Memorandum 14-143 Airport Terminal Sublease Hertz/Pioneer Car Rental, Inc.

Memorandum 14-143

TO:                       Mayor Wythe and Homer City Council
FROM:                Walt Wrede
DATE:                 September 17, 2014      
SUBJECT:         New Airport Sublease Approval / Hertz Rental Cars

John Thompson dba Hertz/ Pioneer Car Rental wishes to sell his business to Brian Berens.  Mr. Thompson has a current sublease with the City of Homer which does not expire until December 31, 2016.  The State of Alaska Department of Transportation does not allow subleases to be assigned, and only permits five years as the maximum term of a sublease.  (Leases within the airport terminal are subleases. The City leases the land the terminal sits on from the State.)

The proposal submitted by Hertz / Pioneer Car Rentals is complete and fully responsive to the lease application requirements.  The proposal is included for your information. The credit report and the financial statement have been removed in order to protect the privacy of the owners and proprietary business information.

Hertz has been an excellent tenant at the airport. Hertz generated $29,340 in direct lease revenue for the City last year and has averaged just above that over the past three years.  Hertz’s generates sales tax revenues, jobs, and spin-off economic activity. The owners have continually invested in the company and upgraded the rental car fleet, and the new buyer has indicated he will continue to do the same.  The company works hard to provide convenient and professional services to the travelling public and does a great deal to promote tourism and business in Homer.
 

RECOMMENDATION: Approve a new five year sublease at the Airport Terminal for Hertz/Pioneer Car Rentals and authorize the City Manager to execute the appropriate documents.