Michigan Should Commercialize Its Rest Areas

Driving on I-75 on a cold day while running late and low on gas, you might ponder why the state's rest areas don't offer a place to fill up or grab a bite to eat. The answer is that business endeavors on Michigan highways are prohibited by state and federal law. While removing these restrictions may be politically difficult, doing so would help motorists looking for convenience and a state looking for revenue.

Rest areas can be traced back to 1929, when the manager of the Ionia County Road Commission created the nation's first "roadside park" after seeing families stop on the roadside to have a picnic.

The Interstate Highway Act of the 1950s stipulated that more of these "Safety Rest Areas" be included in the construction of the interstate highway system. These areas were put in vast stretches of land and wilderness between cities, where common services might not be available, according to historian Joanna Dowling. State and federal law, however, did — and still does — prevent commercial endeavors along interstate right-of-ways.

Little has changed since the Highway Act's inception. According to federal regulations, rest areas exist to "provide facilities reasonably necessary for the comfort, convenience, relaxation, and information needs of the motorist." Michigan law echoes the federal law: "The state transportation department shall allow only the installation of vending machines at selected sites on the limited access highway system to dispense food, drink, and other articles that the state transportation department determines appropriate."

Drivers may be aware that other states have turnpikes with multiple food vendors, gas stations and other commercial endeavors. Different laws govern service plazas on toll roads, and they allow for business activity. That the law treats rest areas as safety features on the highway ignores the use that most people get out of them.

We don't live in that 1950s world where there is pent-up demand for a roadside picnic. There are lots of opportunities to eat at local parks and public forests. In fact, it's likely that rest areas that offer more services, such as food and fill-ups, would be quite popular. Speculators have even purchased options to buy land adjacent to rest areas just in case the state permits commercialization.

Obviously, there's going to be pushback for selling rest area assets. Converting Michigan's 81 rest areas to commercial convenience areas would mean that all of the off-ramp gas stations, truck stops and fast-food restaurants would face new competition from places with easier access.

Also, many of the rest areas may not be big enough. Current rest areas are designed to accommodate motorists' habits — average stops of 15 minutes or less. If people are also getting food and gas, however, additional parking may be needed, and expansion might not be possible in some areas. But like an autographed baseball, you're never quite sure what it is worth until you try to sell it.

Of course, beyond the benefits of offering drivers new and attractive services, commercialized rest areas could serve as a revenue source for the state. The restaurants and retail establishments at Ohio's 14 turnpike service plazas returned $13.6 million to the state last year, and there were additional revenues from its other commercial endeavors. While Michigan's potential revenues are difficult to estimate, they could easily be in the millions of dollars. Because the rest areas are in locations all around the state, however, a quick analysis of their expected market value is unavailable.

Since the state is prohibited by state and federal law from commercializing its rest areas, it  has three options.

First, the state could theoretically convert its roadways to turnpikes and reclassify its rest areas as toll plazas. That is unlikely, and revenues from commercialized rest areas should not be the impetus for making such a drastic change in how Michigan finances its highways.

Next, the state could apply for a waiver of rest area commercialization regulations from the Federal Highway Administration. A Special Experimental Project (SEP-15) waiver was created to allow public-private partnership experiments and may allow the state to waive commercialization restrictions. However, it is up to the administration to approve these waivers, and no waivers for rest area commercialization have yet been approved.

Finally, Michigan's congressional delegation could work to eliminate commercialization restrictions. Congress looked at removing these restrictions in the past two highway spending reauthorizations, but have not done so. Eliminating the restrictions would be the most straight-forward way of opening Michigan's rest areas to privatization.

All three options would require changes in Michigan's law as well.

Allowing commercial service plazas would help state legislators meet current road construction needs. Travelers, too, would benefit from a wider selection of roadside services.

James Hohman is a fiscal policy analyst at the Mackinac Center for Public Policy.