Buy Low, Sell High
Who knows since I do not recall seeing anything definite about it. I'd ask a Councillor but he/she would not dare tell me anything, if he/she actually knew anything in the first place, for fear of being integrity commissionered! Or has it fallen apart as the Star now claims?
I really do not get it. With so many good investments out there, why would anyone want to put big money into the Detroit-Windsor Tunnel whether as an outright purchase of it as an asset or a 75 year operating agreement. Wouldn't Windsor be better off using US$75M that we don't have for preparing shovel ready land at the Airport for all these investors who are just waiting to come here?
Here are the latest traffic stats for the Tunnel. It is another dismal picture. The fall in traffic between May 2007 and May 2006 is about 70,000 vehicles in total. For the year, the drop from last year is about 380,000 vehicles or about 16%!
Can it be that poorly managed? Or is Eddie playing a game as he did with the Cleary? Run it down and then deal with it at a bargain basement price. In the next stage, hope to make a fortune on it if the traffic can be built up.
With the Cleary, he got rid of it by saying it was losing a million a year. Let St. Clair take it off the market so that the Casino would not have the Hilton as a competitor.
With the Tunnel, let the volume drop so that Detroit will be glad to be rid of it since it is NOT a core asset for them anyway and then build the traffic up again to get better value out of the Tunnel subsequently. After all, it paid a dividend of $6.6M to Windsor supposedly just out of the Canadian side.
There may be some validity to what I am saying. I hear that Mark Galvin of the Tunnel Plaza Improvements Project has just been named "Executive Director, Windsor Tunnel Commission on an interim basis." So I guess after all of this time, Eddie has someone who can "breathe" the Tunnel. Interestingly, it was announced just before the Business Case meeting of Council so he can pretend that he is going to do something with the Tunnel to make it better.
My expectation is that within a short time after the Detroit deal is closed, Windsor's Tunnel and the operating agreement will be dealt with somehow and whatever price we get will be said to include premium, a factor built in for the traffic that will be gained back ie Eddie is a hero for doing such a great deal.
But it will NOT be a great deal no matter how it is spinned. The value of the Tunnel has fallen dramatically since Eddie has been Mayor. As I wrote before:
- "Back in February, 2005, the Mayor claimed that "We're sitting on a $200 million to $300 million asset." But that was when he said that Windsor was getting $6.6M as a dividend. At that time, the City was looking to hire someone who would live and breathe tunnel business to make it prosper. After all, the Tunnel was called as well "our greatest revenue-producing asset."
In November, 2005, Representative Steve Tobocman, D-Detroit said "Factoring in inflation, Detroit's side of the tunnel is worth at least $62 million up front, Tobocman said. In 2020, the city could ask for $118 million for its portion of the tunnel, he said." (He's probably using an inflation factor of around 4.5% and that is after DCTC was gone).
I assume that Rep. Tobocman got the number from someone in Detroit City government. If we multiply it by 2 to include Windsor, then we would get a value today of about $125 million for the Tunnel. That is quite a drop in value in less than a year!"
The co-incidence with Detroit's net number of $58M and Steve Tobocman's $62M number is nothing short of amazing! Even if we double the $75M and reach $150M, it is a far cry away from what Eddie said the Tunnel was worth in February, 2005. And I have to assume that Eddie's number was the Canadian side only so double it to see how much he has cost us!
Oh this is a great deal after all....but not for City taxpayers in Windsor no matter what the spin doctors try to make us believe.