Letter from The Canadian Border — From the December 2017 issue

Crossing Guards

When private ownership of a bridge gets old

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For decades before one was built, people wanted a bridge over the Detroit River, but neither the United States nor Canada had the cash. In 1921, the two governments passed laws allowing a private developer to control the project. In 1927, after funding was secured, construction on the Ambassador began. Moroun was born that year. His family, immigrants from Lebanon, had recently moved across the border from a Windsor neighborhood called Sandwich. Their house had been demolished to make way for the bridge.

Erecting the Ambassador took two years, and its opening coincided with the Great Depression. People celebrated anyway — in 1930 the actress Dottie Reid danced across it followed by a five-piece band; brides and grooms exchanged vows at its peak. Its builder, Joseph Bower, a Detroit native working on Wall Street, saved himself from bankruptcy by selling shares of the Detroit International Bridge Company to his creditors and listing it on the New York Stock Exchange.

Over the next decade, as the economy recovered and truck traffic rose, the Ambassador began to generate a profit. The Moroun family owned a gas station in Detroit, and business was good. When one of their customers, a two-truck delivery business, racked up a bill too large to pay, Tufick, Moroun’s father, took over the company. This was the start of what is today a transit empire (which includes Central Transport) with a fleet of trucks ten thousand strong, operating on both sides of the border.

In the late Seventies, Joseph Bower died, and his family decided to sell their controlling stake in the Ambassador. Moroun, by now running his family’s business, reasoned that they should buy; tolls would be dropped in their pocket. But he faced two obstacles: Warren Buffett was buying shares and could afford far more, and Pierre Trudeau, Canada’s prime minister, was determined to stop private investors from claiming ownership. Since the Ambassador was built, governments around the world had been increasing restrictions on private-sector investment in infrastructure, typically through a clause that transferred possession to the public after the investor made profits — an arrangement that has further evolved into what’s known as a public-private partnership.

For Trudeau, the Bower family’s exit was a chance to bring the Ambassador at least partially under Canada’s control. He insisted that any prospective buyer relinquish the Canadian half to the government within twenty-five years. Yet the Bowers were selling on the New York Stock Exchange; Canadian law applied only to the Canadian side. In 1979, Buffett, unwilling to accept Trudeau’s conditions or to bother fighting him in Canadian court, decided to sell his stake, $8 million, to Moroun. The rest of the shareholders followed. Moroun spent $32 million acquiring the Ambassador; when the purchase was complete, he checked the archives of the Canadian Transit Company for the deed to the old family house in Windsor, and presented it to his father.

As promised, Canada fought Moroun over the bridge. It took a decade for the two sides to reach a settlement. The terms were not made public, but Mickey Blashfield, Moroun’s spokesman, said that Canada agreed to recognize the family’s right to own the Ambassador in exchange for upgrades to customs booths and inspection facilities.

In the United States, Moroun sued for the right to sell duty-free gas at the base. Only cars traveling to Canada can fill up there, but he makes a considerable profit — likely as much as fifty cents a gallon. He doesn’t have to report sales, though in 2011 the Michigan Senate relied on an estimate from the Detroit Free Press: if each pump at his place were used once an hour instead of others elsewhere in the state, that would divert $14.4 million annually in would-be tax revenue to Moroun. Steve Tobocman, a former Michigan state representative who has dealt with Moroun, told me, “The bridge is a license to print money.”

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