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Agenda Item
ASR
Control 19-001092 |
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MEETING DATE: |
10/22/19 |
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legal entity taking action: |
Board of Supervisors |
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board of supervisors
district(s): |
2 |
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SUBMITTING
Agency/Department: |
John Wayne Airport
(Approved) |
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Department contact
person(s): |
Barry A. Rondinella (949) 252-5183 |
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Dave Pfeiffer (949) 252-5291 |
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Subject: Award On-Airport Rental Car
Concession Leases
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ceo CONCUR |
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Clerk of the Board |
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Concur |
Approved Agreement to Form |
Discussion |
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4/5 Vote |
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Budgeted: N/A |
Current Year Cost:
N/A |
Annual Cost:
N/A |
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Staffing Impact: |
No |
# of Positions:
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Sole Source:
N/A |
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Current Fiscal Year Revenue: See Financial Impact Section
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Prior Board Action: 5/21/2019
#50, 11/20/2018 #30 |
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RECOMMENDED ACTION(S):
Award and execute the following On-Airport Rental Car Concession Leases at John Wayne Airport, effective December 1, 2019, through November 30, 2029:
Concession Site 1 - Avis Budget Car Rental, LLC, dba Budget;
Concession Site 2 - The Hertz Corporation d/b/a Hertz;
Concession Site 3 - Enterprise Rent-A-Car Company of Los Angeles, LLC, d/b/a Alamo Rent A Car;
Concession Site 5 - Avis Budget Car Rental, LLC dba Avis;
Concession Site 6 - Enterprise Rent-A-Car Company of Los Angeles, LLC d/b/a National Car Rental;
Concession Site 7 - The Hertz Corporation d/b/a Thrifty Car Rental;
Concession Site 8 - The Hertz Corporation d/b/a Dollar Rent A Car;
Concession Site 9 - Enterprise Rent-A-Car Company of Los Angeles, LLC d/b/a Enterprise Rent-A-Car.
SUMMARY:
Awarding and executing the on-airport rental car concession leases will allow John Wayne Airport to improve on the rental car experience and safety for the traveling public.
BACKGROUND INFORMATION:
On May 7, 2013, the Board of Supervisors (Board) awarded concession leases to six rental car concessionaires: Hertz/Dollar; Alamo/National; Avis; Enterprise; Budget and Advantage. The leases were awarded for the operation of the rental car concessions at John Wayne Airport (JWA) for a five-year term from December 1, 2013, through November 30, 2018.
On November 20, 2018, the Board approved amendments that extended the term of the rental car concessions through November 30, 2019. The one-year extension allowed JWA to conduct parking studies and finalize a new rental car layout for level zero of the parking garage. There are seven Rent-A-Car (RAC) brands currently operating under five leases on-airport: Hertz/Dollar, Avis, Budget, National/Alamo and Enterprise. Advantage did not participate in the lease extension and discontinued operations at JWA on November 30, 2018.
On May 21, 2019, the Board approved releasing of the Request for Proposals (RFP) for On-Airport RAC concessions, empaneling a group of subject matter experts to assist JWA staff in evaluating responsive proposals and authorizing the Airport Director or designee to return to the Board with recommendations for award of the new RAC concession leases. JWA posted the RFP on BidSync on May 22, 2019, and proposals were due July 23, 2019. JWA received 12 proposals for seven of the nine available Concession Sites. Proposals were not received for Concession Sites 4 and 6.
Request for Proposal Minimum Requirements
JWA only considered proposals from respondents who met, at a minimum, the following criteria:
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1. |
At least five years of continuous experience within the last five years in the management and operation of rental car concessions serving domestic airports; |
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2. |
A minimum of five existing concession locations within the United States of America;
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3. |
Gross revenues of at least $5 million per year for the last two years; |
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4. |
The capacity to operate a national reservation system with exclusive brand name representation; and |
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5. |
A customer service plan that outlines delivering a superior guest experience at JWA, including how each proposer will resolve guest disputes and complaints. |
On-Airport RAC Concession Lease Terms for the RFP
The term of the new RAC concession leases will be 10 years commencing on December 1, 2019. The 10-year term will allow the RAC operators to amortize the costs associated with the required safety and facility improvements on level zero of the RAC facility. JWA invited proposals on nine On-Airport RAC Concession Sites ranging in size from 14,232 square feet to 43,688 square feet. The three components of rent are: i) the greater of the Minimum Annual Guarantee (MAG) rent or 10 percent of gross receipts; ii) Ready Car Parking Area Rent at 48 cents per square foot monthly; and iii) Common Areas rent at 48 cents per square foot monthly. Proposers had the opportunity to lease overflow parking in the Main Street lot at the rate of 45 cents per square foot monthly. The Ready Car Parking Areas rent, Common Areas rent and the optional Overflow Parking rent will increase annually based upon increases in the Consumer Price Index (CPI). The MAG rent will increase to the greater of 85 percent of the gross revenue paid to JWA for the previous year or the increase in CPI. The initial security deposit will be equal to four times the estimated monthly rent as determined by the Airport Director. Additionally, the Proposer shall be required to contribute an annual marketing fund fee of $10,000, which will be prorated for the one month remaining in 2019.
Five years after the commencement date of each lease, each RAC concessionaire will perform a midterm refurbishment in an amount up to 50 percent of its initial capital investment, based upon review of the facility conditions and Airport Director approval.
Proposals were evaluated on the following criteria: Proposed MAG rent, with a minimum starting proposal of $450,000; Experience and Qualifications; Financial Viability; Capital Improvements; and Sales and Management Plans. The evaluation committee also conducted structured oral interviews with responsive proposers.
Proposals Received
Twelve proposals were received for seven of the nine Concession Sites, shown below. The proposals were from individual brands of the following three corporations:
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Enterprise Rent-A-Car Company of Los Angeles, LLC consisting of Enterprise Rent-A-Car, National Car Rental, and Alamo Rent-A-Car |
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The Hertz Corporation, consisting of Hertz, Dollar Rent-A-Car, and Thrifty Car Rental |
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Avis Budget Car Rental, LLC consisting of Avis and Budget |
No proposals were received for Concession Sites 4 and 6.
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Company |
Brand or DBA |
Concession Site No. |
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Avis Budget Car Rental, LLC |
Budget |
1 |
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The Hertz Corporation |
Hertz |
2 |
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Enterprise Rent-A-Car Company of Los Angeles, LLC |
National Car Rental |
2 |
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Enterprise Rent-A-Car Company of Los Angeles, LLC |
Alamo Rent A Car |
3 |
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Avis Budget Car Rental, LLC |
Avis |
5 |
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Enterprise Rent-A-Car Company of Los Angeles, LLC |
National Car Rental |
5 |
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The Hertz Corporation |
Thrifty Car Rental |
7 |
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The Hertz Corporation |
Dollar Rent A Car |
8 |
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Enterprise Rent-A-Car Company of Los Angeles, LLC |
Enterprise Rent-A-Car |
8 |
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Enterprise Rent-A-Car Company of Los Angeles, LLC |
Alamo Rent A Car |
9 |
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Enterprise Rent-A-Car Company of Los Angeles, LLC |
Enterprise Rent-A-Car |
9 |
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The Hertz Corporation |
Thrifty Car Rental |
9 |
Proposal Evaluation
The proposal evaluation committee met on September 3, 2019, to review and score the proposals. The committee was comprised of four members of the public with subject matter expertise. The Board-approved rating criteria and their allotted points are listed below. Structured oral interviews were held with each proposing company on September 5, 2019. The interviews were scored and included in the overall scoring by the evaluation committee.
Evaluation Criteria for On-Airport Rental Car Concessions
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Category |
Points |
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Capital Improvements |
25 |
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Financial Viability |
25 |
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Experience and Qualifications |
20 |
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Sales and Management Plans |
20 |
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Oral Interview |
10 |
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Total Points Available |
100 |
Evaluation Committee Proposal Review Scores
The scores for the proposers are summarized below. Individual evaluators' score sheets are provided as Attachment I.
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Proposer by Brand Name |
SITE # |
RATER #1 |
RATER #2 |
RATER #3 |
RATER #4 |
AVERAGE SCORE |
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Budget |
1 |
93 |
80 |
85 |
93 |
87.8 |
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Hertz |
2 |
92 |
90 |
85 |
86 |
88.3 |
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National |
2 |
97 |
85 |
96 |
94 |
93 |
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Alamo |
3 |
93 |
85 |
96 |
94 |
92 |
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None |
4 |
N/A |
N/A |
N/A |
N/A |
N/A |
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Avis |
5 |
93 |
81 |
85 |
93 |
88 |
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National |
5 |
93 |
85 |
96 |
86 |
90 |
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None |
6 |
N/A |
N/A |
N/A |
N/A |
N/A |
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Thrifty |
7 |
92 |
88 |
85 |
86 |
87.8 |
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Dollar |
8 |
92 |
90 |
85 |
86 |
88.3 |
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Enterprise |
8 |
93 |
85 |
96 |
86 |
90 |
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Alamo |
9 |
93 |
85 |
96 |
89 |
90.8 |
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Enterprise |
9 |
93 |
85 |
96 |
86 |
90 |
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Thrifty |
9 |
92 |
89 |
86 |
86 |
88.3 |
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Based on the committee’s evaluation and recommendation to keep the individual brands of the three corporations together for efficient utilization of management resources, in addition to assigning Concession Sites that are in close proximity to each other, JWA seeks Board approval to award the on-airport RAC concession leases as follows:
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Concession Site #1 |
Budget |
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Concession Site #2 |
Hertz |
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Concession Site #3 |
Alamo Rent A Car |
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Concession Site #4 |
N/A |
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Concession Site #5 |
Avis |
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Concession Site #6 |
National Car Rental |
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Concession Site #7 |
Thrifty Car Rental |
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Concession Site #8 |
Dollar Rent A Car |
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Concession Site #9 |
Enterprise Rent-A-Car |
Although no proposal was submitted for Concession Site #6, this site is located in close proximity to Concession Sites #3 and #9, and is being recommended for award to Enterprise Rent-A-Car Company of Los Angeles, LLC, for the National Car Rental brand. See Attachment J depicting the on-airport rental car Concession Sites. The recommended awards are determined to be adequate for meeting JWA’s anticipated needs for rental car services, with no negative impacts foreseen from the absence of Concession Site #4.
Compliance with CEQA: The proposed project was previously determined to be Categorically Exempt from the California Environmental Quality Act pursuant to Section 15301 (Class 1) of the CEQA Guidelines. This section provides for the exemption of equipment installation and maintenance of an existing facility involving negligible or no expansion of use beyond that already existing on May 7, 2013, when it was originally approved.
FINANCIAL IMPACT:
Revenues related to the rental car concession leases have been included in the FY 2019-20 Budget for Fund 280, JWA Operating Fund, and will be included in the budgeting process for future years. In addition, JWA will charge rent for Ready Car Parking Areas, Common Areas and Overflow Parking Areas.
The leases may be terminated for convenience by the County for any reason, and without cause, upon 60 days' written notice.
STAFFING IMPACT:
N/A
ATTACHMENT(S):
Attachment A - Rental Car Concession - Site 1 - Budget
Attachment B - Rental Car Concession - Site 2 - Hertz
Attachment C - Rental Car Concession - Site 3 - Alamo
Attachment D - Rental Car Concession - Site 5 - Avis
Attachment E - Rental Car Concession - Site 6 - National
Attachment F - Rental Car Concession - Site 7 - Thrifty
Attachment G - Rental Car Concession - Site 8 - Dollar
Attachment H - Rental Car Concession - Site 9 - Enterprise
Attachment I - Panel Score Sheets
Attachment J - Site Plan Depicting On-Airport Rental Car Concession Sites