The Port of San Diego's 1 Billion Dollar Project
In 2018, The Port of San Diego planned a massive $1 billion Bayfront hotel and convention center in Chula Vista, California, the second largest city in the San Diego metropolitan area. This could boost the local economy, create hundreds of new jobs, and provide the city with a welcome injection of new business.
What Happened: The Cause of the $3.50 Rental Car Spat
The Port of San Diego thought it a good idea to charge car rental companies a $3.50 fee each time one of their vehicles entered the envisaged 1,600-space parking garage that was part of the design. They figured this would eventually fund that part of the project, which was expected to generate $5 million annually. This would defray the cost of building the $40 million parking garage for the planned hotel and convention center.
This sounds fair since the rental companies would be making a profit from the process. Moreover, the rate appears reasonable, and non-profiteering since the payback period would be eight years. However, Enterprise Rent-A-Car and Hertz Corp. want nothing to do with it, according to the San Diego Tribune.
Enterprise Rent-A-Car and Hertz Corp. opposed the fee. In July of 2018, they opened a lawsuit against the Port of San Diego, which the San Diego Airport Authority joined in a move that surprised many residents. Several officials criticized the airport authority’s decision, including Chula Vista Mayor Mary Casillas Salas and State Assemblywoman Lorena Gonzalez Fletcher.
Resolution and Aftermath
By August of the same year, the two parties reached a truce. The San Diego Airport Authority withdrew from the lawsuit on the condition that the Port won't increase the $3.50 fee. The Port also agreed to provide a 30-day notice before imposing any taxes on ride-sharing companies and shuttle services.
However, Rent-A-Car and Hertz Corp. did not let go as easily. They figured the fee is actually a tax and therefore requires voter approval.
In a bizarre turn of events in 2020, a San Diego Superior Court judge declared the $3.50 fee charged to rental car customers at San Diego International Airport since May 2018 illegal and unconstitutional. The fee was meant to fund a new parking garage as part of the $1 billion Chula Vista Bayfront project. Rental car companies Enterprise Rent-A-Car and Hertz Corporation sued, arguing that the fee was actually a tax requiring voter approval. The judge sided with the rental car companies, stating that the charge did not qualify as a true user fee and violated the California Constitution.
The Port of San Diego had already collected millions of dollars in fees from rental car companies, and a final decision on refunds and remedies is pending. The garage construction, originally planned as part of the Chula Vista Bayfront project, might be affected by the court's decision, but city officials remain committed to the overall success of the project. The Port was expected to appeal the ruling, and the future of the fee or tax remains uncertain.
Bonzah continues to advocate for renters, providing insights into critical issues affecting rental car costs, including collision damage and loss waiver charges. Bonzah primary rental car insurance publishes this in the interest of renters of autos everywhere. We thought you would like to know where some of the ridiculously high collision damage and loss waiver money goes, that they assure you is great value for money.
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