The governing authority for Los Angeles International Airport chose a consortium led by Fengate Real Asset Investments to develop the next phase of a multi-stage public-private partnership modernising the US’s second-largest airport.
Los Angeles World Airports recommended LA Gateway Partners be approved to design, build, finance, operate and maintain a consolidated rental car (ConRAC) facility at the Los Angeles airport, known as LAX, under a 28-year lease agreement. LAWA’s recommendation must be approved by the Los Angeles City Council.
LAWA chose the consortium, which also includes PCL Investments and MVI Finance as equity partners, because it had the lowest price score and second-highest technical score out of four submitted bids, according to a statement.
The project involves building a rental car facility that consolidates 20 various locations around the airport. LA Gateway Partners will build a 5.3 million square foot facility with 6,600 parking stalls, 10,000 idle vehicle storage spaces and 1,100 rental car employee parking spaces.
“This was a very competitive process that brought out strong proposals from all four teams who bid for the project,” LAWA board of commissioners president Sean Burton said in a statement. “The ConRAC is an important piece of infrastructure.”
“We’re excited about the LAX ConRAC deal and pleased to be selected as the winning bidder,” Fengate chairman for US infrastructure Martin Klepper told Infrastructure Investor. “This is a good demonstration of Fengate’s value-add as a partner. We not only provided equity for the deal but helped arrange the financing, basically serving as the quarterback to pull together the technical, legal and construction aspects of the project.”
Klepper said Fengate, which has backed around 15 PPPs in North America, plans to use experience gained from the LAX rental car project to pursue more US airport developments.
“There is a huge opportunity for investment in infrastructure projects at airports,” Klepper explained. “We’re going to be spending a lot more time focusing on the airport sector as an important sector in our PPP model.”
The ConRAC facility will connect to an automated people mover system, which was also procured as a PPP and is currently under development. That project includes an elevated 2.25 mile-guideway, six train stations and a moving walkway.
Klepper did not disclose the price it will take to build the ConRAC facility. Part of the approval includes a $5 million “early works” agreement to cover the costs of pre-construction activities. The automated people mover PPP included a $42 million early works agreement, and that project is valued at $4.9 billion. Both projects are part of the Landside Access Modernisation Programme.
The $5.5 billion Landside Access Modernisation Program (LAMP) is a five-part project, with two components qualifying as a public-private partnership, to improve efficiency and accessibility of LAX. Along with the rental car and people mover projects, modernisation includes constructing a transit connection to the Metro 96th Street station, two intermodal transit facilities, including pick-up/drop-off curbs, and road improvements.