06-26-1996 Council Agenda - Laserfiche WebLink

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Alliance Car Rental, Inc. is a local Twin Cities company which rents automobiles in the "insurance replacement" market. This target market consists of automobile owners whose cars have been damaged or stolen and who are in need of an automobile for a short period of time (e.g., 3 -20 days) while their car is being repaired or replaced. This emphasis is very different from that of the large, well-known car rental companies which focus exclusively on business travellers and vacationers. Insurance companies play a key role in the market niche of Alliance Car Rental. When a policyholder's car has been damaged or stolen, the insurance company involved will provide full payment, or a financial allowance, for the client to rent a vehicle while his/her car is being repaired or replaced. Because they absorb the cost for the car rentals, insurance companies want their clients to rent automobiles at the most competitive rates. Therefore, they will refer their clients to companies like Alliance Car Rental because its daily rental rate is approximately one -half the amount it would be had the client obtained a car from a large company at a traditional airport location. The role the insurance companies play in this process obviously impacts the marketing strategy of Alliance Car Rental. Alliance Car Rental does not market to the general public. Instead, all of its sales efforts are directed to insurance claims adjusters, insurance agents, and automobile body shop managers. These are the individuals who refer customers to the company for its car rental service. Because of this marketing strategy, Alliance Car Rental maintains a very low profile with the general public. A typical rental transaction with Alliance Car Rental also differs significantly from a car rental a person would experience at an airport location. As stated above, customers are first made aware of Alliance Car Rental by insurance and body shop representatives. After a referral is made, the customer will call the company and make a reservation for a car on a specified date. On that date, an employee will then deliver the car to the customer at a specified time and location. Most deliveries are made at automobile repair shops, but they are also made at a customer's home or place of work. The actual rental transaction (i.e., signing of the rental agreement) takes place at the delivery location. At the completion of the rental, the customer normally returns to the body shop in the rental car. The customer would then pick up his /her own vehicle and leave the rental car with the body shop manager. An employee of Alliance Car Rental would soon pick up the rental car at the body shop and then prepare it for the next rental. Alliance Car Rental conducts its operations from four locations: Little Canada, Burnsville, Brooklyn Park, and Edina. These four sites enable the company to provide rental coverage and delivery service to all quadrants of the Twin Cities. The issue in question is the Alliance Car Rental location in Little Canada. The company has been notified by Mr. Joel Hanson, City Administrator of Little Canada, that the company's current location at 80 Minnesota Avenue (The Little Canada Mall) is not in compliance with the that area's existing B - 3, General Business zoning. Alliance Car rental is requesting an amendment to the text of the B - 3 zoning language which would permit Alliance Car Rental to continue its operations at the Little Canada Mall. Page 6