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LAX Consolidated Rental Car Facility Update

Board of Airport CommissionersDecember 4, 2014

Today’s Objectives & Project Assessment

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Objectives

1. Provide a project progress report 

2. Relate the ConRAC project element to the overall Landside Improvement Program, which is to be briefed on December 18th and has planned January CEQA events

3. Outline future steps, particularly in relation to financing and current/future agreements with rental car companies

Assessment

1. Establish consensus on the ConRAC size, functions, and site:Ahead of expectations

2. Provide needed information to the anticipated environmental processes: On schedule

3. Identifying  a preferred configuration:On schedule

4. Evaluating the project’s finance/business deal requirements:Emerging rapidly; likely more complicated than anticipated due to unique LAX circumstances

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Context within LAX Landside Program

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• The Specific Plan Amendment Study validated Manchester Square as the best site for the LAX Consolidated Rental Car Facility (ConRAC)

• ConRAC planning and programming is a unique challenge given stakeholder expectations and unusual existing conditions at LAX

Rank Airport  ConRAC?

1 Orlando Companies at Terminals 2 LAX No3 Phoenix Yes4 Atlanta Yes5 Miami Yes6 Denver No7 Tampa Planned8 Las Vegas Yes9 Fort Lauderdale Yes10 San Francisco Yes

ConRAC

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LAX ConRAC Benefits

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Vitae Street

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• Improved Passenger Experience – ConRAC will provide enhanced customer experience and safety with an easy‐to‐find consolidated location conveniently linked to the Central Terminal Area (CTA) by an Automated People Mover (APM) 

• Improved Traffic Flow – Eliminate more than 3,200 daily rental car shuttle trips on city streets and CTA 

• Free‐up CTA Curb Space – ConRAC will open up 945 feet (20% of total) of commercial curb zone on the lower level

• Operational Efficiencies – Facility for rental car operators to share space, resources and transportation

• Better Land Use – Potential for re‐use of existing privately held land used by rental car companies

The LAX ConRAC is a vital component of the overall LAX Landside Improvement Program and LAWA’s single most important opportunity to reduce traffic/congestion 

while improving passenger experience

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Current Rent‐a‐Car Signage in the Airport Vicinity

5More than 50 signs scattered around the Airport vicinity directing rental customers to various Rent-A-Car locations

Rental Car Facilities around LAX 

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Project  Process

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Survey Rental Car 

Companies

Develop Program 

Requirements

Identify Site Constraints Survey Rental 

Develop Range of Alternative Concepts

Evaluate and Refine Concepts; Review Preliminary Affordability 

Analysis

Select Preferred Concept

Develop Program Definition Document

Current Project Stage

Car Companies

BOAC Contract Approval

February 2014 Accomplishments to Date:• Reached consensus on appropriate size of

ConRAC based on industry-supplied data

• Developed numerous alternatives for review; three shortlisted alternatives emerged

• Established roadway plans to provide for efficient traffic circulation

• Evaluated phase-ability of construction given certain external factors

• Prepared preliminary cost estimates for shortlisted alternatives

• Initiated development of Finance and Business Plan

• Conducted preliminary market study for potential uses of remaining Manchester Square property

ConRAC Examples:

Project Requirements Consensus

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Component Design Basis AcresReady/Return Area (RAC)

7,600 stalls 55(area where customers pick‐up and return vehicles)

Quick Turn Around (QTA)15.7

(multi‐level fueling, wash & maintenance)

Customer Service Building (CSB)239 counters 4.4(lobby with customer service counters, restrooms, retail amenities and other 

functions)

Idle storage and employee parking 12,700 stalls 63.7

(for overflow vehicles on stand‐by to meet peak demands)QTA Support and Additional Site Functions                                                                   

3.2(visitor parking,  car carriers load, loading dock/service yard)

Total ConRAC Program (acres) 142

• To realize operational efficiencies the project must meet the industry’s needs

• Through a series of meetings with rental car companies, consensus was reached on project requirements, which are summarized below

• While a very large facility emerges from the requirements, these benchmark well with other large airport ConRACs

Comparison of the Three Remaining Alternatives 

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Site Utilization

RAC Building Footprint (acres) 65.2 39.4 56.1

% of Site Occupied by RAC Buildings 51% 31% 44%

Passenger Convenience

APM Station Single APM Station for use by

ConRAC and Transit passengersSeparate APM Station for

ConRACSeparate APM Station for

ConRAC% of RAC area within 350' walking distance

48% 92% 87%

Public Parking Roof Level of ConRAC Separate Structure Separate Structure

Construction

Phasing Difficult to construct in phases Most practical for phasedconstruction

Difficult to construct in phases

Rough-Order Magnitude Costs $921,000,000 $981,000,000 $980,000,000

ALTERNATIVE 1 ALTERNATIVE 2 ALTERNATIVE 3

ConRAC Overall Layout (Alternative 2 used as example)

Aerial View

Side Views

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LAX ConRAC Aerial Perspective (Alternative 2 used as Example)

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Affordability ‐ Developing the Financial Plan

$895

$950

$870 $880 $890 $900 $910 $920 $930 $940 $950 $960

Supportable Project Costs (in millions)

2017 Dollars

Preliminary findings:

Project cost of $900m to $950m is supportable (in 2017 dollars) with an assumed interest rate of 6.5%

Taxable special facility (SFB) bonds are expected to fund costs

To date CFC collections are assumed to be used to pay for design and bond interest costs during construction

Revenues from the CFC are assumed to be approved and increased to the maximum legally permitted per‐day level by 1/1/2018

Preliminary findings to be validated with transaction information forthcoming from the companies and more refined cost estimates

Efficiently delivering the ConRAC project increases the ability to fund APM costs

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Current Dollars

Business Terms Challenges

• Companies expect a high degree of certainty on project cost, affordability, schedule, and that the program meets industry needs before committing to the ConRAC

• Companies expect longer term agreements than is customary for LAWA given that most companies would leave currently secure sites on private land

• To realize full benefits, ConRAC participation should be maximized, which requires LAWA to move away from an historical approach that limits the number of concessionaires and which staff believes needs to commence pre‐ConRAC

• A solid regulatory framework needs to be in place so that ConRAC participants are not undercut by non‐participants, including competitors operating from other facilities such as hotels and private parking facilities whose buses currently access the CTA

• The program and business framework needs to meet requirements and reasonably contribute to transportation costs, including the APM 

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Next Steps

Complete traffic modeling to refine roadway circulation plan

Complete project definition for commencement of EIR process in 2015

Establish land acquisition plans needed for the ConRAC site 

Refine affordability and business terms to inform preferred alternative decision

Prepare and complete Program Definition Document

Coordinate with Caltrans on‐ramp improvements on the I‐405 Freeway 

Continue to develop Finance and Business Plan including:

– Identify project and operational costs associated with new ConRAC facility, including transportation costs

– Integrate APM financial plan with CFC eligibility and capacity

– Finalize Customer Facility Charge level and uses

– Adopt regulations regarding CTA access for companies not participating in ConRAC

– Establish terms of potential new agreement(s) for occupancy of the ConRAC, with the goal of having Letters of Intent that lead to future agreements

– Adopt “bridge” concession amendments/agreements with rental car companies to cover interim operations at LAX and other agreements that enable ConRACdevelopment

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