Moroun terminal control keeps port authority handcuffed
The heat was on: It was 2005 and Kwame Kilpatrick was mayor, wheeling and dealing to salvage his deficit-ridden city. City officials lobbied the Detroit/Wayne County Port Authority board to borrow $2 million from bridge baron Matty Moroun. In exchange, the billionaire’s Ambassador Port Co. won control of the authority’s prize package, a 34-acre freighter terminal on the Detroit River, including its revenue stream and tax exempt status.
Kwame saved the city’s bond-rating that day, but the price was the port authority’s soul: Ten years later — with 90 years to go — the city owes $2.1 million on a $2 million loan, under repayment terms that would make a loan shark proud.
Three separate legal analyses have questioned the deal’s legality and for good reason: It gave Moroun control of the terminal’s revenue and its physical site, and handcuffed the authority to Moroun’s company in all potential development or bond deals.
“It appears to render the Detroit/Wayne County Port Authority nearly constructively powerless to independently exercise its legal rights, duties and privileges,” the city council’s lawyer said in an analysis 10 years ago.
“I’ve never seen anything like it,” said John Loftus, port authority director, who has been trying to re-negotiate its terms for the 14 months he’s been in office — so far proving himself powerless.
But for all the hand-wringing then and now, Moroun’s status as port boss has never been challenged. The City Council approved the contract, which named Moroun’s company “master concessionaire.” Although the deal is unlikely to withstand judicial scrutiny, Moroun’s reputation for being willing to litigate endlessly — and a contract provision banning lawsuits — has kept legal action at bay. The authority has neither the money nor the political appetite to sue its deep-pocket “partner.”
Last week, Jonathan Kinloch, an appointee of Mayor Mike Duggan, finally took action: He pushed the port authority board to formally request a legal review of the agreement from Attorney General Bill Schuette. The board, which met at the port authority’s dazzling $22 million Atwater facility, a few steps from the Detroit River, reluctantly approved Kinloch’s resolution.
Chairman Tom Orzechowski Jr. said the board had never asked for a ruling “mainly out of political concerns,” even though there’s a consensus that the contract is “unenforceable.”
For years, the port authority’s impotence has been overlooked, while the city and county struggled with bankruptcy and corruption on a bigger scale. But taxpayers have a right to expect the port authority’s board to exert oversight, rather than ineptitude. “It is outrageous that a taxpayer-subsidized entity ... entered into such a sham deal with Moroun,” says Gregg Ward, an eloquent Moroun foe who operates a truck ferry on the Detroit River. “But it’s even more shocking that law enforcement has yet to intervene in the public interest.”
Like so many Michigan politicians, Bill Schuette is the beneficiary of the Moroun family’s generous way with a checkbook. Matty, wife Nora and son Matthew Moroun all donated to the attorney general’s last campaign. Even so, we can still hope that Bill Schuette, like the port authority board of directors, yearns for release from the tight shackles of indentured Moroun-itude.