Title
Rental Car Center Independent Operator Premises (Tier 2) Revenue Contract Solicitation Award Recommendation (Ordinance S-43921)
Description
Request to authorize the City Manager, or his designee, to enter into concession agreements and lease agreements (Contracts) with Sixt Rent A Car, LLC; Advantage Opco, LLC; and Fox Rent A Car, Inc. for the independent operator premises (IOP) at the Rental Car Center (RCC) at Phoenix Sky Harbor International Airport. The Contracts may contain other terms and conditions deemed necessary or appropriate by the City Manager or his designee.
Revenue to the Aviation Department from the Contracts is estimated to be a minimum of $22,885,560 over the initial five-year term of the Contracts based on the minimum annual guarantee bids submitted by the successful respondents. In addition, recommended operators will be responsible for collecting and remitting a $6 per-day customer facility charge.
Report
Summary
On May 31, 2017, the City Council authorized the Aviation Department to issue a revenue contract solicitation (RCS) for three rental car operators to occupy space in the IOP. The RCS was issued on June 7, 2017. The RCS process was designed to provide qualified independent rental car operators (i.e., Tier 2 operators) not affiliated with the three Tier 1 rental car operators (i.e., Avis Budget Car Rental, LLC; Enterprise Leasing Company of Phoenix, LLC; and The Hertz Corporation) an opportunity to rent cars at the RCC.
Procurement Information
After a local and national outreach effort and a competitive RCS process, the following companies are recommended for award to enter in Contracts for the IOP. Successful respondents were selected based on compliance with minimum qualifications and ranked based on the amount of minimum annual guarantee submitted by each respondent:
Recommended Operator and MAG
Sixt Rent A Car, LLC: $1,701,111
Advantage Opco, LLC: $1,576,001
Fox Rent A Car, Inc.: $1,300,000
Contract Term
The term of each Contract will be five years. The Contracts will contain a five-year option to extend the term that may be exercised at the discretion of the Aviation Director.
Financial Impact
The Aviation Department will receive 10 percent of gross sales for rental car services from each recommended operator or the minimum annual guarantee.
Concurrence/Previous Council Action
This item was recommended by the Downtown, Aviation, Economy and Innovation Subcommittee on Sept. 6, 2017 by a vote of 3-0.
Location
The Rental Car Center is located at 1805 E. Sky Harbor Circle S.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Aviation Department.