Lockport Union-Sun & Journal Online

November 15, 2012

NTCC's value to Lockport debated

By Joyce M. Miles
Lockport Union-Sun & Journal

Lockport Union-Sun & Journal — The city attorney’s office is researching legal alternatives to turning over city bed tax income to Niagara County’s designated tourism promotion agency.

As it does, one of the biggest tour attraction operators in Lockport appealed to the Common Council on Wednesday to abandon any notion of cutting ties with Niagara Tourism & Convention Corporation.

Doing so would be “foolish ... a mistake,” Mike Murphy, owner-operator of Lockport Locks & Erie Canal Cruises, warned.

The city’s 2013 tentative budget shows a 50 percent reduction in the amount of city bed tax that would be turned over to NTCC, and a new budget line for a city marketing & communications director. Late last month, Mayor Michael Tucker told the US&J that he thinks the city should end its roughly $85,000-a-year contract with NTCC next year and redirect the bed tax money to an in-house/city-only marketing effort.

“We have not been happy with (NTCC) for a long time, we just haven’t had a ‘Plan B’ until now,” he said.

Over time, Tucker and various city aldermen, some no longer serving, have questioned whether Lockport is getting its money’s worth from NTCC, whose charge is to promote “Niagara U.S.A.” It’s done so by promoting Niagara County as four regions or destination areas: The falls, the river, the lake and the Erie Canal.

In the past, city leaders said they resented seeing Lockport treated like a Niagara Falls side trip. Recently, Tucker has turned to questioning why NTCC doesn’t do more for Lockport as a direct funder of the agency.

The tipping point, he said, was NTCC’s decision to stop subsidizing operation of the Lockport Trolley after this year if it doesn’t receive overdue shares of Seneca Niagara Casino profits. Tucker said NTCC director John Percy informed him that Lewiston also wants a trolley and the agency can’t fund one and not another.

“We’re a shareholder and Lewiston is not. That’s the difference, to me,” Tucker said.

Except for the City of Niagara Falls, “nobody else pays. Lewiston, Newfane, Olcott, they all get promoted — which they should — but none of them pay. ... We’re not getting the bang for our buck, and I think we can take care of ourselves.”

City looking for legal ‘alternative’ to NTCC

NTCC’s main income source is bed tax from the cities of Niagara Falls and Lockport, and Niagara County — which collects the 4 percent tax charged on hotel/motel rooms outside the cities.

According to county Treasurer Kyle Andrews, Niagara County collected $84,600 in bed tax between September 2011 and this past August. Minus a 5 percent “administrative fee” the county turned over $82,100 to NTCC in the same time period.

Among the towns, Andrews added, “Far and away, the largest producer” of bed tax is hotels/motels in Wheatfield, with noticeable “pockets” of room rentals also seen in Olcott/Newfane, and the village of Lewiston, in peak touring months.

By the state tax law that allowed the City of Lockport to collect a 4 percent tax on all hotel/motel rooms in its borders, 75 percent of the total annual collection must go to “a not-for-profit corporation under contract with the county for the promotion of tourism in the county.”

While Percy, the NTCC director, asserted the law requires Lockport to help fund NTCC as the county’s designated tourism promotion agency, City Attorney John Ottaviano said this week he doesn’t think that’s the case.

The law refers to “a” non-profit corporation that promotes tourism, he said, and there’s already one in Lockport that could receive the city’s bed tax revenue, if the county Legislature agreed to contract with it — Lockport Main Street Inc., the non-profit company created in 2008 with establishment of the Lockport Main Street program.

While the Main Street program is an enterprise of the National Trust For Historic Preservation, LMS Inc.’s certificate of incorporation says its “primary objective (is) to stimulate and promote downtown business district revitalization” in Lockport, in part through “promoting downtown Lockport as an exciting place to live, shop, dine and invest.”

That language might be enough to make LMS Inc. legitimately a tourism promotion agency and thus eligible to receive city bed tax, Ottaviano said.

While researching that possibility, Ottaviano said he’s also going over the 10-year agreement between the city and NTCC, signed in February 2003, to check the agency’s “compliance” with obligations including annual reporting on its budget, spending, and program performance.

Noting the absence of required reports from 2011 in NTCC’s legal file, Ottaviano said, “I think there are some issues there with respect to the level of performance.”

Percy acknowledged in a Wednesday telephone interview that he never met with the Common Council to deliver NTCC’s 2011 annual report to investors. Then he insisted that’s because Tucker “never responded to our request for a meeting.”

Lockport city officials and business people hold three of 13 seats on the NTCC board of directors. One of those seats is held by Tucker, technically, although he used to send Bill Evert, now-retired director of community development in his place and recently appointed Tom Callahan, co-owner of the Lockport Cave and Underground Boat Ride tour attraction, to the seat. Mike Murphy and Heather Peck, director of the Main Street program, have the other two seats.

None of Lockport’s board members has ever complained to the board about the agency’s efforts on behalf of the city, Percy said.

“I’m troubled by the mayor’s level of dissatisfaction with us. What’s behind it?” he said. “Not once have we heard him voice this level of dissatisfaction, until now.”

NTCC’s performance, value defended

In answer to local critics’ question, what does NTCC “do” for Lockport, Percy sent the US&J a copy of its newly finished 2012 report to Lockport stakeholders.

It’s a nine-page summary of publications, radio/TV and social media ad campaigns, take-away promotions, websites, blogs, special event promotions and trade shows in which Lockport-based touring attractions are mentioned or featured; Niagara U.S.A. got air play in the Buffalo, Rochester, Pittsburgh, Cleveland and Columbus, Ohio, media markets this past summer.

The report gives a brief accounting of seven travel writers who were wooed to Lockport by NTCC this year, and latest information on a new Niagara U.S.A. tour package, “Wine Water & Wonders,” that’s going global with brochures distributed in Paris and London. Lockport Locks & Erie Canal Cruises and the Kenan Center are included in the brochure.

Percy told the US&J he’d estimate the value of all that media exposure for Lockport “in excess of $1 million” a year.

The city, spending only the bed tax dollars that it collects, could not come close to matching NTCC’s efforts for Lockport — especially if half the bed tax money is already committed to a marketing person’s salary, Mike Murphy told the Council. He’s spending about $55,000 a year on top of NTCC’s promotions to advertise his business, he said.

“What’s left (after paying the marketing director’s salary, less than $50,000) won’t get you anywhere,” Murphy said.

Tucker asserted NTCC would still have to promote the Lock City even if it’s not receiving Lockport bed tax money, “because that’s its job” as Niagara County’s designated TPA.

Murphy openly knocked Tucker’s attitude toward the agency. Bed tax isn’t “city” money, he reminded the mayor.

“You’re not paying for (NTCC’s services), it’s the guy from Indiana who’s paying for it,” Murphy said. “It does no good to be divided, I think.”

Percy said the loss of Lockport’s bed tax money would equal an almost 5 percent income loss for NTCC, which is still reeling from the loss of about $1 million a year in Seneca Niagara casino profit sharing. The agency gets a cut of the City of Niagara Falls’ annual profit share, which has been withheld the past three years while the state and the Seneca Nation litigate over gaming rights. 

NTCC’s 2013 operating budget is $2.1 million, or $900,000 less than in 2008. It made up the loss of casino cash by layoffs and pay cuts for remaining staff, as well as scaled-back programming.