One of the biggest reasons Chelsea has had money to spare for the last four years is a car rental lot on Marginal Street. The City Manager said so, in a letter to the council in February: Enterprise Rent-A-Car’s excise tax “is one of the biggest drivers of our very healthy free cash balance.”
How a rental lot pays a city
Every registered motor vehicle in Massachusetts pays an annual excise tax to the city or town where it is principally garaged, at $25 per $1,000 of value. A household pays it on one or two cars. A rental company pays it on a fleet, and Enterprise garages a large fleet at 324 Marginal Street, a few minutes from Logan Airport on the Chelsea side of the creek. Every car on that lot is a Chelsea excise bill, and the newer the fleet, the bigger the bill.
The city has never published the annual figure. The February letter says only that in FY25 Enterprise “generated a significant amount of revenue from excise tax.” The Assessor and the Auditor hold the figure; it has not been made public.
The lease
In June 2025 the council extended Enterprise’s lease on the city-owned Marginal Street site through the end of fiscal year 2045, on terms the City Manager described as “advantageous to the City.” The trade in the lease is explicit: Enterprise keeps its fleet, and its excise payments, in Chelsea for twenty years, and the city reimburses Enterprise for the cost of the site improvements it made. That reimbursement is what the February letter was for. The council was asked to move $745,000 from free cash into the Marginal Street Capital fund to pay it, and the order was referred to Ways and Means and approved in March.
So the arithmetic runs in a circle. The rental lot generates excise, the excise fattens free cash, and free cash pays the rental company back for paving its lot. The city’s position is that the circle is worth it, because the excise over twenty years dwarfs $745,000, and because the same letter credited Enterprise’s contribution for the $10 million the council was able to move from free cash into stabilization in January.
The risk
A city whose surplus rests on one tenant’s fleet has a concentration problem. Enterprise could shrink the Marginal Street operation, move fleet registration, or change how it garages cars for Logan, and the excise would follow. The lease extension to 2045 is the city’s hedge against that, and it explains why the council took the terms it was offered. It also means that when the administration warns that free cash is falling to $5 million, part of the reason is that the ordinary sources of surplus have thinned and the Enterprise check is now doing more of the work.
We will publish the excise figure when the city provides it.