July 9, 2007
Rest stop | The MTA expects big returns from its new service centers
By Whit Richardson
Turnpike service plazas keep the highway safe by providing a place for somnolent truck drivers to catch some shuteye. They keep heavy traffic off local roads and prevent wear and tear on local infrastructure.
And, in the case of the northbound Kennebunk service plaza, which an estimated two million people will use every year, it's often where tourists first set foot in Maine. "It means a lot to tourists to get a warm welcome and that's their first point of entry, really," says Patricia Eltman, director of the Maine Office of Tourism.
But the service plazas also play a critical role in helping to keep the pavement smooth on the Maine Turnpike, funneling millions to the Maine Turnpike Authority, which receives no state or federal funds to pay for highway maintenance or infrastructure improvements on the turnpike.
In fact, the plazas are so critical the Maine Turnpike Authority in 2002 decided to spend as much as $26 million to completely overhaul its six service plazas from Kennebunk to Litchfield, all of which were built between 1948 and 1956 and last renovated in the mid-1980s, says Paul Violette, executive director of the Maine Turnpike Authority.
On June 1, the MTA unveiled the first of those newly replaced service plazas in Kennebunk: The northbound and southbound plazas were built for a combined $11 million and include trendy attractions like Starbucks coffee, and an additional 122 parking spaces for 18-wheelers. And on June 18, the MTA cut the ribbon on a $1.8 million northbound plaza in Gray and a $1.8 million southbound plaza in Cumberland.
The next phase of the plan is to replace plazas in Lewiston and Litchfield with one full-service plaza in West Gardiner, which is expected to cost roughly $12 million, at the confluence of the turnpike and Interstate 295. The turnpike authority plans to break ground on that project this fall and open it by the end of summer 2008, Violette says.
The MTA expects to pull in an average of $7 million in rent each year for the next 30 years from plaza vendors like Burger King and Popeyes Chicken. That additional revenue helps fund turnpike maintenance and infrastructure improvements ˆ $52 million worth in 2007 alone ˆ and eases the amount of revenue the MTA needs to raise through tolls paid by Maine motorists. "These are the things the average person isn't always aware of," says Dan Paradee, an MTA spokesperson.
Paying the toll
The original Kennebunk service plaza opened a few months after the 1948 completion of the initial 50-mile stretch of the Maine Turnpike, and featured a Howard Johnson's restaurant and an Esso gas station. The idea was that by marrying public amenities like restrooms with the private sector in the form of restaurants and gas stations, the MTA would be providing ˆ but not paying to maintain ˆ the necessary services for its customers. At the same time, the restaurant and gas station helped generate additional revenue to help ease the financial burden of paying for the highway. "This is not some fancy-schmancy magical thing," Violette says. "It's using a business model to provide basic services for our customers and making additional revenue. For us that's a win-win situation."
These days, the MTA works with HMSHost, a Bethesda, Md.-based firm that operates concessions on turnpikes in the United States and Canada, and in airports around the world, to run the service plazas. The MTA builds the shell of the facilities and rents the space to HMSHost, which is spending an additional $8 million building out the interior of all the new plazas. The company is in charge of lining up the restaurants and maintaining the facilities, and also pays a rental fee to the MTA equal to a percentage of the vendors' gross revenue. (That revenue doesn't include fuel sales, which are managed by C.N. Brown of South Paris.)
It's a payment model the MTA pioneered, Violette says, and as a result it receives the greatest percentage of its vendors' revenue of any turnpike in the country. In Maine, HMSHost forks over 20% of its vendors' revenues to the MTA. That compares to rental fees between 11% and 18% of revenues for service plazas it manages along the Florida Turnpike, Atlantic City Expressway and New Jersey Turnpike, according to the MTA. And the MTA's take is expected to keep growing: The percentage will increase to 21% for the second 10 years of the 30-year lease the MTA signed in 2005, and 22% for the last 10 years, Violette says. The MTA receives eight cents per gallon of fuel sold at the service plaza's pumps.
n 2006, before the service plazas were replaced, travelers spent a combined $12.7 million at the turnpike authority's six service plazas, 75% of which was tallied at the two Kennebunk plazas, Violette says. He expects that revenue to nearly double with the completion of the new plazas. As a result, the MTA also will see an increase in its share of revenues. Already, sales at the Kennebunk plazas are exceeding initial goals, he says. "Especially the Starbucks ˆ it's doing way more [business] than they thought it would do."
The additional $7 million the MTA is expected to reap in rent revenue every year from its service plazas will help fund large capital projects planned for the future, especially the anticipated widening of the eight-mile stretch of turnpike that runs through Portland, a project set to begin in 2010 with an estimated price tag of $150 million.
But while the MTA can fund these types of large infrastructure projects, the Maine Department of Transportation has a hard time coming up with even enough money to maintain the state's system of roads and bridges. Looking forward, Violette says the state should take a lesson from the Maine turnpike: The turnpike is independent, which gives it the flexibility the DOT doesn't have. It can raise tolls when and if it needs additional revenue; it can borrow money when it needs to.
Violette knows people gripe about paying tolls, but says it's a system that is reliable and fair. "This is a model the state needs to look at," Violette says. "Something is going to have to be done and there aren't a lot of options."
And, in the case of the northbound Kennebunk service plaza, which an estimated two million people will use every year, it's often where tourists first set foot in Maine. "It means a lot to tourists to get a warm welcome and that's their first point of entry, really," says Patricia Eltman, director of the Maine Office of Tourism.
But the service plazas also play a critical role in helping to keep the pavement smooth on the Maine Turnpike, funneling millions to the Maine Turnpike Authority, which receives no state or federal funds to pay for highway maintenance or infrastructure improvements on the turnpike.
In fact, the plazas are so critical the Maine Turnpike Authority in 2002 decided to spend as much as $26 million to completely overhaul its six service plazas from Kennebunk to Litchfield, all of which were built between 1948 and 1956 and last renovated in the mid-1980s, says Paul Violette, executive director of the Maine Turnpike Authority.
On June 1, the MTA unveiled the first of those newly replaced service plazas in Kennebunk: The northbound and southbound plazas were built for a combined $11 million and include trendy attractions like Starbucks coffee, and an additional 122 parking spaces for 18-wheelers. And on June 18, the MTA cut the ribbon on a $1.8 million northbound plaza in Gray and a $1.8 million southbound plaza in Cumberland.
The next phase of the plan is to replace plazas in Lewiston and Litchfield with one full-service plaza in West Gardiner, which is expected to cost roughly $12 million, at the confluence of the turnpike and Interstate 295. The turnpike authority plans to break ground on that project this fall and open it by the end of summer 2008, Violette says.
The MTA expects to pull in an average of $7 million in rent each year for the next 30 years from plaza vendors like Burger King and Popeyes Chicken. That additional revenue helps fund turnpike maintenance and infrastructure improvements ˆ $52 million worth in 2007 alone ˆ and eases the amount of revenue the MTA needs to raise through tolls paid by Maine motorists. "These are the things the average person isn't always aware of," says Dan Paradee, an MTA spokesperson.
Paying the toll
The original Kennebunk service plaza opened a few months after the 1948 completion of the initial 50-mile stretch of the Maine Turnpike, and featured a Howard Johnson's restaurant and an Esso gas station. The idea was that by marrying public amenities like restrooms with the private sector in the form of restaurants and gas stations, the MTA would be providing ˆ but not paying to maintain ˆ the necessary services for its customers. At the same time, the restaurant and gas station helped generate additional revenue to help ease the financial burden of paying for the highway. "This is not some fancy-schmancy magical thing," Violette says. "It's using a business model to provide basic services for our customers and making additional revenue. For us that's a win-win situation."
These days, the MTA works with HMSHost, a Bethesda, Md.-based firm that operates concessions on turnpikes in the United States and Canada, and in airports around the world, to run the service plazas. The MTA builds the shell of the facilities and rents the space to HMSHost, which is spending an additional $8 million building out the interior of all the new plazas. The company is in charge of lining up the restaurants and maintaining the facilities, and also pays a rental fee to the MTA equal to a percentage of the vendors' gross revenue. (That revenue doesn't include fuel sales, which are managed by C.N. Brown of South Paris.)
It's a payment model the MTA pioneered, Violette says, and as a result it receives the greatest percentage of its vendors' revenue of any turnpike in the country. In Maine, HMSHost forks over 20% of its vendors' revenues to the MTA. That compares to rental fees between 11% and 18% of revenues for service plazas it manages along the Florida Turnpike, Atlantic City Expressway and New Jersey Turnpike, according to the MTA. And the MTA's take is expected to keep growing: The percentage will increase to 21% for the second 10 years of the 30-year lease the MTA signed in 2005, and 22% for the last 10 years, Violette says. The MTA receives eight cents per gallon of fuel sold at the service plaza's pumps.
n 2006, before the service plazas were replaced, travelers spent a combined $12.7 million at the turnpike authority's six service plazas, 75% of which was tallied at the two Kennebunk plazas, Violette says. He expects that revenue to nearly double with the completion of the new plazas. As a result, the MTA also will see an increase in its share of revenues. Already, sales at the Kennebunk plazas are exceeding initial goals, he says. "Especially the Starbucks ˆ it's doing way more [business] than they thought it would do."
The additional $7 million the MTA is expected to reap in rent revenue every year from its service plazas will help fund large capital projects planned for the future, especially the anticipated widening of the eight-mile stretch of turnpike that runs through Portland, a project set to begin in 2010 with an estimated price tag of $150 million.
But while the MTA can fund these types of large infrastructure projects, the Maine Department of Transportation has a hard time coming up with even enough money to maintain the state's system of roads and bridges. Looking forward, Violette says the state should take a lesson from the Maine turnpike: The turnpike is independent, which gives it the flexibility the DOT doesn't have. It can raise tolls when and if it needs additional revenue; it can borrow money when it needs to.
Violette knows people gripe about paying tolls, but says it's a system that is reliable and fair. "This is a model the state needs to look at," Violette says. "Something is going to have to be done and there aren't a lot of options."
Mainebiz web partners
Most Recent
Most Recent
Comments