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Wednesday, Nov 29, 2023

Airport Boosts Access Fees for Offsite Parking

Airport Boosts Access Fees for Offsite Parking By JACQUELINE FOX Staff Reporter The Burbank Airport Authority’s decision last week to increase fees it charges off-site parking companies that shuttle passengers to and from the airport is raising some legal and financial questions among local businesses and city officials. Beginning Jan. 1, access fees for the airport’s only off-site parking operator could double from $1 to as much as $2 per trip, and for the first time ever the airport will begin collecting access fees from the Burbank Hilton Hotel, which has its own airport parking lot. V.S.P. Parking could see its monthly bill to the airport increase from $100 to $30,000 under the new plan. Some suggest the new fees are really aimed at blocking one developer from completing a planned two-story, off-site parking structure that will no doubt take business away from the airport’s own lots. The airport denies that, saying it has a right to revenues earned from businesses that profit from airport customers, though no increases are planned for airline landing fees. Airport officials say the two issues aren’t related, but the facility has taken a hit since the attacks of Sept. 11 and the subsequent tailspin in the travel and airline industry. It is projecting a $4.7 million decrease in revenues for 2002, halted all plans for and discussions of a new terminal, sold off property for some fast cash and faces more expenditures to comply with new federal security mandates. The new increases, according to Victor Gill, airport spokesman, are expected to boost access fee revenues to about $500,000. Currently, the airport collects a total of $290,000 annually in airport access fees, including tolls from taxis, privately run shuttle firms and limos. The airport will begin charging V.S.P. up to 12 percent of its gross receipts and as much as $2 for each trip around the terminal. The fees could vary slightly depending on a final blueprint for the increases due out next month. Car rental companies already pay the airport an access fee of 8 percent of their gross revenues but no trip fees. Those fees will not change, according to Gill. He said privately run shuttles pay a trip fee of $1 and higher, depending on how long they stay, but no fees on gross revenues, and taxis are charged a flat rate of $250 per year. Neither of those two types of providers will be affected by the increases. The owners of V.S.P. Parking have been paying the airport an access fee for years, but it’s a flat rate of $100 per month. The new increases would mean V.S.P., which runs about 300 trips to the terminal per day, will have to begin paying as much as $30,000 a month, and that’s on top of the 10 percent of revenue it already pays the city in transient parking tax. V.S.P. Vice President Derek Sweet said his company has been negotiating a potential access fee increase with the airport for a few years. So the decision to raise it now comes as no surprise. The size of the increase, however, is a surprise. “This is not the increase we were talking about originally,” Sweet said. “We were looking at a fee of about 50 cents or 75 cents per trip, period, before it all fell off the table.” Sweet agreed that the airport is probably hurting financially and needs to do all it can to generate revenue. But, he said, the new fees are much higher than what was originally discussed. “We understand (the airport) is in trouble, the economy is bad, and the attacks in September really hurt them,” said Sweet. “But we are hurting too.” He said his business has fallen roughly 10 percent since Sept. 11. Gill said a recent study conducted by a consultant recommended the airport charge off-site parking lots a fee of $4.14 per trip. He also said the reason that the Hilton has never paid access fees before is because, until the last few years, its off-site parking lot business had been minimal. “It’s really been a work load issue,” said Gill. “We crossed this bridge about nine or 10 years ago when we implemented fees for off-site rental car companies. At the time Hilton was not a major threat. But their activity to and from the airport has increased significantly since then.” Gill said the airport is not planning to increase landing fees because its agreement with the airlines states it must do all it can to raise revenues elsewhere before asking them to help pick up the slack. “Obviously, if we ever got past the politics and began spending money on a new terminal, (airline landing fee increases) would probably happen,” said Gill. Currently, the airport’s revenue from parking is about five and a half times the revenue it collects from the airlines. According to an unaudited copy of the airport’s schedule of cash receipts and disbursements for the quarter ending Sept. 30, revenues for landing fees were about $734,000, compared to revenues from parking fees of $3.8 million. For the fiscal year ending June 30, the airport collected just under $3 million in landing fees, compared to $16.5 million in parking fees, which include revenues from off-site companies and from the airport lots. Burbank City Manager Robert “Bud” Ovrom suggested the access fee hikes are aimed at thwarting plans by Zellman Development Corp. to construct a parking structure that would siphon revenue from the airport’s paid lots. Zellman plans to break ground next month on a $7 million structure with 3,732 parking spaces. The city of Burbank would also collect 10 percent of the revenues earned by Zellman’s lot. Zellman President Ben Reiling said his company had no intention of halting its plans, despite the airport’s new fees. “Charges from cities and municipalities will be what they will be, and we are still moving forward,” he said. Ovrom suggested that most passengers using the Zellman lot would walk to the terminal, not use a shuttle He also said there are some legal questions as to whether the airport can impose a levy on a business’s gross receipts without voter approval. He said the city’s attorneys would be looking into whether the airport can impose the levies. “I understand how they can charge a van or a taxi or a limo for access, but not a parking lot for their gross receipts,” said Ovrom. “It sounds like they are pioneering new ground here. We just don’t know.” Gill said the authority is relying on case law to support its decision to impose the levies and denied it is attempting to block Zellman’s plans. “This is in no way an attempt to keep that project from happening,” said Gill. “It is clearly an attempt to capture more revenues for the airport and, as I said, this was on the table long before we caught wind of any plans by Zellman to build a parking structure.” Indeed, Zellman’s plans for the lot are new: Reiling made the decision in August to scrap a proposed $65 million industrial park on the same spot after he said lenders had become skittish about funding larger industrial projects. Ovrom also suggested the airport is using the recession and the events of Sept. 11 to justify the increases. Based on the report of the airport’s cash receipts and disbursements, he may have a point. According to city documents provided by Ovrom, the airport actually experienced a net increase in cash from operations of 3.9 percent for the quarter ending Sept. 30. The document also states that the airport is expected to take a $7 million hit due to the impact of Sept. 11, a loss that will be offset by the airport’s recent decision to scrap a $10 million overhaul of one of its long-term parking lots. In other words, said Ovrom, things are not as bad as they seem. “I know I’m not going to lose any sleep over the airport’s financial troubles,” said Ovrom. “They are still in the black and business is strong.” Gill said the increases and new charges have nothing to do with Sept. 11 or decreased revenue forecasts, but rather represent the airport’s right to collect some of the cash others are making off of the 4.7 million passengers that pass through the airport annually. “It’s not a question of 9/11,” said Gill. “This is simply a way of making sure that the burden of operating the airport is fairly distributed among all users of the airport.”

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