Airport cuts car rental deal

Looking to eliminate 700,000 car trips, increase options for travelers and improve runway safety, Bob Hope Airport officials this week unveiled their new contract with rental car firms for use of the upcoming $120-million transit center.

The plan calls for seven rental car firms to operate on airport grounds by 2013, up from the current five. Under the 30-year leases, rental car companies will help pay for the roughly $90-million bond the airport plans to float to pay for construction of the new transit center, which will include connections to bus and passenger rail lines and may eventually be a stop on the proposed California high-speed rail line.

Richard Broome, a spokesman for Hertz Rent-a-Cars, said the new building will be a big upgrade from the rental lots at the edge of Terminal B.

“We have space constraints in the current configuration,” Broome said. “We think moving to a consolidated facility makes sense at the Burbank airport.”

John Hatanaka, the airport’s senior deputy executive director, told Burbank-Glendale-Pasadena Airport Authority board members Monday the lease negotiations were “arduous” as they worked with rental car firms to map out specific counter and fleet space in the four-story building using market share data and other factors.

“It was a highly collaborative process, and maybe that’s made it somewhat difficult for the airport,” said Broome, who noted that Hertz engages in similar negotiations at hundreds of airports around the country. “We’ve seen the good, the bad and the ugly, where there hasn’t been as much (company) involvement as their really needs to be.”

A key feature for the rental firms is on-site fueling and cleaning facilities. Workers at the new facility will be able to wash, refuel and re-rent cars without having to drive them to and from nearby maintenance lots.

Rental car concession fees made up $5.1 million of the airport’s $46.3 million in operating revenues in 2011, or about 11%, airport spokesman Victor Gill said. The companies also paid roughly $500,000 in rent.

In the new building, the companies will pay a per-square-foot fee to cover part of the airport bond, in addition to the concession charges. Gill said complexities in the new deal make it difficult to calculate exactly how much the companies will pay for their new space, but said the total will exceed $500,000 a year.

When the transit center is completed, the airport will demolish the existing rental car buildings, removing what the Federal Aviation Administration has identified as a safety hazard for planes taking off from the airport’s north-south runway.

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