- You want to know the real story behind the story don't you. That is why you are drinking your morning coffee at your computer. Just sit back and relax and read on. You will not believe it! Here is my speculation.
"The bridge company has agreed to table its offer for the tunnel lease at Detroit's request, according to president Dan Stamper.
"They told us they wanted a chance to look at other proposals," Stamper said. "Others have taken offers to them. We agreed to table our offer until they look at others and figure out what's best for Detroit. The timing is in the city's hands, not ours. If the city can get a better offer than ours -- God bless them."
That was said almost 16 months ago to the day. Well someone has blessed Kwame and in a big way. According to Detroit's Mayor, Windsor's payment will be enough to eliminate their deficit!
I am going to wear my Maple Leaf pin on my coat jacket as I walk around Detroit over the next few weeks so that I can be hugged by every Detroit resident for using Windsor taxpayer dollars to bail out their City . Now if that is not being charitable and neighbourly, then I do not know what is! I bet I will be very popular in Greektown and that people will be bending over themselves to pay for my drinks!
Front row seats for a Red Wings game---nothing but the best for their Canuck friends!
As for Windsor, I am not worried. Why Cliff Sutts was quoted as saying:
- "the deal will not be completed until he is fully assured local taxpayers will not be hurt.
“We will be extraordinarily cautious so costs of the acquisition will be self-supporting of the project itself. That there will be no need to go to the well of the city to support this transaction.”
Wow, that sounds like Councillor Postma who told us that the arena would not result in an increase in taxes! I am very impressed. Not only that, if the deal costs Windsor anything, we can sue Mr. Sutts and his law firm on his guarantee! That is extraordinarily gracious of the law firm. See, that is how Windsor law firms treat their clients Mr. Rock. No wonder you moved here.
I do not want to jinx anything but wasn't Mr. Sutts involved as the lawyer on one arena deal years ago that was not completed. I hope that does not happen this time because our American friends would be so upset.
Remember his language at the time. You might hear a variation of this soon enough:
- "Cliff Sutts, the lawyer hired by the city to help negotiate a deal, said his recommendation will be to reject the $32-million development. It's too big, too expensive and Jebb's revenue projections are too optimistic, Sutts says."
You have to admit that I was pretty accurate in my BLOGs about what Eddie was doing on the Tunnel. I told you that it was all about the sale, lease or securitization of revenues didn’t I! So listen to me when I tell you that there are some major problems too.
Remember that Gord Henderson was in awe of Matty Moroun and his staff. Well they only bid $20M for a 100 year lease while Eddie is offering $75M upfront for a 75 year lease. Either Eddie has outsmarted them or they are really dumb. Since the Bridge Co. is the number one border operator between Canada and the US, I have to think they may know what the Tunnel is worth.
Remember I valued the tunnel at around $30M or so, but what do I know about high finance. I was no four year old financial visionary! I would have to think the value of the Tunnel is less now with the Tunnel business being run into the ground with massive traffic losses over the last 9 months and a huge reduction since 1999. And a very small dividend amount if any. Moreover, it is still a unique security risk that needs dollars to fix. It is old with the Tunnel ventilation building cost over-runs being proof of that. Imagine the maintenance costs for 75 years!
I am curious about Alinda. How will Eddie pay to get rid of their remaining contract until 2020. Is that another $70M needed from taxpayers since that amount was shown on the Macquarie books in mid-May, 2006?
As an aside, and just between us, do you really think that Eddie ran the business down to scare Kwame to force him to sell out cheaply? Do you think Eddie will now hire someone to "breathe the Tunnel” and increase volumes? Do you think it always was his plan to get numbers up and then sub-let the tunnel so that he can say that he wiped out Windsor’s debt too or helped pay for the arena? If so, will Eddie look like a genius and Kwame the fool?
I wonder how Eddie will get the Municipal Act changed to allow Windsor to deal with an out of province asset. Will he be able to get permission under Bill C-3 to operate the Tunnel? Will Homeland Security allow a foreigner to operate a key border point. (Sorry West enders and politicos, you just lost an anti-Bridge Co, argument!)
Hey, I know why the Treasurer did not answer me about reserves yesterday. I know now why our reserves will drop from $74.1M to $39M by year end. I know now why Eddie wanted reserves of $140M last December in his inaugural speech but only wants $112M now. That amount was the deposit for the deal wasn’t it! Now all Eddie needs is the balance!
Hmmmm how is he going to get that? Is he going to have to get a partner? Will it be it Borealis and Mike Hurst? Remember that, all of a sudden, Mike’s Letter to the Editor appeared in the Star to remind us that DRTP was still around and then a donation to Festival Epicure. They are nice guys now aren’t they?
What about Macquarie Bank? After all, David Estrin’s partner and head of the Gowling Infrastructure group is big on P3s and is tied into Macquarie too in DCTC of the Tunnel fame.
Perhaps Alinda also except who knows about them.
Perhaps it is both Borealis and Macquarie working together with Eddie as I suggested in one of my BLOGs recently
But if I was a betting man, my choice of partner for Eddie is the Senior Levels. The three levels of Government already committed $30 million to the Tunnel Plaza improvements, $10M each in the Phase 1 agreement that was signed. But was there ever going to be a project? Don’t you find it odd that the Public Information session on the Tunnel was cancelled in the last second and never rescheduled? All of a sudden, vehicles were allowed to queue in the Tunnel when they were not allowed to do so before. POOOOF, the problem of congestion and back-ups was gone but $30M was still around.
Now my math may not be the best but $30 M and the drop in reserves is very close to what has to be paid to Kwame. As for the small difference, why else did Eddie buy Donna Cansfield lunch recently. Howard Hampton is introducing Tunnel resolutions and Michael Prue can ask questions to shake up Sandra and Dwight. Should we thank Eddie’s pal, Brian, for that?
Oh me oh my. My Competition Act background is starting to bother me, especially in my taxpayer pocket-book if there is a case against Windsor.
The Tunnel is the competitor of the bridge isn’t it no matter what Eddie and George Wilkki now say. Remember the BLOGs I did about the inherent conflict of interest of the Mayor as mayor and as head of the Windsor Tunnel Commission. The Senate picked up on that quickly too.
Oh my, the Joint Councils session was nothing more than a sales pitch for Eddie to do a Tunnel deal with Detroit. Could any salesman get such a hearing or only a Mayor?
If the Feds and Province are involved, do we now have a conspiracy? After all when the Bridge Co. tried to do a Tunnel deal, didn’t the Feds threaten Detroit? Let’s see, Senior Level money for the Tunnel made available and being used. There is $300M BIF money around for a road to the Bridge but nothing used while in other jurisdictions money was spent on border roads.
Was there deliberate misinformation about the Bridge Co.’s position to enflame passions against them as they were booted out of the DRIC process and as their EA commences in Canada. Why Councillor Postma on John Fairley’s show yesterday told us as well that a third of Sandwich would be swallowed up by the Bridge plaza. Now that’s scary!
I have this big problem though. How can Eddie pay for this deal? If Alinda won’t go away, then we have 13 years where $75M has been paid but little revenue comes in since Alinda is the operator. Does this make sense? I’d like to see his financial calculations.
Here are the consequence of this brilliance. As Tunnel tolls increase dramatically to cover costs, as in Alabama, boycotts start and people use alternative routes ie the bridge. When Eddie increased Tunnel tolls, it drove traffic to the Bridge. Can you imagine how much higher the tolls must go to finance and pay $75M. Matty Moroun can just sit there with his existing tolls or just increase them slightly and make a nice extra income thanks to Eddie’s generosity.
Thanks to Eddie, I now have absolute proof that the Senior Levels never wanted a new DRIC bridge but wanted to force Matty Moroun to sell the Ambassador Bridge to them. Not even a four year old financial guru would spend $75M on a Tunnel that is barely surviving knowing that another crossing, a DRIC bridge, was going to open up soon and nearby in location to take away more business. The Tunnel would go broke first since it has little commercial traffic to sustain the loss of car traffic. Eddie must know there is no DRIC bridge. No wonder he had to change Councillor Marra’s motion on tunnelling!
You know this makes no sense to me at all. It is just too easy for Eddie and the Senior Levels. Where is the Bridge Co. butting in? There has to be something more. Kwame does not like Eddie since Eddie interfered in Kwame’s mayoral campaign in the last minute and might have cost him a win. I thought that the Bridge Co. is rumoured to be so close to the Mayor. Why would Kwame undercut his “friend” to benefit Eddie?
Wait a minute….isn’t the Bridge Co. offer still around? It was only tabled not withdrawn. They had a deal with Kwame so how can he walk away from it? Does the Bridge Co. have a right of first refusal to match or better Eddie’s offer? If so, then he can hardly complain if the Bridge Co. scoops him and the Senior Levels have been neutralized!
How about this one----part of the $75M goes to the Bridge Co. to allow them to walk away from the deal and not tie it up in the courts for the next dozen years alleging breach of contract or tortious interference. How much would they get? How about up to half of the difference between $75M and $20M! Kwame said he is only getting $58M out of $75M advanced!
But I have the real answer. Eddie was euchered. First Kwame was a hero yesterday eliminating the deficit with Windsor money so that problem is off of his back for a few months. If the deal does not go forward, whose fault is it? Not Kwame but Eddie and Cliff Sutts. Then the Bridge Co. can come back in as saviour and no one can complain.
I wonder how the $75M was reached? Did Kwame have Matty Moroun coaching him as to values and was Eddie suckered to increase the price by the threat of someone filling the Tunnel with cement as the Star suggested. What a bloody insult! Eddie should apologize for his remarks or Council should force him to do so. No Mayor should ever say what he did.
He also insults our intelligence by claiming:
- “The City of Windsor has entered into an agreement worth US$75-million with the City of Detroit to take full control of the tunnel, in an attempt to block billionaire Ambassador Bridge owner Matty Moroun from gaining control of Windsor's two border crossings.”
Can’t he ever stand up like a man and take responsibility for his actions! Is he that cowardly and lacking in confidence!
In the end, Kwame is laughing since he gets the money upfront so why should he care what happens to Tunnel business and he gets his debts paid off. Let Eddie stay up at night worrying!
Poor Mr. Moroun. He loses out. Yea right. He just sits around with his bridge taking business away from the Tunnel day after day, month after month seeing his profits increase.
One wonders how long it would be before the Tunnel goes broke with its vast indebtedness. Then guess who would be asked by Detroit and the new Mayor of Windsor to take over its operation or to buy it from the Trustee in Bankruptcy.
There is only one loser in this game and two winners. And the two winners must be having a good time right about now in Detroit celebrating getting even at unfortunately Windsor taxpayer expense.
And a happy Friday the 13th to you Eddie. Your luck may be all bad today after all.
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