e-Texas e-Texassmaller smarter faster governmentDecember, 2000
Carole Keeton Rylander
Texas Comptroller of Public Accounts

Recommendations of the Texas Comptroller

Chapter 9: Transportation

Lease Rest Area Sites

to the Private Sector


The Texas Department of Transportation should offer rest areas on US highways for lease to the private sector to reduce state maintenance costs and provide travelers with additional services.


As befits its size, Texas has a huge network of US highways. Rest areas along these highways provide various amenities including restroom facilities, picnic tables, vending machines, and useful information for travelers. In fiscal 1999, the Texas Department of Transportation (TxDOT) maintained a total of 21 US highway rest stops, 85 percent of which were 20 years old or older. In the same year, the agency spent more than $966,000 for maintenance work on these rest areas, an average of about $46,000 per rest area.[1]

Federal law prohibits the leasing of interstate highway rest areas. No similar prohibition exists, however, for US highways; Texas could lease any or all of its 21 US highway rest areas if it could find interested private partners.[2] A survey conducted by the University of Texas at Austin’s Bureau of Engineering Research concerning US Highway 59 near Lufkin reported that 65 percent of 295 respondents supported the commercialization of rest areas (i.e. the involvement of private sector partners in both operating rest areas and offering commercial concessions).[3]

The state is missing opportunities to commercialize rest area sites that may have a significant potential for generating revenue. Texas has already realized some successes in leasing state-owned property; in December 1990, for instance, the state executed a lease on a 39-acre portion of the Austin State Hospital’s holdings that became the site of 870,000 square feet of mixed-use development.[4] Returns from the 75-year lease and associated subleases are projected to generate $270 million. At the end of the term the leasehold interest, along with all improvements, will revert to the state’s full control.

Some rest areas are not used steadily over the course of a typical day, and such sites tend to attract vandalism, panhandling, graffiti, drug use, and other unwelcome activities that cause the public to avoid them. Assuming that the highway carries enough traffic to attract customers, a private firm operating a business on a rest-area site might increase public safety for travelers.


The Texas Department of Transportation should issue a request for information (RFI) to identify vendor interest in leasing any of the state’s 21 US Highway rest areas.

This RFI would allow private vendors to consider and recommend options for using rest areas that would benefit the public and save taxpayer dollars. The public would reap benefits through improved amenities. The lessee would be responsible for maintaining each site, reducing the state’s maintenance costs.

To ensure that the property is used for public advantage, policymakers, local citizens, and area businesses should have input into the proposed uses of rest areas.

Fiscal Impact

Any fiscal impact would be contingent upon private interest in leasing rest area sites as well as the specific provisions in each lease contract. Potential savings to the state would derive from the elimination of construction and maintenance costs. Potential revenues would come from state shares of the sales of lessees as well as lease payments. Lease arrangements would incur some additional state administrative costs associated with TxDOT’s monitoring of the leases.

If Texas could lease two rest areas over the biennium, the state could realize savings of up to $92,000 per year for the State Highway Fund. Potential revenue gains cannot be estimated.

[1 ] Interviews with and e-mail from Richard Kirby, Texas Department of Transportation, June-August 2000.

[2] V.T.C.A., Transportation Code, Chapter 202.055.

[3] Texas Department of Transportation, Feasibility of Safety Rest Area Commercialization in Texas, by the Center for Transportation Research, Bureau of Engineering Research, the University of Texas at Austin (Austin, Texas, November 1992). (Consultant’s report.)

[4] Texas General Land Office, Real Property Evaluation Reports: Texas Department of Mental Health and Mental Retardation (September 1, 1993), pp. 5-6.

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Post Office Box 13528, Capitol Station
Austin, Texas

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