Applegreen has announced that it is part of a consortium – Empire State Thruway Partners – which has been awarded and signed a conditional 33-year lease for the design, construction, financing, operation and maintenance of the 27 motorway service areas on the New York State Thruway.
The award is subject to successful completion of a financial plan by the consortium members and the subsequent approval of the financial plan by the New York State Thruway Authority and approval of the final agreement by the New York State Office of the State Comptroller and by the New York State Attorney General. The award is also subject to the consortium securing financing for the project, a process which is ongoing.
The sites are located on the New York State Thruway, which is a 570-mile superhighway system crossing the State, running from the outskirts of New York City north to the state capital, Albany and continuing on to Buffalo in the west of the State. The Thruway handles approximately 250 million trips annually, and accounts for an estimated 8 billion miles of travel each year. It is the longest toll superhighway system in the United States. The 27 service areas offer essential services on the route including fuel, quick-service food and beverage, retail stores, restrooms, EV facilities, truck fueling and other facilities, operating 24 hours a day and seven days a week. Total food, beverage and retail turnover for 2019 was approximately $118 million.
Subject to the lease award completing, the consortium said it will invest $300m between H2 2021 and H1 2025 in redevelopment capital expenditure which will be comprised of a mix of equity and project finance debt to be obtained by the Consortium. Applegreen will operate all 84 food and beverage outlets and a retail store on each site. Applegreen said it is expected to have a minority shareholding in the consortium and its equity contribution for the transaction is still to be determined and will be agreed as part of completing the consortium’s financial plan. It is not expected that there would be any equity contribution required from Applegreen before 2023.
The terms of the financial plan and lease agreement are yet to be finalised and remain subject to final approval. A further announcement, as appropriate, will be made in due course.