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BED TAXES FOR NEW TOURISM AGENCY WITHHELD

The City Council stood pat Monday on its decision to ask Mayor Irene J. Elia to hold off signing a contract with the new Niagara Tourism and Convention Corp. despite urgings to sign from a state representative and the president of the agency's board.

The Council decided to keep the $900,000 it collects in bed taxes with the Convention & Visitors Bureau "at least temporarily" until it gets answers on questions about other sources of funding and the structure of the new organization. The Council also asked the new tourism corporation for a business plan.

It also urged the state Office of Parks, Recreation and Historic Preservation to make good on what Council members believed was a promise to raise the cost of the Prospect Point elevator from 50 cents to $1, with the extra 50 cents going toward funding the new agency.

Assemblywoman Francine DelMonte, D-Niagara Falls, said there have been many conversations with state parks about the funding, but the agency has not agreed. At this point, the state would keep all of the revenues, she said.

DelMonte told the Council it would be "a gross mistake" for the city to hold off signing the contract until the state agrees to the funding. Christopher M. Glynn, chairman of the corporation's 19-member board, said the matter needs to be decided in days, not weeks.

But Council members and City Administrator Albert T. Joseph were equally adamant that the deal now on the table isn't what they initially supported.

The new corporation, as originally proposed, was to have $3 million in funding from a variety of sources to market the entire county. As of now, it has $1.2 million from bed taxes, $900,000 of which will be collected in Niagara Falls. Council members said hotels in the city think it's unfair that they'll provide the bulk of the funding.

Even though the bed tax is paid by the hotels' customers, Councilman Paul A. Dyster said there is a cost to the hotels because they have to tack the tax onto their rates, making them less competitive with hotels in Canada and possibly the Seneca Nation of Indians' new territory around the casino, which would be tax-exempt.

DelMonte said the bed tax is meant to be a base from which the agency would grow. She said it is envisioned that private sector interests, such as the casino, would partner with the agency. But, she said, no agreements are in place.

Glynn said one of the primary things the board would look for in a chief operating officer would be a fund-raising background. He said the agency has received 40 applications, but they are getting "stale" as time goes on. The contract has been on hold for a month.

The new corporation was supposed to replace the bureau and the Niagara County Tourism Department as of Jan. 1. Council members asked how there could not be a business plan in place with just over a month to go.

Councilman Charles A. Walker said there should already be a plan in place to market the 2003 tourist season. Joseph said the bureau is continuing to plan for the 2003 season. Councilman Vince V. Anello said the new corporation could use that plan as a jumping-off point.

Council members said they also were concerned that if bureau employees are not picked up, the new agency would lose valuable expertise that would help it hit the ground running. Dyster said bureau employees didn't come to the Council complaining that they were losing their jobs. He said Council members went to the bureau looking for information. Adoption of the resolution with the amendments led to a heated exchange between DelMonte and members of the Council.

e-mail: jscelsa@buffnews.com

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