbursements of its out-of-pocket expenses, consistent with the market budget.”

Rivers has not yet said if he plans to return for a second holiday market later this year.

Dyster said the 2011 event received strong reviews from participating vendors, several of whom indicated an interest in returning for the 2012 Christmas season. Dyster said a formal survey of vendors has been conducted and officials from the city and the state plan to review the responses in the coming weeks. City and state officials have said that the market allowed them to test the level of interest in retail operations in the downtown area and may lead to continued retail outings in the future. Officials are considering a plan to offer space inside vendor booths built for the Christmas season during the summer months.

“We’re still trying to get this thing disassembled,” Dyster said. “The next thing to do is sit down and evaluate where we are going in the future.”

Fruscione said he supports the market as a concept, but is not sure the city can afford to do it again. He noted the city is no longer receiving casino revenue payments as a result of an ongoing dispute between the Seneca Nation of Indians and the state and, as a result, the city has nearly exhausted its casino cash. He suggested he’d be more inclined to get on board in 2012 if the state agreed to pick up the entire tab.

“I think conceptually it was a very good idea,” Fruscione said. “Moving forward, we have no casino cash. We don’t have the funds anymore. Without any casino cash, we can’t do this.”