PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.       4f 
ACTION ITEM 
Date of Meeting      June 28, 2016 
DATE:    May 17, 2016 
TO:      Ted Fick, Chief Executive Officer 
FROM:   James Schone, Director, Aviation Business Development 
James Jennings, Senior Manager, Aviation Properties 
SUBJECT:  Tenant Reimbursement  Agreement (TRA)  for American Express Centurion
Lounge Lease Expansion on Concourse B, CIP: C800154) 
Amount of This Request:         $278,000   Source of Funds:   Airport Development
Fund 
Est. Total Project Cost:           $278,000 
Est. State and Local Taxes:         $18,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to execute a tenant
reimbursement agreement in the amount of $278,000 for costs to be incurred by American
Express Travel Related Services for expansion of the Amex Centurion Studio Lounge. 
SYNOPSIS 
The Amex Centurion Studio Lounge, currently located on Concourse B, provides a premium
passenger experience at Sea-Tac International Airport, but when compared to Amex's other
airport locations it is significantly undersized (currently 3,200 square feet compared to their
typical 10,000 square foot lounges elsewhere). Because of this small footprint, Amex frequently
experiences lounge congestion and have to turn away valuable passengers during peak times. To
make matters worse, the new construction of the adjacent Delta Airlines Lounge blocks all of the
windows and natural light of the existing Amex lounge, creating a decreased level of service for
passengers. Fortunately, the adjacent lounge construction also affords Amex an opportunity to
expand their footprint by 1,400 square feet into a newly constructed area directly adjacent to the
existing Amex Lounge. This expanded location would also return the opportunity for their
lounge to have windows and natural light. 
Amex has indicated they are interested in expanding into this new expansion space, but since this
area has never been occupied and does not have utilities or occupancy improvements, Amex has 
requested to construct all needed improvements as part of their tenant improvement project,
requesting the Port provide a reimbursement for the landlord portion of the improvements via the
Port established Tenant Reimbursement Procedure and Guideline (AV-2). Amex's request of a
$278,000 reimbursement has been pre-negotiated as a fixed price, based on review of Port

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 17, 2016 
Page 2 of 6 
Project Management Group's estimate of likely costs based on the project scope. American
Express assumes all risk of cost increases associated with construction. It requires Commission
authorization because Resolution 3605 still limits staff authority delegation for tenant
reimbursements to $200,000. 
BACKGROUND 
To support its growing operations at the Airport, Delta is constructing a new centrally located
Delta SkyClub Lounge located between Concourses A and B.  As part of this project, Delta's
Lounge project construction obstructs all existing windows of the existing Amex Lounge, but is
also constructing a separate HVAC tower that provides for the opportunity of approximately
1,400 square feet of expansion space for Amex to grow into and regain some of their exterior
windows. Although this expansion opportunity gives them only a fraction of their desired
expansion area, they are interested in the incremental buildout until the Port can find a long-term
solution that meets their desired lounge requirement of 10,000 square feet. But because this area 
has never been occupied by a tenant, it is in a raw condition which requires basic improvements
to allow for occupancy and lease. Using the Port's Tenant Reimbursement Policy/Guidelines,
the Port would reimburse Amex the cost to construct basic utilities and other occupancy related
improvements. Amex's leased premises would expand 1,400 square feet and would return some
of the windows and daylight hidden by the current Delta construction project. This capital
project funding is included in the 2016  2020 capital budget under CIP C800154 (Tenant
Reimbursement)
PROJECT JUSTIFICATION AND DETAILS 
At present there is not adequate space in the terminal to accommodate Amex' interest for a larger 
lounge to support current and projected passenger loads at the Airport; their desired program for
Seattle is between 10,000  12,000 square feet.  This project presents a strategic opportunity to
utilize newly  created  space  on the concourse level  that will  meet an important tenant's
operational need, while generating increased non-aeronautical revenue for the Airport. When
combined with their existing Premises, this expansion will provide Amex with a lounge that is
approximately 4,500 square feet. 
The Port forecasts an increase of approximately $308,000 per year in revenue from this lease of
this expansion area to Amex.
Schedule 
Commission Authorization of TRA and project                    2nd Quarter 2016 
Building Permit Issued/Construction Begins                       3rd Quarter 2016 
Construction Complete/Grand Opening                         4th Quarter 2016 
Amex is planning to work with the same contractor as Delta, so that the completion of their
tenant improvements will be scheduled in tandem with the completion of Delta's Sky Club
project.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 17, 2016 
Page 3 of 6 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original Budget                        $278,000          $0     $278,000 
Previous Authorizations                       $0          $0          $0 
Current request for authorization              $278,000          $0      $278,000 
Total Authorizations, including this request      $278,000          $0      $278,000 
Remaining budget to be authorized               $0          $0          $0 
Total Estimated Project Cost               $278,000          $0     $278,000 
Project Cost Breakdown                     This Request       Total Project 
Design Phase                                  $0              $0 
Construction Phase                           $260,000          $260,000 
Sales Tax                                   $18,000           $18,000 
Total                                       $278,000           $278,000 
Budget Status and Source of Funds 
This project, C800154 (Tenant Reimbursement) is included in the 2016  2020 capital budget
and plan of finance. The funding source is the Airport Development Fund. 
Financial Analysis and Summary 
CIP Category             Revenue/Capacity Growth 
Project Type              New Business Development 
Risk adjusted discount rate     8% 
Key risk factors             Risks that may affect performance and financial returns,
as displayed below, include: 
-schedule delays may impact rent payments 
-expanded lounge may reduce revenues at the Port's Club
at SEA on Concourse A 
Project cost for analysis        $278,000 
Business Unit (BU)          Terminal Building 
Effect on business performance  Lease payments are assumed to begin 10/1/16. Annual
lease payments of $308,000 are assumed

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 17, 2016 
Page 4 of 6 
IRR/NPV             Remaining lease term analysis (expansion premises only;
existing Amex lease, expires March 26, 2020): 
NPV: $634,467 
IRR: 136% 
Payback: < 1 year 
Assumptions: 
-lease rate of $220.00 per square foot per year 
-lease space of 1,400 square feet. 
-lease payments begin 10/1/2016. 
CPE Impact             Less than $.01(should actually reduce CPE due to revenue
sharing) 
Lifecycle Cost and Savings 
This project will upgrade for occupancy approximately 1,400 square feet of shell space. Tenant
will be responsible for maintenance of these improvements. 
STRATEGIES AND OBJECTIVES 
This project supports the Port's goals of: 
Advancing the region as a tourism destination and business gateway by providing the
improved facilities and amenities that are expected by international and business
travelers. 
Operating a world class airport by anticipating and meeting the needs of our tenants and
passengers. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1)  Do not allow Amex to expand into this new area. 
Additional Cost:    $0 
Pros: 
Port defers costs of upgrading shell space to leasable condition. 
Cons: 
No additional lease revenue for space. 
Keeps Amex operating in a windowless lounge that does not meet their desired customer
service standard. 
Does not meet the business requirements of an important tenant. 
This is not the recommended alternative.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 17, 2016 
Page 5 of 6 
Alternative 2)  Allow Amex to expand into this newly created expansion area, but do not
reimburse them for basic occupancy and system improvements in the expanded lounge space 
which the landlord is typically responsible for. 
Additional Cost:    $0 for the Port 
Pros: 
This would be the least cost option, with Amex bearing 100% of the costs to expand the
terminal and build out the space for their lease. 
Cons: 
Although the Port has made no formal commitment for reimbursement pending
Commission approval of this action, not reimbursing Amex for this work is inconsistent
with past practice. 
This would put an undesirable financial burden on Amex, making them pay for the costs
of both the landlord and tenant improvements.
This is not consistent with industry norms, where the landlord is generally responsible for
costs associated with the development of building systems, utilities and other occupancy
related improvements. 
This is not the recommended alternative. 
Alternative 3)  Authorize a TRA with Amex for costs associated with the construction of basic
systems and finishes in the new lounge space. 
Cost:  $278,000 
Pros: 
Port will receive annual lease revenues of approximately $308,000 per year. 
Minimizes the Port's costs to bring the space to leasable condition, combining the
landlord's occupancy and systems scope with the tenant's interior improvements and
finishes. 
Puts the otherwise inaccessible space into productive use. 
Cons: 
No perceivable cons. 
This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
Exhibit A: Expanded premises 
Exhibit B: Tenant Reimbursement Agreement and associated support documents

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 17, 2016 
Page 6 of 6 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None