DEPARTMENT: Aviation
DEPARTMENT HEAD: Noel T. Jones
COUNCIL DISTRICTS IMPACTED: Citywide
SUBJECT:
Briefing and possible action on the Gas Station Concession Agreement for the San Antonio International Airport
SUMMARY:
The Aviation Department will brief the Economic and Human Development Committee on the lease and concession agreement with Northwest Petroleum for a gas station, convenience store and fast food restaurant at the San Antonio International Airport to be located at the northeast corner of the intersection of Airport Blvd and Loop 410. As a concessionaire, Northwest Petroleum will design and construct the building and the project is expected to take 18 months once construction begins.
BACKGROUND INFORMATION:
Improving the customer experience for passengers at the San Antonio International Airport is one of the Airport’s top priorities. Staff has received passenger concerns related to difficulty locating a gas station to refuel their rental vehicle before returning to the rental car company. The Aviation Department has identified property that could be developed as a gas station for both passengers and the general public. In addition to providing increased service, the Airport will also receive non-airline revenue that will assist in keeping costs lower for airlines operating at the airport.
In November 2013, a Request for Proposals (RFP) was released to select a qualified respondent to provide complete development, financing, design, construction, operation, and maintenance of a gas station concession on up to 4.67 acres at the northeast corner of Loop 410 and Airport Boulevard. The selection committee utilized a consensus scoring method to evaluate the proposal based on the published criteria that included: experience; background and qualifications in providing retail fueling service; consideration of the proposed plan for site plan; design and operation of a gas station concession; proposed minimum annual guarantee; and Airport Concessions Disadvantaged Business Enterprise program compliance. The evaluation committee unanimously voted to recommend the respondent for contract award.
The briefing to the members of the Council committee will include a review of the project and the solicitation process, the terms of the agreement and the fiscal impact. The project briefing was presented before the High Profile Contract Council Committee on June 10, 2014, the Audit Council Committee on April 19, 2016 and the Airport Advisory Commission on September 16, 2014 and March 22, 2016.
The Aviation Department is recommending the Economic and Human Development Committee approve the concession agreement for a gas station, convenience store and fast food restaurant for the San Antonio International Airport and recommend the item move forward for Council consideration on May 12, 2016.
ISSUE:
This action is for briefing purposes only.
ALTERNATIVES:
This action is for briefing purposes only.
FISCAL IMPACT:
Ground Rent
The Airport will receive $81,889.00 in annual ground rental for the first five years of the lease term. Thereafter, the ground rent will increase 15% every five years of the term of the agreement.
Minimum Annual Guarantee and Percent Rent
The minimum annual guarantee (MAG) will be $50,000.00 during the first lease year of the agreement. During year two and thereafter, the MAG will be 85% of the prior year’s payables consisting of guaranteed rent and percentage rent. Revenue generated from these contracts will be deposited in the Airport Operations & Maintenance Fund.
|
Product Category |
Percentage Fee Rate |
|
All convenience store and fast food restaurant gross receipts |
2% of Gross Receipts |
|
Commissions paid to Northwest Petroleum on Lottery Sales and winnings |
1% of amount paid to Northwest Petroleum |
|
Retail fuel sales |
$0.01 per gallon |
|
ATM Rental |
$100.00 per month |
RECOMMENDATION:
Staff recommends the Economic and Human Development Council Committee approve the item to move forward for Council consideration on May 12, 2016.