Maryland I-95 Travel Plazas Redevelopment

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In 2012, the Maryland Transportation Authority (MDTA) entered into a bundled long-term P3 lease concession agreement with Areas USA, a subsidiary of Areas S.A., a Spanish food and beverage service provider to the travel industry, to redesign and rebuild two Maryland Travel Plazas along I-95 (John F. Kennedy Highway) and operate and maintain them over a 35-year lease term. The concessionaire has invested $56 million in the reconstruction of the two travel plazas. Originally constructed in 1963, the Maryland House Travel Plaza in Harford County closed shortly after the lease was finalized in September 2012 and reopened on January 16, 2014. Chesapeake House Travel Plaza in Cecil County remained open during that time. Originally completed in 1975, the construction of the new Chesapeake House began construction in spring 2013, and the new facility opened August 5, 2014. The projects supported an estimated 400 construction jobs, and the new facilities employ approximately 575 people. The new travel plazas feature expanded, modern facilities with different food options, a convenience store, free Wi-Fi, natural lighting, a staffed welcome center, and high-speed fueling. Recently, electric vehicle charging stations have been added. In addition to reconstructing the travel plazas, the concessionaire is responsible for all operations and maintenance activities, and additional capital investments to be made on a specified schedule. The State of Maryland benefits from the lease through these savings, as well as a revenue sharing agreement that includes specified percentages and thresholds of gross sales from primary facilities, gross sales from the convenience stores, and fuel sales. The lease agreement also includes performance targets for custodial service, grounds maintenance, landscaping, snow and ice removal, and emergency maintenance. The overall value to the State, including avoided capital, operations, and maintenance costs, as well as revenue sharing, is estimated to be $577 to $662 million in year-of-expenditure dollars over the 35-year term. By avoiding capital expenditures on the two facilities, MDTA preserves available debt capacity - which cannot exceed $3.0 billion on June 30 of any year - for its core business responsibilities of preserving and maintaining transportation facilities, and it remains better positioned to respond to emergency and/or unforeseen capital expenses. The project is also an excellent example of the joint development value capture technique, as it is beneficial to both MDTA and Areas USA, decreases MDTA's operating costs, involves cost sharing, provides complementary infrastructure, and enhances amenities for motorists.

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