City Cuts Off Funding to NTCC

The council majority (l-r) Bob Anderson, Sam Fruscione and Glenn Choolokian at a recent fundraiser for Council Candidate Russ Vesci. All three men have had criticism of the NTCC. Councilman Bob Anderson "It is nothing personal, because I did not create this gravy train," Anderson said. Sam Fruscione said of the NTCC that they did "a lot of traveling, a lot of foolishness. It's the good life: high salaries, low productivity." "They are done," said Council Chairman Glenn Choolokian. "There is no benefit to the city of Niagara Falls... I don't believe that the NTCC helps the majority of hotels, or the tourist industry or Niagara Falls."

Much like the delicious Gravy Train dog food, the NTCC was the world's only taxpayer-funded tourism agency that made its own gravy.

Since 2006, this newspaper has documented the extravagant comings and goings of NTCC president John Percy. For just as long, Percy has decided to keep the details of how he spent $15 million of taxpayer money a secret. "I've been hired to produce positive results for this destination and want to do that effectively," he said. "I don't need to be criticized by every little receipt that is provided," Percy said.

It's official.

The Niagara Tourism and Convention Center (NTCC) is no longer getting bed tax money from the city, starting this month.

The private corporation's 10-year contract to promote tourism in Niagara Falls has expired and City Controller Maria Brown confirmed that, absent a new contract, the city cannot continue to send them a monthly check.

That new contract is unlikely to come anytime soon, according to the majority on the city council, who have told the Reporter the NTCC has failed to live up to its promises.

Brown told the Reporter that she has instructed her department to suspend payments to the NTCC, effective immediately.

For the last decade and up until last month, the NTCC has been getting paid 80 percent of all bed tax money collected from the more than 3,000 hotel rooms in the city.

On average, that amounts to more than $1 million in bed taxes paid to the NTCC per year.

Although hotels pay bed taxes to the city quarterly, the city has paid the NTCC in monthly installments of about $80,000 per month.

"This month the payment has ceased," according to Brown who said the final payment to conclude the contract was made recently. "The contract has expired," she said. "Without a contract, I have to hold the bed tax money in escrow. It cannot go to the NTCC."

The council or the mayor may seek special legislation to develop an alternate plan for using the bed tax money, which by law is to be used to promote tourism in the city.

There has been some disagreement between the mayor and the council over what constitutes promoting tourism. The council majority, consisting of Chairman Glenn Choolokian and members Sam Fruscione and Robert Anderson, believe that fixing the deplorable streets in the city, and reducing crime in the city are as much a promotion of tourism as spending hundreds of thousands on Hard Rock concerts or paying a secretive organization like the NTCC millions to travel around the world attending conventions trying to lure people to Niagara Falls.

In any event, thanks to the majority on the council, the NTCC's days of getting one million per year from the city seem to be over.

Anderson, Fruscione and Choolokian have all told the Reporter this week that they will not vote to renew a contract for the organization.

“It is another entity that lives off the taxpayers of Niagara Falls,” Choolokian said. “With its large salaries, large expense accounts, and lack of transparency, [the NTCC] does not provide any demonstrable benefit to the city.”

These same three also voted to cut funding to USA Niagara, whose contract also expired recently, saving taxpayers more than $3 million per year. By doing so, the three-member majority avoided an 8.3 percent tax hike for city property owners.

Many critics at the time said that USA Niagara -- created in 2002 to convert downtown Niagara Falls into "another Times Square" --  had morphed into an agency that mainly provided corporate welfare for millionaire campaign contributors to whichever governor was in office.  Others said the council’s action would force the agency to close its doors, but USA Niagara did not fold.

The state took up the slack and USA Niagara continues to function aiding millionaires with tax free incentives, grants and gifts to develop properties in downtown Niagara Falls to compete with longtime business owners and paying a host of state workers six-figure salaries for doing virtually nothing.

The only difference is city residents no longer have to pay for USA Niagara.

The council majority has now determined to stop the NTCC and just as USA Niagara will continue, it is likely that the true beneficiaries of the NTCC: the state parks and private businesses like the Maid of the Mist and Delaware North, will fund the secretive organization.

The NTCC is headed by President John Percy and in total, the secretive organization has collected more than $15 million from the city without ever making an accounting of what has been done with all the money.

The Reporter obtained copies of prior tax returns and learned that Percy gets more than $200,000 per year in salary, bonuses and unaudited travel allowances.

Percy has long claimed that what the NTCC did with the $15 million was “proprietary (i.e. secret) in nature” and that the public has no right to know how the money is spent.

Councilman Fruscione has criticized Percy in past years, saying "how can you take taxpayer money and claim taxpayers have no right to know how you spend their money?" But until Choolokian took office in 2012, the council did not have a firm enough majority to fight Dyster and his two lockstep votes, Council members Kristen Grandinetti and Charles Walker.

As of this date, Mayor Paul Dyster, a strong supporter of the NTCC, has not put forth a resolution for the council to extend the contract, most probably because it will be voted down.

One of the biggest complaints against the NTCC has been a lack of transparency, an issue that this newspaper has reported on over the last several years.

Chairman Choolokian said of the bed tax money that the city will collect but no longer disburse to the NTCC: “For now, we are going to leave the money (in a city bank account) until a plan is developed for the prudent and careful use of bed tax money. One thing for sure, whatever is done with bed tax money in the future, the public will know how every dime of it is spent.

"We just don’t feel like we’ve been getting the bang for the buck [from NTCC]. We’ve received a lot of calls, and roughly 90 percent of the callers are not happy with them.”

Fruscione has said that the council might consider an improved agreement with NTCC after a “thorough housecleaning,” if they can “ensure they will do things properly.”

Both Choolokian and Fruscione say lawmakers will consult with members of the local tourism industry and suggest that a new hotel marketing association could emerge, using the $1 million in bed tax money that is saved from ending of the NTCC contract.

It’s also possible, according to the lawmaker, that the bed tax could be reduced or eliminated altogether, cutting the costs for a hotel room in the city.

Choolokian and Fruscione have maintained that NTCC, under Percy, has been much too secretive about how it spends the public’s money and have questioned the reports about how much money NTCC claims it brings into the city.

While refusing to reveal what it has done with $15 million it has received to date, the agency provides little substantial proof to claims of bringing in any tourists.

Their claim of millions of tourists coming here solely because of their website has not been backed up with anything other than their saying it is so, which was more than sufficient proof prior to the council majority taking control of the spending in this spendthrift  city.

NTCC is the latest, but probably not the last, agency to feel the sting of the council’s strong fiscal oversight.