A citizen's group in Niagara Falls is angry over what it considers broken promises to build an estimated $40-million worth of tourism attractions in the city.

Margaret Dunn, spokeswoman for the group Fair Share, says Toronto-based Fallsview Management Corp. (FMC) made the promises while negotiating a management contract for the $1-billion Fallsview Casino Resort.

Privately held FMC operates Casino Niagara and the Fallsview Casino, which opened last year, for the Ontario Lottery and Gaming Corp. (OLGC).

Dunn says Fair Share started earlier this year with about a dozen members, with more than 600 people asking to be contacted about upcoming meetings.

Ivan Sack

Niagara Falls residents got their first glimpse of the Fallsview Casino during an invitation-only gala in June 2004. The 200,000-sq.-ft. casino has 3,000 slot machines, 1,500 gaming tables and a fountain inside the main entrance that cost $10 million to build. But the tourist attractions they believed had been promised were nowhere to be seen.

"We have a huge, long list of things they promised and never delivered," Dunn says. "We put millions of our local tax dollars into fixing up the area for them rather than putting it into our hospital or another area that's badly needed. Now it's time for them to keep their end of the bargain."

Dunn says the original request for proposal to build and manage the casino that came from the OLGC detailed "a world-class casino complex and one or more prestigious first-class year-round attractors."

She adds that the attractions were to include a 72,000- sq.-ft. convention facility, a River Country theme park on the Marineland property and a 12,000-seat indoor-outdoor amphitheatre.

While Dunn insists the final contract between OLGC and FMC included promises to build the attractions, she admits she has not seen the contract.

OLGC spokeswoman Teresa Roncon says the deal is being kept confidential because of intense competition between casinos, especially the nearby Seneca Niagara Casino, located minutes away in Niagara Falls, N.Y. The U.S. casino has 3,200 slot machines, 97 gaming tables and five restaurants.

Roncon says OLGC officials believe the Fallsview Casino is an attraction in itself.

"The Fallsview Casino does go a long way in attracting tourism to the area," she says. "We still agree there should have been more progress in building the other attractions. They (FMC) are aware of their obligations."

FMC has hired an outside consulting firm that is currently studying what attractions are needed in Niagara Falls, Roncon says, although she declined to provide any details.

City of Niagara Falls chief administrative officer John MacDonald says FMC did pay for a portion of municipal improvements through development and other charges. "Typically, a developer might need a road widened, but their patrons would not be the only user of that road. The developer would be responsible for a portion of the total road cost."

MacDonald says while he does not have the exact amount that FMC has paid the city, the fees were in the "millions of dollars."

"There were still commitments made to build attractors and (city) council is growing increasingly impatient," MacDonald says. "We've never seen the contract, but the public perception is they were to build them."

MacDonald says Niagara Falls Mayor Ted Salci, who is recovering from heart surgery, has repeatedly tried to pressure the OLGC and FMC for the attractions without success.

As compensation for hosting a commercial casino, Niagara Falls and Windsor each receive $2.6 million annually for 10 years from the OLGC, rising to $3 million annually for a subsequent 10-year period.

Gross gaming revenues for the Windsor, Rama and Niagara commercial casinos were about $1.53 billion in the 2003-04 fiscal year, which ended March 31, 2004. Those revenues do not include the Fallsview Casino, which did not open until June 2004.

At the end of the third quarter of the 2004-05 fiscal year, gross gaming revenues for Windsor, Rama and consolidated Niagara were about $1.2 billion. Fourth-quarter results are not yet available.

Ivan Sack, editor of the Mississauga-based casino-industry publication Canadian Gaming News, says it is possible the attraction promises were not in the final contract and that he has heard speculation that FMC threatened to walk away from the negotiations.

Casino Niagara opened in 1996 without any public discussion about tourism facilities, and Sack says provincial officials came up with the idea of attractions at the Fallsview Casino to appease voters.

"They started calling it the Niagara Falls Casino and Gateway project, saying basically if you want all the good stuff you have to take the other parts, too," Sack says. "It was all about politics."

Sack says the amphitheatre idea was doomed from the beginning. "We're basically talking about an outdoor facility that can only be used during the summer months. This is when Niagara Falls is already full of tourists. They need something for the winter months."

OLGC and FMC officials frequently referred in the past to Casino Niagara as the "interim" or "temporary" casino, Sack says.

Just before the last provincial election, however, OLGC officials announced that Casino Niagara would remain open to accommodate patrons in the immediate catchment area, while the larger and flashier Fallsview Casino would handle international guests.

Niagara Falls city councillors became worried recently about rumours that FMC might close Casino Niagara. The rumours grew more persistent when they learned FMC has not yet renewed a long-term lease on the Casino Niagara property, MacDonald says.

A Toronto Star story published on March 17 said OLGC executive Duncan Brown had written FMC that he had "serious concerns regarding the performance by Falls Management Corp. of its obligations" and that there would be penalties if there were no improvements in performance.

"Nobody ever denied the existence of that letter," Sack says, adding that his requests for a copy were turned down. "It's clear when you also look at other things like revenues though, that the OLGC is getting frustrated. When Duncan Brown talked about FMC's obligations, he might have been referring to the attractions."

(David Hatton can be reached at hatton@businessedge.ca)