PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6c 
ACTION ITEM 
Date of Meeting      May 17, 2016 
DATE:    May 9, 2016 
TO:      Ted Fick, Chief Executive Officer 
FROM:   James R. Schone, Director, Aviation Business Development 
Wayne Grotheer, Director, Aviation Project Management Group 
SUBJECT: Airport Dining & Retail Infrastructure Modifications  Central Terminal (CIP
#C800638) 
Amount of This Request:         $5,120,000   Source of Funds:   Airport Development
Fund, Future
Est. Total Project Cost:           $13,953,000 
Revenue Bonds 
Est. State and Local Taxes:          $821,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to advertise and execute a
construction contract related to the Airport Dining and Retail Infrastructure  Central Terminal
project at Seattle-Tacoma International Airport for an amount not-to-exceed $5,120,000 for a
total estimated project cost of $13,953,000. 
SYNOPSIS 
In order to provide adequate dining and retail service to meet the growth in passenger volume
and demand at Seattle-Tacoma International Airport which in turn will support growth in
business and small business opportunities, jobs, and non-aeronautical revenues, the Airport
Dining and Retail (ADR) program must make a number of changes to current ADR unit
configuration and the infrastructure that is supporting these units. This project is part of that
program and continues the efforts to redevelop the airport dining and retail experience
specifically for the units in the airport's Central Terminal. The infrastructure modification work
required to support the ADR Master Plan for the Central Terminal consists of creating new
vertical circulation to serve the unleased mezzanine spaces and modifying existing mechanical,
electrical, communications, and other utility infrastructure as necessary to support the final use
for each space at the concourse level. 
We anticipate a forthcoming budget increase request and an additional job order contract 
advertisement and execution request prior to the expiration of the current job order contract. 
BACKGROUND 
Leases for 90 percent of the Airport's restaurant, retail and passenger serviceslocations expire
between mid-2015 and mid-2017. Port staff has been developing the ADR Master Plan to 

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 9, 2016 
Page 2 of 8 
address increased passenger demand, best use of limited square footage and facility changes
driven by terminal expansion while creating a more manageable number of lease expirations
during any year for the next redevelopment cycle. This request is the second construction 
authorization required to complete the ADR program. The first was for a job order contract to
complete individual unit utilities, except for the Central Terminal units under this current
request. 
When originally designed, the Central Terminal included the option to provide future mezzanine
level restaurants. Now that demand forecasts support their development, vertical conveyance is
needed to provide direct customer access to these locations. The existing leasable tenant
restaurant spaces on the south side of the Central Terminal do not have efficient floor plans. This
project reconfigures these spaces for improved functionality and efficiency. Some utilities are
being replaced as part of this project. For instance, the existing cooking exhaust ductwork does
not meet airport standards. The work consists of base-building modifications that will outlast the
tenancy of any specific tenant. Therefore it would not be appropriate to consider this work as a
tenant improvement. 
In order to maintain an acceptable level of passenger service, the tenant lease for the large
restaurant in the Central Terminal needs to be extended through September 2018 so that it can
remain operational while the south end restaurants are closed during the first phase of
construction. These Central Terminal tenant spaces will be part of ADR Lease Group 3.
Construction will be done in phases over a two-year period in order to allow some of the dining
concessions to be operational in the Central Terminal to serve passengers while others are closed
for construction. The first phase of Port construction is scheduled to start in Q2 2017 and the last
phase of tenant construction is scheduled to complete in Q2 2019. 
The ADR program has experienced delays and scope and cost increases. Staff anticipates
returning to the Port Commission in June to provide more detail and request a budget increase.
The current job order contract is also expected to expire prior to the completion of work and will
require further authorization in the future as well. 
PROJECT JUSTIFICATION AND DETAILS 
The redevelopment of the ADR program over the next several years aims to maximize the
economic and community benefit of offerings to the travelling public. In 2015, the ADR program
generated $271 million in gross sales with $44.77 million paid to the Port as rent and concession
payments. More importantly, the program supports over 1,800 jobs. Based on forecasts of
anticipated passenger demand for dining, retail and passenger services over the next ten years, a
redeveloped program with a fully maximized use of available square footage will enable growth 
of ADR gross sales resulting in higher revenues to the Port and an increase in local employment
opportunities. 
In order to achieve this growth, the Airport must expand dining and retail capacity throughout
the terminal and also change the uses of some existing units to meet specific demand. All 
identified changes in use as well as the development of new locations have been evaluated and

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 9, 2016 
Page 3 of 8 
have been projected to increase sales by better meeting passenger demand for products and
services. 
In order to prepare eight Central Terminal locations for development by tenants in subsequent
stages of the ADR Master Plan, this project will reconfigure unit utilities.  Without
reconfiguration, new tenants would be required to connect to building utilities outside of their
lease lines, which is not what is common practice for malls or industry standard for airports.
Existing cooking exhaust systems serving tenant spaces leak when they are being cleaned and
this requires additional attention and clean-up during maintenance activities. These cooking
exhaust systems will be replaced to meet code and airport standards. 
Project Objectives 
The objectives of this project include: 
Develop new or currently unused space or repurpose existing dining and retail space to
better meet passenger demand and generate additional revenue 
Reconfigure existing space to allow more efficient operations and assure the greatest
capacity to serve passenger needs 
Maximize the overall use of space in order to achieve the optimal mix of offerings in the
Central Terminal. 
Ensure that necessary utility points of connection and other required infrastructure are in
place for each unit to support operations 
Carefully scheduling work that could impact customer service, revenue generation and
airline operations in the terminal
Scope of Work 
Installation of two public-use elevators connecting concourse level to the mezzanine level
of the Central Terminal
Installation of two sets of public-use stairs serving the same purpose as the elevators 
Relocation of partition walls delineating tenant spaces on the concourse level 
Reconfiguration of mechanical, plumbing and electrical and communications
infrastructure systems in existing tenant spaces to facilitate subsequent tenant
development. 
Replacement of existing cooking exhaust ductwork. 
Schedule 
Activity                                      End 
Design                                  Second Quarter 2016 
Commission Authorization for Construction        Second Quarter 2016 
Equipment Fabrication                       First Quarter 2017 
Construction                             Fourth Quarter 2018

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 9, 2016 
Page 4 of 8 

FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original Budget                     $10,900,000          $0   $10,900,000 
Previous Budget Adjustments             $6,453,000         $0    $6,453,000 
Budget transfer                       ($3,400,000)          $0   ($3,400,000) 
Revised Budget                     $13,953,000         $0   $13,953,000 
Previous Authorizations                 $8,833,000          $0    $8,833,000 
Current request for authorization            $5,120,000          $0    $5,120,000 
Total Authorizations, including this request    $13,953,000          $0    $13,953,000 
Remaining budget to be authorized               $0         $0          $0 
Total Estimated Project Cost             $13,953,000          $0   $13,953,000 
Project Cost Breakdown                     This Request       Total Project 
Design                                      $0       $2,616,000
Construction                              $4,708,000        $10,516,000 
State & Local Taxes (estimated)                   $412,000          $821,000 
Total                                     $5,120,000        $13,953,000 
Budget Status and Source of Funds 
This project, C800638, was included in the 2016  2020 capital budget with an estimated cost of
$13,953,000. On October 28, 2014, the commission authorized $2,800,000 for design and
approved the transfer of $3,400,000 to the Checked Baggage Optimization project, C800612,
(for scope relating to the elevators that will be constructed as a part of that project) and a revised
budget of $13,953,000. The sources of funds will include the Airport Development Fund and
future revenue bonds. 
Return on Investment 
Most investments at the Airport are intended to directly support airline operations. The
investments outlined in this proposal indirectly support airline operations by providing needed
products and services to their customers as well as visitors to the Airport. However, the benefit to
airline customers is only the beginning of a cycle of business activity ultimately benefiting the
Airport with a healthy return on investment along with considerable positive impact on the
community beyond the Airport. This impact comes through businesses locally procuring the
products they need to support their business and by way of increased employment both in the
short-term for design and construction jobs, as well as the long-term with at least 30 to 60 new
permanent jobs. 
The Net Present Value of these investments has been analyzed over a period of 20 years.
Generally, these investments represent permanent changes to the facility in order to support
commercial use of terminal space. The increased revenues generate a Net Present Value of over

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 9, 2016 
Page 5 of 8 
$20 million. Over the course of the next 20 years, staff does not believe that further major
infrastructure investments will be needed in the Main Terminal to support the projected growth
in program revenues. 
The Airport Dining and Retail master plan includes gross sales assumptions for each anticipated
location for food service, retail and passenger services which have been used as the baseline for
the future return on investment. These sales assumptions through 2036 include elements for
enplanement growth and sales per enplanement growth. Enplanement assumptions are derived
from the most recent enplanement forecasts produced for the Sustainability Master Plan in
September 2014. 
Financial Analysis and Summary 
CIP Category             Capacity/Revenue Growth 
Project Type              Business Redevelopment and Expansion 
Risk adjusted discount rate     7.5% 
Key risk factors                Coordination with other construction projects 
Delays in improved base building HVAC and
electrical capacity to support expansion 
Delays in needed leasing activity 
Project cost for analysis        $17,353,000 (full cost of project)* 
Business Unit (BU)          Non-Aeronautical (Airport Dining and Retail) 
Effect on business performance  NOI after depreciation will increase 
IRR/NPV             15%/$21 million* 
CPE Impact             No direct impact. However, potential reduction in CPE
due to increased revenue sharing 
*From October 2014 request 
Lifecycle Cost and Savings 
Long-term operating costs will be minimized by incorporating newer more energy-efficient 
equipment and components. Specifically, the project will install new traction elevators rather
than hydraulic elevators in order to meet the Port's mechanical design standards for operational
cost and optimum utilization of energy. Maintainability will be improved by installation of
additional access openings for new cooking exhaust ductwork. These will improve existing
conditions to current industry standards, and improve maintainability for forthcoming tenant
food preparation areas. These Port standards support environmentally sustainable development
and conservation.
There will be incremental maintenance costs associated with the Port-owned mechanical, water,
communication, and electrical utilities added to the lease line of each unit. 
STRATEGIES AND OBJECTIVES 
This project supports the Port's Century Agenda goal to "advance the region as a leading tourism
destination and business gateway" by providing an extraordinary customer experience at the

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 9, 2016 
Page 6 of 8 
Airport and also is an important contributor to the Port's goal to grow jobs by 100,000 by 2025. 
The project also supports the Aviation Division's strategies of operating a world-class
international airport and maximizing non-aeronautical net operating income. The pursuit of this
redevelopment is consistent with specific guidance principles articulated by the Commission for
the Airport Dining and Retail program in a motion approved in February 2012 and reiterated in a
motion approved in November 2014.
ENVIRONMENTAL RESPONSIBILITY AND COMMUNITY BENEFITS 
The ADR program generates enormous benefit for the Airport and the broader community. One
of the most significant direct benefits of a prosperous and growing dining and retail program is
the number of jobs that the program makes possible. Currently, there are approximately 1,800 
people directly employed by the businesses in the airport's dining and retail program. An
analysis conducted as part of the Airport Dining and Retail Master Plan forecasts that the
program can grow job opportunities by as much as 40% by 2025, presuming that investments are
made in order to expand square footage where possible, and to make more efficient use of the
square footage currently utilized by the program. ADR businesses also generate benefit for local
businesses outside of the airport by way of procuring products from local vendors, providing
product placement opportunities for those local vendors as well as providing mentorship
opportunities. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1)  Status Quo  Do not install elevators and stairs, do not reconfigure partition
walls and do not modify infrastructure systems. 
Cost Implications: 
$765,000 project cost (spent to date) 
Total revenue over a 20 year period remains approximately $54,000,000 
Pros: 
Avoid incurring construction cost 
Cons: 
Does not support ADR Master Plan for new lease spaces 
Does not increase dining level of service for passengers 
Inefficient layout of concession units 
Existing mechanical and other infrastructure in the Central Terminal are inadequate
for current and projected demand because cooking exhaust ductwork is out of
compliance with building code and Port standards 
Tenant construction projects will potentially cause disruption of utility service,
business operations and passenger service to adjacent tenants 
Costs already incurred for design and project management services would need to be
expensed 
This is not the recommended alternative.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 9, 2016 
Page 7 of 8 
Alternative 2)  Install elevators and stairs in the first year. After the mezzanine restaurant
opens, close and reconfigure the partition walls and infrastructure systems of the concourse level
spaces. 
Cost Implications: 
$7,400,000 project cost 
Total revenue over a 20 year period increases to approximately $67,000,000 
Pros: 
Provides an increased level of service by allowing concourse quick-serve restaurants
to remain open while mezzanine restaurant is built out 
Provides an increased level of service by providing an additional restaurant in the
Central Terminal 
Provides an increased level of revenue by providing an additional restaurant in the
Central Terminal 
Cons: 
Increased construction cost for the project for additional contractor mobilizations. 
Increased costs to redesign the project for additional phasing and two construction
bids 
Delays the ADR Master Plan for new lease spaces at concourse level 
Delays optimization of dining level of service for passengers 
The new elevators will obstruct some of the existing concourse level restaurant spaces
while they are trying to remain in operation 
Existing cooking exhaust ductwork in some of the tenant spaces will remain out of
compliance with building code and Port standards for a longer period 
This is not the recommended alternative. 
Alternative 3)  Install elevators and stairs, reconfigure partition walls and modify infrastructure
systems 
Cost Implications: 
$6,927,000 project cost 
Total revenue for a 20 year period increases to approximately $67,000,000 
Pros: 
Supports the ADR Master Plan 
Increases dining concessions level of service for passengers 
Existing mezzanine spaces that are currently unleased will be transformed into
revenue-producing tenant spaces and the passenger level of service will be improved
by the additional restaurant options that become available 
Concourse level tenant space revenue will increase as a result of the project
improvements 
Reconfigures existing tenant restaurant spaces on the south side of the Central
Terminal for improved functionality/efficiency

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 9, 2016 
Page 8 of 8 
Existing cooking exhaust ductwork will be brought into compliance with Building
Code and Port facility standards 
Tenant construction work will be possible without disrupting utility connections and
operations of adjacent tenant restaurant spaces 
Elevators/Stairs are required to create access to mezzanine areas so that they can be
leased to restaurant tenants and provide an improved level of service for passengers 
Cons: 
Some of the dining operations will be closed while the project is in construction 
In order to maintain an acceptable level of passenger service, the tenant lease for the
large restaurant in the Central Terminal needs to be extended through September
2018 so that it can remain operational while the south end restaurants are closed
during the first phase of construction. 
This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
Slide presentation 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
December 8, 2015  Request for Lease Group 2 Authorization 
November 24, 2015 Request for Airport Dining and Retail Lease Group
Authorization 
August 4, 2015 Request for Airport Dining and Retail Group Lease Authorization 
April 6, 2015  Airport Dining and Retail Infrastructure JOC Construction 
February 24, 2015  Airport Dining and Retail Outreach and Leasing Plans Briefing 
December 9, 2014  Phasing Proposal for Hudson Group Leased Units 
December 9, 2014  Phasing Proposal for HMSHost Leased Units 
December 9, 2014  Amendment to Lease and Concession Agreement Anton
Airfoods 
November 25, 2014  Airport Dining and Retail Quality Jobs Motion/Guidance 
November 11, 2014  Airport Dining and Retail Quality Jobs Briefing 
October 28, 2014  Airport Dining and Retail Infrastructure Modifications Design 
September 30, 2014  Drivers for Phasing Plan Decisions Briefing 
May 27, 2014  Airport Dining and Retail Master Plan Briefing 
April 22, 2014  Terminal Utility Upgrades Design Services Contract 
September 11, 2012  Airport Concessions Master Plan Update Briefing 
March 27, 2012  Interim Concessions Leasing Briefing 
February 14, 2012  Commission Motion Concerning the Airport Concessions
Program 
December 13, 2011  Aviation Concessions Program Principles and Practices 
July 26, 2011  Procurement for Concessions Planning and Leasing Services