Did Infrastructure Ontario Say No

Time passes even more quickly not when you are having fun, but when you are in a panic because your business deal is falling apart.

I found it very surprising that Councillor Halberstadt did not mention in his BLOG anything with respect to the loan from Infrastructure Ontario.

Was something discussed about the loan transaction at the in camera meeting that the City held last week, something that no one in the public is supposed to know? Or was the subject not brought up at all? That would be rather shocking if true since I would have thought that someone would want to know how this deal is going to be financed on Windsor's side and why Windsor taxpayers should be potentially at risk.

Again remember that Cliff Sutts said months ago:

• "Residents and council in Windsor will soon be privy to more details of the multimillion-dollar transaction, Sutts said.
  
  "I've said all along from square one I will not recommend a deal to the city of Windsor that did not make business sense," he said. "My intention has not changed.
  
  "In all of these negotiations everything I've done is with that in mind."

The only "privy" I have seen in Windsor recently were the portable toilets on Fireworks night along the riverfront!

I trust that Mr. Sutts and the Mayor are not in conflict over what is a good business deal since the Mayor's justification seems to be different:

• "Mayor Eddie Francis insisted the tunnel deal is still worth making.
  
  "The whole premise of the City of Windsor engaging Detroit in these discussions is we want to keep the public asset in public hands," he said."

I would have thought that Mr. Sutts would be just itching after all this time to let everyone know what kind of business sense this deal made but nothing has been disclosed so far publicly.

It was first revealed on April 16 in the Windsor Star that the Province was approached for the loan:

• "Windsor is seeking a loan from the provincial government to finance a $75-million deal for the U.S. side of the Windsor-Detroit tunnel.
  
  The city has applied to the Ontario Strategic Infrastructure Financing Authority, a loan program run through Infrastructure Ontario, to get the money needed to complete two years of negotiations with Detroit.
  
  Meanwhile, discussions between the city and the province to secure financing for the $75-million deal are "extremely preliminary," said Steve Erwin, spokesman for MPP Dwight Duncan (L - - Windsor-Tecumseh), the province's finance minister.
  
  "The city will have to provide a business case. It's our understanding that an application has been filed. It's in the very early stages."

On April 18, we were told:

• "Windsor's $75-million plan to take control of the U.S. side of the Windsor-Detroit tunnel is the kind of project that would qualify for an Infrastructure Ontario loan, a spokesman for the provincial Crown corporation said Thursday...
  
  The city is poised to apply to the Ontario Strategic Infrastructure Financing Authority, a loan program run by Infrastructure Ontario, to get the money needed to complete two years of tunnel negotiations with Detroit.
  
  "There has been some discussion about an application with the city of Windsor and Infrastructure Ontario," said Steve Dyck, a spokesman for the agency. "It's at the due diligence stage -- looking at information that will be required in terms of processing the application."
  
  He said the tunnel deal would qualify under the loan program, but Windsor has not yet indicated when the application will be made.
  
  There is no cap on the amount of funds a municipality can borrow under the program, but the ministry looks closely at the ability to repay, the strength of the business case and market conditions to determine if a loan will be approved.
  
  More than 90 per cent of loan applications are approved, with applications taking about two months to process, Dyck said."

So has an application been made or not? If so when was it made? It would appear that one was made since the Detroit News reported:

• "Windsor told the Ontario government Friday to put its loan application for the $75 million on hold, said the city's lead negotiator, Cliff Sutts."

Infrastructure Ontario wrote a friend of mine in early June confirming that an application had been made in the name of the Windsor Detroit Tunnel Corporation.

In passing, if the intention is to keep this corporation arm's-length from the City to minimize the City's liability, as was the suggestion of Mr. Sutts in the first place when setting this up, why did the in camera Council meeting involve the City and the Windsor Tunnel Commission?

If the application was submitted in mid April or even at the end of April, the two months are up. Surely by now Infrastructure Ontario has made a decision. How could it take so long? It is not that complicated a transaction. Is there a business case for it or isn't there?

It is absolutely bizarre to me that the application will be put "on hold" when it seems fundamental to get the approval of Detroit Councillors that there is financing. Why would Eddie be working so hard on a Friday afternoon on the Tunnel deal and snubbing John Tory if the application wasn't going anywhere?

Can it be in fact that the Mayor is aware that a decision has been made by Infrastructure Ontario. If so, what is it? What if the Province has said that they are not prepared to fund the transaction in the amount of $75 million or is only prepared to put up a small fraction of the amount requested? Doesn't that kill the deal! There is no other source of funds that I've heard about that would finance this transaction for Windsor.

Just out of curiosity, if a decision is made that is negative to the City but the application is put "on hold" for further clarification so that no "final" letter is sent out, would that mean that technically the Province has not killed it yet?

I wonder what Detroit has been told and what that City's Mayor's office will be able to tell its Council to get Councillors onside. After all, how many meals can Kwame eat or poeple can he hypnotize!

Let me have even more fun and try and speculate how much Infrastructure Ontario would say the deal is worth. They probably would take very seriously the offer that the Bridge Company made to Detroit of $20 million since the Bridge Company ought to know how to run a border operation. Since that time, DRIC has said that up to 25% of the Tunnel traffic could be taken away by the new DRIC bridge and the Bridge Company has opened up new Customs booths in Canada and the United States. Perhaps then Infrastructure Ontario would reduce the value by 25% especially since Tunnel traffic numbers are dropping or could be conservative and reduce the value of the $20 million by say, 10 or 20%.

If one does the math, the range might be somewhere in the range between $15- $16 million up to $18 million at the maximum. Certainly, that is nowhere near the $75 million that has been discussed.

In any event, I've had enough. I'm getting tired of trying to figure out what is really going on. I think I will file a Freedom of Information Application to find out what the documentation says. I'll let you know what I am given and when.