Los Angeles World Airports (LAWA) and LA Gateway Partners (LAGP) have reached commercial close on the design-build-finance-operate-maintain (DBFOM) agreement for the consolidated rent-a-car facility (ConRAC) at Los Angeles International Airport (LAX). In reaching this milestone, LAWA’s ConRAC project becomes the first public-private partnership for a ConRAC facility in the United States. LAGP will now proceed to close the financing for the project, which is expected to occur in December. The financing structure will be a private placement.
Leading up to commercial close, LAWA’s Board of Airport Commissioners and the Los Angeles City Council both unanimously approved the roughly $2 billion DBFOM availability payment agreement for the project. The Board’s approval came on October 18, 2018, and the City Council took its action on October 31, 2018.
The 5.3 million square foot ConRAC facility will include 6,600 ready/return parking stalls, 10,000 idle storage and 1,100 rental car employee parking spaces, easily making it the largest ConRAC facility in the nation. The new facility will be the anchor of LAX’s Landside Airport Modernization Program, which includes a new Automated People Mover (APM), various stations, and a connection to LA Metro’s Crenshaw Light Rail Line. The APM is under construction pursuant to a separate DBFOM agreement.
The ConRAC DBFOM agreement requires LAGP to design, build and partially finance the ConRAC facility, and then operate and maintain the facility until the end of the agreement’s 28-year term. LAWA will make milestone and other periodic payments to LAGP during construction. Once the ConRAC facility is available for use by rental car customers, LAWA will make availability payments to LAGP, which may be adjusted downward if the facility does not meet specified availability and performance requirements.
For more details, click here to read the full press release from LAWA.
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