James A. “Jimmy” Haslam III, CEO of Pilot Flying J and a board member of the National Truck Stop Operators Association, is urging state and federal lawmakers to block further “commercialization” of highway rest stops.
In his home state of Tennessee, where Haslam’s brother is governor, his viewpoint appears likely to prevail — at least for now. Several state legislators, while saying they are willing to explore the idea if it helps the state budget, also say they have no plans to push it.
And John Schroer, the commissioner of the state Department of Transportation appointed by Gov. Bill Haslam, is opposed to such rest stop privatization efforts in Tennessee.
Current federal law generally prohibits states from setting up commercial operations at rest stops along Interstate highways except those states — mostly in the Northeast — where Interstates were in place before 1960. But some states and organizations are pushing for change in the law by Congress at a time when state governments are seeking new revenue.
“While at first glance this may seem like an easy way for state DOTs to generate revenue, the fact is it will devastate private businesses like mine that for the last 50 years have operated under the current law and established locations at the highway exits,” said Haslam in his letter. “The advantageous location of state-owned commercial rest areas establishes virtual monopolies on the sale of commercial services to highway travelers.”
Tennessee currently has 18 rest areas and will spend $3,752,548 to operate them this fiscal year, according to TDOT spokeswoman Lyndsay Botts. The state contracts with CMRA Community Rehabilitation Agencies of Tennessee to clean the facilities, provide tourist information and the like
The state also operates 14 “welcome centers” along the state’s borders at a cost of $6.2 million o Tennessee taxpayers for the current year, Botts said in an email. The workers there are employees of the state Department of Tourism.
The only services offered at the rest areas and welcome centers — other than information, restrooms and a place to relax with picnic tables — are vending machines operated by Tennessee Business Enterprises Program Services for the Blind.
In contrast to Tennessee, where the combined cost of operations is about $10 million per year, other states are making money off their rest stops. In Delaware, where full commercialization is allowed under federal law, a contract guarantees the state at least $1.6 million per year and perhaps more, depending on the contractor’s profits, according to a Stateline article. The contractor spent $35 million building a 42,000-square foot welcome center last year, the article says.
In Virginia, where full commercialization with restaurants and gas stations is not permitted, Gov. Bob McDonnell’s administration recently awarded a contract for operating vending kiosks and sale of advertising rights at 42 rest areas and welcome centers that is projected to net about $2 million per year, according to the AP.
In Tennessee, Botts said in an email that TDOT Commissioner Schroer “believes that privatizing the operations of our facilities is not in the best interest of the state of Tennessee and would not be compatible with the vision of the department.
“We (TDOT) maintain that commercializing rest areas with direct access to the Interstates would compete with businesses located along the interstate exits, resulting in fewer options for motorists,” Botts said.
That view echoes the sentiments of the National Association of Truck Stop Operators (NATSO). Jimmy Haslam’s letter was sent with that in mind to state and federal lawmakers representing Pilot Flying J’s headquarters in Knoxville, said spokeswoman Cynthia Moxley
“The commercialization of rest areas is the No. 1 issue facing the truck stop industry and has been for many years,” she said in an email responding to a reporter’s request for comment.
“Commercializing rest areas will not add to the amount of goods sold on the interstate. It will only shift those sales away from the current operators.
“There currently is no shortage of items available for sale. There is no need for this change. Jimmy Haslam’s letter was in support of the industry’s position on this matter,” she wrote.
Moxley said Gov. Haslam, who was chairman of the NATSO board in 1999 while a Pilot executive, was sent a copy of the letter as were state Rep. Harry Tindell, D-Knoxville; Sen. Stacey Campfield, R-Knoxville; U.S. Sens. Lamar Alexander and Bob Corker, and U.S. Rep. John J. “Jimmy” Duncan of Knoxville.
The governor was in California last week on a business-recruiting trip and his spokesman, David Smith, referred questions to Botts.
Campfield, Tindell and a sampling of other state legislators interviewed said they were not familiar with the move to privatize rest stops, but would be open to consider the idea.
“That’s something we ought to take a look at,” said House Majority Leader Gerald McCormick, R-Chattanooga.
Tindell voiced some skepticism that the revenue from privatized rest stop contracts would outweigh the losses to businesses now relying on sales to interstate travelers, saying such a move “might be throwing the baby out with the bath water.”
A spokesman for Alexander said the senator has not received the letter and declined comment.