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NIAGARA FALLS – A judge has allowed the Maid of the Mist Corp. to resume work on its new boat docking and service facility in the Niagara River Gorge, but the question of whether the company will get to use it remains unsettled.

State Supreme Court Justice Catherine Nugent Panepinto on Thursday threw out a lawsuit by a local preservation group that had obtained a court order last Friday temporarily stopping work on the project. She lifted the ban on construction of the $32 million project, effective immediately.

“The Maid of the Mist would probably be out of business if this project doesn’t go forward,” said its attorney, Brian Gwitt of the Buffalo firm of Damon & Morey.

But Panepinto reserved decision on whether the Maid’s contract to provide boat tours below Niagara Falls, as it has since 1846, should be subject to competitive bidding.

Hornblower Cruises, the California company that last year took the Canadian boat-tour license away from Maid of the Mist after Ontario allowed open bidding, has sued New York State to force it to hold competitive bidding for the tour boat service on the American side of the falls. The administration of Gov. Andrew M. Cuomo amended the Maid’s existing contract late in 2012 to increase the amount of money the company would have to pay the state and to allow construction of the boat facility on the American side.

With Hornblower in control on the Canadian side after this year, the Maid would no longer have access to its facilities there.

After two hours of oral argument over the restraining order obtained by the Niagara Preservation Coalition, a newly minted group set up with Hornblower’s assistance, Panepinto ruled that the group led by Louis Ricciuti of Niagara Falls lacks standing to sue.

The coalition’s lawsuit said the New York Power Authority’s environmental review process for the project was rushed and flawed. It contended that the work would bury the ruins of the old Schoellkopf Power Station, which collapsed into the gorge in 1956. That led to the founding of the Power Authority and the construction of the Niagara Power Project.

The Schoellkopf site was added to the National Register of Historic Places six weeks ago. “The project buries the historic resource,” said Linda R. Shaw, Ricciuti’s Hornblower-recommended attorney. “This project is eliminating a lot of that National Registry site ... Only about half of it will be left.”

Assistant State Attorney General George Zimmermann said the Maid’s project had been approved by the state Historic Preservation Office.

“It preserves the situation for future archaeological discovery,” Zimmermann said. “It’s not being bulldozed away. It’s being encapsulated.”

“Let’s be clear about this. This is rubble,” Gwitt, the Maid’s attorney, said. “This is a power plant that fell in 1956, and it’s rubbish.”

Panepinto asked Shaw for a list of coalition members, but Shaw could come up with only five and told the judge she could hand in something later.

Under state environmental law, “Not anybody gets to sue,” said John J. Henry, an attorney for the Power Authority. “You have to show injury in fact, different from the public at large ... We think this is one of the weakest attempts to circumvent that rule.”

Attempting to show personal injury to her clients, Shaw said a hiking trail in the gorge would be cut off for 18 months by the construction project. “Lou and his colleagues have hiked that trail since childhood,” she said.

Panepinto didn’t buy it: “What about a company that’s going to go out of business? What do you say to 300 [construction] people who are making prevailing wage, sitting at home?”

Ricciuti said he intends to appeal Panepinto’s ruling.

On the bidding issue, Hornblower attorney Edward G. Kehoe said he wasn’t challenging the validity of the Maid’s 2003 no-bid contract. But he insisted last year’s contract amendment was a new deal that should have caused a round of bidding, because the conditions had significantly changed with the larger payments to the state and the construction of the new boat facility. “If the Maid could perform under the 2003 contract without a $32 million investment, we wouldn’t be here,” he said. “Up until now, everyone thought it was impossible to build [on the U.S. side of the river].”

Gwitt said an amendment was not a new contract, and no bidding is required because the state isn’t spending any money on the project. “This license is valid, and it’s exclusive,” he said, adding the Maid has the tour rights until 2043 unless there is a breach of contract.

email: tprohaska@buffnews.com