Stateline Story

As Some States Close Highway Rest Stops, Others See Roadside Revenue

  • July 28, 2010
  • By Ali Eaves
Last month on the busy Interstate 95 corridor, Delaware unveiled a new $35 million welcome center, which houses restaurants and shops and is expected to bring additional money to the state.
Photo courtesy of HMSHost Corporation
Last month on the busy Interstate 95 corridor, Delaware unveiled a new $35 million welcome center, which houses restaurants and shops and is expected to bring additional money to the state.

Anyone making a long drive through New Mexico next year may want to plan bathroom breaks strategically. State officials are considering closing nearly half of the state's 32 highway rest stops, in a move that could save the state up to $1.6 million in maintenance costs.

New Mexico is the most recent case in a rash of rest-stop closures that has affected states from Vermont to California. Facing enormous budget deficits, many states have raided transportation funds, forcing them to shut down all but the most necessary of operations. For Arizona, Louisiana and Virginia, the shuttering of roadside rest stops has become one of the most visible signs of the current budget crisis.

In Delaware, however, the story couldn't possibly be more different. Last month, Delaware unveiled a sparkling new 42,000-square foot welcome center on the busy Interstate 95 corridor. Not only did Delaware not spend a dime constructing what amounts to a $35 million mini-mall in the highway median. The rest stop actually makes Delaware money. The state's contract with HMSHost, a company that runs retail operations at many airports, gives Delaware a percentage of revenues from sales of gas, food and other goods — at least $1.6 million per year for 35 years.

There's always been a difference between the highly commercialized highway rest areas in the Northeast and those in the South and West, where the stops often are little more than parking lots with bathrooms and perhaps some vending machines. But the contrast has never been more stark than it is now. The states with commercialized rest stops like Delaware are free to find ways to milk them for more and more revenue. Meanwhile, the states without commercialization are coming to see highway rest areas as a financial drain they might just as well do without.

Further south on Interstate 95, Virginia&rsuo;s rest stops are much more austere, with amenities limited to grills, grass and restrooms. In Virginia, the shuttering (and subsequent reopening) of these rest stops, which on average cost half a million dollars to run, has become one of the most visible signs of the current budget crisis.
Photo courtesy of the Virginia Department of Transportation
Further south on Interstate 95, Virginia's rest stops are much more austere, with amenities limited to grills, grass and restrooms. In Virginia, the shuttering (and subsequent reopening) of these rest stops, which on average cost half a million dollars to run, has become one of the most visible signs of the current budget crisis.

The disparity is due to a 1956 federal law aimed at protecting restaurants and gas stations located just off the exits of a growing Interstate highway system. The federal law bans the selling of food or fuel — or anything not sold from a vending machine — at rest areas on Interstates built after 1960. By that time, states in the Northeast and parts of the Midwest had already built turnpikes and other major highways with commercialized rest stops, which were allowed to continue operating.

Today, the issue reaches far beyond the number of restrooms on the highways. It's also a matter of safety. Money spent on keeping rest stops open can mean less money for snow plows, road maintenance and highway crash response. Additionally, rest areas serve as a place for weary drivers to pull over and take a break from time behind the wheel. If many of them are closed, that means more tired eyes on the road, and for longer periods of time.

Millions of dollars at stake

States that aren't allowed to lease rest-area space to businesses have to pay millions of dollars each year to clean and maintain the facilities. Georgia, for example, spent $4.5 million in 2008 to run 17 rest areas and nine welcome centers. Last summer, the state closed two stops to save $300,000 on each of them. Now, the state is looking at more creative alternatives: Transportation officials announced plans this month to seek a private partner to maintain the rest stops in return for rights to sell advertising space and sponsorships.

In Virginia, rest stops have played an outsized role in the past two years' budget debates. Following the budget crisis of 2009, the Virginia Department of Transportation closed 19 of the state's 42 rest stops, saving nearly half a million dollars on each of them. The move caused such uproar that Bob McDonnell, then a Republican candidate for governor, campaigned on a promise to reopen them all in the first three months of his term. As governor, he made good on that promise this year, but critics noted that rest stops got more money at the same time that K-12 education, health care and safety-net services were seeing cuts.

Arizona's $5.8 million budget for rest areas fell victim to massive cuts last year, when the state was forced to close of all but five of the stops. According to the New York Times , Arizona residents were more outraged by this act than by the state's decision to mortgage its executive office building. Revenues have stabilized this year and the state is beginning to reopen some of the rest areas, but Arizona officials are taking a national lead in the push for rest-area reform.

Lobbying Washington

Increasingly, states subject to the 1956 ban have been lobbying the federal government for permission to commercialize rest stops and turn them from a cost into a revenue source. California, Oregon and Washington State have appealed to the U.S. Department of Transportation for help. The latest effort came from Arizona Governor Jan Brewer, who in February wrote a letter to U.S. Transportation Secretary Ray LaHood and Arizona's congressional delegation asking that they work to repeal the federal restrictions. "This law exemplifies how an outdated federal regulation places a heavy hand on states," she wrote.

John Halikowski, director the Arizona Department of Transportation, says what the states need is more flexibility. In addition to the ban on commercialization, states can't use federal highway money for rest areas. There also is a federal law requiring states to give preference to blind people to operate the vending machines. "I think a complete repeal would be an aggressive approach and not likely," Halikowski says . "What we're looking for is some amendments that would provide flexibility."

But the states haven't gotten much traction in Washington. A bill in Congress that would have lifted the federal ban, introduced last year by U.S. Rep. Frank R. Wolf of Virginia, was defeated amidst heavy lobbying from the fast-food industry. The topic has come up in the much larger debate surrounding the reauthorization of the nation's surface transportation program, but that bill is stuck in Congress and has little hope of moving anytime soon.

Meanwhile, the states with commercial rest areas seem to exist in a parallel universe. Connecticut recently began renovations on all 23 of its service plazas after a study found that the state could earn up to $11 million more per year if it redeveloped its rest stops. Like Delaware, Connecticut is paying nothing for the renovations. The state's private partner, Project Service, is footing the $178 million bill. Throughout the 35-year contract, Project Service will pay for the maintenance and operation of the service plazas and fork over a percentage of sales to the state — an estimated $250 million.

And in Delaware, drivers already are enjoying the food options at the newly opened I-95 rest area. There's a Starbucks, a Burger King and a Baja Fresh, among numerous fast food outlets, as well as a Delaware-themed gift shop and two sets of restrooms. State coffers are benefitting from the rest area, too. Even before it opened, Delaware collected from HMSHost more than $1.5 million in rent payments. The money will go to statewide transportation improvements — something states like Arizona, New Mexico and Virginia could certainly use.

"Revenue is always nice," says John Sisson, manager of facilities and projects at the Delaware Department of Transportation. "But our main goal is to provide a safe, secure place for travelers to rest and get food and fuel."