TO: Mayor and Members of City Council
THRU: Karen M. McDonald, City Attorney
Telly Whitfield, Assistant City Manager
FROM: Kecia N. Parker, NCCP
Alvester T. (Toney) Coleman, PhD, A.A.E.
DATE: June 13, 2022
RE:
Title
Approval of Proposed Leases for Avis Rent A Car System, LLC, Budget Rent A Car System, LLC, Enterprise Leasing Company Southeast, LLC, Enterprise Leasing Company, Southeast d/b/a National/Alamo, ILM Transportation, Inc. and The Hertz Corporation, and Sierra Nevada Corporation,Their Successors or Assigns at the Fayetteville Regional Airport
end
COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal II - Responsive City Government Supporting a Diverse and Viable Economy-Have a strong, diverse, and local viable economy
Objective 2.1 - To ensure a diverse tax base
Goal IV - Desirable Place to Live, Work and Recreate
Objective 4.1 - To maintain public transportation investments with high quality transit and airport services
Executive Summary:
I: Avis Rent A Car System, LLC, Budget Rent A Car System, LLC, Enterprise Leasing Company Southeast, LLC, Enterprise Leasing Company, Southeast dba National/Alamo, The Hertz Corporation, and ILM Transportation, Inc. have leased parking spaces and indoor office/counter space from the Fayetteville Regional Airport. The current leases were established in 2016 and are currently being updated. The term of the leases coincides with the new fiscal year (July 1st) and will be for an initial five-year term with an option to extend for one additional five-year term.
II: Sierra Nevada Corporation currently leases all of the former Air Cargo building at 3139 Doc Bennett Road and has leased said premises since June 1, 2005. The new lease term begins July 1, 2022 and will be for an initial two-year term with an option to extend for two additional two year terms.
Background:
The mission and goal of the Fayetteville Regional Airport (FAY) is to provide safe and efficient airport operation to meet the aviation needs of the community. The Airport serves an eleven county service area with a catchment population of over 430,000 residents. The Airport generates 960,000 Origination & Destination passengers per year with its two current legacy carriers to three major hubs in Atlanta, Charlotte and Ft. Worth. It has an estimated regional economic impact of over $790 million. The Airport has been self-sustaining since 1994; meaning there has been no use of City General Funds for operational or capital expenditures for nearly thirty years. Rental cars and parking lot revenues are the primary sources of Airport revenue generation.
I: The Terminal Renovations Phase II impacted the number of ready car spaces and configuration of all rental car offices. Given the number of changes it was mutually agreed by Airport Management and Real Estate that short-term agreements should be used until construction in those area was complete. Rental Car ready spaces and office areas are now complete and the leases presented reflect those changes as well as are long term agreement with our partners.
II: Sierra Nevada Corporation (SNC) is a government contractor who has had a long-standing lease with the City. They are desirous of continuing their tenure at the Fayetteville Regional Airport and have been excellent tenants since being recommended to Airport Management by Economic Development in 2005.
The Airport Commission is recommending all of the above to be entered into by the City to continue the longstanding relationships with each company.
Issues/Analysis:
None
Budget Impact:
All revenues will remain with the Airport Operating Fund for each of the proposed leases and there will be no impact to the City of Fayetteville General Fund.
Options:
• Approve the proposed Lease Agreements and allow the City Manager to execute the documents on behalf of the City.
• Disapprove the proposed Lease Agreements and not allow the City Manager to execute the documents on behalf of the City.
Recommended Action:
Staff recommends City Council approve the proposed Lease Agreements and allow the City Manager to execute the documents on behalf of the City
Attachments:
Proposed Leases
Resolutions