Agenda Item Wording:
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Authorize an Amendment and Extension to Airport Concession Agreement - Authorize the City Manager to execute an amendment and extension to the Airport Concession Agreement between the City of Visalia and the Enterprise Rent-a-Car Company for its location at the Visalia Municipal Airport.
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Deadline for Action: None
Submitting Department: Administration - Airport
Contact Name and Phone Number:
Jody Miller, Airport Manager, (559)713-4282, Jody.Miller@Visalia.City
John Lollis, Assistant City Manager, (559)713-4323, John.Lollis@Visalia.City
Department Recommendation:
Staff recommends that the City Council authorize the City Manager to execute an Amendment to the current Airport Concession Agreement with Enterprise Rent-a-Car Company of Sacramento, LLC, to provide two (2) additional two (2) year lease renewal options upon the conclusion of the current Agreement on March 31, 2027, resulting in a potential additional Agreement term of four (4) years until March 31, 2031.
Background Discussion:
At its meeting on May 1, 2017, the Council approved Ordinance No. 2017-04 that authorized the City Manager to execute the current Airport Concession Agreement between the City of Visalia and Enterprise Rent-a-Car Company of Sacramento, LLC, which was executed on May 16, 2017, and is set to expire on March 31, 2027. Staff is requesting authorization for the City Manager to execute an amendment and extension to the agreement to provide two (2) additional two (2) year lease renewal options, resulting in a potential lease end date of March 31, 2031. The second of the two (2) year renewal options requires mutual agreement of the parties to proceed, which protects the City’s choice to use the building that Enterprise currently occupies for other projects should the need and opportunity arise.
At its meeting on November 6, 2023, the Council authorized an amendment to the agreement, adding an additional 800 square feet to the total lease space. Enterprise would now would like to renovate its spaces to make better use of the additional square footage, however, Enterprise desires the amendment prior to that fiscal commitment to amortize its investment over the requested term.
This agreement authorizes Enterprise to operate both its rental car and truck rental services at the former airport terminal. As the Council is aware, the City is planning for the reconstruction of this facility into a new airport terminal, with a number of contingencies needing to be secured, including grant funding from the Federal Aviation Administration and a federal Community Project Funding (earmark) allocation. On December 6, 2024, City staff met with Enterprise staff to coordinate on the City’s future plans for the facility, which Enterprise was supportive and wishing to coordinate and remain informed on progress and keep its rental services on the Airport.
Staff recommends the amendment and extension to the agreement, as having rental car services on-site at the Airport is something that modern airport customers desire and expect, and losing such service could lead to fewer transient flights landing resulting in a loss of income for the Airport.
Fiscal Impact:
The Airport will continue to receive rent of $2,148 monthly plus annual Consumer Price Index (CPI) adjustments until March 21, 2027, which this amendment would extend that term for a potential of four (4) additional years should Enterprise exercise the two (2) additional two (2) year lease renewal options at the conclusion of the initial term. Additionally, the City will continue to make ancillary profits from the agreement in the form of fuel sales and commercial landing fees associated with airport users that land at Visalia Airport due to the rental car services offered on-site.
Prior Council Action:
May 1, 2017: Council authorized the current Airport Concession Agreement between the City of Visalia and the Enterprise Rent-a-Car Company of Sacramento, LLC.
November 6, 2023: Council authorized an Amendment to the current Agreement between the City of Visalia and Enterprise Rent-a-Car Company of Sacramento, LLC, adding an additional 800 square feet of space to its leased space.
Alternatives:
City Council not authorize the City Manager to execute an amendment and extension to the Airport Concession Agreement between the City and Enterprise, resulting in the current Agreement remaining effective until March 31, 2027, and Enterprise likely not performing its desired renovations.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to authorize the City Manager to execute an amendment to the current Airport Concession Agreement between the City of Visalia and the Enterprise Rent-a-Car Company of Sacramento, LLC for its location at the Visalia Municipal Airport, extending the current lease for the terms and cost specified within the staff report.
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Environmental Assessment Status: NA.
CEQA Review: N/A
Attachments: .
1. Draft Amendment to Concession Agreement
2. Amendment to Airport Lease Agreement - August 1, 2024
3. City Council Agenda Staff Report - November 6, 2023
4. Concession Agreement - May 16, 2017
5. City Council Agenda Staff Report - May 1, 2017
6. Ordinance No. 2017-04