Chelsea has reached an agreement with Enterprise Rent A Car to extend its lease on a city parking lot for the full 20-year term through 2034, with the arrangement including guaranteed excise tax payments to the municipality.
Under the current agreement, the City receives approximately $1 million annually in guaranteed excise taxes. The new deal substantially increases this to $5 million per year.
An RFP for the lot was issued by the City in 2013, with Enterprise selected as the winning bidder in 2014. The original lease was structured as a five-year term with an optional five-year extension. This new agreement expands the arrangement to span 20 years. The property sits on a parking area adjacent to Highland Park.
“It’s more to have the guarantee for budgeting because it gives us a number that’s locked,” City Manager Tom Ambrosino said. “This will guarantee excise payments at a higher level.”
Motor vehicle excise taxes, collected on all vehicles registered within the City pursuant to state law, represent a significant funding stream for municipalities alongside property tax revenue.
Ambrosino expressed confidence that dedicating the land to Airport-related parking operations would not prevent more substantial development opportunities. He noted that the site’s proximity to the Designated Port Area (DPA) already limits development possibilities to water-dependent uses.
A proposed hotel development in the vicinity has been blocked due to this DPA designation, which was reaffirmed last year.
“No one has proposed anything like that there now,” he said.
The company plans to construct a more permanent structure at the location.
Council President Leo Robinson expressed support for extending the lease, noting that locking in payments to the City at five times the previous guaranteed amount represents a sound arrangement.