Bridge Company Presentation to Michigan House Committee

This presentation of the Ambassador Bridge Company was different than other presentations that they have given before in a very subtle way. They spoke in front of a Michigan House Committee on the border issue. A lot of what they are stating, they have said before. However, what they are doing now is challenging their opponents with the Ambassador Gateway Project as their prime weapon.

What they are throwing at their opponents is not something like a pie-in-the-sky plan concocted by a phalanx of expert consultants that will never see the light of day and which is designed to scare them so that they will sell out at a reduced price. Rather they are putting forward a real and concrete project that is being built after they worked on it and spent money on it for a decade. And it is all taking place at the same time as the Hearings are going on for the Legislators to see!

All one needs to do is cross the bridge into the United States to understand the importance of the project to the border and to the Bridge Company. The gist of what they are saying in their presentation is that they, as a private enterprise company, have invested their after-tax dollars in building up this crossing to be the best in North America based on an understanding arrived at with Michigan. They take direct aim at DRIC and their megaproject mentality and at the Canadian Governments who have failed to complete the road to their Bridge.

What I found interesting is that the Bridge Company is setting up the position that Governments are acting in bad faith at a time when there is no need for capacity because traffic is falling. They are specifically setting out how much money the Company has invested over the last decade in improving the border both before and after 9/11 and setting out in detail what steps they have taken based on the arrangement made with respect to the Ambassador Gateway project. One of the objectives of that project was "to accommodate a second span next to the Ambassador Bridge."

The dollar figures being thrown around are huge for a private company, over half a billion dollars over a decade. Is there any Public Authority who runs a crossing who has spent that kind of money in advance? Those numbers alone should give Governments pause if their intention is to change the rules of the game considering how much has been done. It will be an eye-opener for some in Government who had no real understanding until now respecting what the Bridge Company has done and at what cost.

There is an undertone as well of bitterness at the Government of Canada who settled the decade-long lawsuit issue of ownership of the Bridge with the Bridge Company many years ago. The Bridge Company as I have Blogged before believes that the Government is trying to ignore the settlement. The Bridge Company goes after DRIC and the Government in very strong language and, I am sure, in a way that the Government is not used to dealing. You need to take a look at the second half of the Presentation to see what I mean.

Their language is also very pointed towards MDOT as well:

• "It is unconscionable that MDOT would be so willing to duplicate such sacrifice when Canada has failed to fulfill its obligation by fixing the road to the current crossing."

Read it for yourself and form your own opinion. The grounds for a resolution of the border crossing issue have just been set out or the basis for another decade-long lawsuit has just been created.

Frankly,when you add in what City Council said last night, and the Mayor in particular with respect to the border road, one has to be extremely pessimistic but realistic that all we will get in Windsor are giant lawsuits.

MI House Transportation Appropriations Subcommittee
Hearings on DRIC, Rep. Gonzales, Chairman

Ambassador Bridge Testimony offered May 19, 2008
Dan Stamper, President
Mickey Blashfield, Governmental Relations

Thank you for the opportunity to speak today as part of your oversight hearings on the Detroit River International Crossing (DRIC) study. As the stewards of North America’s #1 border crossing, we certainly have opinions on the direction of the DRIC study and its impact on business confidence in our region. Before we get into that, it is important to understand a brief background of the Detroit Windsor border and the manner in which the Ambassador Bridge has addressed the real challenges at our border.

Others have already spoken of the significance of this border – its importance to the economies of our great nations of the United States and Canada – and no one will dispute the trading relationship that has been nurtured over the years. Michigan recognized and embraced these facts some 14 years ago by partnering with the Ambassador Bridge to implement the Ambassador Bridge Gateway Project which is in the final construction phases as we speak.

From its beginning in 1994, the Gateway Project was set in motion well in advance of the challenging events of September 11, 2001. From the very beginning, Gateway embodied three specific goals:

• 1. Facilitate direct connections to the three interstates (I-75, I-96 & I-94) while improving access for the local community.
  2. Accommodate a second span next to the Ambassador Bridge.
  3. Host a “Welcome Center” at the foot of the Bridge.

So far, MDOT/FHWA have dedicated $230 million to accomplish these Gateway goals. In addition, the Ambassador Bridge has invested $50 million directly in infrastructure to accommodate the Gateway, and $500 million property acquisition in both the US and Canada. The Ambassador Bridge Gateway Project has provided a bold blueprint of action, and our company took that commitment very seriously in that all improvements at our crossing for over a decade have been designed to fit the Gateway foot print. The Ambassador Bridge Enhancement Span compliments the intent of Gateway by building a six-lane, cable-stayed bridge adjacent to the existing span, allowing effective, efficient use of improved facilities. Moreover, the advent of our new span will allow efficient use of Customs processing of traffic by ensuring pre-cleared freight & people get to the dedicated inspection facilities.

This is where history is instructive. Since the early 1990’s, the Ambassador Bridge has invested millions of after tax dollars to maximize the functionality of our crossing by offering facilities and services from which the trade and tourist users have benefited. Since 1992, DIBC has invested millions of after-tax dollars in property acquisitions and new infrastructure in order to ensure the ability to improve our facility by adding additional infrastructure at the appropriate time.

These improvements include, but are not limited to:

•  Created additional entrances and exits to the Ambassador Bridge in the early 1990’s
   Built a dedicated commercial vehicle-only ramp off the bridge allowing for the efficient separation of truck and car traffic prior to the inspection lanes and more than doubling the size of our U.S. Customs secondary parking facility in 1992
   Removed the old Canada Customs administration building allowing for better traffic flow on the Canadian plaza in 1992
   Built a new Canada Customs plaza and administration building more than doubling throughput capacity in 1994
   Opened new duty free store in Canada in 1995 with traveler amenities
   More than doubled the size of our Canada Customs secondary parking facility in 1995
   Re-located entire toll operation to the U.S. plaza in 2002 freeing up much needed plaza space in Canada for traffic management purposes
  And, since the terrible attacks of 9/11:
   Added 7 additional Customs booths in the U.S. and 9 additional Customs booths including a new dedicated ramp to them in Canada to eliminate truck inspection delay time
   Reconfigured US Customs secondary inspection facilities to accommodate radiation portals, license plate readers, stationary cargo x-ray devices (and other security technology) as well as absorbing additional staff
   Established new Advanced Border Processing Centers (ABpC) in advance of the border to assist trucks, drivers and cargo in complying with new “E-Manifest” and pre-notification requirements. ABpC has reduced wait times for paperwork delays by 90% at secondary Customs processing for commercial vehicles
   Embraced and built dedicated NEXUS lanes for pre-cleared passenger vehicles, eliminating delays for frequent border users.

It is important to understand the profound change that occurred at the border in 2001, as Customs changed its mission from revenue collection & documentation to homeland security. Trucks were backed up at every crossing and port in the US. But at the Ambassador Bridge, we responded by increasing the inspection capacity by 160% in the US and by 90% in Canada. More inspection facilities combined with implementing pre-clearance technology (FAST & NEXUS) have ensured that traffic moves. We recognized the border is like a supermarket checkout lanes – it’s not the roadbed capacity of the crossing but the inspection capacity that is key. If you were waiting at a grocery store to “check out” you would open more checkout lanes – not build another store next door.

Detroit auto manufactures commended the efforts of the Ambassador Bridge for responding to those changes and for restoring the flow of cross border traffic. Letters from GM, Ford, Nissan, Toyota, and Volkswagen recognized our prompt response and our investment of private funds to accomplish the improvements. In 2006, we were recognized by the Department of Homeland Security for fulfilling DHS’s “25% challenge” to improve thru-put at the border. In fact, the Ambassador Bridge’s expansion of Customs facilities carried our entire region in meeting the “25% challenge.” And our commitment to continued improvement and our advancement of the new span has been continuous.

And that brings us to the DRIC: a solution in search of a problem. As you fulfill your statutory duties of having oversight hearings on “the involvement of MDOT’s [the department] on the DRIC study” and “an accounting of any DRIC project costs,” you should be very concerned with the build-it-at-all-costs mega project mentality of the DRIC. At a time when border traffic continues to decline, at a time when auto assembly plants are closing (not expanding), DRIC proposes to duplicate the Gateway project about a mile away – before the concrete is even dry on the current construction. Now while no one disputes the importance of cross border trade & tourism, even the auto industry would never build a new assembly plant that isn’t needed for two decades.

Let’s look at traffic: since 1999, border traffic has declined (not increased as DRIC projected) at all crossings in the region. You see, reality is a pesky thing. Last week, SEMCOG provided testimony in response to a question from Rep. Gonzales about the adequacy of addressing border needs for 30 to 50 years, and Mr. Palombo answered honestly: “it depends on how you define ‘needs’ – is it capacity or redundancy?” In response to a question from Rep. Agema about the accuracy of the traffic forecasts, the SEMCOG representative acknowledged that they had to come up with a “new [traffic] model for this study to accommodate international traffic. Regardless of their method, it has proven overly optimistic. From 2004 to 2008, the DRIC projections called for dramatic traffic increases, yet traffic actually declined (as it has since 1999). In your oversight role, you should not confuse the general significance of trade (as Rep. Tobocman & the associate with the Brookings Institute emphasized) with the urgency for a DRIC bridge, especially given the accuracy of DRIC traffic projections. Using DRIC’s official forecasts from 2004, the study is drastically wrong in the first four years (from 2004 to 2008) and has little credibility for its 30 year projections.

Traffic at the Ambassador Bridge has dropped off 26%; Blue Water Bridge traffic has dropped 12% and stands at 1990 levels – before the second span at Port Huron was built. Detroit Windsor Tunnel traffic has declined 52%. That is reality. If there was any doubt about the urgency of the DRIC proposal based on real traffic needs, DRIC’s Draft Environmental Impact Statement acknowledges that they expect to populate their crossing by DIVERTING traffic from the existing crossings (76% of trucks from Ambassador, 24% of vehicles from the Tunnel, 16-18% of the trucks from Blue Water). DRIC threatens to cannibalize the viability of the current crossings to somehow justify another bridge about a mile away.

But let’s go back a couple of years to 2005 – MDOT & FHWA eliminated the Ambassador Bridge location from further consideration by DRIC – despite the massive investments in Gateway and despite the Ambassador scoring as a one of the top two alternatives (“least expensive span to construct”… “better performance than most alternatives in terms of improvement to regional mobility”… “ranked #1 of all 37 alternatives according to citizens weighted scores” … “one of the top performers overall performers [sic.] in terms of effectiveness and cost-effectiveness.”) it was dismissed from further consideration in Nov. 2005 because, “in Canada, the plaza and freeway connections…would have unacceptable community impacts” even though the “US project team recommended these alternatives be carried forward for consideration as practical alternatives while the Canadian project team did not.” (DRIC US and Canadian Reports, Nov. & Dec. 2005) DRIC failed to seize the advantage of the North America’s #1 crossing and the Gateway investment. MDOT and FHWA acquiesced to Canada’s preference, but the so-called plaza impacts were always FALSE (never the Ambassador Bridge proposal) and the Canadian road to the border has since been resolved by Transport Canada’s May 1 announcement – except for less than two kilometers in Windsor.

As a result, the alleged community impacts in Canada that have been proven false, compelled the DRIC to move about a mile downriver and now requires the Delray community to have 414 homes, 56 businesses, and 14 churches/non-profits to be condemned. We have raised concerns in appropriate forums and will continue to do so because we are acutely aware of the pain inflicted on the community surrounding the border crossing. The Gateway Project is evidence of the on-going sacrifice of all community stakeholders. It is unconscionable that MDOT would be so willing to duplicate such sacrifice when Canada has failed to fulfill its obligation by fixing the road to the current crossing.

Last week, this committee heard from the Chairman of the Peace Bridge in New York, and I wanted to clarify a couple of items from his testimony. First, the needs at Buffalo and Detroit are drastically different. The Peace Bridge and don’t easily allow “apples to apples” comparisons. He failed to tell you that until last spring, the Peace Bridge was promoting “co-located Customs facilities” in Canada – until US Homeland Security concerns eliminated that option and expansion of facilities in Buffalo has significant impacts. There are many other considerations that differ in the need for another crossing in that corridor versus Detroit-Windsor. Second, he left the impression that the Peace Bridge, as an independent toll authority, pays for its operation out of tolls – ostensibly to demonstrate that the DRIC bridge would be self sustaining. What the Chairman failed to tell you is that there is significant public subsidy for the Peace Bridge, including the $18 million for their environmental study (compared to DRIC’s $34 million DEIS vs. Ambassador Bridge’s privately funded environmental clearance). Also, it might have been appropriate for him to acknowledge the $90 million dollar “earmark” the Peace Bridge is seeking from FHWA – complimenting the $76 million Canadian contribution. Instead of self-sustaining itself from tolls, the Peace Bridge seeks public subsidy in order for it to fulfill its mission. When we testified before the MI House & Senate Transportation Committees in 2006, we warned that this would be the case with the DRIC bridge, based on analysis from Citigroup provided at that time.

Since 1990, the end-to-end border solution for the Detroit-Windsor corridor has been threefold, including:

• 1. Moving forward with the $230 million Ambassador Bridge Gateway Project, under construction;
  2. The replacement span of the Ambassador Bridge which is awaiting environmental clearances from the US and Canada at a cost of $400 million (along with the property acquisitions of $500 million by the Ambassador Bridge);
  3. The “Canadian Gateway” project that was announced in 2002 and partially reaffirmed on May 1, 2008.

This end-to-end solution connects three US Interstates to the single highway in Canada (Hwy 401) The only gap in this historic effort is less than 2 kilometers of Huron Church in Windsor – and now Canada wants the US to move about a mile away and duplicate all the sacrifice and investment of the US, Michigan and the Ambassador Bridge. The solution is simple: Canada should acknowledge the historic commitment to the border on the US side of the river and finish 401 directly to the Ambassador Bridge. This approach addresses the business confidence concerns, assumes the advantage of the new six-lane, cable stayed bridge and allows rehabilitation of the current Ambassador Bridge for redundancy. Most importantly, this approach maximizes the uses of all of the US investments made on the US side. This prevents the cannibalization of all existing crossings, the loss of tax base in Detroit and the decimation of 414 homes, 56 businesses and 14 churches/non-profits.

In 2006 testimony, we posed the question: “What if the money spent on DRIC had instead be dedicated to Southwest Detroit for community enhancements for the sacrifices made to accommodate international traffic?” That question is equally valid today as this legislature evaluates the cost of the DRIC study. That rhetorical question was posed well before MDOT spent an additional $11 Million on drilling over salt mines, brine wells, sinkholes and hazardous waste sites in 2006 & 2007.

The question we leave with this committee today as you evaluate the DRIC is an equally important choice: “Should the historic border corridor be relocated about a mile west of the Ambassador Bridge at Canada’s request and at a cost of $3-5 Billion to connect to a single highway (I-75) from the only major highway in Windsor? – Or, should Canada complete the upgrade of less than two kilometers of existing road to the Ambassador Bridge to accomplish an end-to-end border solution that connects to three US interstates?

Thank you for your time today. We would be happy to answer any question you may have.