Snyder pushes for public bridge at trade meeting

Paul Egan / Detroit News Lansing Bureau

East Lansing— Gov. Rick Snyder made another pitch for a public bridge to Canada in a Tuesday morning speech to a trade and transportation meeting.

“I encourage you all to contact your senators and remind them of that priority,” Snyder said at the Great Lakes International Trade and Transport Hub Summit at the Kellogg Center.

Bills pushed by Snyder to create a public authority to call for bids on a new bridge across the Detroit River are stalled in a Senate committee. Snyder is expected to meet Tuesday with Senate Majority Leader Randy Richardville, who backs the bridge, to discuss strategy on getting the bills through the Legislature.

The bridge is supported by all major business and labor groups in Michigan but opposed by Ambassador Bridge owner Manuel “Matty” Moroun and many Republican lawmakers who question the need for a new span and whether it should instead be built by the private sector.

Snyder told those at the summit the bridge would be privately financed, built and run and would increase competition.

“I don’t think there’s any good reason not to support the bridge proposal,” he said.

“This is something that is clearly in the best interests of the citizens of Michigan because it’s about international job creation,” and construction jobs in the short term.

“Unfortunately, there is really just one special interest that has another bridge that’s against their financial interest, and they’re spending a tremendous amount of money on misinformation, and it’s having an impact.”

Moroun has spent millions on TV ads and lobbying against the new bridge. He said he wants to use private funds to build a new span beside his existing 83-year-old Ambassador Bridge.

After his speech, the governor told reporters he meets regularly with legislative leaders and his meeting Tuesday with Richardville is “not just a bridge meeting.”

“We’re in continuing dialogue with many legislators on the best way to move this bridge ahead,” he said.

Snyder on Monday named a transportation task force to examine transit issues in southeast Michigan. He is expected to deliver a special message on transportation and other infrastructure needs next week.

The summit, hosted by Michigan State University, Canada’s Dalhousie University and the Prima Civitas Foundation, is intended to develop action plans for increasing trade and development in the Great Lakes region and address shared goals between the United States and Canada.

Boosting the Great Lakes International Economy

Brookings Institution

The regions on both sides of the Great Lakes international border need to team up to strengthen their highly integrated economies.

That was the conclusion of over 250 public and private leaders from both the United States and Canada recently brought together by Brookings and the University of Toronto Mowat Centre in Detroit-Windsor

The tone was set by Bruce Katz’s keynote–where he pressed for international metro action to expand exports and encouraged the industrial Great Lakes to seize and lead the low-carbon, clean-tech economy.

Overall, two topics dominated discussion by delegates as ripe for international teamwork.

One was building the 21st century transportation infrastructure the region needs as a platform for enhanced exports–and in particular building a state-of-the-art span connecting Detroit and Windsor, the world’s highest dollar international trade crossing point. Michigan Senate Majority Leader Randy Richardville, and Canada’s Consul General Roy Norton were pitching hard for the Michigan Legislature to follow Governor Rick Snyder’s call, and vote final approval for the new bridge.

The New International Trade Crossing has been 10 years in the planning, and is strongly backed by business leaders and governments on both sides of the border. It seemed a done-deal when Gov. Snyder announced that Ontario would pay cash-strapped Michigan’s share of the project, and in turn the U.S. Department of Transportation would let the Canadian dollars stand-in as Michigan’s match for federally-funded highway projects across Michigan.

The project keeps being sabotaged by the aging billionaire Mattie Maroun (born 1927), owner of the equally aging Ambassador Bridge (built 1929), fighting hard to keep a monopoly on toll traffic.

Maroun has contributed hundreds of thousands of dollars to Michigan State legislators, and bankrolled groups that are behind dirty tricks that would make Donald Segretti blush, including fake eviction notices at the doors of homeowners near the proposed bridge and patently false TV spots claiming Michigan taxpayers will foot the bill.

Meanwhile the whole $250 billion economic relationship with Canada is at risk, as the tightly wound manufacturing, agricultural, and commerce supply chains are bottlenecked–just at a moment they are poised to grow.

Another area for Great Lakes international teamwork is converting the region’s prodigious innovation, technology-base, and manufacturing talent to support new jobs and leadership in the clean-technology market. Recent Brookings research shows Michigan already 12th in the nation in share of clean-tech jobs and confirmed the jobs potential of clean-tech growth.

Grand Rapids Mayor George Heartwell made the point, “I can think of nothing more important than a more robust, and better harmonized Great Lakes renewable energy portfolio standard to drive job creation in the clean energy sector.”

Heartwell was articulating the market opportunities seen by business leaders in West Michigan, who feel well positioned to grow product lines and new jobs developing and manufacturing clean-energy and clean water solutions. When Gov. Snyder showed up in West Michigan to give his first “Reinvent Michigan Award” to Energetx, a wind turbine and electric vehicle parts supplier, the former venture capitalist was also petitioned by a 40-member delegation of clean energy business buddies, asking him to better support these emerging markets with more aggressive public policy.

As the Brookings study shows, clean-tech is one emerging arena in which to repurpose the engineering and manufacturing competencies of the Great Lakes to replace jobs lost in auto and other sectors–if state and metro leaders provide the supportive policy platform.

Cross-Border Public-Private Partnerships

Dome Magazine

by Rick Haglund

If the proposed New International Trade Crossing bridge connecting Detroit and Windsor gets built, Canada’s contribution to Michigan’s economy could go well beyond the $550 million our northern neighbor has pledged to pay for the state’s costs.

The bridge project could usher in a new era of cross-border, public-private partnerships used to expand transportation systems, Great Lakes environmental clean-ups and border security systems.

“The sky’s the limit. What you can turn into economic development opportunities using public-private partnerships is incredible,” said Lieutenant Governor Brian Calley, the governor’s point man on winning legislative approval for the bridge.

Public-private partnerships, known as P3s, often are mischaracterized as a privatization of government services or simply contracting for goods and services provided by private companies.

A P3 is a contractual agreement between a governmental entity and a private-sector company in which the risks and profits of building and operating public use projects, such as roads, bridges, municipal water systems and wastewater treatment plants, are shared.

As with the New International Trade Crossing plan, a private contractor or developer often finances the entire project and earns a return from the revenue generated by tolls or user fees.

“It’s a methodology using the best attributes of a strong government with the assets of the private sector in being innovative and taking risks, with the opportunity of making a profit,” said David Lick, a P3 legal expert at the Lansing law firm Foster Swift Collins & Smith.

Lick has been involved in structuring P3s since the 1980s, but they are not widely known in Michigan. One such project he worked on recently was a recycling and material recovery plant for the Resource Recovery and Recycling Authority of Southwest Oakland County.

In that project, the authority purchased the land for the plant, which was financed and built by a private contractor. The authority and the contactor share in the profits from the recycled material that’s produced and sold.

“I think we could make more use of P3s than we do now,” Lick said.

In Canada, P3s have been used to build 157 projects since the early 1990s, including hospitals, schools and sports stadiums. Canada is considered one of the world’s leaders in using such partnerships.

“The United States is a little behind the curve in using P3s,” said Sarah Hubbard, president of Acuitas, a Lansing lobbying firm, and former lobbyist for the Detroit Regional Chamber, another champion of the bridge project. “It can be a tough concept to understand.”

Indeed, the National Council for Public-Private Partnerships lists 18 types of P3s and says no two projects are alike.

P3s can be an attractive option for state and local governments that are dealing with aging infrastructures and tight budget.

Last year, the Michigan Department of Transportation rebuilt a section of the I-69 freeway in St. Clair County and a portion of I-75 near Flint using one type of P3 known as design-build-finance, or DBF.

In those projects, the contractor financed the construction and is being repaid over four years. The arrangement provided an acceptable financial return to the contractor and “allowed the project to go from concept to bid-letting much more quickly,” Lick said.

“The main benefit of a design-build project is to allow for innovative ideas to be implemented faster and in a competitive environment,” said state Transportation Director Kirk Steudle. “Once the bids are received and the plans approved, work proceeds quicker.”

P3s have been controversial, in part, because of the amount of power given to private developers, or concessionaires, who often operate the public works projects that they build.

One of the bills in the Michigan Legislature enabling the construction of the New International Trade Crossing specifically establishes it as P3. The legislation is needed, officials say, because it is unclear whether a private company has the legal authority to collect tolls on a bridge that has public involvement.

“There is an outstanding legal question,” Calley said. “I don’t believe there is a prohibition for a private company to collect tolls, but it’s a question that’s open for debate.”

In Canada, questions have also arisen about whether or not P3s save money for taxpayers.

For instance, a 2008 Ontario Auditor General’s report found that $200 million could have been saved in the construction of the Brampton Civic Hospital had the province financed the project itself, rather than letting a private developer finance it.

And public employee unions have criticized P3s, saying they cut jobs for government workers.

Lick said borrowing costs by private companies doing P3s can be higher than for government-financed projects, but they sometimes can qualify for tax-free municipal bond interest rates.

Other advantages of such partnerships make them a viable choice for constructing and operating public works projects, he said.

Cost overruns, common in such projects, usually are minimized when P3s are used.

“I think the issue of cost overruns is mitigated because the private sector does not have an open checkbook,” Lick said. “It has to produce the best value for every dollar spent.”

They keys to successful projects are having competent contractors and savvy government partners, according to Lick.

“Make no mistake — the use of a public-private partnership takes a government that has a strong backbone and knows what it is doing,” he said.

Calley and others say the potential for cross-border P3s between Canada and Michigan lies mostly in areas such as transportation and logistics.

Phil Power, chairman of The Center for Michigan, an Ann Arbor-based “think-and-do tank,” wrote in a recent column that creating a “multi-modal logistical hub” linking southeast Michigan and Ontario could create 200,000 jobs and billions of dollars in economy activity.

Such a hub would link air, water, rail and road transportation and could turn the region into the most efficient freight-moving center in the Midwest.

Gov. Rick Snyder also has said he’d like to see the proposed high-speed rail link between Chicago and Detroit extended to Toronto. A P3 could be used for such a project.

“There are a lot of transportation assets located in this area,” Calley said. “I think it is important to keep in mind the potential of building a continental transportation hub here.”

Bridging the Trade Divide

Working toward a shared vision, Canada and the U.S. need to make the New International Trade Crossing a top priority

by Colin Robertson and James Blanchard

Ever since Samuel de Champlain and his First Nations guides canoed down the St. Lawrence River and into the Great Lakes, those waterways have been critical in bringing trade, people, and prosperity to the people of both Canada and the United States. For most of our history in the Great Lakes-St. Lawrence region, the only barrier to cross-border migration and trade has been the water itself.

The lakes were once the sites of fierce naval battles, playing a significant role in the sacking of the city of York (today’s Toronto) during the War of 1812. The far-sighted decision to demilitarize the lakes through the 1818 Rush-Bagot Treaty continues to be an important precedent in the negotiation of contemporary disarmament agreements.

The region has long been the cradle of “good neighbourly relations” – particularly with regard to water stewardship. The International Boundary Waters Treaty of 1909 was one of the world’s first environmental agreements, and its implementing institution, the International Joint Commission, is a model for bi-national stewardship. The Great Lakes Water Quality Agreement (1972, 1978), along with the Compact (2005) that was signed by the Great Lakes governors and premiers, protects the basin and prevents any future water diversion.

But the 105 million people living in the region today need their respective governments to continue to work together on border issues. To remain the world’s fourth-largest economy, the region needs a second Detroit-Windsor crossing.

The Canada-U.S. Auto Pact of 1965 set the course for the Canada-U.S. Free Trade Agreement, and, subsequently, the North American Free Trade Agreement. Our most integrated trade industry by far, the production and assembly of automobiles is concentrated in the Great Lakes region. This “industry of industries” draws in hundreds of feeder manufacturers in dozens of locations in Canada, the U.S., and Mexico.

Although global pressures once put the automotive sector in peril, today, the industry is on the road to recovery, thanks to the collaborative efforts of our federal, provincial, and state governments. It also represents the evolution in North American business from trading separately to making things together.

However, industrial co-operation requires border co-operation.

Before a car is assembled in Michigan and Ontario, the component parts have crisscrossed the border an average of seven times. The Michigan-based Center for Automotive Research recently concluded that 61 per cent of cars or trucks that roll off the assembly line in Ontario are “Made in the U.S.A.” – now that’s making things together!

It is no surprise, then, that the Great Lakes region contains our busiest border crossings, presenting unique challenges for “just-in-time delivery.” The first step toward making the border work better for people across the region should also be the easiest step: We need to make inspection for all government services at each of the region’s crossings available 24/7. Our competition overseas does not work nine to five, and neither can we.

But the top priority has to be the construction of a second bridge between Windsor and Detroit. The 7,000 trucks that cross the Ambassador Bridge daily contain more than a quarter of the goods traded between Canada and the U.S. Any interruption in traffic on this 80-year-old, privately owned bridge means layoffs – thousands in the first day, and tens of thousands (stretching south to the Carolinas) by Day 2. Resiliency, national security, and the national interests of both countries require us to build a second crossing – the New International Trade Crossing.

We also need to invest in the crossings and customs plazas between Port Huron and Sarnia, Ont., and along the Niagara River from Buffalo-Fort Erie to Lewiston-Queenston. Rail and waterways are cost-efficient and produce low emissions. They need our attention, too.

For nearly 200 years, Canada and the U.S. have enjoyed good relations across our land and maritime borders, and the commensurate benefits in jobs and growth that have resulted from our close ties. Now we need to meet the challenges of the 21st century by thinking like a region and making sure that a choked-up border doesn’t get in the way of our shared vision and mutual prosperity.