The current Automobile Rental Concession Leases to operate car rental concessions at the Billings Logan International Airport are set to expire March 31, 2011.  The current car rental concessionaires are: Hertz, Enterprise, Alamo/National, and Thrifty/Dollar.  In order to determine interest in and commitment to new leases for operating car rental concessions at the Airport, and to assist in the sizing/design of and funding for the new Quick Turn Around Facility (QTA) that the Airport is building for use by the on-Airport car rental companies, the car rental concession opportunity at the Airport was placed out for bid early. In the past, only four concession spots were available for car rental companies at the Airport. Along with the new QTA, the Airport is making a fifth concession spot available in this bid process by renovating a couple of the former airline freight offices (located on the west end of the baggage claim area) into a car rental concession counter.

A Request for Bids (RFB) was prepared for concessionaires interested in operating at the Airport. Notice of the RFB was advertised in the Billings Times on July 29 and August 5, 2010, and on the City's Web Site continuously from July 29 through August 24, 2010. A pre-bid meeting was held on August 4, 2010. Bids were opened on Tuesday, August 24, 2010. Interested parties submitted bids consisting of the total amount of Minimum Annual Guarantee (MAG) revenue that the individual car rental companies would be willing to pay the City for the opportunity to operate their business at the Airport's Terminal Building for the next five years.  There are five car rental concessionaires that service the Billings market and all five submitted bids to operate in one of the five available concession positions.   The term of the new Lease will commence on April 1, 2011 and end on March 31, 2016. With the new Lease and a fifth available position, Avis/Budget will return its car rental operations to the Terminal Building, after being outbid during the previous bid process. 

In addition to establishing the MAG for each car rental concessionaire, the bid also establishes the location of both the car rental counter in the Terminal Building and the location and number of ready and return parking stalls that each concessionaire is allocated.  The highest bidder receives the largest counter area, as well as a block of ready/return stalls closest to the Terminal Building.  The second highest bidder receives the second largest counter area and a block of ready/return parking stalls next closest to the Terminal Building, etc.  A draft copy of the Automobile Rental Concession and Lease is attached and available for review.  

The City Council may:

• Approve the five new Automobile Rental Concession and Lease agreements; or
• Not approve the five new Automobile Rental Concession and Lease agreements.
   

With the acceptance and approval of the five Automobile Rental Concession bids, the City will be guaranteed a minimum revenue stream of $5,569,851 over the next five-year period.  The revenues could exceed the minimum guarantee, as the new Concession and Lease agreement establishes the revenue to the Airport as the greater of either the MAG or ten percent of each car rental concessionaire's gross receipts for rental car operations at the Airport. The successful bidders and MAG amounts are as follows:

CONCESSIONAIRE	BID AMOUNT
Overland West, Inc. DBA Hertz Rent A Car	$1,895,000
Corpat, Inc. DBA Alamo/National Car Rental	$1,605,000
Enterprise Rent A Car	$766,845
Avis/Budget Rent A Car	$700,000
Lewis Transportation Group DBA Thrifty/Dollar Rent A Car	$603,006

Staff recommends that Council approve the five new Automobile Rental Concession Leases with the five successful concession bidders for the term commencing April 1, 2011 and ending on March 31, 2016.