PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA             Item No.      6c 
ACTION ITEM             Date of Meeting   March 12, 2013 

DATE:    February 22, 2013 
TO:     Tay Yoshitani, Chief Executive Officer 
FROM:    James R. Schone, Director, Aviation Business Development 
Jeff Wolf, Manager, Aviation Business Development and Analysis 
SUBJECT:  Doug Fox Parking Lot Lease Approval 

ACTION REQUESTED: 
Request Commission authorization for the Chief Executive Officer to execute a lease,
substantially as drafted in the attached Exhibit 1, with ATZ Inc. (ATZ), for a term of five (5) 
years, with two, five (5)-year extension options, upon mutual agreement between the Port and
ATZ, for operation of the parking facility commonly known as the Doug Fox Parking Lot (Doug
Fox) located north of 170th Street and east of the North Airport Expressway in the City of
SeaTac. 
SYNOPSIS:
The Port owns two public parking facilities at the Airport. One is the large on-site Airport
garage adjacent to the main terminal building that provides immediate direct walking connection
to the ticketing and bag claim areas. The second is Doug Fox, an "off-site" surface parking lot
operation on South 170th Street that is approximately  mile from the Airport, which allows the
Port to provide parking to more price-conscious travelers. Shuttle bus service is provided to the
main terminal garage and travelers have a short walk into the terminal building (see Exhibit 2).
In 2004, the Port signed a 5-year lease with ATZ for operation of this facility. In September
2009, the Port signed a new 2-year lease with ATZ that included a 1-year option to extend. The
current lease for operation of the facility has been in month-to-month holdover since October
2012 and is set to expire on March 31, 2013. 
In early 2012, in anticipation of lease expiration, Airport staff identified the need for necessary
improvements to critical infrastructure at the facility, including storm drainage repair and
pavement repair and replacement. In an effort to enhance revenues to the Port, staff also
identified upgrade opportunities that included new lighting, new signage, and a new building. 
Construction for storm drainage improvements was approved by the Commission on February
14, 2012, and design funds for pavement repair, lighting, signage, and a new building were
approved by Commission on May 22, 2012.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 22, 2013 
Page 2 of 10 

Following Commission approval of design funds for the recommended improvements, Airport
staff conducted a competitive bid process through a public request for proposal (RFP) process
during the summer of 2012. As a result of this process, staff selected ATZ as the winning bidder
and entered into lease contract negotiations. On May 22, 2012, staff communicated to
Commission that the expected commencement date of the new contract was anticipated to be no
later than February 1, 2013. However, due to extended negotiations with the selected operator,
primarily involving the impact of the potential construction project on the operation of the
facility during the summer of 2013, the commencement date for the new lease with ATZ will be
April 1, 2013. The terms of the lease have been enhanced to include a minimum annual
guarantee, which was not a term of the previous lease, and a higher base concession fee, both of
which are beneficial to the Port. 
In conjunction with this request for lease execution authorization, a separate request for
construction funding for the previously recommended improvements in the amount of $5.1
million is being presented (CIP #C800451). The financial implications of the new lease with
ATZ and the associated construction project for facility repair and upgrade is positive. The
overall net present value (NPV) of the project, including new lease terms and construction costs, 
is $5.7 million with an associated rate of return of 13% and a payback of 6 years. 
BACKGROUND: 
The Airport auto parking market is highly competitive with two key differentiating
characteristics being distance from the Airport and available services. No other parking facility
is as close to the main terminal building as the Airport garage, which is owned and operated by
the Port. Customers who utilize the Airport garage do not have to ride a shuttle van to the
Airport, and can simply walk across the skybridge into the terminal. All other parking lots and
garages are "off-site" and utilize a shuttle van to carry their customers to the terminal. Available
services at some of the off-site facilities include: covered parking, valet parking, auto detailing
and amenities such as restaurants and retail shops. 
In addition to the Airport garage, the Port owns the Doug Fox Parking Lot. This property is
currently operated as a surface parking lot for Airport parking by a third party lessee, ATZ.
Doug Fox Parking is the current brand name affiliated with the facility. The Doug Fox name
originated as a result of an earlier lease to an independent operator who also ran a former wellknown
local travel agency by the same name. The lot has been utilized primarily for Airport
parking since its development well over 20 years ago. It is an uncovered surface lot and like all
other off-site parking facilities, the operator utilizes a shuttle van to bring customers to and from
the Airport. However, it has an advantage of being relatively close to the Airport with a
convenient approach from the North Airport Expressway (NAE). The lot provides the Airport
with a facility that competes in the off-site market where prices are lower, while the Airport
garage commands higher rates based on the value of proximity to the terminal.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 22, 2013 
Page 3 of 10 

Revenues generated at the Doug Fox Parking Lot peaked in 2006 at $5.8 million with concession
and lease revenue to the Port of $3.2 million. Revenues and fees paid to the Port dropped during
the following years, reaching a low point in 2011 at $4.6 million and $2.2 million, respectively. 
In 2012, both revenues and fees paid to the Port were relatively flat compared to 2011, with only
slight increases over 2011 levels. Outside of recession-based causes, Port staff believe that there
are three main factors that contributed to the drop in revenues. 
First, operations at the facility were significantly affected beginning in 2006 with the
construction of the NAE Relocation Project. A significant portion of the southwest corner of the
facility was taken out of service to accommodate the new elevated roadway, resulting in the
elimination of 154 parking stalls (approximately 9% of the then-total stalls). In addition, the new
elevated roadway significantly reduced visibility of the lot by blocking the line of sight of the
entrance and building located at the south end of the facility, primarily for customers travelling
along South 170th Street. Moreover, prior to the construction of the new elevated roadway, an
on-ramp allowing customers quick and easy access to the northbound lanes of the NAE existed.
However, this was eliminated to accommodate the new roadway. 
Second, the overall Airport parking market has seen a significant enhancement in new and
existing parking facilities over the last several years. The level of service provided by local and
national parking operators in the Airport parking market has increased dramatically, including
the construction of multi-level, structured parking facilities along International Boulevard that
offer a variety of services as well as retail and food establishments. 
Third, many physical components of the facility, including the pavement, the building located at
the south end of the facility, the on-site lighting, and the stormwater collection system are at a
point in their lifecycle that, in order to continue being functional and operational, now require
investment. 
In anticipation of the end of the lease with ATZ in 2009, Port staff commissioned a study by
Heartland Consulting to evaluate alternative uses of the Doug Fox property. The results showed
that an office complex, hotel, or combination thereof would be viable. However, industrial use
was not, primarily because of traffic and access issues. The main challenge identified with the
viable alternative uses was the timing of such development. The analysis showed that these
opportunities would not be viable for at least another ten years. The hotel was viable in the
shorter term but there are potentially better locations to serve the Airport. This study was
updated and validated in 2011 by HDR Engineering. 
In addition to the property evaluations performed by Heartland and HDR Engineering, staff
evaluated the option of closing the facility to attract Doug Fox customers to the Airport parking
garage. However, as the Doug Fox Lot serves the more price-conscious traveler, simply closing
the lot would not attract those customers to the Airport garage but would more likely drive them
to other off-site lots, depriving the Airport of substantial income. Based on these factors, Port

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 22, 2013 
Page 4 of 10 

staff made the determination that the best near-term use of this property is as an off-site parking
facility.
Prior to expiration of the Port's lease and concession agreement with ATZ Inc. on September 30,
2009, a new two-year lease was negotiated with the possibility for a one-year option. The
purpose for this new lease was twofold: 1) to resolve all claims related to the impact of the NAE
construction on the lessee and 2) to provide sufficient time to determine the appropriate
investments to make in the facility given the decision to keep its use in parking. In 2011, the
one-year option was executed, extending the agreement termination date to September 30, 2012.
The agreement included a month-to-month holdover clause for a maximum of six months, thus
allowing for the termination of the agreement to be extended to March 31, 2013. 
Staff investigated various improvements to the facility focused on addressing the three factors
listed above affecting performance. Substantial input was received from parking colleagues at
other airports as well as from the Port's own parking consultant, Leigh Fisher. As a result of this
investigation, on May 22, 2012, staff recommended proceeding with pavement repair and
upgrade, a new and improved lighting system, new signage to improve visibility of the facility,
and a new building. These improvements were in addition to the previously Commissionauthorized
construction of a new storm drainage system on February 14, 2012. 
Similar to the storm drainage upgrade, pavement in many locations at the facility is failing.
Without this investment, sections of the facility will increasingly need to be closed off due to
safety concerns regarding the pavement. The lighting system at the facility will be upgraded to
offer a more safe and secure environment, as well as improve the overall visibility and aesthetics
of the facility. 
Arguably the most important upgrade to enhance visibility and marketability of the facility will
be new signage. To determine the most appropriate signage plan, Port staff undertook a
collaborative effort with the City of SeaTac to develop an overall upgraded signage system that
is expected to significantly benefit the facility while adhering to mutually acceptable guidelines
consistent with the Interlocal Agreement (ILA) between the Port and City. Elements of the new
signage system include: a new sign placed along the side of the southbound lanes of the NAE
just south of the return-to-terminal loop overpass that will guide drivers to exit at 170th Street for
economy parking; signs along the 170th Street off-ramp will be updated to include guidance for
economy parking to the east; and a new monument sign located across from the entrance to the
facility on the south side of South 170th Street targeted towards drivers travelling eastbound on
that street. In addition, a new 22-foot free-standing sign will be located on the property that is
targeted towards northbound travelers on the NAE. A depiction of the new signs and their
locations are included in Exhibit 3. 
The current building at the facility was originally constructed to support a travel agency
operation, branded Doug Fox Travel. However, the facility has evolved into an Airport parking
operation with no travel agency functions. The current design and configuration of the building

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 22, 2013 
Page 5 of 10 

does not support parking operations in a manner consistent with other parking facilities in the
Airport parking market. In addition, the current building is two to five years from the end of its
useful life. The proposed new building will be significantly more functional for a parking
operation, as well as much more cohesive with the overall aesthetics and marketability of the
facility. 
Following Commission approval of design funds in May 2012, staff initiated a public RFP
process in the summer in anticipation of the expiration of the current lease agreement with ATZ
in September 2012. Based on the evaluation criteria and scoring methodology contained within
the RFP, ATZ was the only responder that met the minimum qualifications. In evaluating ATZ's
response, staff determined that it was a strong proposal and decided to enter into contract
negotiations during the fall of 2012. Since that time, the design process for the construction
project and lease negotiations with ATZ have been moving forward concurrently. Staff
transitioned the current contract with ATZ into month-to-month holdover in September 2012
with a new expiration date set for March 31, 2013. 
ATZ is a locally-owned and operated business that has over 30 years of experience managing
parking operations in the local airport market. In its history managing the Doug Fox lot, ATZ
has expanded the operation from a travel agency and parking operation, including moving to an
exclusive focus on parking as well as several expansions to the facility throughout the years. In
addition, ATZ successfully maintained the operation during the construction of the NAE
beginning in 2006, which was a significant disruption to the facility with major impacts,
including installation of a permanent elevated overpass at the entrance to the Doug Fox lot. 
Staff believes the resulting proposed lease includes enhanced terms to the Port with a quality
operator of the facility. The new agreement includes a minimum annual guarantee (MAG) that
escalates over the five (5)-year term, beginning at $1.5 million in year one and ending at $2.8
million in year five. The first year MAG is lower compared to the final four years of the contract
due to the anticipated impacts from the construction project on parking operations at the facility. 
The current agreement does not have a MAG. In addition, the base concession fees paid by ATZ
are higher in the new, proposed agreement with a beginning percentage of 55% of gross receipts
escalating to 63% of gross receipts in year five. The current agreement requires 54.5% to be
paid to the Port (with the possibility of higher percentages paid to the Port if higher gross
receipts are achieved.) Finally, the new lease requires that ATZ not own, operate, or have a
financial interest in any other parking operation within a 3-mile radius of the Airport. The
current lease does not include this requirement. Additional details on new and old lease terms
are stated below. 
Lease Summary and Financial Analysis: 
Below is a comparison of the key business terms of the current lease and new, proposed lease. 
The full version of the new, proposed lease is attached as Exhibit 1:

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 22, 2013 
Page 6 of 10 

Current Lease     New, proposed 5-year lease
Two (2)-years from 10/1/2009
Term                          Five (5)-years
through 9/30/2011
Yes. Two, five (5)-year
Yes. One, one (1)-year option
extensions based on mutual
Extension           at Port's sole discretion
agreement between Port and
(executed)
ATZ
Yes. Month-to-month, for no  Yes. Month-to-month, for no
Holdover
more than six (6) months     more than six (6) months
Year 1:  $1.5 million
Year 2:  $2.5 million
MAG (Minimum
None         Year 3: $2.6 million
Annual Guarantee)
Year 4:  $2.7 million
Year 5:  $2.8 million
Concession
fee to Port    Gross Receipts
Year 1:    55%
from $0 to $4.8
54.5%
million, plus          Year 2:      60%
Concession Fee(s)           from $4.8 million to     Year 3:    61%
70%
$5.25 million, plus        Year 4:      62%
from $5.25 million to
72%                 Year 5:    63%
$6.6 million, plus
75%    over $6.6 million.
Separate shuttle
access to terminal per-  Yes, based on cost recovery          No
trip fee
Non-compete (ability
to have interest in
Not included in contract       Included in contract
another local parking
operation)

As part of the February 14, 2012, request for design and construction funding for the stormwater
drainage repair work, the associated financial analysis assumed that by upgrading the drainage
system, the current revenues generated at the facility would be maintained. However, no new,
incremental revenues were anticipated as part of that analysis.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 22, 2013 
Page 7 of 10 

The financial analysis associated with the additional design funds requested on May 22, 2012, 
assumed new, incremental revenues associated with the construction of the additional project
elements based on staff's expectation that with new, enhanced pavement, lighting, signage and a
new building, revenues would be enhanced. 
The financial analysis and justification associated with this request again includes only the new, 
incremental revenue generated from the facility with implementation of all the project elements,
including the cost of the previously approved drainage work. This was done to create a
conservative financial analysis showing all costs associated with the project, both previously
approved by Commission and those related to this request, as well as new revenues anticipated
from an enhanced surface parking facility. In addition, since the May 22, 2012, communication
to Commission, staff has been able to better refine the parking activity assumptions throughout
the lease term and extensions associated with the facility improvements. The updated
assumptions included significant input and review from ATZ as well as review by Leigh Fisher 
Associates, a parking consulting firm currently under contract with the Port of Seattle. 

CIP Category          Revenue/Capacity Growth 
Project Type           Business Expansion/New Business Development 
Risk adjusted Discount    8% 
rate 
Key risk factors             Construction risks: the project may encounter
unexpected delays due to unforeseen issues, such as
contaminated soils, which may increase the cost of
the project and/or cause schedule delays. 
Financial risks: general economic conditions will
impact the parking market and if general economic
declines occur in the future, future incremental
revenues may fall short of forecasts. 
A timeframe of 15 years was included in the financial
analysis, covering the initial five-year lease and two
(2) five-year extensions. There is risk associated with
a potential future conversion of the property to nonparking
use, and lease terms associated with future
extensions. 
Project cost for analysis     $5.1 million 
Business Unit (BU)       Landside

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 22, 2013 
Page 8 of 10 

Effect on business        The financial analysis assumes that with construction of the
performance           project improvements at the facility, annual revenues to the
Port will increase. Current revenues to the Port are
approximately $2 million to $2.5 million per year. Within
five years of implementation of the improvements, annual
revenues are anticipated to increase by close to $1 million,
totaling $3.5 million. Within ten years, additional revenues
are anticipated at $2 million, bringing the annual total to
around $4.5 million. 
IRR/NPV           NPV: $5.7 million 
IRR: 13% 
Payback: 6 years 
CPE Impact          None 
STRATEGIC OBJECTIVES: 
This project aligns with the Port's Century Agenda strategy of advancing the region as a leading
tourism destination and business gateway. Upgrading the Doug Fox Parking Lot for Airport
travelers helps meet the objective of meeting the region's air transportation needs at Sea-Tac
Airport for the next 25 years and encourage the cost-effective expansion of domestic and
international passenger and cargo service. In addition, a result of this project will be the ability
of the Airport to increase a current non-aeronautical revenue stream. 
ENVIRONMENTAL SUSTAINABILITY: 
Environmental sustainability elements related to this project are described in the associated
project memo. 
BUSINESS PLAN OBJECTIVES: 
Approval of this lease authorization request in conjunction with associated upgrade project will
contribute to achievement of the Airport's business plan objective of "maximizing non-
aeronautical net operating income" by generating increased non-aeronautical revenues. 
TRIPLE BOTTOM LINE SUMMARY: 
The project supports economic development by investing in an upgraded parking lot to serve the
public's parking needs at the Airport. Environmental sustainability principles will be employed
consistent with Port policy. Also, procedures set forth in the Port's new Small Contractors and
Suppliers Program and other small business participation opportunities in support of the Century
Agenda goals will be used when applicable in the project contracting process in coordination
with the Office of Social Responsibility.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 22, 2013 
Page 9 of 10 

ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS: 
Alternative 1  Do nothing. Do not authorize execution of the new lease with ATZ and
do not approve this construction funding request. The current lease, with holdovers, will
expire March 31, 2013. Port staff would negotiate an amendment to the current lease
with ATZ in order to prepare a revised RFP for a new lease for operation of the facility. 
In addition, staff would not implement any improvements to the facility. Without
required repairs to the facility, continued wear and tear would eventually cause the
facility to shut down. The new negotiated lease would likely include significantly lower
revenue amounts to the Port due to the poor condition of the facility. It would be
uncertain how long the facility could be operated under the current conditions. This is
not the recommended alternative. 
Alternative 2  Similar to Alternative 1 above, do not authorize execution of the new
lease and do not approve this construction funding request. The current lease with ATZ
would expire March 31, 2013. Staff would negotiate an amendment to the current lease 
and prepare an RFP for a new lease for operation of the facility. In addition, staff would
not implement any improvements to the facility. Instead, invest this budget into the
Airport garage and develop a low-cost parking product on two floors of the garage
recently vacated by the rental car companies. This alternative would cannibalize the
ability of the garage to charge premium parking rates on floors just above the low-cost
product. This is not the recommended alternative.
Alternative 3  Authorize execution of the new lease but only invest in critical
infrastructure needs with a lower project cost, such as pavement and lighting, and do not
invest in signage and a new building. This alternative would allow for improvement to 
critical facility systems, thus marginally enhancing the level of customer service. 
However, this alternative is not recommended as the facility will continue to be less
competitive due to its poor visibility to customers, and lower level of customer service
compared to other facilities in the Airport parking market. In addition, this alternative
would only defer the required investment in the building as the current building has an
estimated life of two-to-five years. Although there would be some new incremental
revenues, implementing the full array of improvements as part of Alternative 4 would
generate much larger incremental revenues. Implementing partial improvements under
Alternative 3 would probably result in lost construction and cost efficiencies compared to
Alternative 4. Also, the new lease with ATZ would need to be renegotiated to reflect the
reduced investment in facility upgrades. This is not the recommended alternative. 
Alternative 4  Authorize execution of a new lease with ATZ and invest in improvements
to the facility, including new pavement, new lighting, new signage, and a new building.
This alternative will lead to a better customer experience and enhanced revenues due to
an upgraded parking facility that is more competitive in the Airport parking market. This
is the recommended alternative.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 22, 2013 
Page 10 of 10 

OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: 
Exhibit 1  Proposed draft Lease and Concession Agreement 
Exhibit 2  Doug Fox Project Site Location 
Exhibit 3  New Doug Fox signs and locations 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
February 14, 2012 - Commission approved funding for design and construction in the
amount of $1,028,000 to install a new stormwater drainage system by September 30,
2012. 
May 22, 2012  Commission approved 1) increasing the project scope by adding lot
resurfacing, lighting, building, and road signage work elements; and 2) proceeding with
project design.