MOCO JUDGE TELLS

HMSHost TO HIT THE ROAD

IN I-95 TRAVEL PLAZA

FIASCO

Montgomery County Circuit Court Judge Eric Johnson rebuffed Bethesda's HMSHost's request to stop the Maryland Board of Public Works from voting on a new I-95 travel plaza contract yesterday.

This means Treasurer Nancy Kopp, Governor Martin O'Malley and Comptroller Peter Franchot are now free to consider the winning bid from Spanish subsidiary Areas USA on March 7 at 10 AM.

The decision is unlikely to be the end of the dispute. Johnson noted that other legal issues outside of the question he ruled on remain. It was somewhat surprising, however, because Johnson felt there was enough evidence on HMSHost's side that he issued the initial injunction.

Now the potential exists for a Maryland-based company - with 1200 employees in the state - to lose a bid to a foreign firm. That is going to be a public relations nightmare, as is the question of a deal that essentially turns 85% of the profits over to Areas.

My guess is that there will be another legal action by HMSHost before Wednesday. This is simply too lucrative of a contract for any bidder to pass it up.

MOCO JUDGE:

MD MTA VIOLATED

PROCUREMENT LAW, REGULATIONS

IN I-95 TRAVEL PLAZA

BIDDING PROCESS

Circuit Court Issues Temporary Injunction

Requested by Bethesda's HMSHost

Montgomery County Circuit Court Judge Eric Johnson sided with Bethesda-based HMSHost in a dispute over who will renovate and operate two I-95 travel plazas.

The Maryland Transportation Authority had selected Spanish subsidiary Areas USA, but HMSHost charged that the state excluded it from a final round of negotiations. Areas has little experience in the travel plaza field, but its bid offered the best financial deal for the state.

Maryland's powerful Board of Public Works had delayed its ruling on the Areas contract Wednesday, in deference to Johnson's imminent ruling in Rockville. The BPW plans to take the matter up at its March 7 meeting.

But, in another dramatic twist in this rest stop soap opera, Johnson has scheduled a hearing for the same morning - just one hour prior to the BPW meeting!

One reason the issue has become unusually sensational by Maryland standards, is the perception that a taxpaying Bethesda, MD company has been rudely knocked aside in favor of a foreign subsidiary.

HMSHost's complaints are substantive. For example, the pie-in-the-sky financial projections in the Areas bid seem hard to believe.

While that has been noted in most media accounts, there's an additional obstacle to those rosy projections of massively-higher gas sales at Maryland travel plazas: the new gas tax hike expected to be passed by the General Assembly this session. Most drivers have smartphone apps that tell them gas prices at each station. If drivers know that gas is cheaper in Delaware and Virginia, who in their right mind would plan to fill up in Maryland along I-95?

Expect more twists and turns before this is over. But Johnson's ruling indicates that HMSHost's claims of exclusion are more than just sour grapes; the court would not have stopped the process otherwise. That bodes well for one of Bethesda's largest international firms going forward.

MD BOARD OF PUBLIC WORKS

VOTES TO DELAY I-95 TRAVEL

PLAZA DECISION

Breaking news: The Maryland Board of Public Works has decided to delay a final decision on a contract to renovate and run two I-95 travel plazas. Areas USA was the winning bidder.

Montgomery County Circuit Court Judge Eric Johnson will rule on a challenge by Bethesda-based HMSHost in the next twenty-four hours.

HMSHost seeks to reopen the bidding process, claiming it was excluded from a final round of negotiation.

Johnson will decide whether or not to grant an injunction. For that reason, the Board will wait until its March 7 meeting to revisit the travel plaza issue.

MD TRAVEL PLAZA

CLIFFHANGER:

WILL THEY OR

WON'T THEY?

Courtroom Shocker Leaves

Maryland Board of Public Works

Free to Vote on Controversial

Contract Wednesday

Yet another twist in the ongoing soap opera over the future of Maryland's I-95 travel plazas occurred in court today. The Montgomery County judge weighing a 10-day restraining order requested by HMSHost now won't rule until Thursday. Just one problem: the Maryland Board of Public Works is scheduled to vote on the matter tomorrow.

Montgomery County Circuit Court Judge Eric Johnson announced his decision today, leaving the Board with the option to approve the winning bid by Spanish subsidiary Areas USA, or table the matter until Johnson's final ruling.

Bethesda-based HMSHost has argued that Areas' bid has wildly-overblown financial projections, and that HMSHost was excluded from a final round of negotiations between Areas and the state.

Johnson's announcement sets up a double-cliffhanger. First, will the Board go ahead and vote on the matter despite the legal uncertainty? And will Johnson provide HMSHost, Airport Plazas LLC and others with the reopened bidding process they seek on Thursday?

Stay tuned!