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Federal Highway Administration Research and Technology
Coordinating, Developing, and Delivering Highway Transportation Innovations
This magazine is an archived publication and may contain dated technical, contact, and link information.
|Publication Number: Date: Sept/Oct 1998|
Issue No: Vol. 62 No. 2
Date: Sept/Oct 1998
Traveling along Interstate 35 in north central Iowa, just south of the Minnesota border, you might think the bright red barn and checked silo are just another part of the Iowa landscape. However, this barn is no ordinary block and wood structure. It's the new Top of Iowa Welcome Center and Rest Area.
Perhaps one of the most uniquely designed rest areas in the country, Iowa's new welcome center and rest area opened in June to an estimated 635,000 visitors a year. On the first day alone, more than 6,000 visitors stopped by to take a peak inside this unusual structure.
Most visitors are amazed by the contrast between the center's appearance, with the high-beam ceiling and loft of a traditional barn, and the high-tech accommodations, such as an Internet kiosk and road-weather information system. The facility is truly a blend of Iowa's rich agricultural history and its booming technology industry.
The story behind this unique barn raising began nearly eight years ago. The Iowa Department of Transportation (DOT) was aware that the physical condition and appearance of some of its rest areas were deteriorating. Many sites that were built during the height of the interstate-building era were approaching the end of their useful lives.
Besides the problems of age, the spacing of sites and capacities of those facilities were not keeping pace with increased traffic volumes. Cost of construction, rehabilitation, and maintenance of rest area facilities were also of concern. To address these needs, Iowa DOT developed a 10-year plan to replace or establish 10 rest areas.
To carry out the plan, Iowa DOT began exploring various alternative funding sources. Involvement by the private sector was one option that could provide a source of capital, saving taxpayer money and expediting construction of the new sites.
While Iowa DOT was attempting to implement its rest area plan, the Iowa Department of Economic Development (IDED) was looking for sites to build additional welcome centers in the state. In particular, they were looking for sites at Iowa's gateway areas. A combination rest area and welcome center just south of the Minnesota border was a natural.
Sharing a facility with IDED also meant the availability of financial assistance to build the combined site. Establishing a partnership between the two state agencies was fairly easy to accomplish. Securing a private partner would prove to be a more difficult task.
Establishing a public-private partnership can take considerable time. This project was no exception. From conceptualization to the grand-opening ceremony held in June, nearly eight years had passed.
Finding a "good match" between the needs and wants of the state and a private sector organization can be a challenge. To find that right match, Iowa DOT advertised for potential partners and held an informational meeting. As a result, Iowa DOT received proposals from three organizations, each offering their own financing ideas.
After lengthy negotiations, Iowa DOT signed a formal partnership agreement with The I-35/105 Welcome Center Inc. (a private, nonprofit organization). The I-35/105 Welcome Center Inc. is an organization made up of area business and community leaders from Worth and Winnebago counties in north central Iowa. They owned a 23.5-hectare site adjacent to the interstate right of way and near the first exit going south into Iowa on I-35.
Financial contributions among the three partners for the rest area/welcome center totaled $2.5 million. Iowa DOT invested $1.8 million, IDED $350,000, and The I-35/105 Welcome Center Inc. $350,000. At the grand opening, Darrel Rensink, Iowa DOT director, spoke about the commitment and dedication of the community throughout the process.
"My mother always said, 'Where there is a will, there is a way.' While her words may not have been original, they could not have been more true. The community had the will, and together we found a way to make it happen," said Rensink.
As anticipated, when venturing into unexplored territory, the project generated a fair amount of questions and controversy. In fact, the controversy started well before the structure was built.
While most of the questions and concerns were eventually laid to rest, one aspect of the project continued to be controversial throughout most of the process. The issue related to the possible sale of property that adjoined the rest area site. That property was also owned by The I-35/105 Welcome Center Inc. The interchange was not commercially developed, but if the rest area were built there, the organization would have a greater opportunity to sell the adjoining land to commercial developers whose businesses would benefit from the traffic generated by the rest area.
Owners of existing businesses along interstate highways expressed concern that the project - and possibly similar ones in the future - would, in some way, benefit one business at the expense of others. In other words, they saw the construction of the rest area facility as the "catalyst" for commercial development at a highway interchange. Travel service businesses operating at nearby interchanges envisioned competition and a threat to their livelihoods.
Backers of the project disagreed. They said the rest area/welcome center could not, on its own, serve as a single catalyst for private commercial development of adjoining properties. They did, however, acknowledge that economic development could be stirred in the area and that would benefit the state and local economies. Those who would be involved in the development of the area would be other private, commercial ventures, which meant an opportunity for fair competition for any business interests. There was no direct state subsidy of any private business.
Eventually, the 7.7 hectares adjoining the rest area site were sold by The I-35/105 Welcome Center Inc. to a private agricultural-based conglomerate. The buyer plans to solicit financial support from investors to build a fast-food restaurant, a convenience store, a motel, a craft and antique mall, and other shops. They also plan to retain the agricultural theme established by the barn and silo.
Unable to dissuade the concerns of the existing interstate businesses, the Iowa Legislature was urged by private interests to prevent Iowa DOT from entering into similar public-private arrangements in the future. The bill, which passed in March 1997, did not affect the Top of Iowa project, which was well underway by this time. However, the retroactive bill stated that after Jan. 1, 1997, private persons, firms, or corporations entering into an agreement with Iowa DOT cannot develop, establish, or own any commercial business located on land adjacent to the rest area that is subject to the agreement. The interstate rest area must also be located entirely on the interstate right-of-way, including - but not limited to - all entrance and exit ramps; all rest area buildings, including information centers; and all parking facilities. The bill also stated that Iowa DOT money and resources cannot be used for any other type of interstate rest area.
When the governor signed the legislation into law, Iowa DOT ceased its negotiations with other parties who had expressed interest in establishing similar partnerships. The Top of Iowa Welcome Center and Rest Area may be the first and only such project in Iowa.
Terms and Negotiations
DOTs from throughout the country have been watching and learning from Iowa's experience. Will Zitterich, director of Iowa DOT's Office of Maintenance Services, was involved in the project since its inception. He points out some areas one should consider when negotiating the terms of similar rest area/welcome center ventures.
"Areas you want to be sure to discuss with your partners are ownership of the land and facility, design and planning, financing options, construction, and maintenance and management of the facility. It's also a good idea to get your legal department involved right from the beginning," Zitterich said. "From Iowa DOT's perspective, this had to be a win-win situation. There had to be a positive gain for the DOT to assume the risks and make the extra effort it takes to establish a private-public partnership," he said.
Iowa DOT is projecting a savings of $3.5 million over the 30-year life of the partnership. In this case, Iowa owns the land, building, well, and parking facilities. The sewage lagoons, which are located across the roadway, remain the property of the nonprofit organization. This arrangement provided the financial security desired by the state for its substantial investment and the long-term maintenance of the property.
Costs associated with the design and planning of the rest area/welcome center were shared among the partners. The barn and silo design was proposed by the members of The I-35/105 Welcome Center. On the first floor are the rest area facilities, janitorial storage and break room, vending machines, road-weather information system, telephones, and Internet and E-mail connections.
On the upper level is the Barn Boutique Gift Shop that offers visitors an array of Iowa-made products. In addition, visitors can find information kiosks, tourism materials, a volunteer-staffed welcome center, and the business office. The silo serves as an elevator between the two floors and meets the requirements of the Americans With Disabilities Act.
Outside the building are aesthetically pleasing picnic areas with tables, shelters and grills, pedestrian walkways, a pet exercise area, and adequate parking space.
In summary, Iowa DOT's agreement with IDED stipulates that the welcome center will lease the upper level for purposes of operating the center and gift shop. Instead of cash lease payments, the welcome center is required to maintain and operate the rest area for a 30-year period. This includes janitorial service, grounds maintenance, trash removal, and snow plowing.
DOT does, however, contribute 100 percent of the cost of consumables for the rest rooms and does pay part of the annual operating and maintenance costs. During the first six years, DOT will also pay the actual costs of any infrastructure repairs. Revenues generated from vending, the gift shop, and kiosk rentals are retained by the welcome center.
This unique partnering project was something that officials of the Federal Highway Administration (FHWA) in Ames, Iowa, had never encountered in the past. Nevertheless, staff from FHWA's Iowa Division were committed to finding ways to "make it work."
Besides reviewing the design options, FHWA officials assisted Iowa DOT in working through two of the most difficult issues.
First, the rest area site is not located within the interstate right of way, yet the state wanted the site to be designated an official interstate rest area accompanied by the appropriate blue-and-white signs. The official designation was desired because it would help attract highway users to the site. On the other hand, a location outside the right of way made it more desirable for the private sector because federal and state laws restrict the types of activities that can be conducted on public rights of way. This issue was resolved by making some design modifications, and the site was designated an official interstate rest area.
The second issue involved access to the noncommercial areas of the site. FHWA wanted to ensure that the traveling public would be allowed direct access to and from the rest rooms without passing through a commercial business area. Modifying the traffic flow within the parking area and restricting access to the site overcame this hurdle.
For more information about this partnering effort, write or call Will Zitterich, Iowa Department of Transportation, 800 Lincoln Way, Ames, IA 50010, telephone (515) 239-1396.
Dena M. Gray-Fisher is director of the Office of Media and Marketing Services of the Iowa Department of Transportation. She is also a member of the American Association of State Highway and Transportation Officials (AASHTO) Subcommittee on Public Affairs, the Strategic Highway Research Program Winter Maintenance Lead States Team, and the Standing Committee on Quality Communications Team.