AutoSlash and the Fee Detective have visited California multiple times. There's the voluntary assessment of 3.5% rental car companies chose to place on renters to promote tourism. California holds four of the top 10 spots on the "Most Expensive Free Rental Day" list. And then there's San Francisco. Los Angeles International Airport (LAX) had escaped treatment by the Fee Detective ... until now. You see, the Fee Detective isn't fond of taxes on imaginary facilities.
A visitor to LAX may well agree that "sprawl" and "congestion" are appropriate descriptors. Renting or car or parking a personal vehicle, one clearly sees that hundreds of acres are expended on rental car companies and parking structures. Trying to get to or from an airport terminal, a traveler might get stuck in a major traffic jam. The Los Angeles City Council has recognized this problem for at least 15 years. Yet the process of getting to/from the airport has largely remained unchanged over the same 15 years -- I flew to Los Angeles to write a review of the Jucy RV and the process of getting to a rental car was the same as when I had an office adjacent to the airport (on West Century Boulevard) in 2001 - 2002. Recently, the City Council approved the purchase process of (more) land to start fixing this traffic flow problem through eminent domain and to begin construction of a consolidated rental car center 2.25 miles from the terminal area.
Love LA? Maybe not in perpetuity.
LAMP and Connecting LAX
As part of the Landside Access Modernization Program* and Connecting LAX, the city intends to build a Consolidated Rental Car Facility (CONRAC) along the western edge of I-405. When the CONRAC is (eventually) completed, all rental car companies operating at the airport would be required to move from their existing sites to the CONRAC. Fifteen years into the program, the city doesn't even own the desired property along I-405, so the current step involves acquiring the property. So how did the City Council of Los Angeles respond? In August 2017, the City Council agreed to acquire 37 homes in order to build the CONRAC.
Well, the City Council agreed -- 7 of the 37 homeowners did not agree but the City Council decided that the purchase was in the public interest, which means eminent domain comes into play. We're not fans of eminent domain at AutoSlash, particularly sites that are 2.25 miles away from the perceived problem. One of our team members has lived through an attempt to have their home seized via eminent domain for use in private property development, so we're definitely saddened that those 37 families will be forced to move once the City (not the residents) decides the "fair market value" of the land.
* Coincidentally, this $5.5 billion access program to improve traffic flow is projected to reduce traffic into LAX by a whopping 2.2 vehicles per minute.
There is one cool aspect of the plan -- an APM (Automated People Mover) that will get airport users to/from the terminal and multiple remote sites on the way to the CONRAC and new Metro stop. The technology does already exist, so we have to hope Los Angeles implements it well. Las Vegas is held up by the U.S. federal government as an example of "innovative financing support", yet encountered cost overruns and even declared bankruptcy.
Hopefully, the APM system will be more Disney and less Las Vegas.
Why is this a Fee Detective article?
A Fee Detective article means there are fees, and those fees often will be a combination of abusive and nonsensical. The Fee Detective usually doesn't write about buildings that won't be constructed until six years from now but there's a reason to make a special exception for Los Angeles.
- There will be future fees on renters (and the rental car companies) when the CONRAC is complete in 2023 or later (the original plan stated 2022).
- There are current fees for the CONRAC where the city doesn't even own the land now.
- And fees have been collected for the CONRAC since 2002.
The fee collected over the last 15 years is not exactly cheap at $10 for every rental car contract, and the CONRAC is still a glimmer in the airport authority's eyes!
Listed as a Customer Facility Charge, the Customer Facility in question only exists in Imaginationland.
The Los Angeles World Airports Authority and City Council have been collecting fees for a building the past 15 years, despite not even having a site for the building, and the building is still at least 6 years away! Here's a sobering thought:
A child born the day the CONRAC fee started might be the first customer (age 21 or older) when the LAX CONRAC actually opens.
How can an airport collect a fee from renters for a building over a period of 21 (or more) years before that building is even constructed? Through the power of the California State Legislature!
It's The Law
There's a provision in California's Code that gives airports the option of assessing fees related to CONRACs in one of two different ways. The State doesn't want airports to completely abuse car renters at airports, so the state allows two different schemes to help pay for rental car facilities and transportation to/from those facilities (whether or not the building actually exists or will exist within the next few decades).
- Option A -- Charge a flat fee of $10 on every single rental contract, no questions asked.
- Option B -- Charge up to $9 per day on rentals (five days maximum) but be required to produce documentation, reports, and audited financial statements of how the funds are being appropriately used.
Los Angeles would attract a lot more scrutiny following Option B for more than two decades without actually paying to construct a building, so it's been Option A since 2002. However, the same California Code allows the airport to switch to Option B if there's a public hearing and the city demonstrates that the revenue from the existing fee isn't enough to cover the (probable) cost overruns.
Look back at your rental car receipts from LAX and there will be a $10 fee for a building that will exist (one day). Of course, most of the individuals paying the fee in the earliest days will be retired by the time the facility opens. Los Angeles has fully taken advantage of their legal right to impose a tax of $10 per rental and we hope that the 2.2 fewer vehicles per minute at the airport in 2023 (or later) makes a truly appreciable difference in the customer rental experience!
Fees, facility charges, and taxes got you confused and/or down? The Fee Detective can explain. Send your query to email@example.com and we may feature your question in an upcoming post.