The New Jersey Turnpike Authority announced a public-private partnership agreement with two companies to invest more than $250 million into capital improvements for the agency’s 16 highway service areas.
The agreement announced Wednesday involves HMSHost and Sunoco paying for rest stop infrastructure enhancements in exchange for new contracts to continue operating food and fuel concessions along the New Jersey Turnpike and Garden State Parkway for the next 25 years.
"This is a once in a generation opportunity to do a public-private partnership in the cause of replacing aging service area facilities, as old as the toll roads themselves," said Christie in remarks announcing the new agreement. "This agreement will provide drivers with the safest, cleanest, most modern highway rest stops up and down the Turnpike and Parkway without spending any of their tax or their toll dollars to get it done."
The agreement, which is still subject to approval from the NJTA board of commissioners, includes HMSHost replacing 138,300 square-feet of service area buildings on the New Jersey Turnpike and Garden State Parkway that have operated since the mid-1950s, shortly after toll roads opened to traffic. Sunoco has committed $90 million for capital improvements along with a planned remodel of existing convenience stores and the construction of three new ones.
New Jersey's initiative follows in the footsteps of other states who have transformed aging rest areas through privatization including a
“The agreements compare favorably to the ones other toll road agencies have with their service area operators,” NJTA Executive Director Joseph W. Mrozek said in a statement. “With the rate of rents and fees the companies will pay and the minimum annual guarantees, we know that the food and fuel concessions will continue to provide an important source of non-toll revenue for the NJTA for the next quarter of a century.”
The NJTA is near the end of a $7 billion 10-year capital improvement program expiring in 2018 funded through the sale of revenue bonds and two toll increases for debt service payments. The authority sold $525 million of revenue bonds in March and is planning to issue $500 million in new money parity bonds later this year for the capital projects.
NJTA debt is rated A2 by Moody’s Investors Service, A by Fitch Ratings and A2 by S&P Global Ratings.
