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Avis, Hertz Sue Chicago Over Airport Facility Cost Burden

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May 23 (Bloomberg) -- Hertz Corp. and Avis Budget Car Rental LLC are among four car rental companies suing the city of Chicago over the minimum bid requirements for space at 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 climbing facility construction costs and other expenses, according to a complaint filed yesterday in state court in Chicago.

In their complaint, the companies called that process “legally deficient” and said 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.”

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 the U.S. airport rental car business, according to the complaint.

While the rental companies’ filing said they face a May 24 bid deadline, Roderick Drew, a spokesman for the Chicago Department of Law, said the date has been moved to May 31.

Drew declined in an e-mail to comment on the allegations, saying the city had not yet been served with the complaint. The Aviation Department’s media relations staff didn’t respond to voice-mail messages seeking comment on the suit.

Rising Costs

The estimated cost of the consolidated rental facility has climbed to $765 million this year from $397 million when the project was announced in 2010, and may reach $817 million, the companies claim.

“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 companies said in the complaint.

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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