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Board of Public Works approves travel plaza contract

ANNAPOLIS — Two Interstate 95 travel plazas will be “like-new” by December 2014 after the Maryland House and Chesapeake House are renovated to bring the facilities up to par with other plazas on the east coast.

Maryland House rest stop on I-95 near Aberdeen

The Board of Public Works Wednesday voted 2-1 to approve the disputed contract to renovate the travel plazas in Harford and Cecil counties as part of a public-private partnership with Miami-based Areas USA Inc.

The renovations are necessary because travel plazas from Delaware to Connecticut have more modern facilities than the 36-year-old Chesapeake House and 48-year-old Maryland House, Maryland Department of Transportation Secretary Beverley Swaim-Staley said.

Areas will begin demolition and construction at the Maryland House in mid-September, said Xavier Rabell, Areas’ CEO. The Chesapeake House will remain open while the Maryland House is under construction.

Gov. Martin O’Malley and Treasurer Nancy K. Kopp voted in favor of the award.

Comptroller Peter Franchot voted against it, citing concern over a lawsuit filed by HMSHost, a losing bidder in the Maryland Transportation Authority project. Lawyers for Bethesda-based HMSHost said they would continue to pursue their lawsuit, which claims Areas received an unfair advantage in the bid process.

“I just get the feeling we’re jumping the gun here,” Franchot said. “I would … feel a lot more comfortable if we allowed the legal process to run its course.”

At the board’s last meeting, on Feb. 22, Franchot moved to defer a decision on the vote until Wednesday because he was concerned a Montgomery County Circuit Court judge might grant a temporary restraining order, preventing the board from voting on the contract.

That order was granted by Circuit Judge Eric M. Johnson, but was dissolved last week, freeing the board to vote Wednesday.

John Wolf, an attorney representing HMSHost, said that the MdTA violated its own procedures for negotiating public private partnerships by not allowing an equal opportunity for bidders to improve their offer. Areas was offered the chance to negotiate a better deal with the agency after its initial bid, which was not afforded other bidders, Wolf said.

“Process is what this all about,” said Wolf, adding that HMSHost wanted there to be a “level playing field” in the bid process.

Wolf argued that should the courts decide to uphold the claims in HMSHosts’ lawsuit, the board could be forced to rescind the contract award, which would make the state responsible for paying all of Areas’ costs up to that point in the project.

But Stanley Turk, an assistant state’s attorney, said the court would likely allow the board freedom to act in the state’s best interest. He also said each bidder had enough opportunity to offer its best proposal.

“Unfortunately, in any competition, there can only be one winner,” he said.

Kopp and O’Malley said they were convinced the process conducted by the MdTA was fair. Both agreed it was unlikely the HMSHost lawsuit would result in the state having to rescind the contract awarded to Areas.

“I think that the process was fairly done,” Kopp said. “I’m quite comfortable supporting the decision of the MdTA and the secretary.”

Regardless, Wolf said HMSHost was “compelled to continue its lawsuit,” which will play out in Baltimore City Circuit Court. Paul Mamalian, HMSHost’s general counsel, said the board’s decision was “a disservice to the state of Maryland.”

“The state has put itself at risk,” Mamalian said.

But Rabell, Areas’ CEO, who said he was nervous before the board meeting, said afterward that his company would move forward with its demolition and construction plans, regardless of what moves HMSHost made in court.

“We are not concerned,” Rabell said.

The Areas proposal calls for an initial $56 million investment by the company, which has a “firm commitment” to complete its work on both plazas by September 2014. Areas will manage and maintain the property for 35 years, ending in 2047.

In the MdTA Request for Proposals, bids were evaluated on three criteria: that renovations created a new or like-new facility; allow for a positive customer service experience; and result in a fair financial return for the state, Swaim-Staley said.

And in response to claims by HMSHost that the process was unfair, Swaim-Staley said there was nothing wrong with the bid process.

“This is … extremely transparent,” Swaim-Staley said. “The process had more oversight and more review” than a normal procurement process. The award was unanimously approved by the MdTA’s board and was reviewed by the Department of Legislative Services and legislative committees before being brought to the Board of Public Works for final approval.

MdTA reserves the right to cancel the contract should Areas fail to deliver, Swaim-Staley said. The secretary said 400 construction jobs would be created during the renovation process.

Restaurants at Maryland House will include Wendy’s, Cosi, Dunkin’ Donuts, Nathan’s Famous, Jamba Juice, Pizza Hut and Baskin Robbins.

Chesapeake House will have Wendy’s, Qdoba Mexican Grill, Caribou Coffee, Jerry’s Subs & Pizza, Wetzel’s Pretzels and Earl of Sandwich.