Metropolitan Airports Commission. Public Hearing to Amend MAC Ordinance 110 October 12, 2015
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1 Metropolitan Airports Commission Presenter Karen Racek, Assistant Manager Airside Leasing & Tenant Relations Commercial Management & Airline Affairs Matthew Krogh, Staff Attorney Ed Podnieks, Manager: Financial Analysis & Business Planning Bridget Rief, Director Airport Development Public Hearing to Amend MAC Ordinance 110 October 12,
2 In September 2015, the Commission granted authority to hold a public hearing to consider amendments to MAC Ordinance 110. Ordinance 110 governs the collection of a Rental Auto Facility Charge (RAFC) at the airport. Following a competitive bid process, in December 2013, the Commission awarded four On-Airport Rental Auto Concession Agreements to Avis Budget Car Rental, LLC, The Hertz Corporation, Enterprise Leasing Company of Minnesota, LLC, and Advantage Opco, LLC. 2
3 The On-Airport Rental Auto Concession Agreements expire December 31, The following are the rental auto brands operating by each Concessionaire at MSP currently: Avis Budget Car Rental, LLC The Hertz Corporation Enterprise Leasing Company of Minnesota, LLC Advantage Opco, LLC Avis Hertz Enterprise Advantage Budget Dollar National Zip Car Thrifty Alamo Under the On-Airport Rental Auto Concession Agreements, the Commission leases space in the Terminal-1 Lindbergh (T1) Red and Blue parking ramps for rental auto ready/return space, customer interface on Level 2 and 3, and a quick turnaround facility on the ground level. 3
4 The Commission leases space in the Terminal-2 Humphrey (T2) Purple parking ramp for rental auto ready/return space (on the ground level and mezzanine level), customer interface within the Customer Service Building, and a quick turnaround facility near the T2 parking structure. Each Concessionaire shall pay MAC the greater of the concession fee (10%) or the Minimum Annual Guarantee (MAG). In addition, the rental auto companies collect the RAFC as set forth in MAC Ordinance
5 As outlined in the approved Capital Improvement Program, projects are proposed for roadway modifications, utility relocations and construction of a new parking structure for T1. Planning and design of these projects is underway. Construction of the utility and roadway improvements is expected to begin in March 2016, with the new parking structure projected to open January The new T1 parking structure, as proposed, will provide both additional rental auto ready/return spaces and public parking spaces. Considering that the T1 rental auto ready/return areas are nearing capacity, the proposed project will move the rental auto ready/return function and the customer service interface from the Red and Blue ramps into the newly constructed parking ramp. 5
6 The new ramp will have 2,100 spaces for the rental auto companies. This is an increase from the current 1,700 spaces that will be repurposed for public parking. The customer service interface area will provide a new single level area for all On-Airport Concessionaire rental auto brands. The T1 rental auto quick turn-around facility will remain within the ground level of the Red and Blue ramps but will include upgrades to equipment to improve efficiencies. Construction costs for the proposed new rental auto facilities are eligible to be funded with Rental Auto Facility Charges (RAFCs). 6
7 RENTAL AUTO FACILITY CHARGE In 2011, the Commission adopted Ordinance 110 that establishes the $3.25 RAFC for repayment of the construction debt service of the new T2 rental auto facility, existing T1 operations, and Tram maintenance costs assigned to the rental auto industry. Historically, the RAFC has been as follows: *Proposed Year RAFC Year RAFC 1999 $ $ $ $ $ $ $ $3.25 1/1/04-1/31/05 $ $5.90* 2/1/05-12/31/07 $ TBD in
8 RENTAL AUTO FACILITY CHARGE Proposed changes to the ordinance are shown in the redlined draft attached to this memo. The proposed changes include: Payment on the bonds for construction of the new rental auto facilities at T1 Payment on the existing debt used to construct the T2 rental auto facilities Continued payments for the apportioned tram maintenance costs, operating and maintenance costs, extraordinary costs, and capital maintenance projects for the existing rental auto facilities at T1 and T2 8
FROM: Karen Racek, Assistant Manager, Airside Leasing and Tenant Relations Commercial Management and Airline Affairs (612)
Page 1 of 6 MEMORANDUM TO: Management and Operations Committee FROM: Karen Racek, Assistant Manager, Airside Leasing and Tenant Relations Commercial Management and Airline Affairs (612) 467-0514 Eric Johnson,
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