CHICAGO — Michigan Gov. Rick Snyder is reportedly close to reaching a final agreement with Canada on a long-stalled $4 billion trade bridge spanning the Detroit River at the nation’s busiest trade route.
The deal would allow Snyder to bypass the state Legislature, which has repeatedly defeated plans for such a span over the last few years.
Snyder has named the bridge, called the New International Trade Crossing, as one of his top priorities, saying that Michigan’s future as an exporter depends on it. The project is expected to be structured as a public-private partnership.
His predecessor, Gov. Jennifer Granholm, also lobbied heavily for the plan. But vigorous opposition from the private owner of the Ambassador Bridge, currently the only bridge spanning the Detroit River, has prevented the proposal from advancing among lawmakers.
The latest agreement would be a so-called interlocal agreement between Michigan, Canada, and the U.S. federal government, according to a report in the Detroit News. The agreement does not need legislative approval and would allow the governments to form a new international bridge authority that would likely act as a conduit issuer on any tax-exempt debt and manage the project.
As under Snyder’s original legislative plan, Canada would lend Michigan $550 million for infrastructure connecting to the new bridge, and recoup the loan from future toll revenues. A team of private firms and investors will front the costs to build the bridge — estimated at $950 million — likely by floating tax-free bonds. The debt would be payable from toll revenues.
Details of the new agreement remained scarce Friday, but earlier deals had feature Canada’s pledge to back up the bonds in case toll revenue falls short if the new bridge authority has the power to set tolls.
The Detroit News reports that the only sticking point is that Canada wants to use Chinese steel in the construction. But because Michigan plans to use Canada’s $550 million loan as local matching funds to win federal transportation dollars, domestic construction materials are required.
