Crain’s Detroit Business, 12 April 2013
Artist’s rendering of the New International Trade Crossing bridge as seen from the Windsor side.
Gov. Rick Snyder today called the $2.1 billion New International Trade Crossing a gateway for “jobs today and tomorrow” after the U.S. Department of State issued a key permit for what would be a second bridge over the Detroit River.
“This is a major construction project that is expected to create 12,000 direct jobs and as many as 31,000 indirect jobs,” Snyder said in a statement after the the State Department issued the presidential permit, which is another part of the process to allow Michigan and Canada to move forward with their span.
Snyder appeared at a 2:30 p.m. news conference to discuss the permit. He was joined by Canadian Labor Minister Lisa Raitt and other officials.
The media event took place at James Group International Inc., a logistics company on Fort Street not far from the Ambassador Bridge.
Project expected to take seven years
The Snyder administration said today that the project will take about seven years, with work to begin on the span itself by 2015. The bridge is expected to be completed by 2020. It will use American and Canadian steel, something allowed when the Federal Highway Administration approved the state’s request for a waiver in December 2012.
The key permit comes 10 months after Snyder and Canadian Prime Minister Stephen Harper struck a deal by which Canada will pay for the bridge and five months after Michigan voters rejected an attempt by Ambassador Bridge owners to slow down or halt construction.
Tom Shields, president of Lansing-based Marketing Resource Group and a longtime spokesman for NITC, attended today’s news conference. “We have been confident that the permit was going to be issued; it was just a matter of when,” he said via email this morning.
Michigan applied for the presidential permit on June 21.
“The State Department issues presidential permits for the construction, connection, operation or maintenance of certain facilities at U.S. borders with Canada and Mexico. Permits are required for land crossings, bridges, pipelines, tunnels and tramways,” Snyder’s office said in a statement.
A permit related to shipping traffic clearance for the bridge is still needed from the U.S. Coast Guard.
The project also must begin to acquire land for the bridge plaza and highway interchange. Construction could be finished in seven years, though lawsuits challenging the project have been filed by owners of the current border bridge.
The new six-plan span would connect Interstate 75 and Highway 401 between Detroit’s industrial Delray neighborhood north of Zug Island and Windsor’s Brighton Beach area with a six-lane bridge.
The I-75 highway interchange was predicted in 2010 to cost $385.9 million, and the U.S. plaza will cost $413.6 million. The nearly $1 billion bridge itself would be financed by Canada through a private-sector concessionaire and the remainder of the $2.1 billion price tag is on the Canadian side of the project. A newer cost estimate, if one exists, hasn’t been disclosed.
Canada has pledged to pay bulk of costs
Canada has pledged to cover any construction and operational deficits. It also will cover all capital costs on the Michigan side of the project, including $264 million that project organizers want the U.S. government to pay for. If Ottawa and Washington can’t reach a deal on that cost, Canada has said it will pay it.
Under a deal reached in June 2012 among the Michigan, Ontario and Canadian governments, a Canadian company called the Crossing Authority will be in charge of the design, construction, finance, operation and maintenance of the bridge, which it is expected to bid out under public-private partnership deal to a private company for a 40- or 50-year concession.
The Crossing Authority will fall under a joint authority and half the bridge will be owned by Michigan and half by Canada.
The deal was swung by Snyder with Canada to bypass the Michigan Legislature, which balked at approving any money for the bridge project because of concerns about its necessity — border traffic has declined since 2001 — and whether it would unfairly affect the competing privately owned Ambassador Bridge.
Backers touted the new jobs and increased trade they predict the span will fuel. They also say it will eliminate a traffic bottleneck at the border and provide redundancy for the Ambassador Bridge two miles away.
The Detroit-Windsor border — which encompasses the bridge, a tunnel and ferries — is the busiest in North America and carries a quarter of all U.S. trade with Canada, which is $120 billion a year.
“Getting Michigan-made products to more markets faster will enhance our economic competitiveness in the future and help our state create more jobs,” Snyder said in a statement this morning.
The project has wide support among business, civic and labor groups and among Democrats. The three Detroit automakers have said a new crossing could reduce vehicle production costs.
All of Michigan’s share of the crossing tolls will go to Canada to pay back its costs. The state will not receive any toll revenue until that money is paid back and after the concession agreement ends in four or five decades.
Tolls will be determined by the private-sector concessionaire during the bidding process. However, the models used by MDOT to justify need for the new span are predicated on using the same toll rates as the Ambassador Bridge.
Plans for a new crossing began in 2002, and Michigan has spent $40 million on research since then, the state has said. The current location was settled on in 2005.
Moroun continues opposition to project
The project is advancing in the face of continued opposition from Ambassador Bridge owner Manuel “Matty” Moroun, who has said the new span will bankrupt his bridge by taking lucrative commercial truck traffic.
Moroun has said he has a legal border traffic monopoly in Detroit granted to the Ambassador Bridge by Congress, a claim disputed by Michigan and Canada.
Last year, he reportedly spent at least $34 million pushing Proposal 6, which would have required a statewide referendum on any new international vehicle crossings in Michigan – specifically aimed at halting the NITC. Prop 6 was the most expensive tactic in Moroun’s long-running effort to block a competing Detroit River bridge, which has included court battles, studies and largely unsuccessful public relations campaigns.
In February, Moroun sued U.S. and Canadian government officials in federal court in Washington, D.C., in the latest bid to halt NITC.
An NITC revenue report from the MDOT in June 2010 estimated the new bridge will siphon about half of the Ambassador Bridge’s commercial truck traffic, currently 65 percent of what’s crossing between Detroit and Port Huron. It’s believed that the bridge generates between $60 million and $100 million in revenue annually. It’s unknown how much expenses such as maintenance on the bridge, built in 1929, take up of that revenue.
Moroun has been seeking to build a $500 million six-lane span next to his current four-lane bridge, a project halted by lack of necessary permits and Canadian opposition to any additional border traffic onto Huron-Church Road in Windsor.
Moroun is estimated by Forbes to be one of Michigan’s richest men, a fortune based off his vast commercial trucking empire headquartered in Warren.
Mickey Blashfield, the Detroit International Bridge Co.’s director of governmental relations, declined to comment. The company does not disclose its finances.
The Detroit-Windsor border is also served by a tunnel under the river, which cannot be used by commercial trucks, and a ferry service that handles hazardous cargo not permitted on the bridge.
The commercial trucking industry also considers the publicly owned Blue Water Bridge in Port Huron to be part of the Detroit border area, and that span also is expected to see a traffic reduction once a new bridge is built.
The Associated Press and Bloomberg News contributed to this report.