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Detroit Bridge Firm Stripped of Project

Monday, March 12, 2012

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After years of delays, numerous court orders and a few stints behind bars, owners of the Ambassador Bridge have lost control of Detroit’s massive Gateway Project and must pay $16 million to have the state complete their piece of it.

U.S. District Court Judge Prentis Edwards has ordered the Michigan Department of Transportation to seize control of the project from Detroit International Bridge Co., saying he is fed up with the company’s "schemes and maneuvers" to delay the project year after year.

 The privately owned, 83-year-old Ambassador Bridge is the busiest trade crossing in North America
The privately owned, 83-year-old Ambassador Bridge is the busiest trade crossing in North America.

The judge’s heated order March 8 followed a packed hearing in which DIBC lawyers argued that the company was making progress on the $230 million Gateway Project, an 11-year-old plan by DIBC and MDOT to connect the bridge and surrounding highways.

Ambassador Bridge

The Ambassador Bridge, which connects Detroit with Windsor, Ontario, is the busiest international border crossing in North America, carrying more than 25 percent of all US-Canadian merchandise trade. The 7,500-foot suspension bridge has a monopoly on commercial truck traffic, and bridge owners also own a nearby store that has a monopoly on duty-free fuel.

All of that is being threatened, however, by plans by the State of Michigan and Canada to build a new bridge nearby that would compete directly with the 83-year-old suspension bridge. DIBC, meanwhile, is determined to build its own new bridge.

In December 2009, MDOT sued DIBC for building a different design on the Gateway Project than that required by the contract. The state contends that the bridge company built the duty-free facility and the starting ramp to a proposed new bridge in a way that kept thousands of trucks a day on local surface streets.

Orders and Delays

In February 2010, Edwards ordered the bridge company to tear down and rebuild the structures it had built illegally, including fuel pumps, toll booths and part of a duty-free shop on the bridge’s plaza.

The company refused and, in January 2011, Edwards ordered DIBC president Dan Stamper jailed for contempt of court. Stamper was released after six hours when the company promised to comply with the order and begin construction.

In January 2012, however, Edwards said the company still had made no progress and sent Stamper back to jail—this time, with billionaire Manuel “Matty” Moroun, 84, the company’s owner. Bridge owners blamed the lack of progress on MDOT, saying its instructions weren’t clear.

Moroun and Stamper were released from jail after one night when the state court of appeals said it would review the case.

‘They Still Want War’

At last week’s hearing, bridge company attorney Godfrey Dillard argued that the company was making progress. “We have put down our swords, but it seems that MDOT has not reciprocated,” Dillard told the court. “They still want war.”

Dave Domina, an attorney representing Moroun and Stamper personally, said his clients had a “deep desire” to respect the judge's orders. "They recognize that mistakes were made in the past,” Domina told the judge. “They want that past behind them.”

 The long-running dispute pits billionaire Manuel “Matty” Moroun, 84, against U.S. District Court Judge Prentis Edwards
The long-running dispute pits billionaire Manuel “Matty” Moroun, 84, against U.S. District Court Judge Prentis Edwards.

The judge disagreed and handed over the project to MDOT. He also ordered DIBC to put $16 million into a bank account to pay for MDOT’s work. (The company will pay more, if the construction eventually costs more, or get a refund if the work costs less.)

‘Complete Disregard’

In his opinion, Edwards wrote that DIBC had “shown a complete disregard for” his order, that the company “is not presently complying” with the order, and “does not appear that it intends to comply with the order."

Thus, he wrote, it “appears unrealistic to expect that DIBC's portion of the project will be completed within a reasonable time if it maintains control over the construction process.”

Edwards noted that his order came eight years after MDOT and the company signed a contract to build the project jointly, and more than two years after he ordered the company to rebuild its portion to comply with the agreed-upon design.

“While DIBC has deluged this court with paperwork, its work on the project has been comparatively barren,” the opinion said.

Moving Ahead

“We're certainly disappointed,” Dillard told reporters after the hearing. “We tried to turn the corner on this project. We've tried to re-establish credibility with the judge.”

Dillard questioned whether MDOT would be able to take over and complete the project more quickly than the company. Tony Kratofil, MDOT's regional engineer in southeast Michigan, said, “We're going to sit down and look at the schedule. We're going to do everything we can to expedite this.”

And department spokesman Jeff Cranson said in a statement: “We appreciate the court's confidence in MDOT and our track record of delivering major highway construction projects."

Bridge company officials are not off the hook yet. Moroun, his son and Stamper all must return to court on March 22 for an update on their compliance with the new order. If the judge is not satisfied with the progress, he could jail all three men.

   

Tagged categories: Bridges; Construction; Project Management

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