Olson Swings His Support in Favor of NITC - With Conditions

Representative Rick Olson (R-Saline) announces his support for the controversial New International Trade Crossing (NITC, formerly known as DRIC) with a few conditions, including a constitutional amendment prohibiting state funds to either pay for the project or bail out any bridge authority. Establishing a freeway-to-freeway connection would enhance trade through the Montreal, Toronto, Windsor, Detroit and Chicago trade corridor and improve motorist convenience. These objectives are too important to be compromised by an individual company's profit motive.

"As a strong supporter of private enterprise, it has taken me months of study and review of the facts to finally decide that the Governor's proposal should be supported. There has been a lot of rhetoric and misinformation spread in this whole debate, and much personal investigation has been necessary to sort out fact from fiction."

I started with the premise that the essence of private enterprise is competition, and therefore I could not protect the Detroit International Bridge company (the owner of the Ambassador Bridge, with the primary owners being Matty Maroun) from competition. But, that competition needed to be fair competition to receive my support. It could not be government supported and/or subsidized competition against a private company providing jobs for Michigan residents and paying Michigan taxes to be fair.

The NITC project can be broken down into four basic components:

• The bridge itself - to be paid for from private funds through a public private partnership (P3) and ultimately repaid through toll fees
• The Canadian side freeway extension and approaches to the proposed bridge - to be paid by the Canadian governments
• The American side approaches to the proposed bridge - to be done with Canadian dollars loaned to the project and repaid through tolls from the proposed bridge
• The customs stations on each side of the bridge - to be paid for by the respective countries, and does not involve Michigan dollars

The existing Ambassador Bridge has had all of the last three of those components paid for by the respective federal or state governments in the past. Therefore, to be "fair competition", only the bridge itself need be paid for, financed, maintained and operated by a private company. That is what is proposed in the NITC proposal via a P3. Therefore, I don't judge the NITC proposal as being anti-private business. A private business might be adversely affected by the new bridge, but any business faces the potential of a competitor setting up shop and competing with it.

The Ambassador Bridge owners claim they have an exclusive right to have the bridge serve Windsor - Detroit, but my review of the documents reveals that they do have a "perpetual" right to operate, maintain and even replace the existing bridge, but it is not "exclusive".

Opponents to the NITC proposal cite statistics saying the traffic over the Ambassador Bridge is down, and therefore another bridge is not needed. To the extent that future traffic may or may not be sufficient to repay the costs of construction and maintenance of the new proposed bridge is a factor the P3 bidders would need to consider. If the projections are either too low or too uncertain, there may not be any bidder willing to take the risk of investing in the project. If they do, they will bear the risk.

Now there is one of the issues opponents see as most problematic - if a P3 and a "bridge authority" is set up and fails economically, will the state be on the hook? The bill makes it clear that revenue bonds created under this act shall not be deemed to constitute a debt of this state or any political subdivision of this state and are not a pledge of the full faith and credit of this state. Nonetheless, opponents fear that if the bridge authority were to fail economically, the state could by another statute later deem the authority "too big to fail", as its failure might adversely affect the state's bond rating. After all, this year we did not want even the city of Pontiac to declare bankruptcy because of its expected effect on the rest of the state.

Richard McLellan, a former adviser to Gov. John Engler and highly respected Michigan constitutional lawyer, has testified to a Michigan Senate panel that NITC will not endanger taxpayer dollars and that the Michigan Constitution is very clear that unless the Legislature asks for a vote of the people, Michigan can't pledge the state's full faith and credit. Nonetheless, the fear that the legislature may later change its mind remains.

My support for the NITC proposal is subject to three conditions:

1. A Constitutional amendment placed on the ballot that no public money should be spent on the bridge itself, or approaches to the bridge, other than MDOT planning and coordinating the project work for the approaches.
2. That any "community benefits" which might be negotiated be not only very limited, if any, but that they be completely paid out of funds loaned by Canada and thus need to be repaid through bridge tolls. I.e., Michigan taxpayer money cannot be used for these benefits. Allowable community benefits would be those mitigation measures required by the federal environmental impact process. To the extent that these add to the cost of the project that need to be paid for through toll fees, these make the bridge less economically viable and thus less likely to be built at all.
3. The language authoring a P3 to be set up must be thoroughly analyzed to make sure the Michigan taxpayer is protected.

What is most important in this debate is that we ultimately accomplish the freeway-to-freeway connection between our two countries between Windsor and Detroit. Equally important is better administration of the customs stations, particular the customs station for returning to the U.S. The bottleneck in the crossing is not the bridge, but the 17 stoplights on Huron Church Road in Windsor and the customs. The Ambassador Bridge has operated for months with only three of its four lanes open as it has been redecking the bridge, all without the bridge itself being the problem.

What finally won my support was seeing the gas station and duty free store still sitting where it was not supposed to be according to the agreement between the Ambassador Bridge and MDOT. Because of its location, MDOT has refused to open the ramps off I-75 onto the bridge as the gas stations are too close to the off ramps from the freeway and have the potential to cause backups onto the freeway. A judge has reviewed the case and ordered the Ambassador Bridge months ago to move the facilities. But, they have not been moved. I suspect that they have not been moved because every day they remain, Matty Maroun is making a lot of money selling gas at slightly lower prices than competitor but at a huge profit per gallon due to the duty (tax) free status of the location. Meanwhile, traffic onto the bridge is routed through a convoluted and confusing approach rather than via the direct routes possible with the new ramps. Our international traffic and motorist convenience is too important to be left as of secondary importance to the profit motives of a single company, no matter if it is a private business currently employing Michigan residents and paying Michigan taxes.