Sign up for the Today newsletter
Get everything you need to know to start your day, delivered right to your inbox every morning.
Global Partners is pressing the state to reverse deal over MassDOT service plazas
Despite losing out to Irish-owned Applegreen, Waltham-based Global Partners says its bid would’ve brought in more revenue and kept operations local.
Global Partners is challenging a state decision to award control of 18 Massachusetts highway service plazas to a rival company.
But even with overwhelming support in public comments, a media blitz, asking the state’s inspector general for help, and pleading with the secretary of transportation, the decision has yet to be overturned.
Waltham-based Global Partners argues this will cost taxpayers millions and keep operations out of local hands.
Irish-based Applegreen stands in their way, touting its readiness and willingness to transform the service plazas.
The MassDOT Board of Directors approved Applegreen’s contract at a June 18 meeting. The only person who can overturn this decision is the governor.
Advertisement:
“This fight for Massachusetts is not over,” Global Partners said in response to the board’s decision. “As MassDOT enters the next phase of the bid process, we hope they will truly consider what they’re giving up.”
The competition
The state hasn’t renovated its service plazas since the 1950s, and many now require major upgrades or complete rebuilding.
According to the state, McDonald’s holds a master lease for food at 14 of the 18 service plazas. Global Partners holds a master lease for food and fuel at four service plazas, in Barnstable, Beverly, and two in Bridgewater.
Advertisement:
Gulf holds the master lease for fuel at 11 service plazas on the Pike, and McDonald’s has the lease for fuel at the Newton and Lexington service plazas.
The call for a request for proposals happened because 14 of the 18 service plaza leases are ending on Dec. 31.
“This is an exciting moment for Massachusetts,” MassDOT Secretary & CEO Monica Tibbits-Nutt told Boston.com. “These service plazas will provide modernized facilities and expanded concession and retail options for the people of Massachusetts and our many visitors.”
Tibbits-Nutt says MassDOT was pleased to receive strong interest from several “highly qualified” companies. However, after a “thorough process,” MassDOT authorized them to award the contract to Applegreen, which she said “has the best experience, will start faster and finish faster.”
Applegreen’s plans include beginning construction on Jan. 1, with completion expected by 2028.
The state says the company proposed the highest capital investment among the other bidders, $750 million, which allows it to rebuild nine plazas and renovate the others.
According to the state, Global’s rent revenue was projected to be $375 million more than Applegreen’s, based on year one revenue over the life of the lease. Global, however, offered $250 million less in capital investment, making the total difference in revenue $125 million between the two companies, according to the state.
Advertisement:
“We wanted significant capital investment,” said Scott Bosworth, MassDOT’s chief development officer, at the June 18 hearing. “We want our facilities to be completely revamped, but also to be maintained that way, and then when they’re ready to be handed back to us, have done so in a way that they will last for years and years to come.”
What Applegreen is promising
Applegreen is working with Suffolk Construction to complete the renovations and rebuilds in a three-year span.
“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,” Bob Etchingham, founder and executive chairman of Applegreen, said in a statement to Boston.com.
The company has proposed three different designs: coastal for the eastern part of the state, an industrial feel for the central and metro areas, and a tribute to the Berkshires in Western Mass.
Etchingham says that the company recognizes that during the life of the 35-year contract, Massachusetts residents will increasingly rely on electric vehicles, and the plazas will reflect that.
The proposal commits over 700 EV charging stations, does not rely on fossil fuel consumption to meet the state’s financial goals, and has designs equipped for travelers waiting for their cars to recharge with more seating, playgrounds, and dog parks.
Advertisement:
In addition, Applegreen is a single-purpose entity and will be in charge of all aspects of the plazas.
Applegreen operates about 530 locations and over 700 individual food and beverage offers, employing 18,000 people globally, including over 7,000 in the U.S.
The company operates 113 service plazas in the U.S. and has partnered with with state authorities and departments of transportation in 10 states, transitioning 260 plazas.
Most recently, Applegreen partnered with the New York State Thruway, with a $450 million project to modernize the 27 service areas. The company took some flak from visitors who complained that one of its tenants Chick-fil-A is closed on Sundays, one of the busiest days at the service plazas.
Global Partners gripes
A Fortune 500 company, Global Partners operates the convenience stores at all 11 service plazas along the Massachusetts Turnpike as a subtenant of McDonald’s and manages fuel operations on behalf of Gulf as their agent.
The company took over four other MassDOT service plaza locations in 2017 after the prior operator went bankrupt.
The lease term was less than 10 years, which made it “difficult to justify major capital investments, but we stepped in to ensure continuous service for the public,” Mark Romaine, Global Partners chief operating officer, said in a statement to Boston.com.
Global Partners also operates the convenience stores and fuel operations at all 23 service plazas in Connecticut. The company has 225 additional company-operated fuel and convenience store locations throughout New England, including Alltown Fresh and Honey Farms Market.
Romaine argues that Global Partners guarantees more than $1.5 billion in rent payments to the state, nearly $900 million more than the competing bid.
Advertisement:
The company also says it values local partnerships like with the nonprofit CommonWealth Kitchen and has better diversity agreements with its suppliers.
In response to the board’s decision, Global Partners has since sent a letter to Inspector General Jeffrey Shapiro asking for better transparency in the process, written a letter to Secretary Tibbits-Nutt outlining how their proposal would be better for the state, and has gone onto multiple news outlets outlining why their plans are superior.
“The stakes are simply too high — for the state, for taxpayers, and for the future of transportation infrastructure in Massaschusetts,” Romaine said. “If Applegreen had more to offer the Commonwealth and we lost, we’d respect the outcome.”
Next steps
The board voted to proceed with Applegreen with conditions for regular updates and audits.
At the board meeting, Bosworth said what it came down to was the commitment to the capital expenditure.
“The capital expenditure was very important to us,” he said. “As we go forward, we want out facilities to be grand.”
To comment, please create a screen name in your profile
To comment, please verify your email address
Conversation
This discussion has ended. Please join elsewhere on Boston.com