HUFNAGEL: A Letter to Gov. Cuomo on Delaware North and the Niagara Falls State Park

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Gov. Andrew Cuomo.

 

Dear Governor Cuomo,

Two years from now, on December 31, 2021, the Delaware North Companies’ state contract to provide food service in Niagara Falls State Park is up for renewal.

Delaware North entered into a twenty-year, $10.2 million agreement with the New York State Office of Parks, Recreation and Historic Preservation, commencing on July 1, 2002, to operate food, beverage and gift shop concessions in the Niagara Falls State Park.

Based on that arrangement, Delaware North tenders to New York State $523,076 a year for its monopoly rights to Niagara Falls State Park, one of the most popular tourist attractions in the world, which receives between eight and nine million visitors annually.

Delaware North made more than $4.72 million from operations in the park over the one year period from Aug. 1, 2016 to July 31, 2017.

Therefore, Delaware North’s revenues from its operations in Niagara Falls State Park are nearly ten times over and above what it pays New York State. None of its profits from activities in the park accrue to the city of Niagara Falls.

* * *

Delaware North is a global food service and hospitality company headquartered in Buffalo, New York. The company also operates in the lodging, sporting, airport, gaming and entertainment spaces, employing over 55,000 people worldwide. Its total annual revenue exceeds $3 billion annually.

Delaware North is one of the largest privately-held business concerns in the world. It is solely owned and operated by the Jeremy M. Jacobs, Sr., family of East Aurora, NY. Pursuant to its 2002 contract with New York State, Delaware North operates Top of the Falls restaurant, an extensive food court and souvenir and gift shop facility at the Cave of the Winds pavilion, in addition to three separate free-standing snack booths in Niagara Falls State Park.

According to Forbes Magazine, Jeremy Jacobs’ net worth is $4.4 billion, ranking him as the 156th richest man in the country.

* * *

Despite its immediate proximity to Niagara Falls State Park, the city of Niagara Falls perenially suffers from the highest rate of unemployment of any city in New York State. According to NYS of Labor statistics, the 2018 unemployment rate for New York State was 4.1%. Unemployment in the city of Niagara Falls for 2018 was more than two full percentage points higher, at 6.7%. For comparison, the rate for Niagara County was 5.2%.

According to FBI statistics, the city of Niagara Falls also has the highest rates, among cities of comparable size in the state, of both property and violent crime.

In addition, Niagara Falls ranks high among all cities in New York State for both the prevalence of poverty, and total tax burden.

Finally, Gov. Cuomo, you must be aware of the extreme budgetary distress the city is undergoing at this time.

A drive through present-day downtown Niagara Falls is reminiscent of the South Bronx during the 1970’s. All main traffic arteries through the city are characterized by abandoned, boarded-up buildings and empty storefronts.

The sorry state of the city of Niagara Falls is a direct result of Delaware North’s retail operations in the Niagara Falls State Park, monopolizing the millions of tourists by supplying food service and souvenir and gift sales. Tourists have little to no reason to venture into and spend money downtown when their every need is addressed within the confines of the park.

All of the commercial activities of Delaware North in the Niagara Falls State Park are in violation of the original 19th century documents establishing the state reservation, as well as the landmark Frederick Law Olmsted plan for the former nature preserve.

* * *

Despite the patchwork of aid packages that have been extended to the city of Niagara Falls over the recent years, the city remains a regional and national embarrassment, the butt of jokes by late night comedians.

We deserve better, and a good start would be to abolish commercial activities in the Niagara Falls State Park.

That would spur business activity and economic development downtown, benefiting the city, instead of the state and Delaware North.

It is within your power to reverse the city’s long-term decline, Governor. All you have to do, is to side with the citizens of Niagara Falls instead of the billionaire Jacobs.

Please allow the Delaware North food contract to expire when it comes due in 2021.

Sincerely,

James Hufnagel

 

**attorney advertising**


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