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Massachusetts Department of
Transportation (MassDOT)
P3 Project Suitability Assessment
Rest Stops & Service Areas
September 11, 2013
Contents
Proposed Project Description
Project Background and Status
Commonwealth Considerations
Transportation Need and Benefit Statement
Assessment Criteria
Potential Delivery Structures
Key Findings Summary
Considerations and Challenges
Potential Next Steps
Appendix: Market Precedents
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Project Description
Physical Project Description

Currently MassDOT owns and runs 11 travel
plazas / visitor centers throughout the
Commonwealth

In addition, there are 18 service plazas on
interstates throughout the Commonwealth not
run by MassDOT
–


These services plazas are currently under
contract with McDonalds (retail) and Gulf
(fuel)
During the onset of the economic downturn in
2008, the Commonwealth reduced the funding
allocated towards operating these travel
plazas / visitor centers, which caused the
majority of them to close or to become
seasonal
More specifically, currently, out of the 11 MassDOT operated visitors centers, one location is completely closed, two are closed
and maintain portable rest rooms, four are seasonal information centers with rest rooms, three are open information centers with
rest rooms, and lastly one is an information center also occupied by the Registry of Motor Vehicles Division of MassDOT

There has been no specific project development surrounding these travel plazas/visitors centers, however, MassDOT is exploring
the viability of a P3 arrangement that would enable the operation of these centers

In addition, MassDOT owns a large number of other facilities (i.e. weigh stations, RMV centers, park & ride lots) that potentially
could be part of a P3 arrangement; however the review of constraints applicable is still outstanding
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Project Background and Status
This report is part of the high-level screening process used to assess the suitability of delivering a project under
a Public-Private Partnership:
Project Background
Date:
September 11, 2013
Project Name:
Travel Plazas and Visitor Centers
Sponsoring Agency:
Massachusetts Department of Transportation
Preliminary Schedule
There is no current schedule in place
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Commonwealth’s Considerations
Project-specific considerations:

Improve service to the traveling public – The project will provide for higher quality service along the
highways of Massachusetts for members of the surrounding community as well as tourists

Support tourism – The improvement of the current travel plazas and visitor centers will allow for
convenience and higher service for tourists that are frequenting the State

Generate revenue – The improvements may provide an ongoing revenue stream or an upfront payment to
the Commonwealth
Indicative drivers for P3 delivery:

Generate funds (revenue or upfront payment) that will be used to offset operating expenses or fund other
priorities

Accelerate any capital development involved in the project

Transfer risk of operations and maintenance (and possibly development depending on project scope)
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Transportation Need and Benefit Statement
Transportation Need and Benefit Statement
To improve the
quality of rest
area service to
the traveling
public and
generate a
source of
funding for the
Commonwealth.
Funding of
improvements
to the quality of
rest area
service to the
traveling public
Description of surrounding area:
• There are 11 travel plazas / visitor centers owned by MassDOT that are under consideration for P3 suitability :
• Barnstable: This location is a seasonal information center with rest rooms. The seasonal locations are open from
Memorial Day to Columbus Day on Fridays, Saturdays and Sundays
• Bourne: This location is a seasonal information center with rest rooms operated by the Cape Cod Chamber of
Commerce
• Cape Cod Canal / Sagamore: This location is a seasonal information center with rest rooms
• Chelmsford: This location closed four years ago, but does have portable rest rooms
• Greenfield: This location closed until the Registry of Motor Vehicles began to occupy the space and included a
tourist information center
• Lancaster: This location is an information center with rest rooms that is open year-round. The Chamber of Commerce
of Lancaster was able convince neighboring towns to provide funding through a 2% tax revenue from surrounding
hotel stays
• Mansfield: This location closed, but does have portable rest rooms
• Plymouth; This location is currently operated by McDonalds year-round and includes a small visitor center. The
Plymouth location is an example of how MassDOT would like all of the rest areas to operate, if allowed by legislation
• Salisbury: This location is an information center with rest rooms operating year-round
• Swansea: This location is completely closed
• Wareham: This location is a seasonal information center with rest rooms
• The above list doesn’t include other facilities that MassDOT owns (e.g. weigh stations, park & ride lots) that could be part of
this project
How will the project improve the quality of service at the visitor centers and travel plazas?
• A private entity can develop innovative ways to provide new services to the traveling public, which may include a broader
selection of food/beverages, convenience goods, retail, internet access, etc. (restrictions apply to Interstates)
• The private partner may be willing to provide an upfront payment or a share of revenues which can be used to offset capital
costs as well as possibly the costs of operating and maintaining the rest areas
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Assessment Criteria
High-Level Screening Criteria –Commonwealth’s Considerations
Yes
Addresses Commonwealth’s
Considerations
Supporting Info
A partnership with a private entity addresses considerations such as:
• Improving the quality of service at the current rest areas
• Promoting tourism throughout the Commonwealth
• Providing funding to the Commonwealth
No
TBD
Supporting Info
The project satisfies the public need to make available, and at a good condition,
rest areas along MassDOT highways and roads for the benefit of community
members and tourists
X
Yes
Addresses Priorities Identified in
State, Regional and / or Local
Transportation Plan
TBD
X
Yes
Satisfies Public Transportation
Need
No
No
TBD
X
Supporting Info
TBD
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Assessment Criteria (Continued)
High-Level Screening Criteria - Opportunity for Acceleration, Innovation and Efficiencies
Yes
No
TBD
Supporting Info
The project does offer an opportunity for private sector innovation in terms of
unearthing new and unique sources of revenue to fund ,at least partially, costs of
operating the rest areas
Opportunity for Private Sector
Innovation
However, there are limitations to what the private sector can do with rest areas
located along Interstates. Under MAP-21 the following services can be provided at
rest areas:
• Items promoting tourism in the State, limited to books, DVDs, and other media
• Tickets for events or attractions in the State of a historical or tourism-related
nature;
• Travel-related information (e.g., maps, travel and coupon booklets)
• Lottery machines
• Vending machines such food, drink and other articles as the State DOT
determines are appropriate and desirable
X
In addition, based on discussions with MassDOT, state law requires any revenues
collected from vending machines to be given to the Commission for the Blind. It
appears that Lottery machines could be considered vending machines
Yes
Ability to Transfer Risk
X
No
TBD
Supporting Info
There is an opportunity to transfer risks including O&M and revenue risk from
specific permissible activities, such advertising and sponsorship. Risks related to
construction/rehabilitation of facilities and financing can also likely be transferred
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Assessment Criteria (Continued)
High-Level Screening Criteria – Funding/Financing
Accelerated Project Development
Ability to Raise Capital
Yes
No
Supporting Info
X
Yes
No
TBD
Supporting Info
X
Yes
No
Potential to Generate Revenue and
Funding Requirement
Yes
Market Precedent
TBD
X
No
TBD
Supporting Info
X
• For the travel plazas/visitor centers, the project could generate revenue to support
at least part of the operating costs. Such revenue streams may be generated from:
advertising, sponsorship, naming rights, internet accessibility. Other sources of
funding may include select DMV centers relocation to travel plaza locations,
involvement of local chambers of commerce
• Ability to generate revenue from other sources for the Commonwealth may
require negotiation federal agencies and/or change of legislation at the federal
and/or state level
• Information on the costs of operating the travel plazas / visitor centers is not
currently available
• At the service plazas more revenue generating activities are allowed,. However,
they are already under contract and operating cots are paid by the concessionaires
TBD
Supporting Info
There is market precedent for projects similar to this project being pursued as a P3.
These projects include:
• Virginia Safety Rest Areas P3 (for sponsorship/advertising programs)
• Arizona ReSOURCE project (from O&M and sponsorship) -in progress
• Connecticut Service Plazas and Maryland Service Plazas (for concessions)
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Assessment Criteria (Continued)
High-Level Screening Criteria - Readiness
Yes
No
TBD
Readiness
X
Yes
Consistent with Federal
Requirements
No
TBD
X
Yes
No
Supporting Info
If MassDOT is willing to take advantage of the currently permissible activities, a
procurement can move relative quickly. However, if changes in legislation or
negotiation with USDOT and other stakeholders is required, the schedule becomes
more uncertain
Supporting Info
Compliance with MAP-21 permitted activities is required
TBD
Supporting Info
Market precedent indicates that the project for the travel plazas /visitor centers
could be structured as an operations P3. O&M and some revenue generating
activities may be combined or kept separate
Can be structured as a P3
X
Although there is market precedent for P3 projects with rest areas that include
substantial up front capital investment, they are mainly focused on service plazas
that allow for revenue generating activities such as restaurants, coffee shops, gas
stations, etc Implementation of such a structure at the travel plazas would require
change in legislation and/or negotiations with key stakeholders.
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Potential Delivery Structures
Potential Delivery Model
Payment Mechanism
Option 1: Sponsorship/advertizing + O&M
(Arizona model)
Contract out operations and maintenance functions for state-owned visitors centers as well as develop
and administer an advertising and sponsorship program for these visitors centers. This project structure
would take advantage of advertising and other revenue generating opportunities that currently exist
under federal and state law.
Option 2: Sponsorship/advertizing +
Vending (Virginia model)
Contract with a sponsor for state-owned visitors centers in order to collect an annual revenue share in
exchange for sponsorship rights directing travelers to visitors centers. This project structure could help
generate excess revenue in order to offset operating costs that are retained by the state. (Compare to
Virginia DOT’s “SAVE” program)
Option 3: Service plazas
Developer will be responsible for the redesign and redevelopment of the travel plazas/visitor centers to
allow for additional activities. The contractor will be responsible for the ongoing operation &
maintenance of the facilities (incl. visitor centers). Repayment of the initial investment and ongoing
costs will be funded from the revenue generated from restaurants, gas stations, etc. A mechanism can
be set to share excess revenue between the developer and the Commonwealth.
Such a s may require changes in legislation and/or negotiations with key stakeholders
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Key Findings Summary
High Level P3 Suitability Assessment
Addresses Considerations:
Yes. This project improves service quality at the rest areas to commuters along the MassDOT interstates,
as well as supporting and encouraging tourism throughout the State. This project also could potentially
generate a revenue stream to the Commonwealth, dependent on the legality of certain activities
Opportunity for Acceleration,
Innovation and Efficiencies
Yes. This project has the potential for private sector innovation and efficiencies by transferring operations
and maintenance of MassDOT owned facilities to the private sector
Funding/Financing:
There is currently no funding available for the project
Readiness:
TBD. The project for the travel plazas/visitor centers can move relatively quickly, if revenue from activities
currently permissible is considered sufficient from a policy perspective
Can the project be structured as a P3?
Yes
Move to the next phase for further analysis?
[TBD by the Commission]
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Key Considerations and Challenges

The impact of the 1956 Interstate Highway Act, which restricts non-grandfathered-in rest areas from being
commercialized

MAP-21 legally permissible activities restrict MassDOT’s ability to improve service or funding

It may be difficult to get US DOT approval to provide expanded services on Interstates

Commission for the Blind’s rights to revenue from vending machines pursuant to state law will limit funding to
MassDOT

Legal constraints or other limitations (e.g. community agreements) for the remaining facilities that MassDOT
owns

Currently limited public funding
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Potential Next Steps

Further assessment of legal and other constraints for MassDOT owned rest stops and service areas

Assessment of potential revenue from of innovative sources of revenue per location

Estimation of O&M costs per location

Estimation of funding gap

Continue to research legally permissible activities for MassDOT owned rest stops

Consider discussions with US DOT and FHWA on expanded services along Interstates
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List of References
Specific information in this report came from the following sources:
Interview with Steve Jacques, [title] (August 1, 2013)
Interview with Owen Kane, (August 12, 2013)
Interview with Owen Kane, (August 30, 2013)
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Appendix: Market precedent
Connecticut Service Plazas P3
Characteristic
Project Detail
Project Type
Greenfield
Sector
Rest areas
Description
Connecticut owns 23 highway service locations across the state
that are redeveloped, operated and maintained by a private
concessionaire under a revenue sharing agreement. The project is
located on I-95, I-395 and Route 15. The project will include major
rebuilds and renovations for the existing service areas, and increase
service offerings to users
Public sponsor
Connecticut Department of Transportation
Private sector partner
Carlyle Infrastructure Partners
Status
Financial Close – November 2009; Redevelopment started in 2010
and is expected to continue to 2015
Term
35 years
Project size
$178 million
Delivery model
DBFOM
Payment mechanism
Revenue / demand risk
 The concessionaire will pay for 100% of the improvements to the
service plaza in exchange for a right to redevelop, operate and
maintain the facilities for 35 years
 In addition to funding the improvements, the concessionaire will
make annual payments to the State in the form of minimum
guarantees and revenue sharing
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Connecticut Service Plazas P3
Connecticut Service Plazas Map
Procurement Schedule
July – 2008
RFP Issued
August – 2008
Notices of Intent Received
December – 2008
Proposals Received
June – 2009
Preferred Bidder Selected
November – 2009
Financial Close
Source: ConnDOT, http://www.ct.gov/dot/lib/dot/documents/dpolicy/restarea/master_voli.pdf
Lessons Learned
P3 suitability
• Single entity responsible for system-wide
upgrade
• Improved service offering at rest areas
Funding / Financing
• The State transferred risk for reconstruction,
operations and maintenance to the private
sector for a 35-year term
Other
• The concessionaire will pay for 100% of the
improvements to the service plazas in
exchange for a right to redevelop, operate
and maintain the facilities for 35 years
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Virginia Safety Rest Areas P3
Characteristic
Project Detail
Project Type
Greenfield
Sector
Transportation – Rest areas
Description
A private partner was selected to establish a contract through
competitive negotiation to create new, and maximize existing,
revenue streams by enhancing opportunities in sponsorship and
vending, and by providing more comprehensive information of
specific interest to the traveling public at the safety rest area and
welcome center facilities throughout the Commonwealth
The cost-saving program was designed to generate additional
revenues to help defray the cost of operating the Commonwealth's
43 Safety Rest Areas and Welcome Centers
Public sponsor
Virginia Department of Transportation
Private sector partner
CRH Catering Co. (Developer) / GEICO (Sponsorship)
Status
Agreement finalized – August 2012
Term
3 years
Delivery model
Finance, Operate and Maintain new vending program
Revenue / demand risk
Payment mechanism
The contract requires CRH to pay VDOT approximately $2 million
annually in revenue generated by the new vending program and
GEICO sponsorship
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Virginia Safety Rest Areas P3
Procurement Schedule
RFP Issued
March – 2011
SAVE Partner Selected
September – 2011
Sponsorship Partner Selected
August – 2012
Virginia Safety Rest Areas Map
Source: VDOT, http://driveert.com/about-the-project/
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