3 Reasons Why Michigan's Roads Deter Investors

Michigan drivers don't need to be told how bad their roads are. For those who don't know, dodging potholes on main roads is akin to playing real-life frogger where the difficulty level is always on expert and there are no extra lives. To put in perspective, a report released earlier this year from a national transportation research group said about a third of Michigan's roads are in either a poor or mediocre condition. More than half of the roads in the Detroit area alone are a less-than-fair condition, according to the TRIP report. Can we imagine what investors considering bringing job-creating and economy-boosting businesses to the state think when they see that? Michigan Infrastructure Transportation Association executive vice president Mike Nystrom told Benzinga that a prospective business owner will, of course, visit the state to do a site inspection. “Obviously, the roads are going to be noticeable immediately,” he said. There are a number of factors investors take into consideration when looking at the roads. Time Brittle roads increase travel time, whether it's due to flat tires from hitting potholes or traffic congestion from trying to avoid them. Manufacturing is a big part of Michigan's economy, and it relies heavily on just in time delivery. Business owners don't want to risk delays in delivery because of road conditions. “They have to consider if they can get the parts in and out in a timely manner,” Nystrom said. The agriculture sector, too, needs to be able get products to market before spoilage. Money The road conditions aren't just costing residents tax money, but also money out-of-pocket. The TRIP report said Michigan drivers collectively spend an additional $2.3 billion every year on vehicle operating costs due to poor road conditions. The roads are costing each metro Detroit area driver an extra $536 a year in repair costs, increased fuel consumption and tire wear. Last in the nation Nystrom said Michigan is dealing with one of the worst pothole seasons of our lifetime, and it's only going to get worse. Other states in the northwest are dealing with the same harsh winter, but Michigan is ranked last in the nation when it comes to per capita spending on roads and bridges. “If we are not choosing to invest in ourselves here in Michigan, why would businesses choose to invest in our state?” he said. Former Michigan State Representative Rick Olson has released a Michigan “road crisis” report since 2011, when he served in the legislature. This year's update says that the state needs an additional $2.18 billion in transportation revenue to maintain and fix its roads. That number doesn't include funding for relieving congestion, addressing safety issues or providing increased funding for public transit. Olso told Benzinga that he hasn't heard of many investors avoiding the state because of the roads, yet. “If the attitude continues that we're going to let our roads fall apart, that certainly is a possibility,” he said. Olson said Benzinga the main road directly south of Detroit Metropolitan Wayne County Airport, a principal roadway for those just leaving the airport, is littered with potholes. Not a great first impression for possible investors. “That road would really make you wonder,” he said.