U.S., Canada set to sign historic deal today
Lansing— A Detroit-to-Canada bridge envisioned to make Michigan a hub of commerce and create thousands of jobs will be built with no cash investment by Michigan under an agreement to be unveiled today.
Canada will be responsible for the design, construction, finance, operation and maintenance of the New International Trade Crossing — but Michigan will retain significant control through an International Authority to include three appointees each from Michigan and Canada.
Details of the agreement to be announced by Gov. Rick Snyder and Canadian Prime Minister Stephen Harper in Windsor and Detroit were presented to The Detroit News late Thursday by Lt. Gov. Brian Calley.
The deal does not require approval by the state Legislature. Republicans who control the House and Senate have been leery of a publicly owned bridge that could edge out Ambassador Bridge owner Matty Moroun, who wants to build a second span of his own, and are skeptical of Snyder’s claims the project won’t cost Michigan a penny.
But the agreement is subject to approval of the U.S. Secretary of State, in accordance with provisions of the U.S. Constitution and federal laws.
The project, with a cost of $2.1 billion, is considered to be one of the largest infrastructure projects in Michigan in years. Snyder said it will create up to 10,000 jobs.
The plan also carries political risks for Snyder. He has called for the bridge’s construction from the first day of his administration. But his efforts to go around a reluctant Legislature could cost him support on other issues. And if the project stalls or is tied up for years in the courts, it could tarnish his reputation as a governor who can get big projects done.
“It’s important that we are able to move goods and people expeditiously and economically between the U.S. and Canada,” said Ryndee Carney, spokeswoman for General Motors Co. which supports the project. “If there is a bottleneck at the crossing that can become a significant impediment to the operation of our plants.
“We estimate for 2012 there will be over 144,000 shipments valued at $6.7 billion, between the U.S. and Canada.”
Snyder’s biggest goal
The NITC is bitterly opposed by free-market Republicans leery of a government-owned bridge and skeptical that Michigan will end up bearing the costs. Getting the bridge built could win major political points for Snyder, who critics have noted has not — until now — been able to make headway on a project he’s touted more than any other.
“His biggest challenge will be — and it’s almost impossible to do in the short run — to convince the politicians and the media that there is absolutely no way this is going to cost the state any money whatsoever,” said Bill Ballenger, editor of Inside Michigan Politics. “He’s got to say ‘This is going to be my bridge, the Rick Snyder Bridge.'”
The plan will first be unveiled at 12:45 p.m. in Windsor by Snyder, Calley and Harper. It will be signed at 3 p.m. at Cobo Center by Snyder, Michigan Department of Transportation Director Kurt Steudle and Michigan Strategic Fund President Michael Finney.
U.S. Transportation Secretary Ray LaHood — who has backed a new bridge since shortly after taking office in 2009 — is attending today’s ceremony in Detroit. In an interview Thursday, he praised Snyder and the Canadian government for reaching a deal.
“It means the kind of friendship we have, the trade we have between our two countries is really going to be enhanced by this new bridge, this new infrastructure,” LaHood said. “It also means — for the people who build the bridge —an enormous number of jobs. This could be a real boost to the economy.”
LaHood noted this could speed and increase exports between Canada and the United States — especially auto trade between the two countries.
Under the agreement:
- A Canadian entity called the Crossing Authority will oversee the construction, management and financing of the NITC.
- The design, construction, operation and maintenance will be done by a private company through a 40-to-50-year public-private partnership with the Crossing Authority.
- Canada will pay for the land needed on both sides of the bridge and the construction of the interchange to Interstate 75.
- Canada will contribute up to $550 million to cover Michigan’s costs, which can be used as the state’s match for up to $2 billion in federal funding.
- Michigan will pay Canada back with bridge tolls, but Canada will guarantee the availability payments for the concessionaire if toll income isn’t great enough; tolls will be charged on the Canadian side of the bridge only.
- The request for proposals to build the bridge must contain a community benefits plan and plans for involvement of the affected communities.
“Whether it’s publicly or privately built, Michigan contractors will have a significant opportunity to build a significant portion of the bridge, if not the entire thing,” said Lance Binoniemi, vice president of government affairs for the Michigan Infrastructure and Transportation Association. “We definitely believe this will help create jobs in Michigan, and help the struggling businesses that have seen revenues decline for infrastructure.
“It’s definitely one of the largest infrastructure projects we’ve seen in recent memory.”
Concerns were raised and one of the final sticking points appeared to be Canada’s interest in using cheaper Chinese steel.
On Thursday, Calley said: “…One thing that we know for sure, (there is) absolute, positive, zero percent chance that there will be any Chinese steel in this project.”
The bridge would be built in southwest Detroit in an area roughly between Zug Island and Historic Fort Wayne.
Construction would force the demolition of at least 250 homes, dozens of businesses and up to five churches in Delray.
When completed, the new border crossing would make a direct connection between Detroit and Windsor to Interstates 75 and 94 on the U.S. side, and Highway 401 in Ontario.
Currently the Ambassador Bridge connects the two cities, with truck traffic moving through city streets in Windsor.
Moroun combats new span
One fierce opponent of the NITC has been Ambassador Bridge owner Manuel “Matty” Moroun, who has spent millions on ads, lobbyists and campaign contributions in a deep pockets war against the new span.
Moroun — who has plans to use his own money to build a second span to the 83-year-old bridge — has argued the governor’s project would steal up to 75 percent of his bridge traffic. He also has maintained a new bridge is unnecessary because crossings between Detroit and Windsor have dropped by 50 percent over the past decade.
In his latest effort to combat the bridge, Moroun has been trying to secure 330,000 signatures to put a referendum on the November ballot in which voters would decide on any future international crossings, including bridges, tunnels and ferrys.
Moroun is facing his own uphill battle with the Canadian government repeatedly saying they do not want another bridge dumping traffic into Windsor.
The project has been so divisive that Oakland County Executive L. Brooks Patterson vetoed a resolution Thursday passed by the Oakland County Commission supporting Moroun’s proposal.
In what might be seen as a futile Parthian shot, on Wednesday the House Appropriations Committee amended a supplemental funding bill barring the Michigan Economic Development Corporation from spending general fund taxpayer money on the new bridge.
New bridge highlights:
- Michigan will appropriate no funds for the bridge’s cost.
- A Canadian-created Crossing Authority will oversee design, construction, financing, operation and maintenance of the bridge.
- A private entity will build and operate the bridge in a 40-50 year agreement with the Crossing Authority.
- Canada will acquire all land in both countries needed for the bridge and construct an interchange to connect the bridge to I-75.
- Tolls will only be charged in Canada for using the bridge.
- Canada will provide $550M to pay for Michigan share of bridge work; it will be repaid through toll revenue.
- The $550M can be used by Michigan as U.S. matching funds for highway projects.
- An International Authority, with 3 Canadian and 3 Michigan members, will oversees awarding of contracts.
- Contracts will have provisions to assure involvement of local communities and businesses.