The Detroit-Wayne County Port Authority found a way to end a 100-year agreement that gave the Moroun-owned Ambassador Port Co. sweeping control, but questions remain about the speed at which the deal gained approval of the public authority's board, transparency about the deal and what it means for the port going forward.
The board on Friday approved a $5 million agreement under which it would sell a 34-acre site that houses the Detroit Marine Terminal and vacant land to Warren-based Ambassador Port. In turn, it would be released from a controversial 2005 Master Concession Agreement it made to get an emergency loan with the Morouns, the billionaire trucking family, in exchange for port facility control. The new deal effectively allows the port authority the freedom to carry out development projects of its own — though without ownership of its port property.
In exchange, Ambassador Port would waive the authority's $2 million in debt, pay the authority $1 million to use as it sees fit and use the remaining $2 million for blight removal, including half of the $3 million needed for a mandated tear-down of the site's languishing Boblo Island Detroit Dock building.
The plan still requires City Council approval, because Detroit would need to waive its reversionary interest in the property.
The port authority board voted after members received the digital packet of documents on the deal the night of March 16.
Secretary-Treasurer Andrew Doctoroff was the only member to vote "no."
"It's important to understand that I do not disagree with the goal of the ports getting out from underneath the master concession agreement, which many have described as unconscionable," Doctoroff said Monday. "The question in my mind is, 'Was this specific deal done at this specific time the best way to achieve that goal?' I as a board member was not comfortable that my questions had been answered sufficiently well to allow me to vote in favor ..."
Doctoroff said he's not necessarily against the plan. He wanted to slow down and get more facts, wary that the parties not enter into a deal to be regretted, like in 2005. The Detroit Free Press in 2015 called the MCA a "lopsided win" for Matty Moroun.
Under the original deal, in exchange for paying off more than $2 million in bond debt and reopening the 34-acre facility, the Moroun family got a long-term concession on operating rights of future transportation facilities owned by the port. The contract terms loosely defined projects subject to the Moroun concessions as freight handling, storage, intermodal rail loading and unloading, or comparable transportation facilities in Wayne County and controlled by the port authority. The agreement has also allowed Ambassador Port to collect revenue from the facility and treat private dollars put toward port development as loans to the authority.
Doctoroff said he wants to know more about what Ambassador Port plans to do with the cargo terminal along the Detroit River, just southwest of the Ambassador Bridge.
"I think that the premise underlying the deal that it will allow the port to more easily grow and spur economic development is an important one to consider, but I would have liked a discussion of: How realistic is that premise?" he said. "What specific growth strategy is going to be pursued … and is that strategy viable?"
He also questioned the port authority's $5 million property valuation. Crain's requested a copy of the appraisal.
State Sen. Stephanie Chang, D-Detroit, said she respects where the port authority is coming from, that the organization likely saw this sale as a way out of a bad deal. But she said she also has questions, and is "disturbed and disappointed" at how it occurred.
Chang has spoken against the Master Concession Agreement and in January asked Michigan Attorney General Dana Nessel to weigh in on its legality. However, community members weren't informed about this substantial land transaction, she said.
The MCA release agreement had been in the works with the port authority for more than a year, Ambassador Port President Dan Stamper told Crain's on Monday.
However, Chang was concerned it didn't go through a "public vetting process," she said.
"The public hasn't known about the deal or had an opportunity to weigh in," she added. "People should pause and ask, 'What is the reason for this, kind of, rush?' and 'What are the plans for the site?'"
While the port authority provided documents to Crain's upon request, they were not available to the public before the board vote and still aren't widely publicly available.
Ambassador Port Co. would have been fine keeping the MCA, Stamper told Crain's, but the authority told Ambassador Port it wanted a separation.
"... The port authority wanted to do other things, and (the new deal) would give us the chance to expand the port without dealing with all the restrictions we had with the port authority in the agreement," he said.
Stamper didn't disclose specific expansion plans at the site, but he said Ambassador Port would hire someone to market the land for import-export opportunities outside its current uses, steel and aluminum. They've been hit hard by tariffs put in place under President Donald Trump that have kept earnings down at the port, he said.
Moving other kinds of cargo would require building out new facilities: storage silos for agricultural products, for example. That's a major industry the company is looking at. It would require using some of the land Ambassador Port owns nearby — at least 6.5 acres per city records — as well as vacating some city streets.
Demolishing the blighted port authority-owned Boblo dock building, which the city has cited for building violations, would leave more room for expansion, Stamper said. Making the property private will put it back onto city property tax rolls, he added.
Gregg Ward, president of Detroit Windsor Truck Ferry and a Detroit River advocate, has also decried the MCA. But he said he's concerned that in this new deal, the port authority is selling a facility that generates its income. He called it "ridiculous" to offload the authority's biggest asset. He also expressed concern that it gives Ambassador Port more control of port properties, and that the deal wasn't made public earlier.
"This is Detroit's one and only cargo terminal and it's something that should be protected for the public use, as once it's gone it's gone," he said.
The port authority would be left with one smaller property: It owns a 1.2-acre parcel downtown that houses its offices and the Waterview Loft event venue run by Troy-based catering company Continental.
Ward also questioned why, especially with the Gordie Howe International Bridge being built nearby and likely to attract new logistics companies, the port authority didn't put out a public request for proposals to redevelop the port site.
"If we had leadership at the port that was looking out for the public interest this would have been put out to bid," he said.
The negotiations between Ambassador Port and the authority started with the authority seeking a consensual way out of the MCA, and the property transfer was brought to the table by the Moroun side, said Mark Schrupp, who started March 1 as the new executive director of the port authority.
It wasn't originally intended to be a sale, he added, but property ownership was the leverage the port authority had.
Those ownership rights were limited with the authority tied to Ambassador Port, meaning if the site got put out for public bid, either they would need to find another way to end the MCA or that next owner would be subject to the limiting agreement, Schrupp said.
At issue is whether there was another way out of the Ambassador deal. Schrupp said likely not, in any affordable manner, based on his research of efforts over the years to do so.
"They should've first explored, is there a way to get out of the MCA? And done it in a public, transparent manner," Ward said.
Schrupp said this deal would allow the authority to "do what it's intended to do," even without the terminal. It would have more opportunities to seek grant funding, it would help expand port traffic to the region's operators and it would have more financing opportunities to help other operators develop their port properties. If it made one of those new deals right now, it must involve Ambassador Port, and he said that "is not proven to be a favorable arrangement in the marketplace."
"In 1979 when we were created and until 2005 we didn't have a port ... A lot of port authorities don't actually own and operate their own ports," he said. "(Without the MCA), we will be allowed to negotiate and entertain proposals from multiple owners of river frontage who have a desire to invest their own money ..."
As for concerns about a lack of public vetting? Schrupp said he expects that to happen now, as the deal goes before Detroit City Council. It was not immediately clear when the issue would go before the body.
Now it's up to the city's lawmakers to ask the hard questions, Sen. Chang said.
Council member Raquel Castañeda-López of District 6, which includes the site, did not return a request for comment Wednesday morning. Another Council member, André Spivey, said in a text message that his office has not yet received information on the deal, and he declined to comment before getting a chance for review.
"I very much understand the port authority has been in a tough position … but I want to make sure we're doing it in the most responsible way, so I have questions and concerns," Chang said.
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