Privatization of Rest Stops Directly Competes with Cities’ Local Businesses

February 26, 2018 - (4 min read)

This is a guest post by Jason D. King, Vice President of Corporate Communications, Clear Channel Outdoor Americas, with Brittney Kohler, NLC’s program director for transportation and infrastructure.

Tucked into the President’s infrastructure proposal to Congress is an old idea that hasn’t gotten any better with time — letting states privatize highway rest areas to directly compete with local small businesses in towns across America. The proposal would allow states to convert highway rest areas into full-service plazas with restaurants and gas stations, but every business that has set up shop to serve drivers and trucks at highway exits would now face direct competition from the state government supported businesses.

With this scheme resurfacing again in Congress and its potential to undercut the local tax base, cities should be watching this issue closely.

When the Interstate system was developed in the 1950s, Congress decided to prohibit commercial establishments on the highway right of way in order to protect small towns and existing businesses located off the road. Food-and-fuel service plazas already built, mainly in the East, were grandfathered.

Republicans usually are not keen to have government getting in the way of local businesses, yet some seem to be wavering in the House. The good news is that the Senate’s Environment & Public Works Committee Chair Senator John Barrasso (R-WY), a key leader on any transportation proposal that moves through Congress, has opposed further commercialization. He cites these reasons:

  • Businesses, many of them considered “small business,” made major investments near highways on land outside the public right of way.
  • Local businesses near highway exits are “often the largest taxpayer and economic backbone of communities located near the Interstate,” the senator said.
  • The public right of way for highways was acquired with public funds for a public purpose.

Barrasso’s public position is incredibly helpful to protecting cities’ local businesses because of his role as chairman of the Senate’s Environment & Public Works Committee and a member of the Senate Republican leadership team. In 2012, the Senate voted 86-12 to reject further commercialization of highway rest areas. Barrasso voted with the overwhelming majority.

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Cities also face the challenge of their zoning authority being usurped by allowing this further commercialization of mostly rural areas, previously designated as agricultural or conservation and open scenic space.

States have been pondered all sorts of auctions to generate revenue, including the sale of naming rights, leasing and commercializing rest areas, and allowing commercial advertising on the highway. But these types of proposals require federal approval, and USDOT often rejects these proposals especially if they have safety implications.

Screen Shot 2018-02-26 at 10.06.00 AM.png
Proposed sponsorship of Texas highway signs.

For example, Texas pushed a plan to sell sponsorships of official highway signs. Corporate logos would cover one-third of changeable-message traffic signs (pictured at right). But in June of 2017, the Federal Highway Administration (FHWA) said “no,” citing existing laws and regulations.

In April last year, FHWA also rejected a proposal from a motorist in Pennsylvania to sell commercial ads on back sides of overhead traffic signs. “All real property within the right of way boundaries must be ‘devoted exclusively to public highway purposes,’” FHWA said in a letter dated April 26, 2017, on behalf of Transportation Secretary Elaine Chao.

While Congressional leaders like Sen. Barrasso and USDOT are siding with cities and the outdoor advertisers today, protecting local businesses from being undercut and preserving the public right of way will be an ongoing effort that we’ll be working together on.

If your city, town or village has local businesses on a highway exit and would be undercut from privatization of rest areas, let Brittney Kohler at the National League of Cities and your Member of Congress know today.

Jason_King_Close_Up_No_Tie_APRIL_2016.jpgAbout the Authors: Jason D. King is senior vice president of corporate communications and marketing at Clear Channel Outdoor.




brittney2_ready.jpgBrittney Kohler is the program director for transportation and infrastructure at the National League of Cities.