CITY COUNCIL STAFF REPORT
DATE: November 12, 2025 CONSENT CALENDAR SUBJECT: APPROVAL OF NON-EXCLUSIVE OPERATING AND LEASE
AGREEMENT NO. 25L418 FOR SIXT RENT A CAR, LLC AT PALM
SPRINGS INTERNATIONAL AIRPORT
FROM: Scott C. Stiles, City Manager
BY: Department of Aviation
SUMMARY:
This action will approve the Non-Exclusive Operating and Lease Agreement No. 25L418 (Agreement) for SIXT Rent a Car, LLC (SIXT) to operate a car rental concession at the Palm Springs International Airport (Airport).
RECOMMENDATION:
1. Approve Non-Exclusive Operating and Lease Agreement No. 25L418 for SIXT Rent a Car, LLC to operate a car rental concession at the Palm Springs International Airport from November 1, 2025, through June 30, 2026, with two (2) one-year extension options.
2. Authorize the City Manager or designee to execute all necessary
BUSINESS PRINCIPAL DISCLOSURE:
According to the Public Integrity Disclosure form (Attachment B), SIXT Rent a Car, LLC (SIXT) is a Delaware Limited Liability Company and has a business license application pending to do business in the City of Palm Springs.
BACKGROUND:
The current Car Rental Concession Agreements were approved after a Public Bid in 2011. On June 15, 2011, the City Council approved the Consent Calendar containing Item 2M, awarding airport rental car concession agreements to: Avis Budget Car Rental, LLC; The Hertz Corporation; Enterprise Rent-A-Car Company of Los Angeles, LLC dba Alamo Rent A Car & National Car Rental; Enterprise Rent A Car Company of Los Angeles, LLC dba Enterprise Rent-A-Car; DTG Operations, Inc dba Dollar Rent A Car and Thrifty Car Rental for a term of three years ending on June 30, 2014.
City Council Staff Report
November 12, 2025 -- Page 2
Non-Exclusive Operating and Lease Agreement for SIXT Rent a Car, LLC At the request of City staff, the City Council has approved subsequent term extensions that extend the current agreements through June 30, 2026. The most recent amendment provides for two (2) one-year optional extensions that, if exercised, would extend the current agreement though to June 30, 2028.
The car rental concession program at the Airport has historically been one of the largest sources of Airport revenue. As Palm Springs is an inbound leisure market, visitors and business travelers are the primary customers for car rental companies. Since the end of the COVID-19 pandemic, enplaned passengers, car rental transactions, and gross receipts have continued to increase, setting new records in 2023 as listed in Table 1.
Table 1
CAR RENTAL
CONCESSIONS CY2021 CY2022 CY2023 CY2024 CY2025*
Enplaned Passengers 1,047,643 1,500,618 1,624,012 1,614,684 1,226,74 5 Gross Revenues $70,657,3
99 $104,149,
629
$104,669,
120
$101,955,
461
$77,327,
354
Transactions 174,960 227,405 258,670 262,484 261,054
Gross Revenues per
Transaction $403.85 $457.99 $404.64 $388.43 $296.21
CFCs $1,749,60
0 $
6,299,58
1 $
8,629,740
$
8,963,550
$6,764,9
58 CFCs per Transaction $10.00 $27.70 $33.36 $34.15 $25.91
* - through September 2025
On July 30, 2025, corporate representatives of the three car rental brand groups, Avis Budget, Enterprise Alamo National, and Hertz Dollar Thrifty were presented with the initial designs of the auxiliary car rental lot and the hybrid CONRAC. As part of the design, the Airport included a fourth car rental brand that represents a new entrant car rental company.
STAFF ANALYSIS:
The Palm Springs International Airport has a responsibility to make the best use of all its facilities and land to generate revenue that supports airport operations and long-term sustainability. This responsibility is guided by Federal Aviation Administration Advisory Circular 150/5190-4B, which outlines how airports should ensure safe operations, compatible development, and the effective use of airport property.
Healthy competition among airport tenants, whether airlines, concessions, or rental car operators directly benefits the City of Palm Springs and the entire Coachella Valley.
We’ve seen this firsthand when ultra–low-cost carriers like Frontier (Denver) and Flair City Council Staff Report
November 12, 2025 -- Page 3
Non-Exclusive Operating and Lease Agreement for SIXT Rent a Car, LLC (Toronto) entered the market, driving down fares and giving travelers more options alongside major airlines such as American, Air Canada, Delta, United, and other low-cost carriers like Southwest and WestJet.
Similarly, when ride-share companies like Uber and Lyft began operating in Palm Springs, it broadened transportation choices for residents and visitors alike, improving convenience, affordability, and customer service standards across the region. The same principle applies to car rental services at the airport—more competition means better pricing, improved service, and greater flexibility for travelers who come to experience our destination.
At PSP, travelers have access to a growing range of ground transportation options, including traditional rental cars, ride-shares, taxis, and more recently, peer-to-peer car rentals through platforms like Turo. These services use the airport’s commercial lane and public parking areas for vehicle pick-up and drop-off, adding another layer of flexibility for visitors arriving in the Coachella Valley.
Currently, PSP is served by three major car rental groups—Avis Budget, Enterprise Alamo National, and Hertz Dollar Thrifty. While these long-standing partners provide valuable service, expanding competition is in the best interest of both the airport and the regional economy. More rental options mean greater vehicle variety, more competitive pricing, and improved availability. Healthy competition also drives existing operators to continually improve their service quality, creating better overall experience for travelers.
In December 2024, SIXT Rent a Car, LLC expressed interest in joining the PSP car rental program and bringing their distinctive, customer-focused brand to the airport. SIXT’s leadership has indicated a strong willingness to collaborate with airport staff to identify suitable space and operations that complement rather than disrupt existing rental car partners.
The Airport facilities are constrained and do limit opportunities for growth. This constraint extends to the existing car rental counters, return lanes, and ready spaces. Airport staff have evaluated the existing car rental operations and determined that space currently being used for employee parking could be allocated to a new entrant car rental company without taking away any of the existing return and ready spaces for the incumbent car rental companies.
The Airport Baggage Claim has limited customer service counter space for airlines and car rental companies. Airport staff have identified a small area in the north end of the Airport Baggage Claim that could be used for a customer service counter without negatively impacting the incumbent airlines and car rental companies. Though no additional back office or breakroom space exists in the Baggage Claim area, the area identified could provide a new entrant car rental company space for a customer service counter.
City Council Staff Report
November 12, 2025 -- Page 4
Non-Exclusive Operating and Lease Agreement for SIXT Rent a Car, LLC The Airport manages twelve office, warehouse, and light industrial buildings at 2901 E.
Alejo Road, referred to as the Accelerator Campus (formerly known as the Coachella Valley Economic Partnership iHub). These buildings are currently generating limited revenue for the City and the Airport. Airport staff have identified a building capable of providing a new entrant car rental company space for light automotive maintenance and cleaning.
As a follow-up to the discussion on July 30, 2025, the Airport has reached out to the corporate representatives of the three car rental brand groups at PSP to advise them of the Airport’s intention to increase competition, variety, and availability for rental vehicles.
According to the terms of the Agreement, upon final confirmation by Airport Staff that SIXT’s entry will not disrupt existing car rental operations at PSP, the City Manager or designee will then issue a Notice to Proceed for SIXT to implement their entry plan. Based upon a preliminary entry plan timeline offered by SIXT, a tentative date for a start of operations at PSP could be as early as mid-December.
ENVIRONMENTAL ASSESSMENT:
The requested City Council action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The requested action is to approve contracts for the above-mentioned services, and is exempt from CEQA pursuant to Section 15378(b), in that a “Project” does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
ALIGNMENT WITH STRATEGIC PLANNING:
Approval of this action supports City Council’s Strategic Plan Broad Goal of Economic Development as well as the Airport’s Strategic Plan Priority 3 – Goal 2: Create Revenue Diversification Through Strategic Partnerships.
FISCAL IMPACT:
The Non-Exclusive Operating and Lease Agreement for SIXT includes a Minimum Annual Guarantee (MAG) of Airport Revenues of $327,910.18 for the 8-month period from November 1, 2025 through June 30, 2026, credited to Airport account 415.38120. In addition to car rental gross revenue, SIXT will be leasing space in the Baggage Claim, the outside employee lot, and Building #5 for $13,965.64 per month, or a total of $111,725.12 for the 8-month period from November 1, 2025 through June 30, 2026, credited to Airport account 415.38120. Staging and overflow vehicle spaces will be invoiced based upon usage at a rate of $2.61 per space per day and credited to Airport account 415.38110.
City Council Staff Report
November 12, 2025 -- Page 5
Non-Exclusive Operating and Lease Agreement for SIXT Rent a Car, LLC REVIEWED BY:
Department Director: Harry Barrett
City Attorney: Geremy Holm
City Manager: Scott Stiles
ATTACHMENTS:
A. Non-Exclusive Operating and Lease Agreement
B. Public Integrity Disclosure Form