|
Item 1.D.
|
| City Council Regular | |
| Date: | 11/10/2025 |
| Title: | Amendment No. 4 to Automobile Parking Concession Agreement |
| Presented by: | Jeff Roach |
| Department: | Airport |
| Presentation: | No |
| Legal Review: | Template Contract |
| Project Number: | N/A |
RECOMMENDATION
Staff recommends the City Council approve Amendment No. 4 to the Automobile Parking Concession Agreement with SP Plus LLC, adding the west end overflow lots for revenue collection, setting the parking rates to accommodate the west end overflow lots, updating the parking rate schedule, updating the concessionaire name, requiring SP Plus LLC to provide a seasonal shuttle service holiday overflow parking, and adding three months to the Agreement term.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
SP Plus LLC, formerly known as SP Plus and Standard Parking, has been the public parking lot concessionaire at the Airport for a number of years, with the most recent Agreement beginning in 2012. In Montana there are only two concessionaires that typically vie for and operate at the commercial service airports, SP Plus LLC and Republic Parking. Over the years and multiple concession agreements with SP Plus, as parking needs increased, the Airport worked with the company to upgrade both the parking lots and parking lot control equipment, bring additional parking spaces online, and introduce credit card pay lanes and scan-to-pay options.
With the upgrade project in 2015, the Airport reconstructed the Airport's old employee parking lot into a new 234 stall Long Term Premium Lot parking area. That project included a new entry merge lane, an entry plaza, an express credit card exit area, and a bypass lane to the existing pay booth for those customers wanting to pay with cash. With this upgrade, SP Plus invested an additional $224,000 for: (a) the additional parking control equipment for the Premium Lot, and (b) upgrading the existing Long Term and Short Term Lots' revenue control system so that all ticket dispensing, credit card exit lane, and manual revenue control equipment would be compatible and current once the Premium Parking Lot was opened. In exchange for SP Plus’s investment, the City approved a term extension on the concession agreement to expire on December 31, 2021.
In 2019, with the new air service provided by American Airlines and the return of Frontier Airlines, the demand for public parking spaces increased, with long-term parking frequently overflowing into a lot that was not part of the Concession Agreement and therefore not generating any revenue. Staff once again worked with SP Plus on a solution to add parking revenue control equipment to the North Economy Lot. SP Plus invested $135,000 for the additional parking control equipment to incorporate the 223 stall North Economy Parking Lot into revenue generation, as well as performed software updates for the parking control equipment in all the Airport's public parking lots. With the addition of the revenue control equipment for the added parking lot, the concessionaire received additional revenue from that lot. Staff also negotiated a new revenue percentage during the three-year term extension.
Previously, SP Plus provided the Airport with 80.5% of gross revenues collected. Staff negotiated with SP Plus to increase the percentage rate for the three-year extension to 82.57% of gross revenues, adding approximately $62,000 per year to the Airport's revenues.
As enplanements continued to increase, the public parking lots were once again often full, especially during special events, holidays, peak seasonal travel, and frequently overflowed beyond the four current paid surface lots. The frequent overflow required use of the last overflow lot referred to as the South Economy Lot. This parking lot was not included in the Concession Agreement and resulted in lost parking revenue for both the concessionaire and the Airport. SP Plus proposed an easy-to-deploy, digital scan and payment platform solution for the South Economy Lot and also deployed this solution to the North Economy Lot that had been experiencing frequent equipment problems especially during cold weather. This payment solution was deployed in time for the 2024 December holiday travel season. There was no equipment, software, or construction costs for the City.
In order to incorporate the South Economy Lot into the current Automobile Parking Concession Agreement, the City Council approved Amendment Three to the Automobile Parking Concession Agreement with SP Plus. The Amendment (1) incorporated the new South Economy Lot into the Agreement, adding 127 parking spaces to the paid public lot inventory, (2) provided a digital scan and payment platform needed to operate the South Economy Lot, (3) updated all the revenue control software for the North Economy Lot with the same digital scan and payment platform and (4) added one year to the existing Concession Agreement's term (to expire on December 31, 2025).
As passenger numbers are continuing to increase, with over one million passengers projected for 2025, and considering requests from travelers for more holiday parking space and shuttle service from the surface lots furthest away from the Terminal during the holidays, staff has once again worked with SP Plus to identify seasonal surface overflow lots for seasonal use that provide 310 additional spaces, and a plan for shuttle service during the peak holiday travel season of November 15, 2025 through January 15, 2026. In exchange for this assistance, to not disrupt parking operations through most of the winter, and to allow the airport additional time to complete master planning for future parking improvements, a three-month term extension was negotiated. These changes and additions require an amendment to the concession agreement and are included in Amendment 4.
With the upgrade project in 2015, the Airport reconstructed the Airport's old employee parking lot into a new 234 stall Long Term Premium Lot parking area. That project included a new entry merge lane, an entry plaza, an express credit card exit area, and a bypass lane to the existing pay booth for those customers wanting to pay with cash. With this upgrade, SP Plus invested an additional $224,000 for: (a) the additional parking control equipment for the Premium Lot, and (b) upgrading the existing Long Term and Short Term Lots' revenue control system so that all ticket dispensing, credit card exit lane, and manual revenue control equipment would be compatible and current once the Premium Parking Lot was opened. In exchange for SP Plus’s investment, the City approved a term extension on the concession agreement to expire on December 31, 2021.
In 2019, with the new air service provided by American Airlines and the return of Frontier Airlines, the demand for public parking spaces increased, with long-term parking frequently overflowing into a lot that was not part of the Concession Agreement and therefore not generating any revenue. Staff once again worked with SP Plus on a solution to add parking revenue control equipment to the North Economy Lot. SP Plus invested $135,000 for the additional parking control equipment to incorporate the 223 stall North Economy Parking Lot into revenue generation, as well as performed software updates for the parking control equipment in all the Airport's public parking lots. With the addition of the revenue control equipment for the added parking lot, the concessionaire received additional revenue from that lot. Staff also negotiated a new revenue percentage during the three-year term extension.
Previously, SP Plus provided the Airport with 80.5% of gross revenues collected. Staff negotiated with SP Plus to increase the percentage rate for the three-year extension to 82.57% of gross revenues, adding approximately $62,000 per year to the Airport's revenues.
As enplanements continued to increase, the public parking lots were once again often full, especially during special events, holidays, peak seasonal travel, and frequently overflowed beyond the four current paid surface lots. The frequent overflow required use of the last overflow lot referred to as the South Economy Lot. This parking lot was not included in the Concession Agreement and resulted in lost parking revenue for both the concessionaire and the Airport. SP Plus proposed an easy-to-deploy, digital scan and payment platform solution for the South Economy Lot and also deployed this solution to the North Economy Lot that had been experiencing frequent equipment problems especially during cold weather. This payment solution was deployed in time for the 2024 December holiday travel season. There was no equipment, software, or construction costs for the City.
In order to incorporate the South Economy Lot into the current Automobile Parking Concession Agreement, the City Council approved Amendment Three to the Automobile Parking Concession Agreement with SP Plus. The Amendment (1) incorporated the new South Economy Lot into the Agreement, adding 127 parking spaces to the paid public lot inventory, (2) provided a digital scan and payment platform needed to operate the South Economy Lot, (3) updated all the revenue control software for the North Economy Lot with the same digital scan and payment platform and (4) added one year to the existing Concession Agreement's term (to expire on December 31, 2025).
As passenger numbers are continuing to increase, with over one million passengers projected for 2025, and considering requests from travelers for more holiday parking space and shuttle service from the surface lots furthest away from the Terminal during the holidays, staff has once again worked with SP Plus to identify seasonal surface overflow lots for seasonal use that provide 310 additional spaces, and a plan for shuttle service during the peak holiday travel season of November 15, 2025 through January 15, 2026. In exchange for this assistance, to not disrupt parking operations through most of the winter, and to allow the airport additional time to complete master planning for future parking improvements, a three-month term extension was negotiated. These changes and additions require an amendment to the concession agreement and are included in Amendment 4.
ALTERNATIVES
City Council may:
- Approve Amendment 4 to the Automobile Parking Concession Agreement; or,
- Not Approve Amendment 4 to the Automobile Parking Concession Agreement.
FISCAL EFFECTS
The Airport estimates that at 80% use of the four west Overflow Lots, for the 60-day contracted shuttle period, this Amendment will provide approximately $148,800 of additional annual revenue during the holiday period. Total annual parking revenues are projected to be between $3,600,000 to $3,850,000 depending on passenger traffic. Additionally, the Airport will not be required to provide any capital outlay for new equipment or software updates and will benefit from the percentage of gross revenues generated from the extended period, estimated to be approximately $870,000 for the three-month extended period. The cost of the contract shuttle service for the holiday period is estimated at $54,000.