New bridge is big reward without the risk, lieutenant governor says
Monday, June 18, 2012
LANSING -- Michigan will get all the benefits of a new international bridge but bear none of the cost or other risk under a long-awaited deal Gov. Rick Snyder and Canadian Prime Minister Stephen Harper will announce in Windsor today , Lt. Gov. Brian Calley said Thursday.
"This really is a no-brainer," Calley said as he told the Free Press details of the deal to build the New International Trade Crossing from Detroit to Windsor.
"This is the type of project which gives us the ability to have our cake and eat it, too."
Snyder, Harper, ambassadors, one of President Barack Obama's cabinet members and a host of other officials from both countries are to announce the deal at news conferences in Windsor and in Detroit this afternoon.
Calley said details of the plan, which Snyder has been negotiating with Canada in secret since soon after a state Senate committee rejected his bridge bill last fall, include:
• Michigan taxpayers would have no obligation to pay any part of the costs – period. Canada will front the state's $550-million share and recover the money from bridge tolls. The provision, Calley said, refutes persistent claims from critics that taxpayers would be left holding the bag.
• Canada bears all of the risk if bridge tolls don't raise enough revenue to make scheduled repayments to the private contractor chosen through competitive bidding to finance, build and manage the bridge.
• There would be equal representation for Michigan and Canada on a six-member international bridge authority and a bridge that's half owned by Michigan and half owned by Canada.
• All tolls for traffic crossing in both directions will be collected in Canada, through a separate Crossing Authority that is "responsible for the design, construction, finance, operation and maintenance" of the new bridge.
• There would be "community benefits," such as help in finding jobs and correcting environmental issues for residents of the Delray neighborhood in southwest Detroit who will be displaced or otherwise affected by construction.
Today's push ahead on the $1-billion bridge could trigger fresh opposition in the Michigan Legislature, which is left out of the deal completely after the rejection of the bridge legislation.
The plan is sure to face continued opposition from Ambassador Bridge owner Manuel (Matty) Moroun. He sees it as unfair competition to his span about 2 miles upstream from the planned site for the new bridge.
Calley dismissed Moroun's objections as "a very blatant attempt to protect a monopoly situation."
Instead of continuing to fight the project, which includes more than $2 billion in new road and plaza infrastructure on both sides of the border in addition to the bridge, "I hope they submit a bid" to build it, and "I hope they win," he said.
Though Snyder has made the bridge one of his signature projects, it's an even higher priority for Canada, which is highly dependent on trade with the U.S. About $120 billion worth of goods cross the Detroit River each year, including many auto parts from the Windsor area that go to assembly plants in metro Detroit.
Calley said the project is needed to clear a bottleneck -- which he described as a threat to Michigan exporters and jobs -- that has truck traffic crawling through miles of residential streets in Windsor before reaching a freeway.
It would do no good to build a new private bridge beside the 83-year-old Ambassador, as Moroun wants, because that would only increase the congestion, he said. Instead, a bridge with freeway-to-freeway connections and ample plaza space will be built downstream, he said.
Preliminary work could start soon on a project that would take at least five years and create about 10,000 construction and construction-related jobs, Calley said.
Moroun, a self-made billionaire, has spent millions of dollars on TV ads, lobbying and campaign donations to attack the project. He says tolls won't cover the construction cost and Michigan taxpayers will be stuck with a tab.
Calley said the agreement protects Michigan and puts all the risk on the Canadians.
The lieutenant governor repeated earlier pledges that the $550-million Canadian contribution will count as Michigan road spending, allowing the state to secure about $2 billion in federal funds over the life of the bridge project through a formula that matches each $1 Michigan spends with $4 in federal money.
He said the $550 million from Canada will include money to buy or acquire through condemnation any land needed on the U.S. side -- some of which is controlled by Moroun.
The Michigan Department of Transportation will handle any condemnation proceedings and the Michigan Strategic Fund -- an arm of the quasi-public Michigan Economic Development Corp. -- will receive and disburse the Canadian money, Calley said.
Reminded that the Republican-controlled Legislature has included language in the 2013 state budget that prohibits the state transportation department from spending money on the bridge, Calley said lawmakers can't amend a statute -- such as the one that grants powers to MDOT to expropriate land -- by inserting language into unrelated legislation such as a budget bill, Calley said. Doing that is known as "amendment by reference" and is unconstitutional, he said.
Legislation is also pending that would bar the Michigan Strategic Fund from spending state-appropriated money on the bridge. But in this case, the money the fund spends won't be appropriated from the state, it will come from Canada, Calley said.
Once a 40- to 50-year contract with the bridge contractor expires and Canada's $550 million is repaid, bridge tolls would be split evenly between Canada and Michigan, Calley said.
Among the obstacles faced by the bridge project is a ballot initiative backed by Moroun that would require a public vote for the project to proceed.
"I'm sure that (the governor) found a way to completely blindside and ignore the Legislature, but I'm not sure it makes it right, or received well by the people," Ambassador Bridge government relations director Mickey Blashfield said earlier this week.
Calley said the wording of Moroun's initiative is so flawed it would require a referendum to build any Michigan bridge -- not just one to Canada. He said he's also confident Michigan voters would reject the initiative despite the fact "there will be a lot of noise created by those who own the Ambassador Bridge."
The U.S. government is expected to contribute about $264 million to the new Customs plaza in Detroit, and the U.S. secretary of state must sign off on the international agreement. But the expected presence today of U.S. Transportation Secretary Ray LaHood suggests the Obama administration supports the project.
Snyder's predecessor, Democratic Gov. Jennifer Granholm, first pushed for the public span but couldn't get the Michigan Senate to vote on the project, despite support from Michigan's automakers, most of the rest of the business community and the Detroit Regional Chamber. In 2011, the Michigan Chamber of Commerce, which had been neutral, threw its support behind the project.
Snyder surprised many in his Republican Party by advocating for the new bridge in his first State of the State address early in 2011. But after months of hearings, a Senate committee last fall voted down legislation to facilitate construction.