A governmental decision to give management of eighteen highway service plazas in Massachusetts to a competitor is being contested by Global Partners.
However, the judgment has not yet been overturned despite significant public support, a media blitz, a request for assistance from the state’s inspector general, and entreaties with the secretary of transportation.
Global Partners, located in Waltham, contends that doing so will keep operations out of local hands and cost taxpayers millions.
Applegreen, an Irish company, is in their way, claiming that it is prepared and eager to change the service plazas.
At a meeting on June 18, the MassDOT Board of Directors authorized Applegreen’s contract. The governor alone has the authority to reverse this ruling.
In reaction to the board’s ruling, Global Partners stated, “This battle for Massachusetts is not over.” We hope that MassDOT will genuinely think about what they’re giving up as they go on to the next stage of the bid process.
The competition
Many of the state’s service plazas need significant renovations or rebuilding because they haven’t been updated since the 1950s.
The state claims that 14 of the 18 service plazas have a master lease for McDonald’s cuisine. In Barnstable, Beverly, and two in Bridgewater, Global Partners owns a master lease for food and fuel at four service plazas.
McDonald’s has the gasoline lease at the Newton and Lexington service plazas, while Gulf owns the master lease for 11 service plazas on the Pike.
Due to the fact that 14 of the 18 service plaza leases are expiring on December 31st, a request for bids was issued.
Monica Tibbits-Nutt, the CEO and secretary of MassDOT, told Boston.com that this is a momentous time for Massachusetts. For the benefit of Massachusetts residents and our numerous tourists, these service plazas will offer updated amenities as well as more options for dining and shopping.
According to Tibbits-Nutt, MassDOT was happy to see a number of highly qualified businesses express a significant interest. But following a rigorous procedure, MassDOT gave them permission to give the contract to Applegreen, which she claimed had the most experience and would begin and finish the project more quickly.
According to Applegreen’s plans, development will start on January 1 and be finished by 2028.
According to the state, the corporation offered the largest capital expenditure of $750 million, which would enable it to refurbish the remaining plazas and reconstruct nine of them.
Based on revenue from the first year of the lease, the state estimated that Global’s rent revenue would be $375 million higher than Applegreen’s. However, the state claims that Global provided $250 million less in capital investment, resulting in a $125 million revenue gap between the two businesses.
At the hearing on June 18, MassDOT’s chief development officer, Scott Bosworth, stated, “We wanted significant capital investment.” When our facilities are ready to be returned to us, we want them to have been fully renovated and maintained so that they will continue to function well for many years to come.
What Applegreen is promising
Applegreen and Suffolk Construction are collaborating to finish the rebuilds and improvements within three years.
In a statement to Boston.com, Applegreen founder and executive chairman Bob Etchingham said, “We will completely transform the traveler experience, achieving statewide goals for travel and tourism, supporting our business community, and meeting the needs of Commonwealth residents.”
Three distinct designs have been put up by the company: one that pays homage to the Berkshires in Western Massachusetts, one that is industrial in feel for the middle and metropolitan districts, and one that is coastal for the eastern portion of the state.
According to Etchingham, the plazas will represent the growing reliance of Massachusetts citizens on electric vehicles throughout the course of the 35-year deal.
More than 700 EV charging stations are committed, the concept does not rely on fossil fuel usage to satisfy the state’s financial goals, and it includes designs with more seating, playgrounds, and dog parks for travelers waiting for their cars to recharge.
Furthermore, Applegreen is a one-stop shop that will oversee every facet of the plazas.
Applegreen employs 18,000 people worldwide, including more than 7,000 in the United States, and runs over 530 sites in addition to more than 700 individual food and beverage offerings.
In addition to operating 113 service plazas in the United States, the business has partnered with state departments of transportation and authorities in ten states to transform 260 plazas.
The New York State Thruway and Applegreen most recently teamed on a $450 million project to update the 27 service areas. Visitors criticized the business for having one of its tenants, Chick-fil-A, close on Sundays, which are among the busiest days at the service plazas.
Global Partners gripes
As a Fortune 500 firm, Global Partners administers fuel operations for Gulf as their agent and runs the convenience stores at all 11 service plazas along the Massachusetts Turnpike as a McDonald’s subtenant.
Following the bankruptcy of the previous operator, the firm acquired four additional MassDOT service plaza facilities in 2017.
“We stepped in to ensure continuous service for the public,” said Mark Romaine, chief operating officer of Global Partners, in a statement to Boston.com. “The lease term was less than 10 years, which made it difficult to justify major capital investments.”
Additionally, Global Partners runs the gas stations and convenience stores at each of Connecticut’s twenty-three service plazas. In New England, the firm operates 225 more convenience stores and fuel stations, such as Alltown Fresh and Honey Farms Market.
Global Partners, according to Romaine, promises the state more than $1.5 billion in rent payments, which is almost $900 million more than the rival bid.
Additionally, the company claims to have better diversity agreements with its suppliers and to emphasize local connections, such as those with the organization CommonWealth Kitchen.
Since the board’s ruling, Global Partners has written to Secretary Tibbits-Nutt explaining how their proposal would benefit the state, sent a letter to Inspector General Jeffrey Shapiro requesting greater transparency in the process, and appeared on numerous news outlets explaining the superiority of their plans.
According to Romaine, the stakes are just too high for the state, taxpayers, and Massaschusetts’ transportation infrastructure’s future. We would accept the result if Applegreen had more to offer the Commonwealth and we were defeated.
Next steps
The board decided to move forward with Applegreen on the proviso of frequent audits and updates.
Bosworth stated at the board meeting that the commitment to the capital expenditure was what ultimately mattered.
He stated that we placed a great deal of importance on the capital expenditure. We want our facilities to be magnificent as we move forward.
For Boston.com, Beth Treffeisen works as a general assignment reporter, covering local news, crime, and business in the New England area.
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