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CPA approves rental rate cuts
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Posted on Dec 04 2006
The Commonwealth Ports Authority board has approved “a sliding scale” reduction of 3 to 5 percent in tenants’ rental rates, said CPA executive director Clyde Norita.
“The rate is on sliding scale, depending on what your rental is,” he said.
The reduced rate proposal was submitted by CPA tenants, who cited drastic decline in their revenues, especially after the pullout of Japan Airlines in 2005.
Car rental companies, for example, had asked the CPA this year to adjust its payment rates.
Based on existing agreements, the rental companies pay CPA a monthly minimum rate if it is equal or more than 12 percent of the gross monthly sales. If 12 percent of gross sale is higher than the guarantee fee, then companies are to pay the 12 percent.
If a rental company has $30,000 in gross revenues and the guarantee amount is $1,000, then the company would have to pay the 12-percent rate because it is the bigger amount.
The companies wanted the rates adjusted, saying that their minimum guarantee amount already represents 40 to 60 percent of their gross sales.
There are six car rental companies operating at the airport: Budget Car Rental, Hertz, Islander, Avis, Alamo National, and Thrifty.
CPA’s audited records show that in fiscal year 2003, car rental concession fees totaled $488,163; in 2004, it was at $565,283.
During the first seven months of fiscal year 2006, CPA’s rental and non-aviation revenues on Saipan totaled $619,981, which is a 29-percent decline compared to the same period in 2005. [I][B](Liberty Dones)
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