A Baltimore circuit judge has dismissed a lawsuit against state officials and a Florida company that claimed the bidding process to award construction and operation of the two Interstate 95 travel plazas was illegal and biased.
Judge Audrey Carrion ruled this week that Bethesda-based HMSHost "had multiple opportunities" to object to state officials about the public-private partnership process that awarded a 35-year contract to Areas USA LLC to rebuild and operate the plazas. "Plaintiff did not do so," the judge concluded.
HMSHost brought suit after the Board of Public Works voted, 2-1, in March to give Areas USA the contract to replace and operate Chesapeake House in Cecil County and Maryland House in Harford County — two of the nation's busiest rest areas. Areas is rebuilding the two plazas for $56 million and promised to pay the state as much as $488 million over the deal's life.
Areas took over operations in September and began tearing down Maryland House to make way for a new facility.
HMSHost, operator of the plazas since 1987, contended that the Maryland Transportation Authority denied it the opportunity to sweeten its initial bid while extending that option to Areas. A Montgomery circuit judge granted and then lifted a temporary restraining order that blocked a vote by the Board of Public Works.
Carrion noted that as a public-private partnership, also known as a P3, the travel plazas deal was not subject to state procurement law. The request for P3 proposals "permits MdTA to negotiate with any, some or no participants; the agency can request from any, some, or none, a best final offer as it sees fit," she wrote.
The suit named as defendants the transportation authority, the members of the Board of Public Works and Areas.
HMSHost officials expressed disappointment with the ruling and said they are still evaluating legal options.
"This decision ignores the fact that the state did not follow its own rules and regulations in awarding this contract," said Tom Fricke, HMSHost's president and CEO, in a statement. "This decision is not only bad for HMSHost, but for all Marylanders."
State officials declined comment.
Said Xavier Rabell, CEO of Areas USA: "We are pleased with the judge's decision to dismiss this case. It is what we expected from the beginning. Areas USA is proud to be a partner with the Maryland Transportation Authority in this important and exciting project that will benefit the state of Maryland, its citizens and traveling public."
The project is the second major public-private partnership undertaken by state transportation officials within the past three years as they look for ways to upgrade infrastructure without incurring taxpayer expense. A $1.3 billion deal with Ports America Chesapeake to enlarge the Seagirt Marine Terminal to handle massive Panamax cargo ships opened the door for other deals, state officials said.
Under the terms of the agreement, Areas will replace the plazas with modern, airy structures and share a portion of its revenue with the state. In addition, Areas will spend millions on upkeep and capital improvements as the plazas age.
During redevelopment, Areas will keep one travel plaza open. Maryland House, to be built on the same footprint, will reopen in December 2013. Chesapeake House will then close, be rebuilt on an adjacent site and reopen in September 2014.