CONRAC FACILITIES: FINANCING AND BUSINESS ARRANGEMENTS prepared for Transportation Research Board 86

1
CONRAC FACILITIESFINANCING AND BUSINESS
ARRANGEMENTSprepared forTransportation
Research Board86th Annual Meetingprepared
byTom Walsh, DirectorJacobs ConsultancyJanuar
y 23, 2007
2
Rental Cars Are Important to Airports

• Rental car activity provides 9 of Airport
  operating revenues
• Privilege fees
• Rentals ground and building
• Customer Facility Charges (CFCs)

3
Recent Trends

• The advent of consolidated facilities
• Common and shared facilities
• Common busing
• A new charge the CFC
• Sharing with public parking

4
Elements of a CONRAC Facility

• Customer service area
• Ready/return spaces
• Quick turnaround (QTA)
• Maintenance
• Vehicle storage
• Common busing

5
ConRAC Facilities Some Examples

• Albuquerque 45 million
• Baltimore-Washington 135 million
• Dallas-Fort Worth 130 million
• Fort Lauderdale 210 million
• Houston 122 million
• Phoenix 270 million
• Tucson 20 million (approx.)

6
The Customer Facility Charge (CFC)

• The CFC a levy on the passenger
• Authorized by the Airport sponsor
• Collected by the rental car companies
• Remitted to the Airport
• CFC revenues dedicated to rental car improvements
• Usually levied per transaction-day (contract-day)
• Sometimes levied per transaction (contract)

7
CFC Levies

• Per Transaction
• Range 2.00 to 13.50 (Median 5.00)
• Jacksonville 2.00
• Louisville 5.00
• Oakland 10.00
• Ontario 10.00
• San Francisco 13.00

• Per Transaction-Day
• Range 1.10 to 4.50 (Median 2.55)
• Colorado Springs 1.50
• Minneapolis 2.00
• Manchester, NH 2.25
• Fort Meyers 2.75
• Houston 3.25
• DFW 4.00
• Phoenix 4.50

8
How Are CONRAC Facilities Financed?

• Bonds leverage the CFC Revenue stream
• CFC cash (equity) pay-as-you-go
• Airport cash or loans
• TIFIA loans

9
Bonds

• CFC-Backed Bonds Special Facility Bonds
• The legal pledge is CFC revenues
• Debt repayment from CFC revenues
• General Airport Revenue Bonds (GARBs)
• The legal pledge is general Airport revenues
• Revenues may (or may not) include CFCs
• Debt repayment from CFC revenues
• Double Barrel bonds
• Primary pledge CFCs
• Backup pledge Airport revenues

10
Rental Payments

• Ground rentals
• Per square foot of ground (footprint)
• Ground under the CONRAC building and other areas
• Space (building) rentals
• Per square foot of building area (or per space)
• Ready return area
• Customer service area exclusive and common
• Contingent Rent

11
TIFIA Loans

• Transportation Infrastructure Finance and
  Innovation Act (TIFIA)
• Federal Program Intermodal facilities
• A loan, not a grant
• Relatively easy terms good rates, long
  repayment schedule
• Big projects only
• Minimum project size -- 50 million
• TIFIA funds up to 1/3 of the project

12
TIFIA Loans Examples

• Miami
• Miami Intermodal Center (MIC) 1.3 billion
• Includes Rental Car Facility 220 million
• TIFIA loans -- 433 million
• Includes people mover and rail component
• Providence
• Project cost 215 million
• TIFIA loan 58 million
• Includes rail and public parking

13
Other Funding Sources

• CFC Equity
• Implement CFC before opening of CONRAC facility
• Use cash for funding project costs (or
  capitalized interest)
• Demonstrate CFC collection track record to Bond
  markets
• Airport Loans
• Airport loans cash to the project
• Airport cash

14
Forecasting CFCs

• The CFC rate
• Total cost of renting a car
• Other below the line charges
• Forecasting transactions
• Forecasting transaction-days
• Rental car customer elasticity

15
Total Cost of Renting a Car Boston

• 3-day rental, intermediate size car (Avis)
• Base rate 3 x 64.99 194.97
• Concession recovery fee (11.11) 22.43
• Reimbursement fee (3.55) 6.92
• Convention Ctr. Surcharge (per rental) 10.00
• Parking tax (per rental) 0.60
• Tax (5.0) 11.22
• TOTAL 246.14
• Add-Ons 26 of base rental rate