City, Region want casino process terminated
The province should scrap its process for selecting the next operator of Niagara Falls’ two casinos, say Niagara Falls Mayor Jim Diodati and Niagara Regional Chairman Alan Caslin. In a joint letter to Finance Minister Charles Sousa, the City of Niagara Falls and Niagara Region ask that the request for pre-qualification and request for proposal process for a new service provider for Casino Niagara and Fallsview Casino be terminated.
The letter calls on the province to reissue an RFPQ with an inclusion of the original four objectives for Niagara Falls as outlined in the RFP when Casino Niagara opened in 1996. The four objectives included job creation; economic development for the city and region; a significant and lasting contribution to the economic benefits from tourism; and maximizing provincial revenue. “Maximizing provincial revenue cannot be the only determining factor,” states the letter, dated Feb. 21. Ontario Lottery and Gaming Corporation, which is a provincial Crown corporation, issued an RFPQ in October for Fallsview Casino and Casino Niagara. The RFPQ closed Dec. 15. Right now, Falls Management Group operates the two casinos on OLG’s behalf. Last year OLG notified Falls Management Group it will not extend its contract beyond its original term, which ends July 10, 2019. In October and November respectively, the City and Region passed resolutions asking the province to postpone the RFPQ until the City’s and Region’s goals and objectives of job retention and creation, as well as investment and economic development are respected and incorporated into the process and weighted just as strongly as or greater than revenue.
The City and Region also asked to be “treated as key partners and involved in the process and structure of the RFPQ and RFP.”
In the past, Diodati said the way the current process is structured, the focus is more on upfront payments to the province than it is on economic development, investment and job creation/protection. He said big-name international gaming companies could be turned off by the way the RFP process is structured.
It’s a message that has been reiterated by Niagara Falls MPP Wayne Gates in the provincial legislature.
“I questioned the minister directly on this in December,” said Gates.
“We need a big name to draw visitors. The ministry may want to move on this, but they should not be hitting the gas pedal when thousands of livelihoods depend on it. They need to have dialogue with the community. “
In the letter, Diodati and Caslin state the city and Region have yet to receive a response from the province regarding the postponement request. They note OLG’s own modernizing document states that explicit municipal consent would be required for any host community.
“We are frustrated with the process to date, especially noting your letter sent to the City of Niagara Falls on June 2, 2016 assuring in writing that OLG would contact the host community to discuss the procurement process and opportunities for the city to provide input with proponents,” states the letter. “This consultation has not occurred and is not planned. Notifying the city the night before the release of the RFPQ does not reflect the collaboration we expect from our provincial partners.” Diodati and Caslin are concerned up to 1,400 jobs could be lost if the current process moves ahead, fearing it could lead to the closure of Casino Niagara. The letter states an independent third-party report by HLT Advisory noting a direct impact of gaming revenue decreases as a result of OLG modernization in Niagara. The report notes there could be a lost payroll in the community of $40-$65 million and lost revenue to local suppliers of goods and services of $5-$10 million. “This job loss and impact on local businesses as a direct result of OLG modernization would be devastating to Niagara’s economy,” states the letter. “This matter is very important for our councils, whose primary goal is to foster an environment for economic prosperity for Niagara residents.”
Caslin said he is focused on creating jobs and “standing up for hard working families in Niagara.
“I won’t stand by as the province takes away 1,400 jobs from hard-working Niagara residents and ignores OLG’s instruction to secure host community consent.”
The two casinos in Niagara Falls are the largest employer in Niagara, employing more than 4,000 residents.
OLG spokesman Tony Bitonti said he would not respond to the comments in the letter, as it was directed to the provincial government.
He said OLG is currently reviewing RFPQ submissions.
“We cannot comment on the number of RFPQ submissions and precise timing of next steps, consistent with public-sector procurement rules.” In addition to Sousa, the letter was circulated to Premier Kathleen Wynne, Gates, St. Catharines MPP Jim Bradley, OLG Presidentand CEO Stephen Rigby, OLG Board Chairman George Cooke, NDP leader Andrea Horwath and Progressive Conservative Party leader Patrick Brown.