Ambassador Bridge company facing crisis with state DOT and judge
The Ambassador Bridge company is facing a legal crisis in relations with the state. Today the state asked a Judge to impose penalties of $100,000/day until the company begins demolition of non-conforming portions of the approaches and reconstructs them in accord with approved and contractually agreed plans. The penalties which would amount to close to half the company's toll revenues were requested by Assistant Attorney General Robert Mol, representing the Michigan Department of Transportation in Wayne County Circuit Court before Judge Prentis Edwards.
Michigan DOT reported to the Judge no progress by the company in complying with the Court's order first made in February 2010, and reiterated since, that the state was a entitled to have the ramps and plaza built according to plans agreed to as part of the joint project. This $230m projected was intended to modernize the ramps, the toll and inspection plazas and connections to the nearby interstate highway system in an agreed plan. Detailed design and contracting was split between the state DOT and the bridge company.
The Bridge company has been under court order to produce a timetable for correcting non-conforming structures and tgo show contracts with builders to do the job. Appeals to higher courts have been rejected.
This January Judge Edwards ordered bridge company president Dan Stamper to jail for contempt of court for the lack of any response to court orders.
In a two-hour hearing today the MDOT lawyer told the Judge the bridge company "has no intent to comply."
Stamper's jailing didn't change anything: "Mr. Stamper, the president of the company, was sent to jail, It didn’t work. Nothing changed. We need something to impress upon (the Bridge company) that it must obey your order.”
More jail time and heavy fines for Stamper?
The Judge said he was "leaning very strongly" to imposing stronger penalties if the bridge company continued its defiance of the court. But he adjourned the case four weeks to July 7 saying he would assess penalties at that time.
A bridge company attorney Reg Turner repeated the claim that there was never an agreed-upon final design so the company was not legally out of conformity with its contract.
The problem with this line of argument is that it was put from the beginning of litigation, and has been repeatedly rejected by the courts.
Turner did ask today that "both sides work" on negotiating "what needs to be done to complete the project."
So far no talks
But so far there are no talks on the Gateway Plaza, and the state's position is simply that the company must build to what they insist is the agreed plan. This would involve removal of a duty free store, truck fuel pumps, major paved areas, toll lanes and booths. And it requires a grade separation over 23rd Street which instead the bridge company simply closed.
The cost of complying is a matter of $50m or so in expense. Just as bad longterm it would provide less space for duty-free sales and fueling, detracting from the bridge company's earning capacity.
Unless miraculously the next four weeks see a settlement the company will pay a heavy price for considering itself above the obligations of contract, and beyond the force of law.
Cooperation to document matching grant spending
In another area - documenting the Ambassador Bridge company's expenditures where eligible to count as matching funds for federal highway grants to the state - the Bridge company and the Michigan DOT are reporting making good progress and developing a cooperative relationship.
If those discussions of what is to mutual advantage could be extended to the Gateway Plaza project the crisis could be averted. Otherwise the bridge company and its top people could pay a crippling price. Judges don't like their orders being ignored.
TOLLROADSnews 2011-06-09
