Bay City modifies agreements with United Bridge Partners to focus on leasing Independence and Liberty bridges

BAY CITY, MI – The Bay City Commission approved two changes to its agreements with the private company preparing to take over and enforce the tolls for the Liberty and Independence bridges.

The commissioners unanimously approved changes to both the Acquisition and Development Agreement (ADA) and the O&M Agreement with United Bridge Partners (UBP) and its subsidiary Bay City during a virtual meeting on Monday April 19 Bridge Partners (BCBP). The changes come as the city and UBP have moved towards a lease situation regarding the Liberty and Independence Bridges as opposed to a full sale to the private company. Both amendments were prepared by Attorney William Lentine of Warner Norcross and Judd.

The amendment to the ADA includes an increase in the cap on legal costs that UBP must reimburse the city for. The agreement initially stipulated an amount of no more than $ 250,000, but the change increases the cap to $ 450,000. According to city officials and Lentine, this additional buffer in the legal cost cap is due to the additional legal services required due to the move to a lease.

“The part of this change changes the amount of professional services we were given in the first agreement for legal fees, and since we’ve switched from selling to leases, the lease now has to be drawn up by a lawyer Lentine,” said City Manager Dana Muscott. “This will allow us to put these funds in place so that Bay City residents don’t pay for it.”

“The original agreement had a cap of $ 250,000 that UBP wanted to cover. That number has been revised up based on the evolution of the relationship which means that, as Ms. Muscott said, it has gone from selling the bridges to leasing the bridges, ”Lentine added.

This change also clarifies the wording of the ADA in order to adapt it to the leasing situation. Wording has been added to the ADA relating to the return of the bridges to the city, stating that the city is under no obligation to reimburse UBP for the costs, expenses, or improvements made to refurbish the Liberty Bridge.

The second amendment changed the O&M agreement to further emphasize the transition from sale to lease in terms of responsibilities for insurance coverage.

The change states that under the ADA, BCBP is not required to purchase or purchase property insurance for the two bridges, and that damage to the bascule bridges that poses risk to the city under the ADA or would be covered by property insurance would be covered by the city as the owner until the bascule bridges are handed over to BCBP

The change in operating and maintenance costs is as follows:

“For the avoidance of doubt, this Section 11 of the Operating and Maintenance Agreement is not intended to change the risks and responsibilities of the city as the owner of the bascule bridges under ADA, nor does BCBP have any obligation under the ADA to obtain property insurance for the bascule bridges complete. The parties clarify that the “Risk of Loss” in this Section 11 relates only to losses arising from, or related to, operation and maintenance activities under this Agreement. Regardless of the language of this Section 11, damage to the bascule bridges that would represent the city’s risk under the ADA or that would be covered by property insurance taken out by the city as the owner will persist until the bascule bridges are handed over to BCBP. “

The move to a rental contract situation was made possible after new laws were passed in December 2020 that allow municipalities to enter into public-private partnerships to improve infrastructure.

Senate Laws 1215-1218 or PA 353-356 were introduced by Senator Ken Horn, R-Frankenmuth, Jeremy Moss, D-Southfield, and Wayne Schmidt, R-Traverse City, in mid-November, before Governor Gretchen Whitmer put the law on the final approval stamp Bills in December.

The bills enabled the private company United Bridge Partners and its local subsidiary Bay City Bridge Partners (BCBP) to lease the Liberty Bridge and Independence Bridge from the city of Bay City while improving both structures and introducing tolls.

The Bay City Commission unanimously approved the original ADA between the city and United Bridge Partners on December 16, 2019. United Bridge Partners was one of three companies scrambling to take over Bay City’s two urban bridges when they presented their proposal along with Kiewit and American Roads during a July 11, 2019 briefing.

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