MDOT says DRIC bridge would generate $70.4 million in tolls in first year

A report released today by the Michigan Department of Transportation predicts that a proposed Detroit River bridge would generate $70.4 million in toll revenue its first year and nearly $240 million by 2040.

MDOT did not plan to release its revenue forecast for the $5.3 billion Detroit River International Crossing bridge because it feared losing a competitive position in the bid process, but the Michigan Senate demanded the numbers amid hearings this week on enabling legislation on the project.

Commercial truck traffic will generate $56.2 million of the $70.4 million in the bridge’s proposed opening year of 2016, according to the report.

That’s based on a prediction of 5.8 million cars and trucks crossing the new bridge.

The numbers conflict with a more conservative, by comparison, set of revenue numbers issued earlier this month that say the bridge would garner $60 million in its proposed opening year of 2016.

Revenue numbers released June 4 originated with Transport Canada, one of the DRIC partner agencies, and not from MDOT as reported at the time.

MDOT acknowledged it was aware that those numbers would be released and that they were calculated based on the agency’s traffic study.

However, MDOT said the June 4 revenue projections were not generated by it and instead came from Canada and its Transport Minister John Baird. The agency did not dispute the numbers when they were released.

A message was left with MDOT spokesman Bill Shreck asking to explain the conflict between the set of revenue projections.

The June 4 revenue numbers were released by Lansing-based Marketing Research Group Inc. , which has been a source of pro-DRIC information but has declined to say who is paying it. The firm has organized at least one DRIC event in which MDOT and state officials participated.

The House last month approved a bill that would authorize MDOT’s continued participation in the project, but it has been under fire in the Senate, where a vote could come soon. Hearings on the bill wrapped up Tuesday.

The revenue numbers were given to lawmakers and the media today.

Critics, including some in the Senate and private-sector infrastructure analysts, have questioned MDOT’s traffic study as overly optimistic, and worry that the project could expose taxpayers financially if the tolls fail to generate enough revenue to pay construction financing debt and operational costs.

MDOT and its partners on the project say tolls will be enough, and have promised that a concession agreement with a private-sector partner to build and operate the bridge will completely shield Michigan taxpayers from ever being at risk.

The span would be constructed between Detroit’s industrial Delray neighborhood near Zug Island and Windsor’s Brighton Beach area. The plan is to have the private sector privately finance its construction and operate it while the governments retain ownership. Tolls would repay debt.

Critics say it would unfairly compete with the privately owned Ambassador Bridge two miles away because border traffic remains at half the rate of 1999, when the DRIC process began.

Supporters say DRIC is needed to bolster trade, protect jobs and provided redundancy for the 80-year-old Ambassador Bridge.

Grosse Pointe trucking industrialist Manuel “Matty” Moroun bought the Ambassador Bridge in 1979 and is trying to build a new second span adjacent to the original. That project is actively opposed by Canada because of traffic concerns in Windsor and passively by many DRIC supporters.

Moroun has ongoing litigation over both bridge projects.

The new DRIC revenue report estimates the span will siphon about half of the Ambassador Bridge’s commercial truck traffic, dropping it from 65 percent of what crossing between Detroit and Port Huron to 33 percent.

“The forecast also shows that the Ambassador Bridge as well as the Blue Water Bridge in Detroit-Windsor Tunnel will continue to be financially viable and important crossings,” the report said. “Thus, while the Ambassador Bridge’s market share will drop somewhat, this hardly represents a bankruptcy scenario that some have claimed would occur.”

The Ambassador Bridge is believed to generate about $60 million annually now in revenue. According to the new MDOT report, the bridge will generate $53.3 million in 2016 and $150.2 million by 2035.

The traffic study said that toll rates are assumed to be the same as the Ambassador Bridge, but the new revenue number included this line: “Revenue calculation includes toll revenue inflation based on an estimated future consumer price index.”

It did not provide a methodology.

The Detroit International Bridge Co. , which operates the Ambassador Bridge, on May 25 released a study that shows border traffic will remain relatively flat at the Ambassador Bridge in coming years, which conflicts with a state-sponsored report showing marked increases that are being used to justify a new public bridge.

The new estimate says that car and truck traffic at the bridge won’t come near its 2008 level of 7.34 million vehicles again until 2035. Commercial truck traffic, which is more lucrative because of higher tolls, is expected to grow an average of 2 percent through 2035.

The DIBC study was done in May 2009 by London-based engineering consultants Halcrow Group Ltd. , which has 20 U.S. offices. It based its estimates primarily on forecasts for the U.S. auto industry and local employment, based on a variety of sources.

The legislatively-mandated DRIC traffic study completed earlier this year by Columbia, S.C.-based engineering and planning firm Wilbur Smith Associates for MDOT predicts that 3.1 million cars and 2.7 million commercial trucks would use the new bridge by its tentative January 2016 opening.

The Halcrow study estimates that 3.85 million cars and 3.39 million trucks will use the Ambassador Bridge in 2016 without a competing bridge.

Fact Check #16

Thursday June 15, 2010

“The facts are beginning to submerge.”

-Former State Senator Arthur Cartwright

On Wednesday, Dan Stamper and his team of attorneys and staff took center stage at the Senate Transportation Committee hearing in Lansing. There was some truths (like the Ambassador is old and needs repair), some exaggerations and some outright, in your face, boldfaced misrepresentations. It’s hard to find the truth without a scorecard. We’ll try to straighten out the top 13 right here.


#1. Ambassador Bridge Company Claim: The Gateway project is stalled because the Michigan Department of Transportation isn’t doing its job.

Fact: The DIBC has defaulted NOT MDOT. That is the ruling of the Michigan courts all the way to the Supreme Court. So, another legal claim by DIBC is struck down. There hasn’t been one such claim on the DRIC in favor of the DIBC’s position.

#2. Ambassador Bridge Company Claim: We withdrew our proposal to build a new bridge in Buffalo 4 years ago.

Fact: They were still pitching their proposed Buffalo bridge 34 days ago. Here is what the Ambassador Bridge representative stated on May 11, 2010, IN BUFFALO:

“There is an alternative to spending a $1 Billion U.S. Federal tax dollars to replace the aging Peace Bridge, now being run by political patrons of the local politicians. It is a private sector plan – using private-sector dollars – to build, own and operate a commercial vehicle crossing at the Buffalo-Niagara border. It’s called the “Ambassador Niagara Signature Bridge Plan” and you can read all about it at: http://www.ambassadorniagara.com. It is about as “shovel-ready” as the Peace Bridge is after taking 20 years and spending $50 Million U.S. Federal tax dollars proving the current location is just not viable as a NAFTA trade and truck corridor.

You won’t hear about this plan from the politicians or the newspapers around here – like I said – the current operation is a POLITICAL one. Thank you.”

J. Kane

Ambassador Niagara Signature Bridge Group

#3. Ambassador Bridge Company Claim: The Canadian offer to pay for the Michigan and U.S. costs of DRIC is unconstitutional.

Fact: First, the Canadian financial commitment is NOT a loan. MDOT will have NO OBLIGATION to repay Canada. Now, with respect to the U.S. constitution, the Bridge Company admits that the consent of Congress has been provided at 33 USC § 535a provides that:

“The consent of Congress is hereby granted for a State or a subdivision or instrumentality thereof to enter into agreements–
(1) with the Government of Canada, a Canadian Province, or a subdivision or instrumentality of either, in the case of a bridge connecting the United States and Canada ….for the construction, operation, and maintenance of such bridge in accordance with the applicable provisions of this Act. The effectiveness of such agreement shall be conditioned on its approval by the Secretary of State.”

Additionally the Bridge Company’s attorney stated that there is no precedence on which to rely for his claim. Therefore, this is like many other Bridge Company claims that wind up in a lawsuit they file, and, there has never been a lawsuit they have filed on the DRIC that has been sustained by the courts.

With regard to Article IX, Section 15 of the Michigan Constitution, it provides in part:

“This state or any political subdivision thereof, [or] any governmental authority . . .may enter into agreements for the performance, financing or execution of their respective functions, with . . . the Dominion of Canada, or any political subdivision thereof unless otherwise provided in this constitution. MICH. CONST. art. III, § 5 (2008).”

Finally, the owner and operator of the Ambassador Bridge has no rights, under agreement, treaty, statute or otherwise, that somehow would prevent the Government of Canada from implementing the Detroit River International Crossing, as the Bridge Company also claims.

No agreement, treaty or statute provides the owner and operator of the Ambassador Bridge with the unfettered right to be the sole operator at the busiest border crossing between Canada and the United States.

While an environmental assessment was submitted in December 2007 for a replacement span of the Ambassador Bridge, this proposal has not received any approvals from Canada.  Various approvals will be required under applicable federal legislation, including the Navigable Waters Protection Act, the Canadian Environmental Assessment Act and the International Bridges and Tunnels Act.

#4. Ambassador Bridge Company Claim: All permits have been issued to build the proposed second span of the bridge.

Fact: Here is what Canada’s Minister of Transportation Baird says on that issue…”on a scale of 1 to 100, they (Ambassador Bridge) are at a zero…they have no approvals in place. They were talking about (the twin span) 20 years ago. It takes years to get all the environmental approvals you need in Canada.”

#5. Ambassador Bridge Company Claim: The tax payers of Michigan are at risk if the DRIC goes forward.

Fact: Here is the bottom line as provided in twice in writing by Minister Baird:

  • Michigan bears no risks during the construction and operating periods and shares in excess revenues after Canada’s investment has been repaid.
  • Canada’s investment will be repaid from toll revenues.
  • Once Canada’s investment has been repaid, net revenues will be shared equally with Michigan.

#6. Ambassador Bridge Company Claim: There will be no jobs associated with the DRIC for years.

Fact: Canada is ready to move forward with their investment immediately. The DRIC will start creating construction jobs this fall, with work on the I-75 connector and the clearing of property.

#7. Ambassador Bridge Company Claim: Traffic will not justify two border crossings.

Fact: DIBC argues that plummeting traffic counts at the Ambassador Bridge, Detroit-Windsor Tunnel and the Blue Water Bridge do not support the need for the new bridge. Yet the DIBC uses the DRIC forecast, that shows growth over the period to 2035, as the bases for their Environmental Assessment of Replacement Span, Projection of Jobs, and Bond Inducement (Michigan Strategic Fund) Documentation.

Additionally the Bridge Company claims that MDOT is keeping secret revenue reports on the DRIC. That information was released on June 16, 2010.

On the other hand, “people in glass houses shouldn’t throw stones”. Specifically, as late as May 2009 a representative of the Bridge Company appeared before the Michigan Strategic Fund to gain a resolution to induce tax-payer supported bonds to build the second span of the Ambassador Bridge. DIBC’s request for the inducement resolution was based on forecasts of traffic growth, by which revenue would be generated to support bond payments. DIBC did this while knowing, through analyses performed their own study by Halcrow, (which they suppressed) that bridge traffic would not grow from current levels for 30 years or more. If the later information were true, it would undermine the ability of the DIBC to repay the bonds.

#8. Ambassador Bridge Company Claim: The Ambassador Bridge can make toll credits available to Michigan to address its current funding shortfalls.

Fact: Capital expenditures by privately-owned toll facilities, such as the Ambassador Bridge, can qualify for toll credits. However, the expenditures are held to the same rules and regulations as government-owned facilities. The DBIC would have to open its books for a state audit before the application for toll credits can be made. The information must also be made available to the FHWA for an audit or inspection. DBIC has never allowed MDOT or the FHWA to access their records after repeated requests. That’s curious in light of the funding needs of the Gateway project. Further, this offer of the Bridge Company was publicly stated in the media as a “trade” for killing the DRIC. How disgraceful.

#9. Ambassador Bridge Company Claim: MDOT will be abdicating it’s right to manage the DRIC project by accepting the funding from Canada.

Fact: Oversight of policy will be shared equally between MDOT and Canada. In that sense, it is like the International Bridge in Sault Ste. Marie The agreement with Canada for the DRIC will include provisions to ensure the usual public oversight of the work of public agencies.  Activities in Michigan are subject to Michigan laws. Activities in Canada are subject to Canadian laws.  That is how the International Bridge currently operates.

#10. Ambassador Bridge Company Claim: The Canadians should take their $550 Million investment and build a highway connection to the base of the Ambassador Bridge?

Fact: Expanding this portion of Huron Church Road and twinning the Ambassador Bridge was thoroughly analyzed and evaluated as part of the Canadian DRIC Environmental Assessment. The benefits did not outweigh high negative impacts to the community associated with the access road and plaza. $1 million has been spent on upgrades to the existing route with improvements to the College Avenue/Huron Church Road and Industrial Drive/Huron Church Road intersections and the installation of several ITS (Intelligent Transportation System) initiatives at intersections along the route.

#11. Ambassador Bridge Company Claim: Canada should use the land assembled west of Huron Church Road to expand this road to the Ambassador Bridge.

Fact: The Ontario Ministry of Transportation has not assembled any properties for the expansion of Huron Church Road. As indicated previously, the impacts of expanding Huron Church Road between EC Row Expressway and the Ambassador Bridge to construct a controlled access freeway would not provide benefits that outweigh the high negative impacts to the community.

#12. Ambassador Bridge Company Claim: The Ambassador Bridge does not bring traffic to downtown Windsor?

Fact: The question of how downtown Windsor is defined is best left to City of Windsor to determine. Nonetheless, the City of Windsor currently contends with the traffic impacts from the Ambassador Bridge, as it is currently configured.  It must be consulted on impacts of any expansion and, to date, the application under Canadian regulation has not been advanced by the Ambassador Bridge Company.

Additionally, the bridge and Canadian inspection plaza are adjacent to dense urban lands that include the University of Windsor, significant other institutional, commercial and residential uses.  What the DBIC is telling the City of Windsor, Province of Ontario and Canadian government to do is equivalent to replacing Woodward Ave in the City of Detroit from the foot of Woodward to Highland Park – with an expressway.

#13. Ambassador Bridge Company Claim: The Michigan Senate should not allow DRIC to be built over salt mines and sink holes?

Fact:The DRIC study teams on both sides of the border conducted extensive sub-surface studies in the areas where the bridge foundations would be built. Bedrock stability in the vicinity of the approved crossing has NOT been influenced by solution mining of salt deposits.

Ambassador Bridge repays Detroit for its 40-year monopoly

Neglecting historic buildings and decrepit properties throughout our city!!

“I’m a benefit to the city. I’m not a detriment,” says Ambassador Bridge owner—Matty Moroun. He sees himself as an asset and benefit to Detroit despite being one of the largest owners of blighted property in the city.  According to the Detroit Free Press, more than 625 parcels of dilapidated, run-down, decaying, abandoned properties, including the granddaddy icon for derelict property management – the Michigan Central Depot – are owned by one company or another controlled by Matty Moroun.

The Michigan Central Train depot, once a shining piece of Michigan’s landscape, is owned by Matty Moroun. Look how it’s been handled. Every year more broken promises – more neglect.

Pictured are two of the more than 625 pieces of property owned by a company controlled by Matty Moroun. These houses, located in the Delray neighborhood of southwest Detroit, are abandoned, open, dangerous and potential havens for drug dealers or worse. Do you believe these will ever be repaired? How about demolished? (See the MC Depot photo above.)

We all can only hope that the Ambassador Bridge Company doesn’t come to our neighborhood.

Political contributions by Ambassador Bridge owner under spotlight as DRIC vote nears

By Jonathan Oosting

As the Michigan Senate prepares to decide the fate of the Detroit River International Crossing, increasingly thorough examinations of the project’s fiercest critic — Ambassador Bridge owner Manuel Moroun — continue to reveal years of political contributions that may be shaping the debate.

If approved by the Senate, Michigan would join in a public-private partnership with Canada to construct and operate a second bridge connecting Detroit and Windsor.  Moroun, whose plans to build his own second span have been thoroughly rejected by Canada, has argued the crossing would create unfair competition for his private company.

Spurred by a Canadian offer to loan Michigan $550 million for its upfront costs on the project, the State House last month passed legislation that would allow the state to enter the partnership, but the bill is expected to face a tougher challenge in the Republican-led Senate.

Last year, the Metro Times reported Moroun and his associates with the bridge company gave at least $1.1 million to political candidates and committees over the past two decades.  In January, The Detroit News pointed out those contributions went to both Republicans and Democrats, with Moroun personally giving at least $45,000 in the past two years.

In a report published this weekend, the Detroit Free Press dug even deeper, examining federal and state records indicating Moroun, his family and top executives have contributed nearly $1.8 million to candidates and campaigns in the past 13 years. Of the $739,805 donated at the state level, $553,665 went to Republican interests.

Those contributions took center stage two weeks ago at the Mackinac Policy Conference, where nearly every Michigan gubernatorial candidate argued against the DRIC — and nearly every candidate indicated they’d received contributions from Moroun.

Dan Stamper, president of Moroun’s Detroit International Bridge Company, denied that the contributions were meant to influence votes, but told the Free Press the company’s “shareholders and executives frequently make political contributions to federal and state officeholders that have influence on the business and employment climate that affects us.”

The report indicates some of Moroun’s spending clearly has not influenced votes — he’s given to DRIC proponents, including Gov. Jennifer Granholm and Sen. Debbie Stabenow — but it’s a reminder that his profits from the Ambassador Bridge have made Moroun a powerful voice in the process.

The Freep followed up their report with another call for legislators to approve the DRIC.  Check out the newspaper’s website for a searchable database of Moroun’s political contributions.

Will bridge baron’s contributions impact vote over new crossing?

By Eartha Jane Melzer 6/14/10 11:12 AM

As the Legislature prepares to vote on a bill authorizing the construction of a new publicly owned bridge to connect Detroit and Windsor the Detroit Free Press takes a look at the massive campaign contributions made by Manuel “Matty” Moroun, the billionaire owner of the Ambassador Bridge which is currently the only bridge connecting the cities.

Moroun has given $1.8 million to Democrats and Republicans over the last 13 years, but the Free Press suggests that this spending has had only “middling success” in advancing his goals.

Now, with his bridge’s near-monopoly on freight traffic at North America’s busiest border crossing facing its most serious threat in its 81-year history, Moroun needs help.

Promoted by the Canadian government, the Michigan Department of Transportation and the Federal Highway Administration, the rival Detroit River International Crossing, or DRIC, has won a key vote in the state House. A win in the state Senate as early as this week could seal it, though there could be resistance in the courts, or from Congress.

Moroun, his family and top executives have given $51,700 to Gov. Jennifer Granholm but she is one of the main supporters of the DRIC. Since 2000 U.S. Senator Debbie Stabenow (D-MI) has received more than $60,000 from Moroun — but she also supports the DRIC.

Some of the most vocal supporters of Moroun’s proposal to build another span on the Ambassador Bridge — state Sen. Alan Cropsey (R-DeWitt) and Rep. George Cushingberry (D-Detroit) — don’t seem to have received any direct contributions from Moroun.

The main argument among those who oppose the construction of a the DRIC is that it would be financially safer to allow Moroun to enhance the Ambassador Bridge at his own expense.

Canada has offer to finance Michigan’s portion of the costs of building the DRIC. Supporters of this project point out that by connecting highways on both sides of the border the DRIC will relieve traffic congestion.

The Free Press has a database of Maroun’s contributions viewable here.

No more dawdling on second bridge

Editorial

Slowly but surely, Michigan’s state senators are getting religion about legislation that would let the Detroit River International Crossing project go forward with a second bridge to Canada. This week, they’ll need to steel themselves against a hard final push by Ambassador Bridge owner Manuel (Matty) Moroun.

The Senate will hold hearings on the bill, which has already been passed by the House, on Tuesday, and Moroun’s advocates are expected to testify. So far, a trickle of Democrats and a few Republicans have warmed to the idea of passing the legislation for DRIC, though most remain undecided.

Senators will likely hear nothing new from opponents on Tuesday — just the same old litany of dubious objections. Traffic won’t support the building of a second bridge. Canada will have undue influence over the project. The public-private partnership created by the legislation would give too much power to the Michigan Department of Transportation.

It’s all just spin.

Yes, traffic across the river is down since 9/11. But truck traffic is on the rise, and the earliest a bridge could go up is 2014. It also makes security sense, in a post 9/11 world, to have a second crossing, downriver from the Ambassador.

And no, Canada’s offer to pay Michigan’s share of the up-front money to build the bridge won’t give that nation more authority over the crossing than it would otherwise have. Both nations would share control, as always. Moreover, the canard offered a few weeks ago that said Michigan taxpayers could be stuck paying off bonds if tolls don’t cover it has been exposed. The bridge wouldn’t even be built if toll projections won’t support paying off the bonds, because investors won’t make the loans.

And it’s far better to have MDOT officials oversee this and other projects than the Legislature, which is hopelessly politicized and lacks the Transportation Department’s expertise.

In truth, there really are no more legitimate objections to the project. It has been studied ad nauseam, and taken through a careful, thoughtful process.

After Tuesday’s hearings, more members of the Senate need to get off the fence and get on board with building the DRIC bridge.

Secretary LaHood speaks out for the DRIC

Comments by Secretary of Transportation Ray LaHood at a meeting of the Canadian American Business Council. June 10, 2010

“Looking ahead, we clearly recognize the need for a new Detroit River International Crossing.  This is, quite simply, one of the largest transportation trade corridors between the U.S. and Canada.

The current Ambassador Bridge and Detroit-Windsor Tunnel carried over 120 billion dollars’ worth of trade between our nations in 2008 ­ over half of that in the form of U.S. exports to Canada.

In our view, upgrading this infrastructure, and expanding our capacity, is vital to our national goals for increasing exports and creating jobs.

And again, it speaks to the need for modern transportation infrastructure that maximizes mobility for cargo and people.

As we all know, this issue is before the Michigan Legislature, and we’ll need to wait to what see what they decide.  But I assure you we’ll continue to work on this, and review our options with Canada.

In any case, the key to our success in Detroit, in Windsor, and elsewhere, is cooperation ­ our ability to work together effectively across all forms of transportation.”