A spat between two public agencies that put a $1 billion Chula Vista bay front hotel and convention center project at risk has been resolved, but an underlying lawsuit that threatens the project remains.

The San Diego County Airport Authority has pulled out of a lawsuit Enterprise Rent-A-Car and Hertz Corporation filed against the Port of San Diego challenging a $3.50 car rental fee that would pay for a 1,600-space parking garage that is part of the project.

“The Chula Vista bay front project is a game-changer for economic development in South Bay, and we need to continue our momentum on the resort hotel and convention center that will be a cornerstone of this project,” said Ann Moore, Chula Vista’s representative on the Port.

In the settlement with the Airport Authority, the Port District agreed that the rental car fee would be used solely to pay for the parking garage and would be removed after initial construction and/or financing costs are paid off.

The Port also agreed that the fee doesn’t apply to taxis, shuttle services, limousine services or ride-sharing companies.

“The Airport Authority stands behind important projects, like the Chula Vista bay front redevelopment, that draw visitors to our region,” said April Boling, Airport Authority board chairman. “Regional prosperity hinges on everyone working together, and in this case, both parties have done that.”

Officials have estimated that the project would generate $1.3 billion and create more than 2,300 jobs during construction.

When finished, it is expected to have an annual economic impact of $475 million and create 7,800 permanent jobs.