Port Authority seeks legal ruling on deal with bridge owners
The Detroit/Wayne County Port Authority board wants Attorney General Bill Schuette to formally rule on the legality of a controversial 2005 contract with Manuel “Matty” Moroun’s Ambassador Bridge Co.
The so-called “master concessionaire agreement,” which allows the company to operate and profit from the Port Authority’s freight terminal with almost no oversight, has been questioned by officials for nearly a decade. Until now, the board has never publicly challenged it.
Friday, members of the authority voted unanimously to approve a resolution seeking an attorney general ruling that could invalidate all or part of the agreement.
The 25-year agreement has always been controversial: In exchange for a $2.1 million emergency loan on a 34-acre riverfront shipping terminal, the Port Authority named the Moroun entity “concessionaire,” a designation with sweeping benefits, including tax-free status.
Three separate reviews conducted in the last decade have questioned the legality of the agreement.
The loan balance now totals over $2 million, despite 10 years of payments, because interest and costs are rolled into the loan principal.
“We’ve been trying to amend or replace it since I started here,” said John Loftus, who became director of the port authority last year.
Dan Stamper, president of the Ambassador Bridge Co., said the deal is structured so “no money ever comes out of the port’s pocket.” If Loftus did his job and grew business at the terminal, the loan would be paid off sooner, Stamper said.
“The only one who is calling on potential customers has been us,” Stamper said. “If the port would bring one customer to the table, instead of complaining, we’d all be doing well. Instead, John Loftus wants to complain.
“I wish Wayne County would hire someone more interested in growing business than being lost in action.”
Stamper noted that port officials approached the bridge company in 2005 with the deal after a previous lease holder left. The deal saved 150 jobs, Stamper said, and has been reviewed numerous times.
A spokesman for Schuette said the office has yet to receive the request.
Loftus echoed concerns about some board members about the reputation of Moroun for lengthy court fights.
“There is a history of litigation there and we’re a small agency. Do we have the financial resources to get into a legal argument?” asked Loftus, whose budget is $1 million per year.
In a 2006 review, Detroit City Council lawyers described the agreement’s breadth: “In sum, the (Port) Authority appears to have formally delegated (to Moroun) all decision-making authority...of the facility.” They also claimed the contract released the Ambassador Port Co. from “generally accepting accounting or auditing principles.”
“We have been directing staff to have discussions with the Moroun family that have been going back and forth. It is time for us to take more aggressive action,” said Jonathan Kinloch, vice chairman of the authority.
“This has been going on for 10 years. It’s time to take action.”