Public-Private Partnership Policy Casebook/Gordie Howe

Summary

Connecting Windsor, Canada to Detroit, Michigan, the Gordie Howe International Bridge was first proposed to be called the Detroit River International Crossing and then the New International Trade Crossing before leaning towards paying homage to the famous Detroit Red Wings hockey player. The name, however, is not what stifled the project’s progression. There are three key physical components of this project; the bridge itself, the Canadian and U.S. Ports of Entry, and the project’s seamless immersion into existing infrastructure. Unified government entities on both sides of the border have fought for fourteen years to get to where they are today and they still have miles to go before they rest. Throughout this venture, they have fought budget constraints, as well as competing interests and lawsuits. Despite this, they have successfully broken ground and have narrowed it down to three possible private corporations to partner with in the design, construction, and operations and maintenance of a new international thoroughfare across the Detroit River between Canada and the U.S.

List of Actors

Amico Infrastructure Inc.- Were paid $59mil and hired by WDBA to complete the initial groundwork by constructing the new Canadian Port of Entry.

Bridging North America- One of three companies competing as the private entity of the Gordie Howe P3. Consisting of ACS Infrastructure Canada Inc., Fluor Canada Ltd., Aecon Concessions, RBC Dominion Securities Inc., AECOM, Carlos, Fernandez Casado S.L/FHECOR Ingenieros Consultores S.A., Moriyama and Teshima Architects, Smith-Miller + Hawkinson Architects LLP, Dragados Canada Inc., Aecon Infrastructure Management Inc., Turner Construction Co., Aecon O&M, DBI Services LLC, and URS Federal Services Inc.

CanAm Gateway Partners- One of three companies competing as the private entity of the Gordie Howe P3. Consisting of Fengate Capital Management Ltd., BBGI CanHoldco Inc., EllisDon Capital Inc., Bechtel Development Company Inc., Arup-Hatch Mott McDonald Design JV, Bergmann Associates Inc., NORR Ltd., Bechtel Canada Co., EllisDon Civil Ltd., Traylor Bros Inc., EllisDon Facilities Services Inc., Egis Projects S.A., and Roy Jorgesen Associates Inc.

International Authority- A six-person governing body (3 U.S. & 3 Canadian) in office until one year after bridge completion designed to ensure WDBA complies with the Crossing Agreement. Two are appointed by Canada, three are appointed by the United States, and one is selected by WDBA. Canadian Representatives: Kristine Burr, Eddie Francis, and Genevieve Gagnon. U.S. Representatives: Michael D. Hayes, Birgit M. Klohs, and Matt Rizik.

Legacy Link Partners- One of three companies competing as the private entity of the Gordie Howe P3. Consisting of SNC Lavalin Capital Inc., VINCI Concessions S.A.S., John Laing Investments Ltd., HDR Corp., Leonhardt, Andra and Partners, Aas-Jakobsen, Alfred Benesch & Co., Golder, American Bridge Canada Co., SNC Lavalin Constructor (Pacific) Inc. (SLCP), VINCI Construction Grands Projects, Barton Malow, DRICCA, SNC Lavalin Operations & Maintenance Inc., VINCI Concessions, and SNC Lavalin Security Consulting Inc.

Manuel “Matty” Moroun- Owner of the Ambassador Bridge and key proponent of dismantling the Gordie Howe P3 project on the grounds of infringement of his own profits.

Windsor-Detroit Bridge Authority (WDBA)- Nonprofit project oversight committee comprised of Canadian and U.S. representatives. Also, WDBA is responsible for design, construction, financing, and O&M procurement management.

Timeline of Events

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• 2000-2001: Cross Border Traffic Study Conducted in response to stakeholder concerns.

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• 2002-2004: Planning Needs and Feasibility Study Conducted to review needs to transportation network.

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• 2005-2008: Environmental Study Process begins.

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• 2009: Land purchased for Canada’s inspection plaza and Canadian portion of the bridge.

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• 2010: Canada increases financial participation to $550 Million US Dollars.

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• 2012: Crossing Agreement is signed allowing Canada and Michigan to move forward with project.

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• 2012: Canada passes Bridge to Strengthen Trade Act.

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• 2013: US State Department issues Presidential Permit, granting approval for the project.

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• 2014: Windsor-Detroit Bridge Authority and International Authority Board appointments made.

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• 2014: US inspections plaza agreement signed by US and Canada.

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• 2015: Gordie Howe chosen as bridge name.

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• 2015: Request for Qualifications sent out, launching procurement process.

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• 2015: WDBA chooses Amico Infrastructures Inc. to break ground on the project.

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• 2016: Request for Proposal sent to Legacy Link Partners, Bridging North American and CanAm Gateway Partners.

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Map

Gordie Howe Bridge

Narrative

The Gordie Howe International Bridge would be the third point of crossing from Detroit, Michigan to Windsor, Ontario. The project, proposed in 2004, would connect Interstates 75 and 94 in Detroit to the proposed extension of Highway 401 in Windsor. The Windsor-Detroit Bridge Authority, created in 2012, manages construction and will eventually run operations for toll collection on the bridge. The Canadian side will collect tolls to run operations, while the United States side will fund the bridge via funding allocated to the Department of Homeland Security.

In 2013, the State Department of the United States, along with President Obama, gave approval for the Michigan side of the project, and the official permit was granted later that year. A customs platform was added to the plans, and would be added to the construction on the Michigan side of the project. As this was not slated as part of the original construction cost and scope of the project, Canada agreed to pay the 250 million dollars to build the platform, and the United States agreed to run the operations and maintenance from the funds the bridge’s toll collection would generate.

Three organizations are currently bidding for the opportunity to become the project’s private partner. The Windsor-Detroit Bridge Authority and its board will choose the winning bid over the next year based on cost estimations, construction timelines, and design and concept choices. A Request for Qualifications was put out by the WDBA which gave any interested party the chance to put their name in for a chance to bid to win the project. Once all entries were looked over, the WDBA narrowed their search down to three groups who will begin working on the next phase of partner selection. The three organizations, all made up of multiple smaller architectural and construction companies and teams, are Bridging North America, CanAm Gateway Partners, and Legacy Link Partners. Only the three groups chosen from the RFQ will get the chance to participate in the RFP stage, and from this pool, the best bid will be chosen by the WDBA who will work with the private entity on the construction phase of the project.

While the project teams are seemingly ready to begin work, land use disputes are severely delaying construction. There are about 30 properties, including homes, churches, schools, and community areas that are on land that the government is attempting to purchase to accommodate the bridge project. Until the bridge authority can buy out the surrounding area and property to build the remaining portions of the bridge, the project will not be able to continue. The financing organizations are currently working with members of the community to resolve the dilemma, however the official RFP process cannot begin until the WDBA has acquired all the land needed to begin building the structure. This means that a private partner cannot be chosen or begin work until all disputes have been settled.

Truck traffic in the area is set to increase by 2.5% after the completion of the Gordie Howe Bridge. This increase has caused concern in the surrounding neighborhoods, as it brings along an increase in the amount of diesel truck emissions. The area, already riddled with asthma and health issues as a result of the emissions from trucks crossing the nearby Ambassador Bridge, is concerned about what the additional traffic could do for the health and safety of residents in nearby neighborhoods. The potential increase in emissions has prompted area activists to request an emissions study and request that a clean truck initiative be put into place to counterbalance that environmental and health concerns that the bridge has sparked.

Policy Issues

Land Use Disputes

The Gordie Howe International Bridge is projected to be completed between 2020 and 2022, however, property disputes could push the completion date further into the future. The properties are on the U.S. side of the bridge and have yet to be purchased. According to Dwight Duncan, the Interim Chair of the Windsor-Detroit Bridge Authority, about 30 properties were determined to be potentially “problematic” and may halt the project's delivery. 20 of these properties are located in Detroit and are owned by Gross Pointe trucking industrialist and billionaire Manuel “Matty” Moruon, who is also the owner of the Ambassador Bridge. Moruon also owns a 42-acre truck terminal, which is partially located within the Gordie Howe construction site. In 2010, Moruon relocated his operations to the site, which could likely lead to hard negotiations and litigation. Without ownership of this land, the official request for proposals cannot be released. Duncan states,

       	“We’re ready to go with the RFP. We intend to release it shortly, However, because of the properties on both sides not being in our possession we’re going to wait a little bit longer before we release the RFP to make sure we are able to manage the risk associated if in fact we don’t get the properties in a timely enough fashion for when they’re needed for construction. So this is all about managing risk, you’ll never eliminate the risk, but if we get to a point where the constructor is on site and building and we still don’t have access (to some parcels) that would wind up costing literally tens of millions of dollars a year. We want to be very careful about managing that risk.”

Although the project cannot begin groundwork on the restricted Canadian land, there have been site preparations made in surrounding areas by the Michigan Department of Transportation.

Eminent Domain Law

The Michigan Department of Transportation has taken legal measures to acquire the First Latin American Baptist Church. Owners of the church were offered $411,000 in good faith, but the offer was rejected and the church counter-offered for $2 million - over 5 times the original offer. MDOT is unwilling to meet this offer and has cited the eminent domain law (enabling the government to acquire private property by compensating owners) in its case. According to Alan Ackerman, the attorney representing the church, the offer is too low as the church plans to move within the immediate vicinity and it would cost the church “at least $2 million to do so.

Environmental Concerns

Construction of the Gordie Howe International Bridge requires increased traffic involving transport vehicles carrying supplies throughout the Canadian and US borders. The Detroit neighborhood of Delray has been said to have substantial pollutants in the air as Detroit Community Benefits spokesperson Simone Sagovac states;

              “We already have really high asthma rates in southwest Detroit, especially along the freeways. And it doesn’t stop at asthma. People have heart conditions, mothers complain to us about their four children having hearing loss and asthma in the same family. So, the conditions are there”.

The city of Delray is very industrial as it is the home for “steel mills, oil refineries, a coal-fired power plant, scrap yards, and the region's waste water treatment plant with incinerators”. Although the project is expected to create jobs in the area, the pollution issue is a major concern for residents.

Discussion Questions

• How will the president-elect impact Gordie Howe construction?

• What are some ways to settle the land disputes?

• Are the environmental concerns reason enough to stop the project?

• There is an 18 month timeline for the RFP process, which has just begun. Is it viable to say there will be sufficient time to complete the project by 2020?