MEMORANDUM 08-120

TO: Mayor Hornaday and City Council

THRU: Walt Wrede, City Manager

FROM: Sheri Hobbs, Personnel/Airport Terminal Manager

DATE: August 19, 2008

RE: Homer Alaska Car Rental Lease

An RFP for car rental leases closed on May 8, 2008. Two proposals were received. A lease proposal was presented to Council on June 9, 2008 but was not accepted. A second RFP was advertised and closed on July 22, 2008. The same two proposals were received Active Car Rental and Homer Alaska Car Rental. We prepared a lease for Active Car Rentals for the car rental concession lease space 124 for Council approval.

We have an area behind the airline ticket counter that was previously used by TSA for baggage screening that could be used for a car rental location. I have spoken with Homer Alaska Car Rental who is agreeable to leasing a smaller area in the terminal and only five car rental parking spaces. There is still a ticket counter available if TSA should return. The office area behind the ticket counters is currently being leased by ERA.

The leased concession area 107 is 49 square feet. The lease term is September 1, 2008 through December 31, 2011. Homer Alaska Car Rental is aware if their lease is approved by Council they cannot occupy the space until the State of Alaska has approved their sublease. The lease includes the car rental concession with 5 car rental parking spaces. Monthly rent for the concession area of 49 square feet is $85.75, plus 10% of car rental fees.

Allowing both car rentals to lease space in the terminal will increase airport revenues while providing additional car rental choices for the public.

RECOMMENDATION: Approve Homer Alaska Car Rental lease and authorize the City Manager to sign.

FISCAL IMPACT: Lease and gross sale fees totaling $9,050 are estimated for airport terminal revenue.