PORT OF SEATTLE 
MEMORANDUM

COMMISSION AGENDA              Item No.          6c
ACTION ITEM 
Date of Meeting   December 8, 2015 


DATE: ;     December 2, 2015 

TO:     Ted Fick, Chief Executive Ofcer

FROM:  Ralph Graves, Managing Director Capital '_ 
David Brush, IAF Program Leader
George England, NSTAR Program Leader
SUBJECT: International Arrivals Facility (IAF) Guaranteedm,
J
Development Period Authorization       a
(CIP #C8005 83)
North Satellite Renovation & North Sa ,llite Transit Station Lobbies
Project (NSAT)               7
(ch #C800556)

ACTION REQUESTED
"
Request Commission authorizatit"    re  1ef Executive Ofcer to take the following
actions to advance two signicant 0     projects at SeattleTacoma International Airport
(Sea-Tac), the details of which% ribed in Attachments A and B for:
,g
1)   Increasing projeg/t,    opiwations, and execute contract amendments and change
,  orders to; Clarita/1y M h the amount of $275.5 million for the IAF and Hensel


3)  Amgnd the previous Commission Authorization for the IAF validation contract
t'Ztoexceed to include sales tax for the estimated amount of $570,000.
INTRODUCTION

Sea-Tac is experiencing record growth driven both by one of the fastest growing regional
economies, the draw of the Seattle Tacoma metropolitan area, and by domestic and
international airline service successes. This has resulted in a shortage of aircraft gates and
existing facilities that cannot accommodate the demands of customers and passengers.
Additionally, both the North Satellite and the South Satellite, which houses the existing
Federal Inspection Services (FIS) for processing arriving international passengers, were

COMMISS ON AGENDA 
Ted Fick, Chief Executive Officer
)ecember 2, 2015
Page 2 of 2

constructed in the early 1970's and have not had any signicant renovations made since
their opening. These facilities are in desperate need of modernization and expansion to
respond to airportwide growth, and to provide world class facilities for our customers
and passengers. To sustain SeaTac's competitive advantage and succeed within the
national market place for airports, as laid out in the Century Agenda, the airport must
modernize and expand its aging facilities. The IAF and NSAT projects are critical to
achieving this.

This request allows these two critical projects to continue proceeding forward /
,
respond to the fast changing dynamics of the airport, meet the needs of multipl alrhnes
and make a deliberate and signicant step to improving Sea-Tac' s capac"
level of service and competitive ranking among peer airports. Speciji
requirements, and supporting information for the requested actions
Attachment A for the IAF project and Attachment 3 for the N

'ORT OF SEATTLE A
MEMORANDUM

COMMISSION AGENDA                  Item No.    6cattach~a
ACTION ITEM
Date of Meeting   December 8, 2015


Attachment A

Subject: International Arrivals Facility (IAF) Guaranteed Maximum Pris 
'0 
Development Period Authorization
(CIP #C800583)

SYNOPSIS

The Port contracted a DesignBuild team to design and constru    ew IAF at Sea-Tac
using, for the rst time, Progressive Design Bui  I'DB) as the delivery method. On
I
November 17, 2015 the IAF Design-Builder c

assumptions, quantied risks, and develope 
Design that evolved from numerous con 
working to nd one that best satised t
Denition Document (PDD), a  g6
Schedule.  In order to advan e     roject to the next phase, staff is requesting
authorization to execute the P       ion Amendment and one or more Early Work
Amendments to allow desi :      minary construction work contemplated during the
'
GMP Development P     ec'Ember 2015 to 4Q16) to proceed. In order to secure
exibility as to when _       sign services and preliminary work are authorized, Port
staff is requesti             ority to execute these amendments as well as subsequent
change orders t  pallo  individual elements of the scope identied in this memo to
,  revised budget limit. Design work Will proceed immediately, but
ill not proceed until March 6, 2016 as permitted under the terms of

MII vote provision of the Signatory Lease and Operating Agreement
This amendment would increase the current $24.5M authorization by

previou- Commission Authorization for the IAF validation contract not-toexceed to
include sales tax for the estimated amount of $570,000.

Staff also requests authorization to execute a contract for construction auditing services
as provided in the DesignBuild Agreement between the Port and Clark/SOM.

COMMISSION AGENDA
Ted Fick, Chief Executive Ofcer
December 2, 2015
Page 2 of 7

BACKGROUND

In July 2013, the Commission approved preliminary funds to program a replacement of
the existing undersized and aging FIS facility in the SSAT with a new IAF that will
serve the Airport well into the future and facilitate the Port's Century Agenda objective to
make the Airport the West Coast "Gateway of Choice" for international travel. The
Commission also authorized use of an alternative project delivery method called
~3uild for the IAF program.                                Progressive Design                    This method is newly available for use
by public agencies in Washington State and allows the Port to select a de31gn-build team
based mainly on their qualifications with competitive pricing on certain commerc1al
terms (e.g. fee, insurance bond) as an additional selection factor 

rm of Clark/SOM as the Design
project.   The contract with Clark/SOM is a phased cont     vering three distinct
periods: the Validation Period, the GMP Development P   d (including some
preliminary base building construction e.g., site utilities and footi
'
long lead items e.g., steel), and the GMP Execution

Subsequent to the signing of the Design-Build Cori      Commission passed a motion
on May 26, 2015 calling for the following:

The Commission will work with the a' gr st to engage key stakeholders
in a transparentjomt                                                     including senior level representative ofall zgnatory airlines
airport/airlinesplanning review       over 90 days to discuss keyissues and
work towards a solution to c  c     ised about the project scope andfunding
'
Such work will include ou    ub ct matter experts with knowledge oflarge airport
., nd guidance.
hm al discussions between airline and airport representatives
J: y 29 and Commission hearings were held on July 14, 28 and

~Euilder delivered the Target Budget and Target


Development Periodduring which design commences and certain preliminary
construction work may, to the extent specifically authorized, proceed. During this period,
the Design- ~3uilder will continue to work to improve on the Target Budget and Target 
Schedule in order to establish the GMP.

COMMISSION AGENDA
Ted Fick, Chief 'xecutive Ofcer 
December 2, 2015
Page 3 of 7

PROJECT D CTAILS 
Scope of Work

This authorization will permit design to commence immediately and will provide that
preliminary construction work can proceed once the terms of the M11 provision of the
SLOA III are met.

Once the GMP has been negotiated, staff will return for Commission auth "
)esignBuild Contract.                                             execute the third (and nal) phase of the IAF

Schedule

Validation Period complete
Finalize Target Budget and Target Schedule
GMP Development Period start
3egin Design activities 







egin Construction activities
Establish GMP                          4Q 1 6 (Estimated)

FINANCIAL MPLICATIONS 
Budget/Authorization Summary              rapital     Expense  Total Project
Original Budget _ 3,800,000  $4,600,000
Previous Authorizations
>   $24,500,000
$275,500,000
$300,000,000  $0 
$308,400,000
$603,800,000


the IAF, as currently dened, is $608.4 million.  The project
the 2015-2019 capital plan and the plan of nance within CIP
roject was originally approved by the airlines with the signing of
th a budget of $300 million. It should be noted that the $300 million cost
def, ied in early 2013,  was  based on 0%  design.   As the planning and
programming work progressed and the overall scope of the project was better understood,
the costs have increased primarily due to an additional 75,000 square feet of space
required by CBP in the FIS, rened denition of vertical circulation at the sterile corridor
and the width of the bridge, and addition of enabling projects required to be undertaken in
order to execute the TAP program within the constraints of the existing airport facilities
and operations.

COMMISSION AGENDA 
Ted Fick, Chief Executive Ofcer
December 2, 2015
Page 4 of 7

An updated plan of nance will be developed upon completion of the validation period.
Funding sources for the updated budget will continue to include the Airport Development
Fund, future revenue bonds, and Passenger Facility Charges (PFCs) as presented during
..Commission briengs in July 2015 and consistent with the funding principles included in
the May 26, 2015 motion. The funding plan will continue to be modied as needed based
on changing circumstances (e. g., project costs, number of deplaning international
passengers, FIS rates at other airports, terms of future airline agreement, etc.).

STRATEGIES AND OBJECTIVES 

This project addresses the Port s Century Agenda strategic objectiveigii advance this
region as a leading tourism destination and business gateway by making S ttle-Tacoma
International Airport the West Coast "Gateway of Choice" for int   t1on  travel. 

will enable the Port to commence the second phase of t
Development Period and speed completion of the IAF to
international trafc at Seattle-Tacoma International ' 

TRIPLE BOTTOM LINE

Economic Development









one opportunity to meet the Airport's sustainability goals.

Community Benets
Arriving at a new modern IAF, instead of to an aging over-crowded facility, will give
foreign and returning US Visitors an improved impression of the SeaTac area and the
Pacic Northwest region as a whole. The new facility will accommodate existing

COMMISSION AGENDA
Ted Fick, Chief Executive Officer
December 2, 2015
Page 5 of 7

operations, facilitate passenger movement, and provide a higher level of service for
international passengers.

Additionally, in the course of delivering the project, the IAF team and the Port's Office
of Social Responsibility will work together collaboratively to establish small business
participation opportunities, in accordance with small business Resolution No. 3618.

ALTERNATIVES AND IMPLICATIONS CONSI ERE ) 


proceeding not before expiration of the SLOAIII prescribed 180 d
I
MII ballot rejection. This is the recommended alternative.
PROS: '
0  Advances this critically needed project from the rst  f t  ee contract phases 
to the second contract phase, the GMP Development Perlod.
o  Maintains project momentum.

o  Permits the IAF team to develop the prej:    "mtion to the next level of cost
certainty  from 0% design to GMP with    esign-Build partner.
CONS:

Alternative 2  Postpone appro        "'i-ration to further fund this project. This is
not the recommended alternative.
PROS:
. _
CONS:
o  Delays cu       dule and curtails current project momentum.

'
0  Strains 11h      rt's ability to sustain international service in a manner
consi       the Port's Century Agenda.
0  Inc:      rial project cost due to escalating labor and material costs.
he loss of some key members of the DesignBuilder's team who would
lybe deployed to other active projects.

Alter t' e 3  Approve authorization to fund an amendment allowing the Design-
Builder/to proceed with design only. This is not the recommended alternative.
PROS:
o  Permits the IAF team to develop the project denition to the next level of cost
certainty  from 0% design to GMP with our Design-Build partner.
0  Provides opportunity for additional airline/airport debate.
CONS:
0  Delays current schedule and curtails current project momentum.

COMMISSION AGENDA
Ted Fick, Chief Executive Ofcer
December 2, 2015
Page 6 of 7

0  Strains the Airport's ability to sustain international service in a manner
consistent With the Port's Century Agenda.
0  Increases nal project cost due to escalating labor and material costs.

0  Constrains a key benecial feature of the P )B project delivery method; early 
collaboration between designer and constructor to identify and quantify risk
concurrent With design development.
0  Risks default of the current DesignBuilder procurement.

0  Risks the loss of some key members of the DesignBuilder's team  he would
likely be deployed to other active projects.

ATTACHMENTS TO THIS BRIEFING

Attachment A  PowerPoint presentation 

PREVIOUS COMMISSION ACTIONS OR BRIEFINGS

November 10,2015  IAF Update.
August 11, 20154 Special Meeting, Roundt ble WithAirline Representatives.
July 28, 2015 IAF Forum.
July 14, 2015 IAF Forum. 
June 23, 2015  Authorization to EX   e a Des1gnBuild Contract.
May 26, 2015  IAF Preliminary Fu
April 28, 2015  Service Agreem fo' Commissioning Services.
April 28, 2015  Request        ion to Execute Lease Agreement With                              ,,
SEATAC VENTURES    LC for International Arrivals Facility (IAF)
0'
Program Management Q    aCe near SeaTac International Airport.
February 24, 2015 S ,    "greement for IAF Consultant Program Leader.

.
1A3; RFP Advertisement.
IAF Update


uly22, 2014 IAF Progress Brieng
0
ne 10, 2014 LAF Update and Quarterly Brieng
May 6, 2014 IAF Project )elivery Brieng.
April 22, 2014 ~ Capital Program Brieng.
March 11, 2014  IAF Master Planning Authorization.
February 25, 2014 ~ IAF Program Brieng.
November 19, 2013  International Arrivals Facility Construction Management,
testing and inspection; surveying and locating and safety service agreements.

COMMISSION AGENDA 
Ted Fick, Chief *xecutive Ofcer 
December 2, 2015
Page 7 of 7

July 23, 2013  International Arrivals Facility Project & Program Support; and
Price Factor Design-build Methodology authorization.
July 9 2013 SeaTac Airport International Arrivals Facility Brieng.
July 9 2013 Alternative Public Works Contracting Brieng.
April 9 2013 SeaTao Airport International Arrivals Facility Brieng
June 26, 2012 Brieng on Airport Terminal Development Challenges at Seattle-
Tacoma International Airport
June 14, 2011  International Air Service Growth and Future Facility brieng
February 2, 2010  Brieng on South Satellite Passenger Growth andFac111ty
Considerations, Delta s Proposed Airline Lounge and Other Possible F, ure
Aviation Projects

PORT OF SEATTLE
MEMO {ANDUM 

COMMISSION AGENDA                 Item No.    6c_attachb
ACTION ITEM
ate of Meeting    December 8, 2015

Attachment  :

Subject: North Satellite Renovation & North Satellite Transit Station Lobbies (NS   PrOj ct (CIP
#C800556) at Seattle Tacoma International Airport

SYNOPSIS

The NorthSTAR program, which is a collaboration of the Port and Alaska A1  roup (AAG), intends to
create and promote a user'friendly'curb-toseat" passenger experience   ough the integration of
facility improvements, technology, and airline services Th Port and AAG share common goals for the
North Satellite (NSAT) including: improved passenger e sed customer level of service,
passenger comfort, and compliance with applicable code   e sure life safety.  A key factor in
renovating and expanding the North Satellite is meetin the P    nd AAG's vision, project objectives,
and programming requirements.

Port staff is requesting an increase in project au   , z tion of $98,100,000 for additional preconstruction
services (up to $1,200,000) and top om        iminary construction work. To allow for this
,
preliminary  construction  work,            (requesting  authority  to  amend  the  General
Contractor/Construction Manageme        ith Hensel Phelps. This amendment would include a
revision to an existing limit on the        y preliminary construction work (currently, no more than
_
10% of the estimated MACC). Fin 21y    der to secure exibility as to when specic preconstruction
services and preliminary wo       thorized, Port staff does not intend to include all of the
:
preconstruction service and pr   'riary construction work in a single amendment, but instead is
requesting the authority 1;      e change orders to the amended contract to authorize individual
elements of the scope "dent' ; in this memo,          all within the revised budget limit. As the nal design
building expansion and renovation is being completed, undertaking the
eallows preparatory construction to begin and continuing preconstruction
tion services covers efforts to reconcile the estimated cost of the project support
,
eering efforts, develop an optimal construction phasing plan, and will also cover the
ced in completing the 60% design phase. This would bring the total authorization for the
,
1,218,800.
Staff also requests authorization to execute a project specic contract for construction auditing services
as  per the  requirements  of the  Regulatory  Code  of Washington  (RCW)  for the  General
Contractor/Construction Manager contract with Hensel Phelps.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer
December 8, 2015
Page 2 of 10

On March 17, 2015, the Commission previously authorized the use of Port Crews for preliminary
construction and during the NSAT building expansion. Port crews may also perform portions of the
work now being requested.

%ased on the completion of 60% design and reconciliation of the estimated cost, the preliminary NSAT
project cost estimate has increased by $79.5 million from $421.7 million established in MarCh 2015 to
$501.2 million a growth of 19% The growth in the estimated cost and initial value eng' 
reductions are detailed below. Though value engineering efforts continue there are1nsuff1c1ent
reductions to achieve the original project budget However, the project team is not; re ommending the
budget be increased until bid results for the preliminary work are received in           to validate
I
whether actual market conditions, subcontractor pricing, and labor or su 
,    ages have

'
escalated as currently estimated. These data will be essential to nal'
ated cost of the
'
project. Staff currently forecasts the estimated cost of the project to             470,000,000 and
$490,000,000 as of the date of this memo and will update the Com 310      h 2016 after actual
_ Ma
preliminary work bid results and market conditions have been analyzed an    design has progressed
further toward completion.

This project is being coordinated with the Sustainable asteringlan (SAMP) and will not be
adversely affected by future development recommendations

BACKGROUND
In August 2014, the Commission approved a bud
I;
to expand the building by ve additional air
General Contractor/Construction M '-
2015, the Commission approved thec b' get of $421,682,944 with the addition of $14,400,000
for expansion of the baggage handlingts    ,
of the previously authorized S
authorized use of $4,900,000 of


At the completion 0        esign phase in October 2014, thirteen (13) additional scope items were
added to the          her refinement and evaluation during 60% design and the revised 60%                                                        proj
_ imated at $501.2 million.
The possibility existed that added costs might be
h design allowance or other project contingencies of the estimate during 60%

the
million or19.%This revised estimate has been reconciled by the Port with the designer s and
General Contractor/Construction Manager s independent estimates  The result has been a more
accurate, but higher estimated cost to accomplish the project.

The most signicant contributing factor to the increased current budget estimate, representing about half
of the $79.5 million increase, is the thirteen added scope items now estimated at $35.4 million, up $5.4

COMMISSION AG CNDA 
Ted Fick, Chief Executive Ofcer
December 8, 2015
Page 3 of 10

million from the $30 million estimated at the completion of 30% design. Market conditions in
combination with the more developed 60% design represent the other major factors contributing $33.8
million in increases that include: updated subcontractor pricing, labor inefciencies due to now known
project logistics, construction worker travel time and new security requirements, impact of the market
conditions that continued to strengthen since the 30% estimate increased knowledge of construction
methods and means and constructability impacts/costs, further progression of the design fr m 30% to
60% resulting in more accurate cost estimating, increased materials quantities identie    '
'

remediation resulting from more extensive reproong overspray removal require
design decisions.
'
An extensive value engineering effort is being conducted with over 50
priority focusis on scope items that maintain the base program obj ecti
more analysis due to modications to Port standards and/or program ob cti es. Evaluation factors
include construction cost savings, maintenance/life cycle cost impa    assenger experience,
operational impacts, additional design fee impacts, and schedule impacts. T   te, approximately $18.5
million in cost savings have been identied and are bein orporated into the project with minimal
impact to the schedule.  The Port is continuing validatio of   estimated cost ranging from $470490
million with the General Contractor/Construction Manager co ra r. Uncertainty in the nal projected
budget will remain, though value engineering efforts continu  *"Seek additional cost reductions, until
the General Contractor/Construction Manager Contr    bids the project and the Port and Contractor
negotiate the maximum allowable construction ).

In accordance with the Letter of Und stand      en the Port and Alaska Airlines Group (AAG)
"
dated April 5, 2012, the Port will seek           ence for various project elements, in particular, for
construction phasing and the project b       e Port continues to collaborate with AAG to optimize



package move forward separate from and ahead of the base building
6.  The preliminary work package includes preparatory work in advance of
1 building expansion and the subsequent Phase 2 renovation of the existing
ase

The cost estimate for the preliminary work is $98.1 million. This construction 
is in addition to the $3. 5 million previously authorized on March 24, 2015 for relocation of
loading bridges, for a total of $101.6 million construction authorization

Staff will solicit and contract for project specic independent construction auditing services. The use of
existing Indenite Delivery Indenite Quantity (IDIQ) contracts were considered but are not viable

COMMISSION AGENDA 
Ted Fick, Chief Executive Ofcer
December 8, 2015
Page 4 of 10

options due to the duration of this project and the General Contractor/Construction Manager contract
with Hensel Phelps.

Staff requests the preconstruction services being provided by Hensel Phelps continue until the Phase 1
construction of the building is underway, currently forecast to begin July 2016  Signicantly more
hours have been spent on preconstruction services than originally anticipated due to delays incurred
concluding the 60% design and additional effort required for reconciling the cost    "
0 
conducting value engineering efforts, and optimizing the construction phasing plan. An a
of $1,200,000 is estimated for these preconstruction services. The cost for the aud-i"
preconstruction services are both included in the $98.1 million authorizationreque  rid the" overall
budget.

Project Objectives
0  Extend the length of NSAT by approximately two hundred forty     to improve customer
service and accommodate additional aircraft and passengers.
0  Seismically strengthen NSAT and expand the existing? ' frastructure.

0  Balance and integrate NSAT functional areas 'd  equirements (concessions, holdrooms,
amenities, airline operations and airline services)    g  a renovation and expansion of the
'
NSATs terminal area to achieve acceptable levels of s    '
o  Align near term and forecasted airport-wide  te use and capacity by providing a total of 20
contact gates at NSAT.
o  Optimize gate door contact points, loadi
hydrants and other support utilities.
0  Meet or exceed current sust-
certication.
0  Create a f''ictionless" and st 

0  Create an exciting and at
concessions.

0.   Maintain  and pro             "orthwest  sense  of place  through  the  design  of architecture  and
connected technolo

Scope of Work
This request in   e  be following elements associated with the requested authorizations:

work to relocate existing passenger loading bridges and aircraft positions,
recon gure 1e1 pits, relocate gate infrastructure, re--route site utilities, construct access stairs for
11nd boarded aircraft, mass excavation, shoring, concrete panels and drill shaft foundations,
p chase and install a section of xed loading bridge, selective demolition, construct a
Waterproof enclosure the north end of the building, and purchase the structural steel, vertical
circulation components, major electrical and mechanical equipment, fuel hydrants, curtainwall
system and other long-lead items for the entire project.

COMMISSION AGENDA
Ted Fick, Chief Executive Ofcer
December 8, 2015
Page 5 of 10

0  Conduct independent construction auditing to comply with the requirements of RCW 39.103 85
(11) to conrm the proper accrual of costs as outlined in the General Contractor/Construction
Manager contract with Hensel Phelps.
0  Additional preconstruction services for Hensel Phelps to continue to undertake cost estimating
and validation participate in value engineering, construction phasing, and subcontr tor bidding
for construction.
Ongoing key elements associated with the overall NSAT renovation and expansion is:
o  Renovation of concourse level nishes, structure and amenities
_

0  Expansion of the NSAT STS, baggage and concourse levels by up to nine structu  bays

.0  Addition of 5 new NSAT aircraft gates With passenger loading brid 
(for a total of 20)
0  Seismic reinforcement

0  Addition of an Alaska Airlines premium traveler lounge (Alask Boar Room)

0  NSAT Train System lobby enhancements construction (including th   SAT, Concourse C and
Main Terminal stations)
0  Expansion, renewal and replacement of mechanic lumbing, vertical transportation,
and communication systems
0  Aircraft taxi lane changes around the NSAT

0  Signicant sustainability features and compon  ts

0  Design development of the north end ramp    l to integrate baggage operations with other ramp
and building requirements.

Schedule
Preliminary Work Package Design C                   2nd Quarter 2016
2nd Quarter 2016
4th Quarter 2017
3rd Quarter 2016
4th Quarter 2016
4th Quarter 2017
4th Quarter 2020


Budget/A thorization Summary           Capital      Expense    Total Project
Original Budget                  1  $194,300,000    $5,000,000]
Previous budget increase               $221,582,944      $800,000 1  $222,382,944$199,300,000'!
I Proposed budget increase                      $0          $0)         $01

COMM SSION AGENDA 
Ted Fick, Chief *'Xecutive Ofcer 
December 8, 2015
Page 6 of 10

Revised budget                  1  $415,882,944    $5,800,000   $421,682,944
Previous Authorizations              I   $62, 118,800    $1,000,000 '
$63,118,800
Current request for authorization         I   $95,600,:00+  $2,500,000    $98,100,000
Total Authorizations, including this request+  $157,718 800    $3,500,000   $161,218,800
Remaining budget to be authorized         $258,164,144 l   $2,300,000   $260,464,144
Total *'stimated Project Cost             1  $415,882,944 1    $5,800,000   $421,682,944

Note: The estimated cost of the project is currently forecasted at $470490 million 
project cost will be determined after the Port and Contractor negotiate the nal M  imum Allowable
Construction Cost (MACC) based on actual bid results

Project Cost Breakdown                       This Re 
Budget
_$90,415,000 334,344,600
Design Phase -   $0 $58,386,744
'
State & Local Taxes (estimated)                    $7,685,000      $28,951,600
Total                                     $98 100,000     $421,682,944
Budget Status and Source ofFunds

project will be funded with a combination of 
Facility Charge revenues (PFCs).

be briefed in the second or third 
majority-in-interest (M11) proj'
'
Agreement (SLOA) may b    ,
the increased project budge  Und r SLOA, the Port as an option may elect to use Management Reserve
funds in lieu of theM11 approval process  The requested authorization for the Preliminary Work
Packageis Within the current MII approved amount.

COMMISSION AGENDA
Ted Fick, Chief Executive Ofcer
December 8, 2015
Page 7 of 10

FinancialAnalysis and Summary

CIP Categ         Renewal and Replacement
'ro'ect T  e               Terminal Infrastructure
Risk ad'usted discount rate    N/A
Key risk factors             N/A
Project cost for analysis       $422M
Business Unit BU         Terminal
Effect on business erformance  NOI after depreciation will increase
IRR/NPV            N/A 
CPE Impact $1.32 by 2021. The actual CP] 



building is still in development as the project elemen
regarding product, materials, and equipment. However, s
progresses. It is already understood that the additional expan  n  ea Wlll1ncur additional maintenance
expense.  A key objective of the project is installing su     1e materials and to maximize the
maintainability of the new equipment.   The 'c    e renovation/replacement of the mechanical,
electrical, baggage and other major systems         an opportunity to achieve life cycle cost
,_
efciencies and savings.

STRATEGIES AND OBJECTIVES";

This project supports the Port's Cen       a objective of meeting the region's air transportation
,
needs at Sea-Tao Airport for th       years. This project also supports the Aviation  ivision's
strategy of anticipating and me   '
'      eeds of our tenants, passengers, and the region's economy.

The NSAT expansion is a     gmnent with Airport master plan development objectives that identify
the NSAT as the most       tion for nearterm expansion of Airport capacity.



increase the longterm ability of the Airport to serve the airlines and AAG's future

e airport facing record growth, this project cost effectively adds new gates to benet the
_.
id         _gate shortfall. It also meets AAG's growth needs by expanding the Satellite and renovating
the existing building with entirely new systems.

Environmental Responsibility

The North Satellite renovation project allows the Port unique opportunities to incorporate sustainable
features into the design and construction of the facility. The project scope has been developed to meet

COMMISSION AGENDA 
Ted Fick, Chief Executive Ofcer
December 8 2015 
Page 8 of 10

the project objectives, the Port Century Agenda goals, and the Airport's Environmental Strategy. Port
staff has engaged AAG in developing the environmental aspects and process. Each scope item has been
evaluated individually based upon the total cost of ownership for the expected life of the facility. The
specic scope features include:

0  Energy conservation for building infrastructure

0  Water conservation for the facility including rainwater harvesting for use in the buildin

0  Construction and operations waste minimization

o  Incorporation of new technology.

0  Exceed current building codes.

This project intends to pursue Leadership in Energy and Environmental
and will continue to evaluate other environmental initiatives as the des

Community Benets
Project managers are coordinating with the Ofce of Socia sponsibility to maximize small business
participation opportunities including, but not limited      all Cgentractors and Suppliers (SCS)


Alternate 1 - Current Schedule: Proceed with   en
,                                                                   expansion/design project
scope and phasing with
or Without AAG concurrence. This is the reco mended alternative.
PROS:
'
o  Maintains Port's programm es including addition of necessary gates, improved
NSAT customer services an        increased non-airline revenues, etc.
,

o  Achieves Port function        gn objectives.
I
0  Savings will be achiev         engineering.

CON&
0  Project currentic      mate exceeds approved $421 million budget and is forecasted to range
between       0 and $490,000,000.
Proj ect         t estimate is greater than 10% above the budget approved in the M11, requiring
airlin       e or use of SLOA management reserve.

relatio  hips.

Alternati e 2  Defer project budget and Preliminary Work Package authorization until January 2016.
PROS:
0  Provides  additional time to  further reconcile the budget cost estimate before  seeking
authorization, and provides time for AAG concurrence if not already obtained.

COMMISSION AGENDA
Ted Fick, Chief 'xecutive Ofcer
December 8, 2015
Page 9 of 10

CONS:
0  Delays construction start 48 weeks at an estimated cost of $2 - $4 million.

Alternative 3  Redesign NSAT project to existing budget.
ROS:

0  Maintain existing budget.

CONS:
o  Requires signicant elimination or reduction of core project scope items.

0  Will not achieve all project objectives/quality/passenger experienc;
business goals, or LEED Certication.
- Redesign delay estimated at 12 months and $15 - $20 million.

0  Total scope reduction may still not result in budget savings nee

ATTACHMENTS TO THIS RESQUEST 

0   None

PREVIOUS COMMISSION ACTIONS OR BRIEFIN

November 24, 2015  NorthSTAR Program status upd    d NSAT budget brieng
July 14, 2015  NorthSTAR Program status 
April 28, 2015  NorthSTAR Program st

ncreasing the project scope for $14,400,000 and
authorizing $1,954,000        the design.                   '
o Entering into a devel 
in reimbursement 


orary construction ofces.
p te construction of a Satellite Transit System (STS) North loop Dynamic
2,000 in expense funds for regulated materials management for AAG'S tenant
ovement project.
_
Approval to use Port crew labor and small works contractors to complete early
project work.
27, 2015  NorthSTAR Program Status Update
1,
ary 6, 2015  The Commission authorized (1) $5,000,000 preconstruction services; (2)
exeCution of a General Contractor/Construction Manager contract for preconstruction services;
and (3) transfer of scope, $1,750,000 budget and authorization for STS station roof replacement
to the North Satellite Renovation and Expansion project.
October 28, 2014  NorthSTAR Program Status Update

COMMISSION AGENDA
*  Ted Fick, Chief executive Ofcer 
December 8, 2015
Page 10 of 10

0   August 5, 2014  Commission authorized an estimated $191,323,143 to expand the NSAT by 8
additional gates, an additional $15,717,800 for design completion, and use Of the General
Contractor/Construction Manager alternative public works contracting procedure for NSAT
expansion construction procurement.
0   July 22, 2014  NSAT Expansion Brieng.

0   April 16, 2014  SeattleTacoma International Airport Capital Program  )rieflng

9   January 14, 2014  NorthSTAR Program status update and initial NSAT Expansion

0   September 24, 2013  NorthSTAR Program status update.

0   September 24,2013  The Commission authorized staff to: (1) advertise, aw
major public works contract for the construction of the NSAT Refurblsh   gage System
Proj ect; and (2) authorize the use of Port crews. ,-' 6
0   June 25, 2013 NorthSTAR Program status update. 

0   May 28, 2013, Commission authorized the execution of   para      lce agreements for
Construction Management Services and Commissioning Services, of  roximate values of $10
million and $1.5 million.
0   April 9, 2013  The Commission authorized the Ch'   executive Ofcer to enter into a project
fl                                labor agreement covering the NorthSTAR program    majoe onstruction projects.
0   March 26, 2013 NorthSTAR Program status update-

0   December 11, 2012  The Commission was briefed 0     Vertical Conveyance Modernization
Project Aero Phases 1 and 2 and the possibilit   addi g he specified elevators and escalators to
the NorthSTAR program.
0   July 24, 2012 - Commission authorize     ,00 000 for the design of the NorthSTAR NSAT
Renovation and NSTS Lobbies proj
'
.   June 26, 2012 - The Port C, briefed on the NorthSTAR program by Wayne 
\
Grotheer, Director Aviation PI'O]      gement Group.
'
0   April 10, 2012 "- The Commi        rlzed the execution of consultant contracts for design and
construction support servie' '   _,am management'services; and the completion of site surveys
for regulated materials "
a ment, in the amount of $1,200,000.