Big money, big names collide in bridge fight

Approval of Proposal 6 could derail public span backed by Snyder, opposed by Moroun

By Chad Livengood
Detroit News Lansing Bureau

Lansing— Proposal 6 has become the latest twist in a decade-long push for a new bridge to Canada by a reclusive billionaire, pitting him against Michigan’s first-term governor, sparking a multimillion dollar advertising campaign and splitting the state’s union brethren.

Ambassador Bridge owner Manuel “Matty” Moroun’s push for voters on Nov. 6 to approve any future international bridges or tunnels has cost his Detroit International Bridge Co. $19.1 million so far in one of the most highly watched voter initiatives in recent memory.

Moroun is trying to thwart a $2.1 billion bridge deal that Snyder signed with Canadian officials in June. The project is one of the signature efforts by Snyder, who called for building the bridge on his first day in office nearly two years ago.

The New International Trade Crossing has the support of many Michigan and Canadian businesses, including the Big Three automakers, chambers of commerce around the state, and most unions.

The Teamsters broke ranks this week saying they would back the proposal in exchange for a guarantee by Moroun that union members will get jobs if he builds a second bridge next to his 83-year-old Ambassador Bridge, the only privately owned major international crossing in North America. Canada has said it won’t allow that, but the 85-year-old trucking mogul holds out hope that if he can block the NITC, he’ll win approval for his crossing plan.

The proposal, written by Moroun’s lawyers, exempts his company from having to ask voters for permission to build a span to Windsor.

“To have a private businessman with his finger stuck in the dike stopping all of state government and the governor from doing something like this is really unprecedented in recent Michigan political history,” said Bill Ballenger, publisher of the Lansing newsletter Inside Michigan Politics.

But Moroun family members, who rarely speak publicly, have acknowledged their bid to influence the state’s long-term transportation policy could backfire.

“We will have to live with that decision,” Matthew Moroun, vice president of the family’s Detroit International Bridge Co., said in April.

Moroun’s Detroit International Bridge Co. has spent nearly $14.5 million in statewide television advertising opposing the NITC and another $4.6 million on signature gathering, consultants and promotions to get the proposal on the ballot.

United Auto Workers president Bob King first told The Detroit News on Sept. 9 that the union was neutral on Proposal 6, despite the union’s support of a new bridge. Last week, The News reported King was in talks with Moroun’s company to support the proposal in exchange for Moroun’s financial support of organized labor’s Proposal 2 seeking to enshrine collective bargaining in the state constitution.

King has since said the UAW will remain neutral and is withholding its support for Proposal 6 because the bridge deal Snyder reached with Canada in June does not include guarantees the Canadians will use American unionized labor. King also wants a community benefits plan for southwest Detroit’s Delray neighborhood where the new bridge will be connected to Interstate 75.

King’s comments echoes recent television ads Moroun’s campaign has aired suggesting the Canadians might use “foreign” laborers to build the bridge. Snyder and King have supported a federal waiver of “Buy America” requirements to use some Canadian iron and steel to build the bridge. Moroun’s ads have labeled it “foreign steel.”

Canada’s pledge

Pending private investment, Canada has pledged to assume the entire cost of the bridge project, including Michigan’s $550 million share. Canada’s contribution could qualify the state for an extra $2 billion in federal road funding, Lt. Gov. Brian Calley said.

The bridge is Canada’s top national transportation priority. To streamline international trade, Canada seeks to connect Michigan’s interstate highways with Ontario Highway 401 and bypass most of the bottleneck on Huron Church Street in Windsor commercial truck drivers find when they exit the narrow Ambassador Bridge, which was constructed in 1920s, long before interstate highways were conceived.

“That bottleneck is the worst bottleneck anywhere in the Pan American freeway system,” Calley said. “You’ll not find any major trade corridor that has as much stop-and-go congestion as that corridor.”

Snyder’s agreement with Canada specifically prohibits Michigan from spending state tax dollars on the bridge, said Dan Crane, a law professor at the University of Michigan.

“As written, the contract makes clear that the Michigan parties have no obligation to provide direct funding,” said Crane, who has analyzed the agreement.

Supporters of the new bridge say the state would be foolish to turn down the deal.

“I don’t know how much more ironclad you could get than the agreement with the Canadian government, short of the prime minister pledging his first born (child),” said Brad Williams, vice president of government relations for the Detroit Regional Chamber.

Crane, however, notes Canada may be willing to foot the bill now, but political winds have a tendency to change.

“Ten years from now we could be in a situation where there are demands that Michigan step up and contribute money,” Crane said.

State Rep. Paul Opsommer, chairman of the House Transportation Committee, said he’d support the bridge agreement if it contained a clause that the contract can never be amended to require payments from Michigan.

“Canada has been very clear that they will loan the money to build the American sides of customs and the ramps connecting I-75,” said Opsommer, R-DeWitt, who supports Proposal 6. “But after all of that, who makes that availability payment in 2020 when the bridge … isn’t coming up with enough revenue?”

Not a deal breaker

Snyder’s office contends passage of Proposal 6 can’t legally break his agreement with the Canadians, even though the ballot question contains retroactive language prohibiting the government from having ownership in any international bridge “not open to the public and serving traffic as of January 1, 2012.”

With Moroun’s campaign portraying the proposal as a referendum on “the governor’s bridge,” Snyder, Calley and Canadian Consulate General Roy Norton have been crisscrossing the state telling voters Michigan taxpayers will bear no responsibility if toll traffic fails to materialize or construction costs skyrocket.

“If this proves to be a dumb financial decision, it’s on the government of Canada,” Norton said.

Regardless of the election outcome, state courts could be asked to sort out the constitutionality of the bridge agreement and Moroun’s constitutional amendment.

“I think what is fair to say is a number of lawyers will be gainfully employed for a number of years if this is put in place,” said Eric Lupher, local affairs director at the Citizens Research Council of Michigan, which has raised questions about Proposal 6’s potential effect on inland bridges.

Ads fail to gain steam

Despite Moroun’s lopsided TV campaign advantage, Proposal 6 has failed to break the 50-percent support mark of likely voters in three Detroit News/WDIV Local 4 statewide polls since mid-August.

The People Should Decide, the Moroun-financed ballot committee campaigning for Proposal 6, has aired a barrage of ads claiming the bridge will divert tax dollars from schools, firefighters and police.

An opposition campaign has failed to materialize as business interests are battling labor unions over the Proposal 2 collective bargaining initiative, even though Michigan’s biggest businesses have supported a new bridge.

“There’re a lot of industries that will supposedly benefit from the new bridge, but they don’t appear to be jumping in,” said Matt Grossmann, assistant political science professor at Michigan State University.

How it reads

Proposal 6: Require the approval of a majority of voters at a statewide election and in each municipality where “new international bridges or tunnels for motor vehicles” are to be located before the State of Michigan may expend state funds or resources for acquiring land, designing, soliciting bids for, constructing, financing, or promoting new international bridges or tunnels.

Create a definition of “new international bridges or tunnels for motor vehicles” that means, “any bridge or tunnel which is not open to the public and serving traffic as of January 1, 2012.”

Who’s for it: Ambassador Bridge owner Manuel “Matty” Moroun and his Detroit International Bridge Co.; Americans for Tax Reform founder Grover Norquist.
Who’s against it: Gov. Rick Snyder, Michigan Chamber of Commerce, Detroit Regional Chamber.

Pros: The constitutional amendment would allow voters to decide whether new bridges and tunnels to Canada are necessary.

Cons: It would tie the hands of transportation and economic policymakers and could derail a planned $2.1 billion Canadian-financed bridge or tie the project up in court for years. Some legal analysts have concluded the amendment’s language could change the definition of an international bridge to include all inland bridges, potentially creating more legal chaos for state courts to sort out.

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Traffic projections

Ambassador Bridge owner Manuel “Matty” Moroun’s company has challenged the notion that a new Detroit-to-Windsor bridge is needed. The company points to long-term data that suggests increased traffic projections used to justify building the Blue Water Bridge’s second span in the mid-1990s from Port Huron to Sarnia, Ontario, never materialized.
The economic recession also has hampered border traffic over the past five years, according to data from the Public Border Operators Association.

The Ambassador Bridge reported 7.2 million truck and passenger crossings last year, an increase from the depths of the recession in 2009, but nowhere near the bridge’s record 12.3 million crossings in 1999, when Michigan’s economy was still humming. Subsequently, the Detroit-Windsor Tunnel reported 3.7 million crossings in 2011, more than half as many as it had a decade ago.

WilburSmith Associates, a consultant commissioned by the Michigan Department of Transportation, projected the new bridge could carry 5.6 million cars and trucks by 2016 and capture 34.5 percent of overall border traffic by 2025, resulting in a 20.5 percent reduction in traffic for the Ambassador Bridge, a 7.2 percent traffic drop at the tunnel and 6.9 percent loss at the Port Huron crossing.

O’Keefe & Associates, a Bloomfield Hills-based financial consultant hired by Moroun, said traffic projections used to justify the new bridge are overly optimistic without the addition of new industry to Michigan or soaring domestic vehicle sales.

“If I took a $2.1 billion project to a CEO of a Fortune 100 company for approval using for the data they’ve used to support this forecast I’d deserve to be fired,” said Brad Coulter, managing director of O’Keefe & Associates.

The Morouns assume trade and economic activity between Michigan and Canada will never return to 1990s levels or beyond, said Brad Williams, vice president of government relations for Detroit Regional Chamber.

“To believe their traffic numbers is to believe that Michigan’s best days are behind us, that we’re never going to make a comeback, to believe we’re going to stop manufacturing … and marketing products to the world,” Williams said.