Is Francis Suckering Detroit

All of you in Windsorites who want to take a job out West but are afraid to do so because you believe that the airfare costs will eat into your income do not have to despair anymore.

WINDSOR TAXPAYERS WILL SUBSIDIZE YOU!

Yes you heard this properly. My inside moles have told me that the hundred million dollar fund that the Mayor wants to set up is really to subsidize your airfares so that the cost will be virtually nothing for you. You can now go out West to earn a big income and return home every week-end with all that money in your pocket. You do not have to sell your Windsor home and your family does not have to move out West to join you. More importantly, the City property taxes will not decline.

Oh, you think that I'm just fooling. You should know by now that everything I tell you is the absolute truth. How can I prove it to you? Why just take a look at the Star story on the Tunnel deal. How many of you believed that the purpose of the deal was:

• "ownership of the Detroit side of the tunnel, which was the original intent when negotiations began two years ago."

How wrong you were. Nope, Eddie is prepared to spend $75 million

• "Instead, the deal would entice Detroit into entering into an agreement to run the tunnel with these arms-length companies, preventing the Detroit side from being sold to a private company."

And why does Eddie want to do that:

• "because Windsor relies on the tunnel to get Windsor commuters to their jobs in Detroit."

Those big bad private investors would use the Tunnel as a profit centre and increase tolls so high that it would become unusable. That is how Eddie is saving our local commuters' income by subsidizing their toll revenues in effect.

So if it is fair for taxpayers to spend $75 million to help out Canadian nurses working in Detroit and Auburn Hills Chrysler workers from Canada, then it is only fair to spend $100 million to help out people who commute out West. Fare is fair!

What a crock this Tunnel story is becoming.

Does anyone think that taxpayers are truly this stupid. I cannot believe that Eddie would dredge up the stuff about the Bridge Company Owner again as justification for what he wants to do:

• "Negotiations began on the deal about two years ago with the intent Windsor would buy ownership of the Detroit side -- currently being leased to private company Alinda until 2020. Both Windsor and the Canadian federal government at that time feared a bid by Ambassador Bridge owner Matty Moroun to buy the tunnel's U.S. side.
  
  "Initially there were legitimate concerns that the American half would fall into private hands with a connecting road to the Ambassador Bridge which would effectively kill or eliminate the entire downtown-to-downtown connection," Francis said."
  


• "Mayor Eddie Francis and Windsor council want to prevent investors such Ambassador Bridge owner Matty Moroun or infrastructure firms such as Macquarie Bank and current tunnel lease holder Alinda from using the asset of the Detroit side solely as a profit venture."

The Bridge Company will not need to spend very much money on legal fees when Eddie keeps acting this way and making it so easy for them. Using City money to compete against him with respect to border traffic and then putting impediments in front of him at the Bridge.

You don't really believe that the exemptions from the bylaws with respect to demolition were being done to help out the developers or to improve the area do you? Come on now, you cannot be that naïve after all this time, dear reader! Especially after the US case on the Bridge Company being a federal instrumentality and given what Eddie and David Estrin said at the Senate, the City knows it has no legal position to prevent the Bridge Company from demolishing their homes.

The Planner at Council has already said that, even if the Bridge Company appeared in front of Council asking for demolition, he would not recommend that their homes be demolished until after the Community Improvement Plan is done months from now! Then the Bridge Company will be faced with Heritage designation for Sandwich to stop them.

In addition, unlike some of the developers who allegedly filled their site with dirt from other locations so that kids could peek into neighbouring houses as Councillor Jones talked about or who did not protect their site or had a work order issued so that an exemption made sense, the Bridge Company foolishly boarded-up the homes, made sure the grass was cut and put a chain link fence around their properties to keep out intruders. By acting responsibly, they made it easy for Council to reject their application!

If our Mayor is so public spirited, why is there a toll on the Canadian side at all? Even when the round-trip toll was lower at the Tunnel than at the Bridge, people still did not go there as the Tunnel lost market share to the Bridge over the years.

It really is a shame that the Star Reporter had to travel to Detroit to find out what this deal is all about. I'm surprised to be honest that there was not a lot more coverage about this specific matter in the Star story or perhaps in a Star Editorial. Imagine, not being able to get that information from our Mayor's office easily.

But then again even our Councillors have no idea what the real story is on the Tunnel. Seriously, can you believe it... a $75 million transaction and only the Mayor and his Lawyer know what is all about!

Let me see how this plays out... at the last possible minute, at an in camera meeting, there is an Administration Report setting out how wonderful the Tunnel deal is but of course not providing the agreements themselves for the Councillors to read. Councillors will be told that they must sign off immediately and approve the deal. Once that is done, the Administration Report will be required to be returned so that no member of the public can see it.

Since the Tunnel Company is private, for competitive reasons, the information cannot be made public so that taxpayers will know what the deal actually is.

Wait a minute... that was the arena deal. That cannot happen with respect to the Tunnel.

I will give Councillor Bill Marra credit at least to be fair for saying the following

• "If the transaction involves both governments, I think the same level of information has to exist on both sides," he said.
  
  "We are five and a half weeks from the deadline. The last thing any member of the (tunnel) commission or council wants is to make a decision on this in a short period of time. This is a decision that will have impact for many years and due diligence needs to be involved.
  
  "I won't participate in a last-minute decision."

I'm told by my inside moles that a considerable number of the Councillors feel this way as well and will not be pushed by the Mayor. Whether that is a majority or not, I am not certain at this time. When you get this type of comment from Councillor Postma, one should get very concerned:

• "I have faith in the team that's working for us, so at this point I await reports from them."

I am afraid Councillor that all taxpayers are not using drug paraphernalia -- such as bongs, glass pipes and hookahs so that their minds are jelly.

Or this one from Councillor Gignac (and by the way she still not responded to my e-mail to her):

• "With the information put in front of me, I'm comfortable with (the legal costs)," said Coun. Jo-Anne Gignac.

Perhaps we might get lucky and those who would not give the Mayor a blank cheque on the University Engineering Complex will feel the same way with respect to this transaction.

I guess the Powers-that-be on both sides of the river have forgotten that the transaction cannot go through until the Federal Government signs off on it because of the transfer of the assets of the Tunnel from the City to a new private Company. That is what the International Bridges and Tunnels Act is all about isn't it. I thought that ownership regulations would not come out for about a year after the passing of the Statute. If the Federal Government does something quickly to help out the City with respect to the Tunnel, then imagine what the Bridge Company will say in arguing that the Federal Government is discriminating against them. More problems I fear for this deal.

Let's come back to the Detroit side now. I must admit that I do not understand the deal whatsoever based on what the Star has written. It makes no sense to me at all. After all Eddie said:

• "Do you really think the city would borrow money, lend money and then be on the hook for the money?
  
  "Negotiations are ongoing and no one should jump to any conclusions. You can't comment until things are done. Things change."

So this means that there is more to the deal than even the Star knows or Detroit Council! That should make some people even more furious at Detroit City Hall.

It looks like the Windsor Tunnel Company will borrow the money from Ontario and send $75 million to the new Detroit Tunnel Company. Note as well that we don't know exactly how much money Eddie is actually borrowing. We are assuming that it is $75 million. Do not forget that there is a promissory note from the Windsor Company to the City for over $100 million as well. Wouldn't the City like to see that promissory note paid off at the same time? Is that what this deal is really all about? Is the Windsor Company actually borrowing $175 million or more? I am merely speculating. I do not know.

The Detroit Company presumably pays off the purchase price of the Tunnel by sending money to the City of Detroit. We are told that Detroit is not on the hook for the repayment, just the Detroit Tunnel Company. I assume that's how you get the Detroit Council on side since there is no liability and the City gets all this money for its Tunnel interest. Of course, someone makes a ton of money on fees on the Detroit side too.

Here's the interesting part though. The only money that the Tunnel Company gets is $600,000 a year from Alinda for the next 12 years until their contract expires. Windsor borrows at least $75 million, and even assuming a 5% interest rate, that is more than $600,000 is it not? How does the Detroit Company pay the outstanding interest?

Does it mean that the Detroit Company is in default within the first year of the transaction taking place? Alternatively, is a deal structured so that no interest is paid for a dozen years so that at some point in time the interest outstanding plus interest on top is added to the amount of $75 million and then repaid? I have no idea.

I ask this question because the Ontario loan is for a maximum of 40 years according to the government website and yet we are told that

• "a Goldman Sachs report prepared for Detroit that looks at projected toll revenues, repair costs and interest expenses, concludes it could take 45 to 50 years to repay the $75 million."

Of course, Windsor Taxpayers may be directly on the hook if we have to guarantee the loan to the Ontario Government or we could lose the asset entirely if the Windsor Tunnel Company defaults. Again I do not know the answer to this.

That overly complicates the transaction so let me try and simplify it. Let's assume it's like a mortgage on your house. You borrow money from the bank and agree to pay them back, principal and interest. If you default, the bank forecloses.

Is that what the real deal is with the Detroit Company? Within the first year since the Detroit Company cannot pay interest on the amount borrowed since they only received $600,000 a year from Alinda, the Windsor Tunnel Company forecloses on the Detroit side and now is the owner of the whole Tunnel.

It is not set up as a sale transaction because Detroit Council would go nuts if that was ever attempted by the Detroit Mayor but it is structured as a loan with the same result. Would this also get around any applicable US laws that might be involved or US Homeland Security concerns if Windsor took over the Tunnel on a sale since the Tunnel is a unique security risk?

It is a conclusion that a reasonable person could arrive at because frankly the amount of $75 million for the Detroit side seems unrealistic given that the Bridge Company offered substantially less and the Canadian Federal Government walked away from the transaction. Remarkably, the amount being offered would pay off the Detroit budget hole.

Can one conclude that someone started working backwards instead saying here's how much money is the minimum we need to pay to get Detroit onside and then figure out a way to do it with the Tunnel? Again, I have no idea.

Let's assume that Eddie Francis is correct in saying that the value of the Canadian side alone is worth $2-$300M as he said a number of years ago. What does that make the entire Tunnel worth? Much more than $75 million to Detroit plus the hundred million dollar promissory note from the Windsor Tunnel Company to the City.

Is this our Mayor taking advantage of the financial position of the City of Detroit? Is he negotiating a very low price so that he can make a huge capital gain down the road by flipping it to a private investor or to the Feds? I wish I knew.

There is something going on given all the secrecy. I find it remarkable that the Gord Henderson column today is concerned more about the Toronto Star articles about windsor than about the Tunnel deal. I find it strange as well that the Star has not written one single significant Editorial about this given all of the attention on the US side.

At the least, I would have expected a thundering Editorial about all of secrecy involved including the fact that our Councillors seem to know nothing. I would have expected the Star to be furious that its reporter had to go to Detroit to find out information about this deal. They could have had fun with our lawyer's use of the word "confidentiality" again after the Privacy Commissioner ruling on the Spitfires' lease:

• "Sutts pointed to a confidentiality agreement surrounding the negotiations which restricts his comments on the $75-million figure."

No, there is an agenda at play. I just don't get it. The City of Windsor cannot afford to spend money for years for the Tunnel Improvement Project in which the Senior Levels are paying two thirds of the costs (and we know that the costs have risen far above the $30 million originally budgetted but we do not know the exact amount yet) but we can borrow $75 million to cure Detroit's budgetary issues.

Without full and complete disclosure now, this is insanity at taxpayer expense.

This is our Mayor playing entrepreneur again with taxpayer dollars to achieve some result that we know nothing about. The Star article today is nothing more than building in a defence so that if this deal disintegrates and falls apart with taxpayers having to pick up the dollars, the Mayor can say it was not structured as a business transaction. Rather it was designed to stop Matty Moroun in the public interest!

What a crock of....oooops I had better watch my language or I might start sounding like local Councillors talking to their colleagues.