Detroit span connects state to can-do past

An effort by Gov. Rick Snyder and the Canadian government to build a $2 billion bridge connecting Detroit and Windsor may provide an answer to a burning question about infrastructure:

Can a huge public works project still be built in an era of Tea Party politics, spending-adverse lawmakers and widespread disdain for government?

It’s been done in the not-too-distant past. The late Wayne County Executive Ed McNamara, through sheer force of will, got Northwest Airlines (now Delta) to mostly pay for a $1.2 billion terminal at Detroit Metro a decade ago.

The Michgian Legislature appropriated a total of $159.2 million to the airport project from 1997 to 2003. For his efforts, McNamara even got his name on the mile-long terminal, which opened in 2002 and cost $1.5 billion in today’s dollars.

The terminal, Detroit Metro Airport’s largest, is a key factor in the $7.6 billion of economic impact the airport generates annually, according to a 2005 study. (That’s about $9 billion in today’s dollars.) Metro also is responsible for 71,000 jobs in the region, according to the 2005 study conducted by the University of Michigan-Dearborn. (The study has not been updated.)

Snyder is looking for a similar story line with the proposed New International Trade Crossing bridge, which will stretch nearly a mile across the Detroit River.

Snyder surprised fellow Republican lawmakers when, during his first State of the State speech in 2011, he cited construction of the bridge as one of his top priorities.

The governor -- who has not been able to convince the Legislature  to take action on ideas to fund much-needed road repairs -- couldn’t get lawmakers to support the bridge, so he used his executive powers to sidestep lawmakers and sign an agreement with the Canadian government to construct it. Snyder has said the agreement will allow the state to use Canada’s $550 million contribution to leverage an additional $2.2 billion in federal transportation funds for other highway projects in the state.

A June study of the bridge’s potential impact estimated it would create more than 11,000 construction jobs and 6,000 permanent jobs in Michigan. An additional $2.2 billion in federal road funds leveraged by the project could result in average 6,600 construction jobs a year for four years, according to the study by the Center for Automotive Research in Ann Arbor.

About 1,400 permanent jobs will be created to operate the bridge, according to the study, which was paid for by the Michigan Manufacturers Association, The Consulate General of Canada in Detroit and the Detroit Regional Chamber.

"We’re hopeful it will be coming soon. The construction industry is still depressed," said Bart Carrigan, president of the Associated General Contractors of Michigan. "We’d like to see this crossing put our tradesmen back to work."

The economic impact study predicted bridge construction would add $2.1 billion in 2012 dollars to the state’s gross domestic product in each of at least the next four years. That’s just six-tenths of 1 percent of Michigan’s $337.4 billion gross domestic product in 2011.

Michigan’s history – and present -- is dotted with major public works projects. How does NITC stack up against some of them? ...

Mackinac Bridge

The span linking Michigan’s two peninsulas by roadway is a symbol of the state’s optimism (many thought it couldn’t be built) and willingness to invest (construction costs were $70.3 million in the 1950s. A report by the Center for Automotive Researchon NITC says it would cost $800 million in today’s dollars to build the Mackinac.)

The project employed more than 11,000 people, from the bridge site itself to the engineers and support workers.

Neither the House Fiscal Agency nor the Michigan Department of Transportation could recall an economic impact study on the Mackinac Bridge, though for generations of Michiganians it probably would be hard to think of their state without it.

Zilwaukee Bridge

The modern, and problem-plagued, iteration of the bridge over the Saginaw River built to relieve congestion on Interstate 75 opened in December 1987, eight years after construction began and four years behind the original schedule. The modern bridge cost $121 million in the 1980s, or about $258 million in today’s dollars.

Blue Water Bridge

Sixty miles north of the Ambassador Bridge and the dispute over NITC, the Blue Water Bridge also carries traffic between Michigan and Ontario. The first version of the bridge opened in 1938. In the 1990s, a second span was added and the original bridge was renovated, at a cost to the Michigan side of $62.6 million, or about $94 million in today’s dollars.

A study for St. Clair County found nearly 6 percent of jobs in the county were "border dependent" and that the county had $1.1 billion in total export value in 2008.

Cobo Center

Cobo Center in Detroit, opened in 1960 and named for former Detroit Mayor Albert Cobo, is undergoing a $279 million renovation, in part to retain the massive North American International Auto Show. The project is expected to be completed next year.

Following years of complaints by show officials that Cobo was deteriorating and needed to be upgraded, operational control of the convention center was transferred from Detroit to a multicounty authority in 2009 and renovations begun.

The auto show is one of the largest annual events in the state, drawing more than 700,000 attendees a year.

M-1 Rail

Detroit also might get its first major public transit project since the 2.9 mile-long People Mover was completed in 1987 at a cost of $210 million, or $430 million in today’s dollars.

A coalition led by auto racing legend Roger Penske, Quicken Loans founder Dan Gilbert, the Kresge Foundation and others is attempting to build a $137 million streetcar line in midtown Detroit.

The 3.3 mile-long M-1 Rail line would be mostly privately financed. But the group is seeking approval of a $25 million federal transportation grant before starting construction of the project, slated for completion in 2014.

Backers say the streetcar line is a key element in attracting young professionals to Detroit and revitalizing the city.

Detroit Metro

Detroit Metro Airport has undergone a number of expansions over the past couple of decades. The most recent was the North Terminal, opened in 2008 and built at a cost of $431 million, or $465 million in today’s dollars.

On campus

Construction cranes also have dotted the state’s university campuses in recent years as colleges have built new hospitals, research centers, classrooms and dormitories.

University of Michigan President Mary Sue Coleman called the university’s $754 million C.S. Mott Children’s Hospital and Von Voigtlander Women’s Hospital, which opened in December, "the largest and most sophisticated project in campus history."

The hospitals were financed, in part, with $588 million in tax-free bonds. They new facilities have resulted in the addition of 500 new jobs at the University of Michigan Health System, which employs about 26,000 people.

Michigan State University is building the $600 million Facility for Rare Isotope Beams, a nuclear research operation on its East Lansing campus.

The FRIB, as it’s known as, is expected to create 5,000 construction jobs and 400 permanent jobs, mostly scientists. It is scheduled for completion in 2019.

In June, Gov. Rick Snyder authorized $300 million in state spending on 18 construction projects at universities and community colleges. Those institutions are supplementing state funds with an additional $300 million.

"These investments allow higher education in Michigan to stay on the cutting edge," Snyder said in announcing the investment. "Our colleges and universities play a critical role in Michigan’s future."

Grand Rapids’ medical surge

The $286 million Helen DeVos Children’s Hospital in Grand Rapids opened 18 months ago and this year underwent an expansion of its emergency department that expanded capacity there by a third.

More than $1 billion has been invested over the past decade in what’s known as the Medical Mile in Grand Rapids, including several hospitals, the Van Andel Institute and MSU’s College of Human Medicine.

Rick Haglund has had a distinguished career covering Michigan business, economics and government at newspapers throughout the state. Most recently, at Booth Newspapers he wrote a statewide business column and was one of only three such columnists in Michigan. He also covered the auto industry and Michigan’s economy extensively.

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Comments

Thu, 08/02/2012 - 9:30am
I am very tired of reading and listening to the rhetoric about the bridge. Gov. Snyder realizes that not only Detroit but most of Michigan is decaying, stagnant and not very proactive in doing anything about it....for years. I applaud him and support his decisions that we dig deep into what will be determining factors in erasing the 'rust belt' persona. Build the bridge, ignore personal gains efforts from those who oppose and call it a 'done deal'.
Action
Thu, 08/02/2012 - 9:42am
Am I the only one who finds it dangerous in the post 9/11 era that a private citizen owns an international border crossing? This just seems creepy to me. Let him own the gas pumps and the duty free shop, but not the bridge. I agree with the gov on 2 things: 1) the bridge 2) his veto of the voting suppresion law The view we show the world sometimes is down right embarrassing! Think of all the good Matty could have done with his money if he would have directed it those in need??? Build the bridge!
Jeffrey Poling
Fri, 08/03/2012 - 12:21pm
You are not alone Action. I have often questioned the logic of allowing private ownership of any public road or bridge, especially an international border crossing. Issues of national security alone require that the states, the U.S.A. and Canada in this case, have total control of the bridge. Matty Moroun has a track record of defying government requirements when he ignored MDOT and did it his way.
Anon E. Mous
Thu, 08/02/2012 - 11:28am
The point you missed is that DRIC is a multi-billion boondoggle based on misinformation when a private party is prepared to build a second bridge at no cost to taxpayers. That bridge will create jobs, boost trade and will provide toll credits for federal matching grants ($50M already used for Snyder's Transportation Budget) The traffic is down 40% from its peak and the Governor finally admitted that tolls cannot pay for it and availability payments will be needed for at least 50 years! Oh, let us not forget that Canda will own 100% of it too.
Charles Richards
Thu, 08/02/2012 - 12:49pm
This article had some useful information, but was not especially illuminating. It does not answer the question of whether Michigan's voters' discount rate is sufficiently low as to make future benefits worth present day sacrifice. Mr. Haglund failed to mention that when the Mackinac Bridge was built, voters were promised that tolls would be sufficient to pay off the bonds. That didn't turn out to be the case. In the case of the new bridge we have been promised that the tolls will be sufficient to repay the $550 million that Canada is advancing us. We are further promised that the language in the contract shields Michigan taxpayers from any liability. But I recall that when New Orleans' football stadium was built years ago, the same promise was made. But it turned out that the fine print contained clauses that overrode other clauses and made the citizens liable for any shortfalls. I support building the bridge, and have confidence in Governor Snyder, but I would have liked Mr. Haglund to explore these issues. There is talk of Michigan pension funds investing in the bridge's bonds, and if there were a shortfall, this might be an avenue for taxpayer funds to be used. I would have like reassurance from Mr. Haglund on this issue also. In short, the article was long on boosterism, and short on information.
Neil
Sat, 08/04/2012 - 3:54pm
Note: The two railroad tunnels, the St Clair and Detroit Rivers, are privately owned by Canadian railroads. Canada is building a freeway from the 401 to the NITC bridge site. Canada plans to divert all truck traffic away from the Ambassador onto the new bridge. Truck traffic provides most of the income to the Ambassador bridge. Canada never had plans to use eminent domain to build a freeway from the 401 to the Ambassador bridge. The Ambassador bridge will be at a multiple disadvantage when the NITC is completed. Canada could then just block the approach to the Ambassador bridge, putting it out of business.