|Jimmy Glynn (l) gets a $200 million plus sweetheart giveaway from the man elected to protect the public interest, Gov. Andrew Cuomo.
It has been reported that Hornblower Cruises and Events stood ready to pay $100 million more to New York State for the boat tours presently operated by James Glynn, called the Maid of the Mist.
Several readers felt that the $100 million number must be a mistake.
How could the governor let $100 million slip off the table and allow the taxpayers of New York to be cheated?
Well, it is true. Actually the $100 million is a mistake.
It is too low.
According to published estimates, the US side gets about 35 percent of the boat tour business at the base of the falls.
Canada gets about 65 percent.
Hornblower CEO Terry MacRae told the Reporter that, given the opportunity, he would pay the same rate of commission on the US side as he agreed to pay in Canada.
He is ready, willing and able to operate the tours without any interruption on both sides of the border.
Now behold these calculations, if you will: According to published reports, Hornblower will pay $500 million to the Niagara Parks Commission (NPC) over 30 years.
If Hornblower pays $500 million over 30 years in Canada for 65 percent of the boat tour business, then he would pay $269 million for the US side over the same 30 years for 35 percent of the business.
But Gov. Cuomo announced the new Glynn lease as being worth $105 million over 30 years.
Right there, a $150 million difference.
The governor however neglected to mention that the $105 million includes not only the rent from the boat tours, but also the rent Glynn pays for his souvenir store and the rent Glynn pays for the state-owned observation deck, which he manages.
Hornblower’s $500 million is only the rent for the boats.
Glynn pays 10 percent of sales as rent on his souvenir store and by special arrangement with the state, keeps 75 percent of the money for the observation deck. The state gets 25 percent.
The rent for his souvenir store and the 25 percent he pays for the observation deck were included in the $105 million Glynn will be paying.
Subtracting the money for the deck and souvenir store, Glynn will pay about $65 million for the boat tours over the 30 year life of the new lease he just got from the governor.
Comparing apples to apples, boat tours to boat tours, Hornblower, who will pay about 35 percent of boat sales to Canada and has offered to do the same for New York, is willing to pay $260 million for the New York lease just for the boats.
Glynn will pay $60 million (about eight percent) for the boats.
That’s a difference of $200 million.
How could the governor ignore such a vast difference in rent?
How, when an open bidding process in Ontario led to a 35 percent rent, could the governor hand Glynn a lease at eight percent without bidding?
Did political considerations outweigh the best interests of the public?
An explanation is in order.