NIAGARA FALLS – It has hosted presidents, prime ministers, princes, princesses, kings and future kings. And now, for the first time in more than a century, the Maid of the Mist Steamboat Co. will not be ferrying passengers to the foot of Niagara Falls.
Hornblower Canada, a California-based cruise company, has been named the successful bidder to run boat tours at the base of Niagara Falls.
The announcement was made during a press conference Wednesday afternoon.
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The new agreement is estimated to generate in excess of $500 million in revenue to the Niagara Parks Commission over the 30-year span of the contract – representing an increase of more than $300 million in revenue compared to previous agreements.
This includes guaranteed minimum revenue of $67 million in the first five years.
In order to realize their vision of operations in the Niagara Falls Gorge, investments will be made to upgrade passenger facilities and construct new tour boats. The new service is expected to commence in Spring 2014.
Hornblower’s parent company is based in San Francisco with over 30 years experience of running boat tours. Hornblower famously operates ferries in New York City to the Statue of Liberty and Ellis Island, and in San Francisco Bay to Alcatraz Island.
“This is a great day for The Niagara Parks Commission and a great day for the tourism industry in Niagara and across Ontario,” said NPC chairwoman Janice Thomson.
“It not only marks the beginning of a new era for all of us, but it continues to build on what Niagara and Niagara Parks is all about, building memories and creating experiences that will last a lifetime.”
Wednesday’s decision marked a major reversal for the NPC. In 2008, it was revealed the NPC had quietly awarded an untendered 25-year lease to operators of the Maid of the Mist tour boat excursions. It then took two government reviews and loud protests from Niagara Falls businessman and former Parks Commissioner Bob Gale before the Ontario Ministry of Tourism ordered the Niagara Parks Commission to conduct a competitive bidding process for lease in 2009.
Eleven companies registered as bidders in April 2010, including 2234685 Ontario Inc., Alcatraz Media (Hornblower), Cade Holdings Inc., Campark Resorts, Destination Cinema, Maid of the Mist Steamboat Company, who are the current operators, Cruise Niagara Inc., Mariposa Cruises Ltd., Ripley Entertainment Inc., Tower Tours LLC and Zoom Tours.
Registering as a bidder did not mean, however, that a company actually came through with a proposal. Six companies were in the running at the end, three from Canada and three from the United States.
Hornblower’s lease with the NPC is for 30 years.
Christopher Glynn is president of Maid of the Mist. He and his family own the Canadian Maid of the Mist Steamboat Co. The Maid of the Mist Corp., also owned by the Glynns, holds a separate lease with the New York State Office of Parks, Recreation and Historic Preservation to run boat tours on the American side.
The Glynns have filed trademarks for sole use of the Maid of the Mist name. It is unclear how this development will impact their American operations in the long term. The American boats, for example, are stored on the Canadian side during winter. Thomson did not know how that arrangement would be impacted, and said it is not up to the Niagara Parks Commission.
The Glynns can continue to run the Maid of the Mist on a month-by-month basis until the launch of the new company in 2014. Thomson said she believes the Glynns will continue to do so, although a statement issued by the family Wednesday casts some doubt on that.
Glynn said the loss of its lease with the Niagara Parks Commission for boat docking space on the Canadian shore near the base of the Horseshoe Falls creates “uncertainties” and may mean the company won’t operate here this year.
“Today we learned that the Maid of the Mist’s bid for the renewal of its lease with the Niagara Parks Commission was rejected by the Ontario government,” Glynn said in the statement.
“As a result of this decision, our business, with a 165-year history of service to tourists from around the world, may soon come to an end. The Maid of the Mist has provided world famous, safe, reliable and affordable boat tour service, and its trademarked brand name has become synonymous with the Niagara Falls experience, drawing millions of tourists to the region annually.
Glynn continued: “The implications of this decision are very complex, and impact on many parties and create many uncertainties, including whether or not a boat tour service will be offered in Niagara Falls, Ontario in 2012. We are carefully assessing our position and will be consulting with other affected parties as we attempt to address the many serious issues resulting from this decision.”
The Glynn family has owned Maid of the Mist since 1971. Thomson said she hopes the Glynns will reconsider their position.
“It’s a very lucrative business,” she said. “They don’t have an obligation to run boat tours (for the next two summers) but they have an opportunity, and I think they would want to do that. They do it very well and should be very proud of their accomplishments.”
No one from the Maid of the Mist returned calls for comment.
Tim Parker, general manager of Ripley’s Entertainment in Niagara Falls, attended the event, no doubt hoping to hear different news. Parker was philosophical and upbeat about the decision.
“It was a long process, a good process,” he said. “We put a good bid in, obviously Hornblower put a better bid in … it’s good for Ontario and good for us because new businesses and new operators bring people to town. That can only benefit us and Niagara Falls as a whole. I’m happy … what else can I say?”
Parker did not say if Ripley’s will request a debriefing to find out where their bid fell short.
Earlier in the day Wednesday, before the successful bidder was announced, Ontario Tourism Minister Michael Chan released a public statement saying the government and the NPC went out of its way to ensure the selection process was fair.
“Today marks the culmination of an extensive process to ensure that all interested parties had the opportunity to submit proposals through an open, fair and transparent competition,” Chan said.
“My ministry appointed a Fairness Commissioner, a Procurement Advisor and a naval architect to work with the Commission to develop a request for proposals and to oversee the process to ensure fairness. The Fairness Commissioner has attested that the process was carried out fairly and that the procurement process included provisions to prevent unfair advantage and conflict of interest. This process has upheld our government’s values of openness, transparency and accountability.”
Chan continued: “A competitive process has resulted in the land lease that provides Ontarians with better value for money. It will help grow our economy, create jobs and offer exciting tourism experiences for Ontario families and visitors to Niagara Falls.”
Gale’s complaint was always with the process – the way the NPC awarded the contract, believed to be worth about $10 million a year in revenue – to the Maid of the Mist.
“No matter what anyone wants to believe, my fight through out this process was started because I had facts to prove that the Niagara Parks Commission had not been fair through the Maid lease renewal process while I was on the Board of Commissioners and I would not stand by and allow it.”
Gale was still critical of Parks Commission and the government for the length of time it took to reach Wednesday’s decision.
“Justice must be swift and fair, and the NPC failed on this. It was far too long a procedure which cost all the participants far too much time and money. Many times in life the end justifies the means, but I feel sorry for the incumbent and the other participants for the waste of money and time – for many it was in the hundreds of thousands of dollars – that was brought on by a process that seemed to be off the tracks from the start.
“I would not be surprised by lawsuits brought on as a result of this tedious process which seemed to only benefit the bureaucrats involved with no one from the government caring about costs or timelines. This process cost the NPC and ultimately the taxpayer many millions of dollars due to the delays.”
Thomson said finding a new operator for the boat tours cost the Parks Commission about $2 million, including legal fees. She defended the protracted procedure as necessary because the NPC wanted to make sure things were done right.
“When you look at the return, it was a good investment.”
Niagara Falls MPP Kim Craitor said he has heard both the criticisms from people who said it was unfair to award to extend the lease four years ago without a competitive bid process and those who said they can’t believe the province would consider doing anything that would jeopardize the Maid of the Mist franchise the way it is now.
“Putting this out to tender was the right thing to do,” said Craitor, who commended former Gale and the community group Preserve Our Parks for making an issue of the lease extension. He said Wednesday’s announcement is vindication of sorts for those believe in an open and transparent tendering process.
“Now we know there were significant people with significant credentials who were willing to give Niagara Parks more money (to operate the tours),” he said.
Craitor said didn’t know who the successful bidder would be until it was announced Wednesday. He said he was surprised to see just how much more money Niagara Parks stands to gain from the new lease arrangement.
“When we went down this road I had no great expectations about what the results would be – it was just a matter of principle. This far exceeded what I thought would be the case. I was staggered when I saw the figures.
“I’m not being critical of the Glynns, but can you imagine how much money the Parks has lost all of these years?”
No one from Hornblower attended the news conference and the company did not return repeated calls for comment.
“We look forward to becoming part of the community and working with the NPC to create a positive and memorable experience for the millions of visitors to Niagara Falls,” Terry MacRae, chairman and chief executive of Hornblower, said in a statement. “We will work with the NPC to ensure a smooth transition and will be sharing more information in the coming months.”
The company also said it plans to build new vessels with more viewing space. It said prices will increase. Current rides cost about $16 for adults and $10 for children. It also said it will have 200 employees when fully operational.
Niagara Falls Coun. Wayne Thomson, president of Niagara Falls Tourism and a former city mayor, sees the outcome of the competitive bid process as a “postive development” and one that will ultimately see more money flow into the coffers of the Niagara Parks Commission.
“Anyone would have trouble looking at that in a negative view,” said Thomson, who once sat on the NPC board as the city’s representative. “It appears that the time spent reviewing this decision has been positive,” said Thomson, adding what’s good for Niagara Parks is good for the city, too.
Niagara Falls Mayor Jim Diodati says he has mixed feelings about the change coming with the boat tour.
On one hand, Diodati said he feels badly for the Glynn family and Maid of the Mist, which has been an “outstanding corporate citizen.” The company has been involved in much charitable and community sponsorship over the years and has provided much appreciated assistance with river rescues.
On the other hand, a transparent bidding process was the right thing to do, said Diodati, adding the deal with Hornblower will be a boon to the cash-strapped Parks Commission.
“I’m glad it’s a better deal that will help Niagara Parks deal with their financial challenges and in turn make them healthier and more viable,” said Diodati.
Diodati said he has not met anyone from Hornblower Canada, the company set to begin running tours in 2014.
“I haven’t met them,” said Diodati. “I stayed out of the process because it didn’t involve the city directly.”