ITEM NO:    6b_Supp_ 
MEETING DATE: June 28, 2016
Request for Additional Budget for 
Airport Dining and Retail (ADR) 
Program Redevelopment 
ADR Infrastructure 
Modifications
(CIP#C800638) 

1

Issues Impacting ADR Construction Timelines
Commission approved original ADR capital request in October
2014. Construction anticipated to begin in May 2015 
What has happened since: 
ADR Personnel Transitions 
Washington State Supreme Court ruling on City of SeaTac Proposition 1 
Revisions to ADR Lease Group packaging 
Result is that construction began in May 2016 

ADR capital construction has incurred a one year delay from the original schedule 
2

Original Budget and 
Proposed Changes 


Deficit 

Schedule delays and scope changes have driven project costs up. 
3

ADR Scope Changes 
Infrastructure Validation and Facility Constraints ($2,100,000) 
Program Redevelopment Infrastructure Validation 
Initial scope assumptions were inadequate 
Cut and cap 
Re-use of existing redundant utilities 
Detailed Program validation confirmed existing and new utility requirements 
Delay in schedule added escalation costs 
Facility Constraint Driven Scope 
Reconfiguring of Concourse "C" bar due to costly grease interceptor (CC-13) 
Concourse D location expansion into TSA area requires raising the floor for two locations (CT-6 and
CT-27) 

Program validation and schedule delays have impacted the budget. 
4

ADR Scope Changes 
Scope changes due to level of service responses to increased
passenger activity ($1,300,000) 
Relocating Children's Play Area on Concourse D to create more
leasable ADR space (Created CD-8 available) 
Adding infrastructure to two new food and beverage locations to
address food and beverage shortfall on Concourse D (CD-8/CT-27) 
Adding new location for Ken's Baggage buildout to facilitate a
seamless turnover (BC-3A) 

Scope has been added to respond to increased passenger levels. 
5

ADR Soft Cost Increases 
Increasing Soft Cost and Consultant Support
($3,925,000) 
Schedule delays 
ADR infrastructure project is not a traditional
construction "Project," but more of a "Program" 
Additional staff time to support increased scope 
ADR staffing gaps 
Additional design to support Level of Service and
scope validation changes 
Leasing delays and the prolonged nature of the "Program" have
increased soft costs. 
6

How Capital Work Fits Into 
Entire ADR Program 
$21 Million: Cost for Port to provide infrastructure and redevelop the Program 


$60-$65 Million: Cost for Tenants to design and build out their spaces 


$10 million: Expense Projects for Port to support Tenant Design and Construction 

Program $90-$95 Million 
Soft cost increases should be considered in light of the full ADR program oversight. 
7

ADR Program Benefits and Costs 
Despite increased spending, revised IRR/NPV of
12.3%/ $15.5 million is still strong. 
(Based on original IRR/NPV capital data. This
IRR/NPV is on the conservative side considering the
passenger growth the airport has seen). 
Creates level playing field for large and small
businesses. 
Maintains a level of service for our customers. 

ADR program still showing strong financial performance with increased costs. 
8

Alternatives Comparison 
Alternative     Budget        Effect on ADR   Effect on ADR   Comments 
Increase       Job Creation    Revenue 
1                 Remains unchanged   Delay in adding      Revenues reduced      Overall project
Status Quo        ($15.3 Million)      additional jobs the   by $6 Million to $64    length
lease packages     Million             extended 
create                             High cost to
tenants 
Not a level
playing field 

2                 Increase by $2.9     Delay in adding      Revenues reduced    Overall project
Add Infrastructure   Million           additional jobs the   by $3 Million to $67  length extended 
only             ($18.2 Million)      lease packages     Million 
create 
3                Increase by $5.9     No delay in         Maximizes         Recommended
Add Infrastructure   Million           additional jobs     Revenues to $70    Alternative 
and Soft Costs      ($21.2 Million)      creation          Million 
Alternatives Comparison 
9