COMMISSION 
AGENDA MEMORANDUM                Item No.       4f 
ACTION ITEM                   Date of Meeting   September 26, 2017 
DATE:    September 18, 2017 
TO:     Dave Soike, Interim Executive Director 
FROM:   Wayne Grotheer, Director, Aviation Project Management Group 
James Schone, Director, Aviation Commercial Management 
Dawn Hunter, Sr. Manager, Airport Dining and Retail 
SUBJECT:  Airport Dining and Retail (ADR) Kiosk Program Expansion (CIP #C800846) 
Amount of this request:          $1,190,000 
Total estimated project cost:       $1,240,000 
ACTION REQUESTED 
Request a single Commission authorization for the Executive Director to: (1) proceed with
design of the Airport Dining and Retail Kiosk Program Expansion project at Seattle-Tacoma 
International Airport; (2) utilize existing or future Job Order Contracts, procured separately, to
construct the project and (3) use Port crews to perform work related to the construction of the
kiosk spaces as needed. The total estimated project cost is $1,240,000. 
EXECUTIVE SUMMARY 
The Airport Dining and Retail (ADR) Kiosk Program provides opportunities for small, local, and
disadvantaged businesses to gain experience doing business  at the  Seattle-Tacoma
International Airport  (Airport).  The program currently provides a tiered approach to its
offerings with three Introductory Kiosk units and three Intermediate Kiosk spaces as stepping
stones to competing for a full-scale retail location. 
The Introductory Kiosk unit requires no capital investment from the tenants. The space,
casework, and storage are provided and maintained by the Port. Lease terms vary from six to
eighteen months. 
The Intermediate Kiosk requires the tenant to provide the design, casework, maintenance and
storage for their space, in return for a larger space and a longer lease term (typically three to
four years). These requirements help prepare the tenants for the competition for full-scale
retail locations. 
This project includes the development of infrastructure for eight (8) Intermediate Kiosk spaces 
and an allowance to convert two (2) of these kiosk spaces into full Introductory Kiosk units as

Template revised September 22, 2016.

COMMISSION AGENDA  Action Item No. _4f___                     Page 2 of 6 
Meeting Date: September 26, 2017 
an option as the designs are finalized. The project budget includes $500,000 to upgrade two
Intermediate Kiosk spaces to Introductory Kiosk units. That amount represents both
construction hard costs and project soft costs. 
Staff is requesting authorization for both Design and Construction. Due to the size and scope of
this project, staff feels that there is a low risk that additional funds will be required after design
efforts are complete. Getting authorization for Design and Construction in one authorization 
will save the project time and allow for the new kiosk locations to be opened sooner. 
JUSTIFICATION 
The primary purpose of this project is to increase small, local, and/or disadvantaged business
opportunities in the ADR Program in support of the Century Agenda goal to promote small
business growth and workforce development and specifically, Commission's goal to achieve
40% of ADR gross sales from these types of businesses. This project will also expand retail
offerings at the airport to meet growing passenger demand.  These offerings will provide
passengers with local, unique, and new products not currently available. This will also help to
increase non-aeronautical revenue, a key source of funding for airport infrastructure projects. 
The Kiosk Program started in early 2014 with 3 locations constructed by the Port at the
entrance to Concourse C. The purpose of this program was to create short-term business
opportunities (6-18 months) for small, local, and/or  disadvantaged businesses to obtain
experience in the airport retail environment without significant investment or a long-term
commitment. Port funds were used to provide the utility infrastructure and kiosk casework,
thus minimizing the barriers to entry. During the past 3 and one-half years, a total of 8 firms
(including the current tenants) have had leases in these locations. 
Several participants in the kiosk program indicated a desire to remain beyond the initial lease
term but were not ready to propose for a full-scale retail location or there weren't suitable fullscale
leasing opportunities available for which to submit a proposal at the end of their kiosk 
lease. In response to this need, ADR staff developed the Intermediate Kiosk Program in 2016. 
This program is intended to provide an "intermediate step" for companies that successfully
complete a term in what is now referred to as the Introductory Kiosk Program (the 3 locations
on Concourse C constructed by the Port). 
The Introductory Kiosk tenants who are interested in the Intermediate Kiosk Program are
required to compete for these spaces (to the extent that there are multiple firms interested in
the available opportunities) through a modified Competitive Evaluation Process (CEP). The CEP
award is based on minimum qualifications, concept, product offered, design creativity and
financials. The selected firms must make a small capital investment (approximately $100/sq. ft. 
or $25k to $30k total) by designing and building out a 250-300 square foot location. For this
investment, the tenants receive a longer lease term (3-4 years). Through this process, the
tenants gain more experience in unit design and construction, acquiring and repaying capital,
creating proposals and understanding the competitive process. The Intermediate Kiosk Program

Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. _4f___                     Page 3 of 6 
Meeting Date: September 26, 2017 
now has 3 spaces on Concourse A (2 of which are currently filled and the other location is 
leased but not yet built out). 
This proposal to increase the number of spaces in the Intermediate Kiosk Program by 8 is based
on the desire to increase the number of opportunities for small, local, disadvantaged
businesses. These locations have been chosen based on where there is adequate space and
high visibility with the travelling public to ensure the greatest chance of success. Upon
completion, there will be a total of 11 Intermediate Kiosk locations and 3 Introductory Kiosk
units. This ratio of nearly 4:1 (Intermediate to Introductory Kiosks) has been selected based on 
the need to have a sufficient number of Intermediate Kiosk spaces for successful participants in
the Introductory Kiosk Program which have significantly shorter lease terms (6 to 18 months) 
compared to those in the Intermediate Kiosk Program (3 to 4 years). However, staff is
requesting an allowance to convert two of the proposed eight Intermediate Kiosk spaces to
Introductory Kiosk units in order to have the flexibility to respond if there is a significant
increase in demand for Introductory Kiosks. 
Scope of Work 
The eight (8) Intermediate Kiosk spaces include the following: 
1.  Dedicated electrical power circuit 
2.  Lighting or lighting circuit as needed 
3.  Dedicated communications network connectivity 
4.  Miscellaneous finishes as needed 
The optional (2) Introductory Kiosk units include the following: 
1.  Dedicated electrical power circuit 
2.  Dedicated communications network connectivity 
3.  Lighting as needed 
4.  Casework 
5.  Finishes 
For both Intermediate and Introductory Kiosks, the Port will relocate signage, access control
devices, and other miscellaneous obstructions as needed to create a clear, usable space. 
Additional work may be required in order to ensure that each kiosk location is adequately
prepared and does not require the incoming tenants to make an investment that exceeds the
intent of the program. These spaces, as part of the Airport's sustainability program, will seek to
use practices that conserve energy, use environmentally preferable materials, and provide
infrastructure to support waste minimization. 
Within both the Introductory and Intermediate Kiosks, the leveraging of the Job Order Contract 
(JOC) would provide additional small business participation within the construction phases. 


Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. _4f___                     Page 4 of 6 
Meeting Date: September 26, 2017 
Schedule 
Activity 
Design start                        2017 Quarter 4 
Construction start                    2018 Quarter 2 
In-use date                        2018 Quarters 3 and 4 
Cost Breakdown                         This Request       Total Project 
Design                                   $382,000          $382,000 
Construction                               $858,000          $858,000 
Total                                      $1,240,000          $1,240,000 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1 Do not add new kiosk opportunities 
Cost Implications: $0 
Pros: 
(1)   No capital investment required from the Port. 
(2)   Allows space to be allocated for other needs. 
(3)   No risk of the capital investment being impacted by airport development. 
Cons: 
(1)   Limits growth opportunities for tenants currently participating in the Introductory
Kiosk Program. The three existing Intermediate Kiosks are currently tenanted. Current
and new Introductory Kiosk tenants will not have growth opportunities. 
(2)   Does not support attainment of the goals set forth by the Port Commission. 
This is not the recommended alternative. 
Alternative 2  Portconstructs the infrastructure and casework for (8) new Introductory Kiosk 
units 
Cost Implications: $3,609,000 
Pros: 
(1)   Provides more small business opportunities with limited tenant investment. 
Cons: 

Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. _4f___                     Page 5 of 6 
Meeting Date: September 26, 2017 
(1)   Port incurs the full cost of the necessary Tenant Improvements. 
(2)   Port must budget for ongoing kiosk maintenance at all (8) locations. 
(3)   Does not provide a progressive opportunity for tenants who successfully operate
Introductory Kiosks. 
(4)   Greater loss  of Port's  capital investment  if kiosks are displaced by airport
development. 
This is not the recommended alternative. 
Alternative 3  Port constructs utility improvements and minor space improvements for (8)
Intermediate Kiosk locations with an option to convert (2) spaces to Introductory Kiosk units 
Cost Implications: $1,240,000 
Pros: 
(1)   Will provide small business opportunities within the airport environment without
requiring the tenant to make the large capital investment costs of an in-line space. 
(2)   Allows businesses with a shorter-term lease in the Introductory Kiosk program to 
participate in a graduated process requiring increasing investment and knowledge. 
(3)   Achieves the small business goals set forth by the Port Commission. 
Cons: 
(1)   Does not provide additional Introductory Kiosk opportunities. 
(2)   The tenant is required to make a larger capital investment with the Intermediate Kiosk
space than with the Introductory Kiosk unit. 
(3)   Greater loss of Port capital investment if kiosks are displaced by airport growth and
development. 
This is the recommended alternative. 
FINANCIAL IMPLICATIONS 
Cost Estimate/Authorization Summary          Capital      Expense        Total 
COST ESTIMATE 
Original estimate                      $3,319,000          $0    $3,319,000 
Estimate Adjustment                 $(1,899,000)             $(1,899,000) 
Revised Estimate                     $1,240,000               $1,240,000 
AUTHORIZATION 
Previous authorizations                    $50,000          $0      $50,000 
Current request for authorization           $1,190,000          $0    $1,190,000 

Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. _4f___                     Page 6 of 6 
Meeting Date: September 26, 2017 
Total authorizations, including this request     $1,240,000          $0    $1,240,000 
Remaining amount to be authorized              $0          $0          $0 
Annual Budget Status and Source of Funds 
This project (CIP #C800846) was included in the 2017-2021 capital budget and plan of finance
with a budget of $3,139,000. The budget decrease was transferred to the Non-Aeronautical
Allowance (C800405). The funding source will be the Airport Development Fund. 
Financial Analysis and Summary 
Project cost for analysis                 $1,240,000 
Business Unit (BU)                   Airport Dining and Retail 
Effect on business performance (NOI after   NOI after depreciation will decrease 
depreciation) 
IRR/NPV (if relevant)                  19.4%/$2,664,356 
CPE Impact                      N/A 
Future Revenues and Expenses (Total cost of ownership) 
Revenues were calculated based on an average gross sales and rent to the Port on a per
location basis over the ten (10) year life of the project. Anticipated average annual gross sales
from these 8 Intermediate Kiosks are projected to be $5,400,000 or $54,000,000 over the ten
(10) periods. Anticipated average annual rent to the Port is $540,000 or $5,400,000 over the
ten (10) year period. 
Ongoing maintenance costs can be held to a minimum if kiosks are standardized and input from
Aviation Maintenance is included relative to the accessibility, quality, and integrity of the units. 
ATTACHMENTS TO THIS REQUEST 
(1)   Presentation slides 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None 





Template revised September 22, 2016; format updates October 19, 2016.