Saks Fifth Avenue Is Latest Mall Anchor To Prepare For Bankruptcy Filing

Saks Fifth Avenue Is Latest Mall Anchor To Prepare For Bankruptcy Filing

Macy’s, JCPenney, Neiman Marcus, and now Saks Fifth Avenue: in just a few weeks, the four core pillars and anchor tennants of the US mall sector will file for bankruptcy.

While we previously reported that the former two retail icons had entered their bond grace period ahead of filing a formal Chapter 11 bankruptcy petition, on Wednesday afternoon Bloomberg reported that Hudson’s Bay Co had also missed its April payments on at least two commercial mortgage-backed securities that were part of $696 million in financing for Saks Fifth Avenue and other stores.

The securities, originated in 2015, were current until this month when the company missed interest-only debt payments totaling only $3.2 million, according to data compiled by Bloomberg and a person familiar with the matter. According to Bloomberg, the missed payments were on securities that financed 34 properties – 10 Saks and 24 Lord & Taylor stores. The Saks locations include Beverly Hills, California, Atlanta, Chicago and Miami.

Demonstrating the shock to the retail sector over the past month, almost 11% of retail CMBS loans were as much as 30 days delinquent this month, up from 1.7% in March, according to an April 23 report by the CRE Finance Council, a commercial real estate trade group.

Hudson’s Bay, which aggressively rolled up the retail sector earlier this decade, operates chains of retail stores which have been hit hard by social-distancing guidelines that have frozen much the economies in the U.S. and Canada. Of course, the coronavirus crisis only exacerbated stress faced by department stores even before being forced to close, as shoppers increasingly shifted to online shopping. Now, those problems are getting worse.

As previously reported, Macy’s, which furloughed workers and shuttered stores, is exploring a rescue financing deal to shore up its liquidity. Neiman Marcus Group missed payments on some bonds this month, and late last week, J.C. Penney Co. also skipped an interest payment and huddled with advisers, with bankruptcy among the options under discussion.


Tyler Durden

Wed, 04/29/2020 – 15:40

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How Justin Amash’s Presidential Campaign Changes the 2020 Election

Rep. Justin Amash of Michigan has announced his campaign for the Libertarian Party’s presidential nomination, which will be decided at the L.P.’s convention in May. Originally elected as a Republican in 2010, Amash left the GOP last July and became an independent. By dint of his new party affiliation, he has also become the first Libertarian member of Congress.

On today’s podcast, Nick Gillespie talks with his Reason colleagues Matt Welch, who interviewed Amash just hours after his announcement, and Brian Doherty, who talked with his L.P. rivals shortly after the news of Amash’s campaign became public. They discuss Amash’s platform, his likely reception among L.P. activists, and what sort of impact the congressman’s presence is likely to have on the 2020 presidential race. They also each suggest a possible campaign song for the 40-year-old Grand Rapids native.

Audio production by Ian Keyser.

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8 of The Top 10 Biggest U.S. Coronavirus Hotspots Are Prisons and Jails

Eight of the top 10 hotspots for the COVID-19 cases in the U.S. are connected to jails and prisons, according to data from The New York Times.

The largest COVID-19 cluster in the country is at Marion Correctional Institution in Marion, Ohio, where there are 2,197 infected inmates—more than 80 percent of the prison’s population.

“As recently as yesterday, we have inmates in here that can’t even walk and breathe because of the virus,” Austin Cooper, an inmate at the prison, told local news outlet ABC News 5. “Medical just keeps sending them back out here to the camp, talking about they can’t do nothing for them.”

Other clusters include Lakeland Correctional Facility in Michigan, where more than 600 inmates have tested positive; the Cook County Jail in Illinois, which is nearing 1,000 positive cases; and Pickaway Correctional Institution in Ohio—the second-largest COVID-19 cluster in the country with 1,629 cases.

The only two hotspots on the top 10 list that aren’t prisons or jails are a pork processing plant in South Dakota and the U.S.S. Theodore Roosevelt aircraft carrier.

The numbers and dire news stories underscore what civil liberties groups and correctional officer unions have been trying to warn local, state, and federal agencies about since COVID-19 reached the country: that jails and prisons were woefully unprepared to handle an epidemic, and that those institutions would inevitably spread the virus into nearby communities unless drastic measures were taken.

WBUR reported Tuesday that COVID-19 has infected nearly 15,000 inmates and corrections staff across the country and killed more than 130.

More worryingly, the infection numbers above are likely undercounts because of the lack of widespread testing in federal, state, and local lockups.

Last week, the American Civil Liberties Union (ACLU) released new epidemiological models estimating that, unless jail populations are dramatically reduced, COVID-19 could kill 100,000 more people than current projections, even with social distancing protocols.

“We are likely facing massive loss of life—both in jails and in communities around the country—if dramatic steps aren’t taken to reduce the incarcerated population in this country,” Udi Ofer, director of the ACLU’s Justice Division, said in a press release. “Mass incarceration was a major public health crisis before the outbreak of COVID-19, but this pandemic has pushed it past the breaking point. The revolving doors of jails make them a tinderbox for COVID-19 spread within our communities. This data is a wakeup call as to the true cost of 50 years of mass incarceration and its impact on communities across the nation, disproportionately communities of color.”

Many district attorney’s offices, jails, and prisons took unprecedented steps to halt the flow of more people into the criminal justice system and get some at-risk inmates out of harm’s way, but it still hasn’t been enough to stop the virus from tearing through many facilities.

In the Federal Bureau of Prisons (BOP), 1,314 inmates and 335 staff have tested positive for the virus. Federal Medical Center Fort Worth, a federal prison in Texas, announced on Monday that 234 inmates had tested positive, following expanded testing.

“We live shoulder to shoulder,” Coty Franks, an FMC Fort Worth inmate, told NBC DFW. “Literally the only time I’m not standing or sitting next to someone is in the shower.”

As Reason reported, the BOP announced the first female federal inmate died Tuesday. She was 30 years old and delivered a child via an emergency cesarean section while ventilated.

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How Justin Amash’s Presidential Campaign Changes the 2020 Election

Rep. Justin Amash of Michigan has announced his campaign for the Libertarian Party’s presidential nomination, which will be decided at the L.P.’s convention in May. Originally elected as a Republican in 2010, Amash left the GOP last July and became an independent. By dint of his new party affiliation, he has also become the first Libertarian member of Congress.

On today’s podcast, Nick Gillespie talks with his Reason colleagues Matt Welch, who interviewed Amash just hours after his announcement, and Brian Doherty, who talked with his L.P. rivals shortly after the news of Amash’s campaign became public. They discuss Amash’s platform, his likely reception among L.P. activists, and what sort of impact the congressman’s presence is likely to have on the 2020 presidential race. They also each suggest a possible campaign song for the 40-year-old Grand Rapids native.

Audio production by Ian Keyser.

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8 of The Top 10 Biggest U.S. Coronavirus Hotspots Are Prisons and Jails

Eight of the top 10 hotspots for the COVID-19 cases in the U.S. are connected to jails and prisons, according to data from The New York Times.

The largest COVID-19 cluster in the country is at Marion Correctional Institution in Marion, Ohio, where there are 2,197 infected inmates—more than 80 percent of the prison’s population.

“As recently as yesterday, we have inmates in here that can’t even walk and breathe because of the virus,” Austin Cooper, an inmate at the prison, told local news outlet ABC News 5. “Medical just keeps sending them back out here to the camp, talking about they can’t do nothing for them.”

Other clusters include Lakeland Correctional Facility in Michigan, where more than 600 inmates have tested positive; the Cook County Jail in Illinois, which is nearing 1,000 positive cases; and Pickaway Correctional Institution in Ohio—the second-largest COVID-19 cluster in the country with 1,629 cases.

The only two hotspots on the top 10 list that aren’t prisons or jails are a pork processing plant in South Dakota and the U.S.S. Theodore Roosevelt aircraft carrier.

The numbers and dire news stories underscore what civil liberties groups and correctional officer unions have been trying to warn local, state, and federal agencies about since COVID-19 reached the country: that jails and prisons were woefully unprepared to handle an epidemic, and that those institutions would inevitably spread the virus into nearby communities unless drastic measures were taken.

WBUR reported Tuesday that COVID-19 has infected nearly 15,000 inmates and corrections staff across the country and killed more than 130.

More worryingly, the infection numbers above are likely undercounts because of the lack of widespread testing in federal, state, and local lockups.

Last week, the American Civil Liberties Union (ACLU) released new epidemiological models estimating that, unless jail populations are dramatically reduced, COVID-19 could kill 100,000 more people than current projections, even with social distancing protocols.

“We are likely facing massive loss of life—both in jails and in communities around the country—if dramatic steps aren’t taken to reduce the incarcerated population in this country,” Udi Ofer, director of the ACLU’s Justice Division, said in a press release. “Mass incarceration was a major public health crisis before the outbreak of COVID-19, but this pandemic has pushed it past the breaking point. The revolving doors of jails make them a tinderbox for COVID-19 spread within our communities. This data is a wakeup call as to the true cost of 50 years of mass incarceration and its impact on communities across the nation, disproportionately communities of color.”

Many district attorney’s offices, jails, and prisons took unprecedented steps to halt the flow of more people into the criminal justice system and get some at-risk inmates out of harm’s way, but it still hasn’t been enough to stop the virus from tearing through many facilities.

In the Federal Bureau of Prisons (BOP), 1,314 inmates and 335 staff have tested positive for the virus. Federal Medical Center Fort Worth, a federal prison in Texas, announced on Monday that 234 inmates had tested positive, following expanded testing.

“We live shoulder to shoulder,” Coty Franks, an FMC Fort Worth inmate, told NBC DFW. “Literally the only time I’m not standing or sitting next to someone is in the shower.”

As Reason reported, the BOP announced the first female federal inmate died Tuesday. She was 30 years old and delivered a child via an emergency cesarean section while ventilated.

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New FOIA Emails Reveal Close Relationship Between WaPo Reporter And Pentagon Director Accused Of Leaking Flynn Call

New FOIA Emails Reveal Close Relationship Between WaPo Reporter And Pentagon Director Accused Of Leaking Flynn Call

The Pentagon’s current Director of the Office of Net Assessment had extensive communications with Washington Post reporter and deep-state conduit David Ignatius during the Russiagate fiasco, according to 143 pages of new records from the Department of Defense obtained through a Freedom of Information Act request by legal watchdog group Judicial Watch.

James Baker (not the Obama FBI’s top attorney with the same name) was alleged in a November 1, 2019 court filing by Lt. Gen. Michael Flynn’s attorneys to be “the person who illegally leaked” transcripts of Flynn’s calls with Russian Ambassador Sergei Kislyak to Ignatius – who published the calls on January 12, 2017, “setting in motion a chain of events that lead to Flynn’s February 13, 2017, firing as National Security Advisor and subsequent prosecution for making false statements to the FBI about the calls,” according to Judicial Watch.

Baker was also accused by Flynn’s legal team of being obese spy Stefan Halper’s handler, acting as a cutout to leak information to Ignatius information that would be damaging to Trump regarding false rumors that Flynn had a romantic relationship with a Russian academic, Svetlana Lokhova, as part of a smear campaign.

Read the rest via Judicial Watch:

Lawyers for Lt. Gen. Michael Flynn alleged in a November 1, 2019, court filing that Baker “is believed to be the person who illegally leaked” to Ignatius the transcripts of Flynn’s December 29, 2016, telephone calls with Russian Ambassador Sergei Kislyak. The Washington Post published Ignatius’ account of the calls on January 12, 2017, setting in motion a chain of events that lead to Flynn’s February 13, 2017, firing as National Security Advisor and subsequent prosecution for making false statements to the FBI about the calls. U.S. Attorney John Durham is reportedly investigating the leak of information targeting Flynn.

Citing “the government’s bad faith, vindictiveness and breach of the plea agreement,” in January 2020 Flynn’s attorney, Sidney Powell, moved to withdraw Flynn’s 2017 guilty plea during the Mueller investigation. Flynn claims he felt forced to plead guilty “when his son was threatened with prosecution and he exhausted his financial resources.” Last week, prosecutors provided Flynn’s defense team with documentation of this threat, according to additional papers Flynn’s lawyers filed April 24, 2020, in support of the motion to withdraw.

Judicial Watch obtained the records in a November 2019 Freedom of Information Act (FOIA) lawsuit filed after the DOD failed to respond to a September 2019 request (Judicial Watch v. Department of Defense (No. 1:19-cv-03564)). Judicial Watch seeks:

  • All calendar entries of Director James Baker of the Office of Net Assessment.
  • All records of communications between ONA Director James Baker and reporter David Ignatius.

The time frame for the requested records was May 2015 through September 25, 2019.

The records include an exchange on February 16, 2016, with the subject line “Ignatius,” in which Baker tells Pentagon colleague Zachary Mears, then-deputy chief of staff to Obama Secretary of Defense Ashton Carter, that he has “a long history with David” and talks with him regularly.

In an email exchange on October 1, 2018, in a discussion about artificial intelligence, Baker tells Ignatius: “David, please, as always, our discussions are completely off the record. If any of my observations strike you as worthy of mixing or folding into your own thinking, that is as usual fine.” Ignatius replies, “Understood. Thanks for talking with me.”

Ignatius and Baker’s email exchanges per year are summarized below: 

  • In 2015, Ignatius and Baker had a total of seven email conversations to set up meetings or calls, two simply to compliment one another and one exchange where Ignatius invited Baker to speak at the Aspen Strategy Group conference.
  • In 2016, Ignatius and Baker had a total of 10 email exchanges to set up meetings or calls and two to compliment each other.
  • In 2017, Ignatius and Baker had a total of 10 email exchanges to set up meetings, one exchange where Ignatius forwarded one of his articles, and one exchange where Ignatius asks Baker for his thoughts on the JCPOA (the Iran nuclear deal), because Baker wasn’t available on the phone.
  • In 2018, Ignatius and Baker had a total of nine email exchanges to set up meetings, four where Ignatius forwarded articles and one where Ignatius asks Baker for tips on what to say at a quantum computing conference where he was speaking.

“These records confirm that Mr. Baker was an anonymous source for Mr. Ignatius,” said Judicial Watch President Tom Fitton. “Mr. Baker should be directly questioned about any and all leaks to his friend at the Washington Post.”

In a related case, in October 2018, Judicial Watch filed a FOIA lawsuit against the U.S. Department of Defense seeking information about the September 2016 contract between the DOD and Stefan Halper, the Cambridge University professor identified as a secret FBI informant used by the Obama administration to spy on Trump’s presidential campaign. Halper also reportedly had high-level ties to both U.S. and British intelligence.

Government records show that the DOD’s Office of Net Assessment (ONA) paid Halper a total of $1,058,161 for four contracts that lasted from May 30, 2012, to March 29, 2018. More than $400,000 of the payments came between July 2016 and September 2017, after Halper reportedly offered Trump campaign volunteer George Papadopoulos work and a trip to London to entice him into disclosing information about alleged collusion between the Russian government and the Trump campaign.

Flynn’s attorney told the court that Baker was Halper’s “handler” in the Office of Net Assessment in the Pentagon.


Tyler Durden

Wed, 04/29/2020 – 15:30

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Powell: “Now Is Not The Time To Be Concerned About Debt”

Powell: “Now Is Not The Time To Be Concerned About Debt”

In what was perhaps the most illuminating soundbite from the Powell press conference, in response to a question about the sustainability of the US fiscal trajectory in general, and the soaring debt and deficit in particular – both of which the Fed is now directly monetizing thanks to MMT/Helicopter Money, the Fed Chairman was laconic: “this is not the time” to be concerned about debt.

Fair enough, in response we will be just as laconic and use the CBO’s latest long-term debt to GDP forecast to ask the Chairman just when will it be the time to be concerned about the Federal debt. For the benefit of the Fed Chair we have conveniently provided several possible answers.


Tyler Durden

Wed, 04/29/2020 – 15:17

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Tyson Foods Offers Workers $1000 Bonus To Return To Corona-Factories

Tyson Foods Offers Workers $1000 Bonus To Return To Corona-Factories

Tyson Foods is set to double bonuses, increase wages, and better protect employees amid one of the worst health crises to strike the nation’s meatpacking plants. 

Several Tyson plants have now been shuttered due to COVID-19 outbreaks. The company is now offering “$120 million in “thank you bonuses” for 116,000 US frontline workers and truckers, up from the $60 million announced in early April. The company is moving up the first $500 bonus payment to early May.” The company said another tranche of payments could arrive as soon as June, totaling $1,000. 

The release also states that it will increase short-term disability coverage to 90% of average pay until June 30 for employees who are not able to work because of sickness. 

Tyson said it was improving social distancing within in plants along with keeping better track of its employee’s health: 

  • Screen workers for additional symptoms, such as coughing and shortness of breath

  • Have designated monitors at each facility to help enforce social distancing

  • Require the use of company-provided surgical-style face coverings

“This pandemic is ever-evolving, and the decision to make these changes reflects our desire to continuously explore new ways of supporting our team members through this crisis,” said Mary Oleksiuk, executive vice president and chief human resources officer for Tyson Foods. 

“The safety and well-being of our people is our top priority as we work together to fulfill our critical role of feeding people across the country.”

Tyson has already waived the waiting period to qualify for short-term disability so employees can get paid quicker while on sick leave. 

The release notes that Tyson has formed an in-house “coronavirus task force” that has implemented numerous measures at facilities to protect workers. Some of those efforts include: 

  • Taking worker temperatures and is installing more than 150 infrared walkthrough TEMPERATURE SCANNERS in its facilities

  • Seeking a supply of FACE COVERINGS before the CDC recommended their use and now requires them in company facilities

  • Doing additional deep cleaning and sanitizing in company facilities

  • Implementing social distancing measures, such as installing workstation dividers and providing more breakroom space, including outdoor tents

  • Relaxing its attendance policy to encourage workers to stay at home when they’re sick

And obviously, this all comes right after President Trump has ordered meatpacking plants to stay open despite outbreaks at many facilities. 


Tyler Durden

Wed, 04/29/2020 – 15:15

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What ‘Excess Deaths’ Do and Don’t Tell Us About COVID-19

New York Times analysis of mortality data from seven states concludes that the “coronavirus death toll” is “far higher than reported.” During the five weeks from March 8 through April 11, the Times found, there were nearly 50 percent more deaths in those states than the average for the same period in the last five years. Comparing those excess deaths to the number of COVID-19 deaths reported in each state, the analysis finds a total difference of 9,000, which is about 50 percent higher than the official tallies suggest.

Like an earlier Times analysis of excess deaths in 11 countries, these calculations call attention to fatalities associated with the COVID-19 epidemic that do not show up in the provisional numbers reported to the U.S. Centers for Disease Control and Prevention (CDC). Those omitted fatalities include not just overlooked deaths caused by COVID-19 (e.g., those involving people who died at home and were never tested) but deaths from other causes that might have been prevented in the absence of the epidemic.

The latter category could include people who did not get adequate treatment because hospitals were flooded by COVID-19 cases, people who avoided hospitals because they were afraid of catching the disease, and people who died because of lockdown-related bans on “elective” surgeries. As former Nebraska Sen. Bob Kerrey noted in a recent Wall Street Journal op-ed piece, those prohibited surgeries have included potentially lifesaving procedures such as diagnostic biopsies and treatments for cancer and heart disease.

Looking at excess deaths therefore helps illuminate the full impact of the epidemic, which goes beyond deaths directly caused by COVID-19. It also includes deaths due to strained health care systems in places such as New York and New Jersey, deaths caused by fear of the disease (which may have led people to eschew medical care), and even deaths caused by policies aimed at curtailing the epidemic.

At the same time, equating excess deaths with the “coronavirus death toll” is potentially misleading. While COVID-19 deaths that have been overlooked obviously are relevant in figuring out what percentage of people infected by the virus will be killed by it, deaths that were not actually caused by COVID-19 are not. Four months into this pandemic, the infection fatality rate (IFR) remains unclear. It hinges not just on the true number of deaths (the point emphasized by the Times) but also on the true number of infections, which is bound to be far higher than the number of confirmed cases because testing in the United States so far has been skewed toward people with severe symptoms, who are not representative of people who have been infected.

The ratio of total infections to confirmed cases is a matter of much controversy. Antibody studies in the United States have generated estimates ranging from around 10 times more total infections than confirmed cases in New York to something like 70 times more in Santa Clara County, California (a result that critics of that study view as impossibly high). Furthermore, it seems likely that the ratio, and therefore the IFR, varies from one part of the country to another, depending on local conditions such as age demographics, the prevalence of preexisting medical conditions, testing rates, and the quality and capacity of the health care system.

Still, it seems clear that when it comes to crude case fatality rates (reported deaths as a percentage of confirmed cases), the error in the denominator is much bigger than the error in the numerator. Even if we (inaccurately) attribute all the excess deaths counted by the Times to COVID-19, a death toll that is off by 50 percent affects the IFR calculation much less than a case tally that is off by a factor of 10 (as suggested by antibody tests in New York).

Another question raised by the Times analysis is the extent to which its findings for these seven states (Colorado, Illinois, Maryland, Massachusetts, Michigan, New Jersey, and New York) reflect the experience in other states or the country as a whole. The CDC keeps a weekly tally that compares “deaths from all causes” to expected deaths based on data for the same week in 2017 through 2019. Perhaps coincidentally, all of the states that the Times chose for its analysis had excess deaths in the week ending yesterday. Most states did not.

According to the CDC, for example, California, Florida, Georgia, Ohio, Pennsylvania, Texas, Virginia, and Washington all had fewer deaths in the week ending on April 28 than would be expected based on the 2017–19 average. The same was true, on average, for the United States, which had 6 percent fewer deaths than expected. In the weeks ending on March 28, April 4, and April 11, by contrast, the country as a whole did have excess deaths, ranging from 2 percent to 15 above the 2017–19 average. But those percentages are far lower than what the Times found in the seven states it considered.

Maybe those snapshots are misleading, and maybe the states that are not seeing excess deaths right now will in the future, depending on the stage of their epidemics and the impact of loosening lockdown restrictions. But it sure looks like the Times picked states that would generate impressive excess-death counts—in particular, New York and New Jersey, which together account for more than 70 percent of the gap between official COVID-19 death tolls and excess deaths described by the Times.

The newspaper’s interpretation of these data is questionable in another way. “These increases belie arguments that the virus is only killing people who would have died anyway from other causes,” it says. That formulation is a strawman, since it is obviously not true that everyone who is killed by COVID-19 “would have died anyway” (except in the long term). But since COVID-19 deaths are concentrated among people who are elderly and/or have serious preexisting medical conditions, the extent to which the epidemic will increase excess deaths this year remains unclear.

That point has been raised by experts such as British epidemiologist Neil Ferguson, whom no one would accuse of trying to minimize the threat posed by COVID-19. “By the end of the year, what proportion of those people who’ve died from COVID-19 [in the U.K.] would have died anyhow?” Ferguson asked during parliamentary testimony last month. “It might be as much as half to two-thirds of the deaths we’re seeing from COVID-19, because it’s affecting people who are either at the end of their lives or in poor health conditions. So I think these considerations are very valid.”

Since the Times analysis covers just five weeks, it does not address that issue. And even if Ferguson’s estimate is wrong, the distribution of deaths matters. Although some people think broaching the subject is unseemly, inhumane, or uncivilized, the number of life-years lost to COVID-19 is clearly relevant in assessing the costs and benefits of policies aimed at containing it.

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Coronavirus Closures Make It Hard for Truckers To Get a Meal, Yet Some States Still Refuse To Let Food Trucks Operate at Rest Stops

An unintended consequence of states’ emergency closures of restaurants during the coronavirus pandemic is that the truck drivers rushing food, medicine, and masks across the country aren’t able to find a decent meal on the road.

To make these drivers’ lives easier, federal regulators have temporarily eased existing restrictions on food trucks operating at highway rest stops. But that move has faced resistance from truckstop owners and state governments who’ve long opposed any commercialization of rest stops, and who are not keen on peeling back their own protectionist regulations.

Stories of restaurant closures frustrating truckers‘ attempts to grab lunch have been a staple of local media’s coverage during the pandemic. While truck stops remain open, many of the restaurants at those stops are closed; allowing traditional restaurants to offer delivery, carryout, and drive-thru doesn’t help truckers whose rigs are too large for restaurant parking lots and drive-thru windows.

“That access to food, access to bathroom facilities, those are two of the things we heard about very early on in all of this. And it’s still is a concern,” says John Espinoza, president of the Texas Trucking Association (TXTA). “I’m in Austin Texas. All the places I have picked up food, none of the places a truck could get in and out of.”

“Let’s say if you have a Taco Bell that’s only doing drive-thru and trucks can’t fit through there, and they have a policy of not providing service to anyone not in a vehicle, that’s going to be a problem,” Norita Taylor of the Owner-Operator Independent Drivers Association told Reason back in March.

To be eligible for federal highway funding, states are prohibited from allowing commercial activity at Interstate Highway rest stops. In early April, the Federal Highway Administration (FHWA) announced that it would be waiving this regulation for the duration of the national emergency President Donald Trump declared on March 13.

“Food trucks may provide vital sustenance for interstate commercial truck drivers and others who are critical to the Nation’s continued ability to deliver needed food and relief supplies,” said the FHWA in an April 3 announcement. “Vending machines may not be adequate to provide the necessary sustenance, and in many cases the vending machines may not be regularly stocked at the present time.”

This announcement, while welcomed by many in the trucking industry, still requires states to take action to lift the food truck prohibitions they’d imposed at the behest of federal regulators.

According to the Institute for Justice, 10 states have followed through and lifted their own restrictions on food trucks, including California, Idaho, Arizona, and Arkansas. Louis Campion of the Maryland Motor Truck Association says Maryland had lifted restrictions at rest stops along I-95 as well.

Other states have yet to act, however, and there is already some resistance to federal highway regulators’ move from associations representing truck stops and restaurants.

In early April, a coalition including the National Association of Truck Stop Owners (NATSO) and the National Restaurant Association (NRA) sent a letter to the agency asking that the waiver of enforcement against commercial activity at rest stops not expand beyond food trucks, and that it be swiftly withdrawn at the end of the emergency.

“We hope that FHWA’s non-enforcement directive does not result in foodservice transactions being redirected to food trucks from nearby rest area vending machines or struggling off-highway businesses, but rather that food trucks operate solely at rest areas that are located on stretches of the Interstate where there are no open foodservice operations in close proximity that are available to truck drivers,” reads the coalition’s letter.

NATSO has long been a critic of commercialized rest stops, saying on its website that “interchange businesses cannot compete with commercialized rest areas, which are conveniently located on the highway right-of-way, and would create a de facto monopoly in favor of businesses operated out of rest areas.”

Concerns that allowing food trucks at rest stops would lead to a loss of business for truck stops—particularly now when many are seeing a drop off in business or being forced to close their dining areas—is causing some state departments of transportation (DOTs) to shy away from lifting their own restrictions on food trucks.

Crystal Collins, president of the North Carolina Trucking Association, says there was some discussion about allowing food trucks at rest stops in her state, while potentially limiting their operations to areas with few other food service options.

However, she says there was little interest in this idea at the state’s DOT because of its potential to take business away from established truck stops, and because it would require an act of the legislature. “They don’t want to hinder or take business away from the truck stops that are open,” Collins says.

A spokesperson for the North Carolina DOT wrote in an email that the department “will not pursue allowing food trucks at rest areas because state law prohibits commercial activities inside the right of way.”

Jessica Gandy, an attorney at the Institute for Justice, says that according to her analysis, North Carolina’s DOT could waive food truck restrictions on their own initiative. “It’s fully in the purview of their DOT to do it. They do have the power to waive that ban if they choose to, but also the governor could do it by issuing an executive order,” she says.

In addition to being bad policy, Gandy argues that bans on food truck service could be unconstitutional as well.

“There is a protectionist element. Their concerned that if other economic activities start happening at those rest areas, other nearby businesses, existing businesses will suffer, because customers may prefer to eat at food trucks,” Gandy says. “Restricting consumer choice so a private party can make money is plainly unconstitutional.”

The Institute for Justice has sued local governments over their protectionist food truck restrictions prior to the pandemic. Last week, they sent letters to a number of state DOTs asking them to suspend food truck restrictions at rest stops.

Lifting these restrictions is only part of the battle. Food truck operators and their advocates have said there is still a need for coordination with state DOTs to get temporary permits and secure parking at rest stops.

“Who cares if Ohio opens up spots, if they don’t have any sort of registry, schedule or way to get the information out to drivers. There has to be coordination. No state wants to do that,” Matt Geller of the National Food Truck Association said to Transportation Topics.

Logistical concerns about parking have factored into Texas regulators deliberations on allowing food trucks at rest stops, Espinoza says. The TXTA has been in talks with regulators about opening up rest stops for food service for several weeks now, and he expects some sort of regulatory waiver to be issued within the next week.

That will allow some more choices for drivers.

“What we are talking about is giving the truckers some more choices,” Espinoza says. “the truck driver hasn’t changed what he or she is doing. They’re out there delivering every day anyway. Let’s get these men and women more options.”

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