CHICAGO -- Construction of a $1 billion bond-funded bridge between Detroit and Canada advanced Wednesday when Michigan Gov. Rick Snyder and Canadian officials announced appointments to a pair of new authorities that will oversee construction and financing of the span.
The announcement came despite the U.S. federal government's lack of a commitment for the project. Snyder said he still hoped to win federal funding, and Canadian officials said they wouldn't let financing snags delay construction.
The project will be structured as a public-private partnership, with Canada taking on nearly all the financial risk. With all related customs plazas and interchanges, the final price tag could reach $4 billion.
The New International Trade Crossing will add a second span over the Detroit River between Detroit and Windsor, the busiest trade crossing in the U.S., joining the privately owned, existing Ambassador Bridge as well as the Detroit-Windsor Tunnel.
Tax-exempt, toll-backed revenue bonds featuring a pledge of the Canadian government are expected to finance the project.
"The new bridge is needed -- it is needed for growing trade and for growing traffic at Canada's busiest U.S. commercial border crossing," Canadian Transportation Minister Lisa Raitt said at the press conference on the Detroit River.
Demolition and land purchases could begin later this year, even though President Obama failed to include money for the bridge in his budget proposal released last week. Michigan officials had hoped the federal budget would include $250 million for a customs plaza in Michigan.
Snyder said he still hopes to get a federal commitment to the dollars.
"That's something I'm going to continue to have strong and ongoing dialogue with the United States government," Snyder said, according to local reports. "The government of Canada has been fabulous. To be blunt, I think the U.S. federal government needs to do a better job."
The bridge has taken years of planning by both Michigan and Canada.
The financing agreement calls for Canada to make availability payments to the private firms, with the expectations that tolls will provide most of the revenue.
The bridge authority will probably issue tax-exempt debt for the bridge and related construction. The agreement calls for Canada to spend $2.3 billion, the private partners to invest $950 million and U.S. federal government to provide $237 million for the customs plaza.
Canada will pay Michigan $550 million that the state can use as local matching dollars for more than $2 billion of federal funding.
The new crossing, opposed by the private owners of the Ambassador Bridge, divided Michigan legislators for years.
Snyder has promised that no Michigan taxpayer money will be used for the bridge and that investors will have no recourse to the state's coffers if — as critics predict — toll revenue proves insufficient to pay off the debt.
Wednesday's announcement featured the appointments to two new authorities that will oversee the project.
A new six-member International Authority will be made up of three Americans and three Canadians, which will oversee the P3 process and compliance with the Canada-Michigan agreement.
The Windsor-Detroit Bridged Authority will be a Canadian-owned non profit that will oversee the actual construction and financing of the bridge, manage the P3 concession, and set and collect tolls. It will report to the international authority.
Michigan members of the international authority are Michael Hayes, president and CEO of the Midlland Center for Arts; Birgit Klohs, president and CEO of the Right Place, an economic development agency; and Matt Rizik, the chief tax officer of Dan Gilbert-owned Rock Ventures.