The state is moving ahead with plans to build a consolidated rental car facility serving the Honolulu International Airport and to pay for it with a tax of up to $5 per day on car rentals.

The planned multistory Honolulu facility is expected to house six current airport rental car providers as well as other rental car agencies now near the airport.

The main purpose for building a consolidated rental car facility is to improve the rental car experience for Honolulu visitors.

Co-locating in one building should create operational efficiencies and economies of scale, said Aaron Medina, president of Catrala-Hawaii, a car and truck rental association.

Honolulu visitors needing to rent a car deal with crowded shuttle buses, airport traffic congestion and, once they arrive at the rental car lot, are exposed to sun and rain, Medina said. Current airport rental facilities also have limited room for staging rental cars, which can cause delays, he added.

"That's a complaint we get from our customers every day — what a terrible facility," said Medina, general manager for Hertz in Hawai'i. "They don't know the difference whether it's the (fault of the) airport or us. All they care about is it's just a bad experience."

As of October, the state had raised nearly $12 million from a $1-a-car daily fee that took effect in September 2008. Lawmakers passed the surcharge to pay for design and construction of consolidated rental vehicle facilities statewide.

The new rental car facility, which could open sometime in 2013 depending on when construction begins, could be partly financed by raising the current $1-a-day rental-vehicle-facility surcharge to as much as $5 a day, Medina said.

In June, the state awarded a $3.5 million contract to design the facility. That was followed by an October $295,000 contract to conduct a statewide rental facility study. Now the state is in the process of awarding a nearly $1.5 million rental facilities management support contract.

FEASIBILITY STUDY

So far, the state isn't ready to disclose where the planned Honolulu facility might be built or how much it may cost. Those details will be disclosed once an ongoing feasibility study is completed a few months from now, said state transportation Director Brennon Morioka.

"Everything is still in the preliminary or draft phase," he said.

The $1-a-car fee was expected to raise $16 million a year. Actual collections were lower because of a decline in visitors, Morioka said.

The plan is to build one facility at Honolulu and Neighbor Island airports where consumers can conveniently rent vehicles.

Currently the Avis, National, Budget, Hertz and Dollar agencies share an open-air lot at the diamondhead end of Honolulu International Airport.

"The goal is to consolidate operations (and) make it more efficient for the car rental companies, but also make it as convenient as possible for the tourists so they don't have to worry about which (rental shuttle) bus they're going to catch, where are they going to catch the shuttle or how far it is," Morioka said.

Similar consolidated rental car facilities exist at Mainland airports ranging from Anchorage, Alaska, to Fort Lauderdale, Fla. Costs vary widely and include $170 million spent in Las Vegas and a $419 million five-story facility now being built at the Seattle-Tacoma airport.

INCREASED FEES

Increased fees aren't expected to reduce visitor demand for rental vehicles, Medina said.

"If anything, it's the other way," he said. "The customer has a significantly enhanced rental car experience, and that's the fee that supports that."

Lowell Kalapa, president of the nonprofit watchdog Tax Foundation of Hawaii, agreed that Honolulu rental facilities need improvement. Moving all rental agencies into one facility also could free up room for eventual Honolulu airport expansion.

However, Kalapa questioned why the state proceeded with a design contract for the facility before choosing a location or identifying the project 's cost.

"How can you do a design contract if you don't know if you're going to be on flat land or on a hill," he said. "The geography has to have an impact.

"It does raise the question of why are they moving so quickly on what should be the middle part of the process?"

Having the design contract in place will allow the state to proceed with the project once a feasibility study is completed, Morioka said.

"Once we do that, the design consultant is already on board so we can just start going," he said.