REPORT TO THE CITY COUNCIL
FROM: FRANCISCO PARTIDA, C.M., C.A.E., USAP, Interim Director of Aviation
Airports Department
BY: MARCOS AYALA, Airports Property Specialist II
Airports Department
SUBJECT
Title
Actions related to the Non-exclusive On-airport Rental Car Concessions Agreements at Fresno Yosemite International Airport (FAT). The potential revenue of the three contracts is $4,846,238 annually. The total anticipated revenue for the five-year term of the three contracts is approximately $24,231,190. (Council District 4).
1. Adopt a finding of Exemption pursuant to Section 15061(b)(3) (Common Sense) and Class 1/Section 15301 (Existing Facilities) of the California Environmental Quality Act (CEQA) Guidelines;
2. Approve a Non-exclusive On-airport Rental Car Concessions Agreement (RAC Concessions Agreement) with Avis Budget Car Rental, LLC., at FAT for a five-year term;
3. Approve a RAC Concessions Agreement with Enterprise Rent-A-Car Company of Sacramento, LLC., at FAT for a five-year term;
4. Approve a RAC Concessions Agreement with The Hertz Corporation at FAT for a five-year term
Body
RECOMMENDATION
Staff recommends that City Council (Council) approve three (3) separate five-year Non-exclusive On-Airport Rental Car Concessions Agreements with: (1) Avis Budget Rental Car, LLC.; (2) Enterprise Rent-A-Car of Sacramento, LLC.; and (3) The Hertz Corporation, to continue operating at FAT. The potential revenue of the three contracts is $4,846,238 annually. The total anticipated revenue for the five-year term of the three contracts is approximately $24,231,190.
EXECUTIVE SUMMARY
On July 17, 2025, Council approved the award of each of these contracts in connection with RFP# 12501615. The City of Fresno Airport Department (Airports) engaged with the three selected Rental Car Companies (RAC) to negotiate the final Non-Exclusive On-Airport Rental Car Concessions Agreement (Agreement) with each company.
Airports now returns to Council to obtain the approval of these three Agreements.
Each Agreement has a five-year term, with one optional five-year extension at the discretion of the City. These Agreements provide continuity of rental car operations and services at the airport for passengers arriving at FAT and locals who rent cars at the airport due to the convenience of having multiple brands all in one location.
The potential revenue of these three Agreements is $4,846,238 annually. The total anticipated revenue for the five-year term of these three Agreements is approximately $24,231,190.
BACKGROUND
The current agreements that are in holdover were executed in 2014 and expired on August 31, 2024. Airports issued a Request for Letters of Interest (LOI) in October 2023 to gauge interest from the rental car industry beyond the incumbent operators, and a Request for Proposals (RFP# 12501615) in March 2025. Although the responses to the LOI included RACs not operating at FAT, only the three incumbent RACs responded to the RFP. On July 17, 2025, Airports came to City Council to obtain approval to award three contracts to the three incumbent (Rent A Car) RACs that responded to the RFP: Avis Budget Rental Car, LLC; Enterprise Rent-A-Car of Sacramento, LLC.; and The Hertz Corporation (collectively referred to as “Industry”).
After Council approved the award of the contracts, Airports moved forward with the negotiation process with the Industry. Airports is now returning to City Council for approval of the final Agreements.
The key business terms of these final Agreements remain the same as the draft agreement that was included in the RFP specification and awarded in July 2025. After meeting with the Industry, changes were made to some of the definitions, the Minimum Annual Guarantee section, and dates and minor formatting fixes. The three Agreements will have a term of five years, with one optional five-year extension for total term of ten (10) years. In addition to the ten percent (10%) concession fee paid to Airports that is based on the rental car company’s (RAC) gross revenues, RACs will also provide payment for their use of the terminal counters located in baggage claim, and the ready-return lot (this is the lot next to baggage claim where passengers pick up and drop off their rental cars).
The City Attorney’s Office has reviewed and approved these proposed Agreements.
ENVIRONMENTAL FINDINGS
On July 17, 2025, when City Council awarded these contracts, Council also adopted a finding of Categorical Exemption pursuant to Section 15061(b)(3) (Common Sense) and Section 15301 (Existing Facilities) pursuant to CEQA Guidelines for these contracts and their subsequent Agreements.
FISCAL IMPACT
The Non-exclusive On-Airport Rental Car Concessions Agreements will provide monthly rental revenue in the form of space rental per square footage and 10% gross revenue at each of the rental car concession locations. All revenue will be deposited into the Airports Enterprise Fund and will contribute to the operation and maintenance of FAT. There is no impact on the General Fund or ratepayers of the City of Fresno from this item.
Attachments:
Notice of Exemption
Avis Budget Rental Car Concession Agreement
Enterprise Rental Car Concession Agreement
Hertz Rental Car Concession Agreement