Why did Applegreen drop out of the Massachusetts highway service plaza contract, and what's next?
The months-long controversy over plans to renovate 18 highway service plazas in Massachusetts took a sudden twist on Tuesday when winning bidder Applegreen pulled out of the project.
The Department of Transportation in June awarded the company founded in Ireland a 35-year contract to renovate the rest stops, 11 of which are located along the Mass Pike. Construction was planned to begin in January on redeveloping the plazas, with nine of them slated to be razed and completely rebuilt.
So, what happened?
Applegreen vs. Global Partners
"It's really hard to say," Boston Business Journal managing editor Don Seiffert said when asked why Applegreen ultimately decided to drop out now.
In its statement, Applegreen said there were "open issues" yet to be resolved in its negotiations with MassDOT. It also cited "costly and continued litigation threats from an opposing bidder."
That bidder is Waltham-based Global Partners, which has argued that it made a better offer for the contract and alleged that process was unfair.
"Global Partners really, they came out of the gate swinging when they didn't get this contract and from the very beginning started making a big deal about it, saying we should've been chosen, we're the local company," Seiffert told WBZ-TV's Courtney Cole. "They argued we'd give more revenue to the state. . . It is very unusual that the losing bidder would make this big of a play for it."
What's next for Massachusetts rest stops?
MassDOT CEO Monica Tibbits-Nutt said in a statement that the Department of Transportation is focused on "moving forward to deliver the highest quality services plazas as quickly as possible for the people of Massachusetts." But it's not clear yet if the agency will be working with Global Partners to make that happen.
"You would think on some level that Global Partners would be the one that the Department of Transportation would turn to. But you have to also think that Global Partners, they have sued the Department of Transportation, they probably haven't made too many friends there," Seiffert said. "So I could see the department kind of saying, well we don't really want to work with Global Partners either."
Global Partners CEO Eric Slifka says that his company is ready to move forward with the project.
"We are prepared to step in with a proven, low-risk transition plan that guarantees $1.5 billion in rent, and delivers on clean energy, diversity, and community commitments from day one," he said in a statement.
Seiffert noted that so far, MassDOT hasn't indicated whether it is going to go back to the drawing board and rebid the project, or just choose a different bidder.
"I think it's safe to say it's not going to begin in January, anyways," he said. "Beyond that, it's really impossible to say when the project might get off the ground."