Avis, Hertz Sue Chicago Over Airport Facility Cost Burden

Hertz Corp. and Avis Budget Car Rental LLC are among four car rental companies suing the city of Chicago over the bidding to occupy a new facility to be built at O’Hare International Airport.

The third-biggest U.S. city and its Aviation Department are requiring the companies to guarantee payment of rising facility construction costs and other expenses, according to a complaint filed yesterday in state court in Chicago.

The companies called that process “legally deficient” and are seeking a court order delaying a May 24 bid deadline.

If forced to choose, “they will either become parties to a defective public bidding process and illegal contract, or forfeit their substantial on-site operations at O’Hare,” according to the complaint.

Joining the suit are the Chicago unit of Enterprise Holdings Inc., the biggest U.S. car rental operator, and Dollar Thrifty Automotive Group Inc. The four companies account for 97 percent of U.S. airport rental car business according to the complaint.

Roderick Drew, a spokesman for the Chicago Department of Law, declined to comment immediately on the allegations, saying the city had not yet been served with the complaint. The Aviation Department’s media relations staff did not immediately reply to a voice-mail message seeking comment.

Cost estimates for the consolidated rental facility project have climbed to $765 million this year from $397 million when the project was announced in 2010 and may reach $817 million, the companies allege.

“The city, through the consolidated facility bidding process, seeks to use unlawful means to put the rental car companies on the hook for those ever-expanding costs,” the rental firms said in their filing.

The case is Enterprise Leasing Co. of Chicago LLC v. City of Chicago, 13CH13269, Cook County, Illinois, Circuit Court, Chancery Division (Chicago).

To contact the reporter on this story: Andrew Harris in the Chicago federal courthouse at aharris16@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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