BY JOHN GALLAGHER
DETROIT FREE PRESS BUSINESS WRITER
An insurance company has told a Wayne County judge that it wants no part of trying to finish the long-delayed Gateway project at the Ambassador Bridge, further complicating efforts to finish the work.
Last month, Wayne County Circuit Judge Prentis Edwards, fed up with bridge owner Manuel (Matty) Moroun’s delays in finishing the Gateway project, ordered a company called Safeco, which had issued a performance bond for the project, to report how it would take over the work to finish the bridge. Edwards had earlier ordered Moroun’s Detroit International Bridge Co. to have the work done by January.
A performance bond is a sort of insurance policy that would pay out damages in the event the work cannot be completed as envisioned by a contract – in this case, the bridge company’s contract with the Michigan Department of Transportation.
In a new court filing, Safeco’s attorney Phillip Alber told Edwards that Safeco’s only obligation is to write a check to cover potential damages, and that it has neither the obligation nor the expertise to handle a big construction project.
If forced to take over the work from the bridge company, Alber wrote, Safeco would have to hire experts, negotiate plans, and do myriad other tasks that would push completion well beyond Edwards’ January 2012 deadline.
“Safeco’s only obligation under the Performance Bond at issue here is to pay money,” Alber wrote in his filing. “The amount of Safeco’s obligation depends on evidence of the damages suffered by MDOT, and MDOT has to date presented no evidence from which its damages, if any, can be determined.”
Safeco’s filing appears to mean that Edwards and MDOT have only one recourse – to force Moroun’s company to somehow do what it agreed to do in the first place in the original contract.
The dispute stems from the $230-million Gateway project, a joint effort by MDOT and Moroun’s company to connect the Ambassador Bridge seamlessly to I-75 and I-96 through a series of ramps.
Instead of following what MDOT contends was the agreed-upon design, the bridge company built its portion of the project in a way that keeps trucks on Fort and other local streets and built a lucrative duty-free store and fuel pumps where Gateway ramps were supposed to go. The Free Press reported earlier this year that those duty-free fuel pumps are worth potentially millions of dollars a year in revenue for the bridge company.
MDOT sued to force the company to rebuild the approaches according to the agreed-upon plan. In February 2010, Edwards ruled in MDOT’s favor and ordered the bridge company to rebuild its portion of the project, even if that meant ripping out part of the duty-free facility.
The bridge company contends that any changes it made to the design were minor and permitted under its contract with MDOT. With no rebuilding taking place, Edwards fined the company and briefly jailed bridge company president Dan Stamper last January.
Last month, with little activity at the site taking place, Edwards ordered Safeco to report within two weeks how it would take over the project. That led to Alber’s new filing.
All sides were scheduled to return to Edwards’ court on Sept. 1 for an update. In the meantime, MDOT attorneys were expected to file a reply to Safeco’s filing possibly Friday.