Millions at Stake: Thrifty Car Rental Dollars Could Be Lost in Relocation

July 26, 2012
By

One wouldn’t think that a steel-framed parking garage going up at Logan Airport would have much to do with the City of Revere, but that facility under construction at Logan could completely break the City if some sort of compromise isn’t reached – and quickly.

The steel-framed facility going up at Logan Airport is the Consolidated Rental Car Facility, known as the CONRAC. Within the next year, one of Revere’s largest car rental companies, Thrifty, will move from Lee Burbank Highway to the CONRAC – taking a lucrative $10 per car surcharge fee with it.

That surcharge is the key to funding the $1.1 million per year debt payments for the recently-build Revere Public Safety Facility, and up until now, everyone believed that Revere would be saved by special legislation that would allow the City to continue collecting from Thrifty – despite their relocation.

However, this week, two powerful Revere state representatives told the Journal that the legislation cannot be passed, and the revenue from Thrifty will likely be lost.

“The House’s legal counsel has identified substantial concerns which have to be worked out prior to it becoming law,” said Seth Gitell, spokesman for House Speaker Bob DeLeo (D-Winthrop). “The Speaker looks forward to talking with Mayor Rizzo and the Revere City Council on ways to provide a solution to replacing this lost revenue.”

Rep. Kathi-Anne Reinstein (D-Revere) said she had re-filed the bill at the beginning of the year, but that lawyers for the Legislature felt the surcharge bill couldn’t meet Constitutional muster.

“Legal counsel seems to think this is a Constitutional issue, but I know we’re working with the Speaker and the mayor and city council,” said Reinstein. “It’s kind of something that’s never been heard of before – a municipality getting revenue from a business that is not within the City…Maybe in the next few months we can sit down and see what changes can be done to it. If there’s anything we can do, we’ll do it. I don’t know what the answer is now, though.”

Within the City, the news of the bill’s rejection by state legal authorities came like an axe cutting one’s legs off at the knees. In short, it was devastating.

Revere Director of Finance George Anzuoni said that Thrifty is the biggest contributor to the surcharge fund. All told, once collected from all the city’s rental car companies, the surcharge amounts to about $750,000 per year. Most of that come from Thrifty, Anzuoni said, and losing it would mean pretty dire consequences.

“That’s going to be a hard hit,” said Anzuoni on Tuesday. “Thrifty is pretty much the biggest contributor to the surcharge and we need that money to help with the yearly debt for the Public Safety facility. The surcharge money doesn’t even cover the total yearly debt service. If we don’t get it from there, we have to get it somewhere else. We’re going to have to lose more personnel; that’s the only place it can come from and I don’t know who it will be we could cut. I hope we can work something out because we were really banking on that legislation.”

City Councillor Tony Zambuto had been instrumental in negotiating the passage of the surcharge years ago, as well as its application to specifically fund the new Public Safety Facility debt. Zambuto and the late Councillor George V. Colella had united forces to pass the measure locally.

After learning of the possible loss, Zambuto said it would severely strain the City’s finances.

“It would be devastating, really bad,” said Zambuto. “We always knew it would be kind of a stretch to collect revenue from a business that wasn’t in our City, but we had no idea there would be a Constitutional question. We are going to have to find a solution.”

The CONRAC facility began construction late last year in the Airport’s Southwest Service Area. It is a project that is pretty much a requirement of the U.S. Environmental Protection Agency (EPA), and is a common thing at most airports across America. The EPA seeks to move all airport-servicing rental car companies onto the airport property into a consolidated facility, eliminating multiple buses and traffic and thus improving the air quality in communities surrounding the airport.

This spring, steel frames started emerging from the CONRAC site and the work is ahead of schedule, with a potential occupancy date of early August 2013 – exactly one year from now.

Thrifty officials in Oklahoma did not return multiple calls from the Journal, but in prior stories, they have indicated to the paper that they have every intention of moving to the CONRAC and are potentially required to do so by the EPA if they want to continue servicing the airport – as transportation to the Revere site would be prohibited.

Revere would still be allowed to collect the surcharge from companies that remain in the city – such as Enterprise and Select. However, those operations are much smaller and contribute much less to the fund.

Reinstein said that nothing can be accomplished in the current legislative session, which ends next week on July 31st. However, she said that in the fall she will probably re-file a bill, and that she will help promote talks between the City and all involved parties.

“What we’ll need to examine is whether there’s some sort of supplemental income to replace it or if we can get MassPort and the City to sit down and work out some kind of agreement,” said Reinstein. “It’s a shame to see it go, but the Constitutionality was really questioned. We have to try and figure something else out.”

  • ChrisTheElder

    Hey Revere – go fly a kite. You shouldn’t have picked on car rental in the first place. Car rental has nothing to do with the public safety facility and you know it’s just easy pickings, but bad tax policy. Now why don’t you collect from the constituency the facility actually benefits. You’re getting what you deserve.

  • voter156

    look at what city employees get paid to teachers and all compared to other cities and towns, Revere still thinks they can pick the bones clean on our dime, did anyone think the relief would help the tax payers, no, line their pockets more wile the rest of us have to bust our asses in traffic, hope they have a job tomorrow and wonder if one can pay for the roof over their heads and put food on the table !

  • Born in EB

    okay< so let me get this right… Revere is upset because they are the next city over from East Boston, where Logan Airport; a GIANT and UP and COMING airport for whole metropolis of BOSTON. Now that MassPort has decided it will make a whole lot more sense to follow in the steps of several larger airports, by combining all the rental car agencies (large and small) into being housed in one facility!?! How on earth can "Revere-ites" be upset by this? It just means our airport might finally measure up to those like LAX, etc. That's just generating more business for everyone, including Revere since there are hotels and motels in just about every city that surrounds Logan! Not to mention the fact that each and every rental car company has at least 5 (and that's Dollar, the smallest company at Logan!) going round and round the airport on a 24-hr basis! Pollution or a tax? Really?

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