AGENDA MEMORANDUM                        Item No.          6a 
ACTION ITEM                            Date of Meeting      January 17, 2017 
DATE:     January 11, 2017 
TO:        Ted Fick, Chief Executive Officer 
FROM:    Jeffrey Brown, Director Aviation Facilities and Capital Programs 
Wayne Grotheer, Director, Aviation Project Management Group 
SUBJECT:  South Satellite (SSAT) HVAC Replacement/Upgrade (CIP #C800798) 
Amount of this request:               $1,300,000 
Total estimated project cost:         $11,000,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to prepare design and
construction bid documents for the South Satellite Heating Ventilation and Air Conditioning
(HVAC) Upgrade project  at Seattle-Tacoma International Airport. This authorization is for
$1,300,000 of a total estimated project cost of $11,000,000. 
EXECUTIVE SUMMARY 
This project addresses immediate needs for improved reliability and capacity of the SSAT HVAC
system.  Maintaining comfortable heating and cooling is a basic necessity for a satisfying
customer experience. While the Port intends to undertake a major renovation of the SSAT, the
inadequacy of the HVAC system today and its risk of failure make this investment necessary. 
The SSAT was constructed in 1971 and the core mechanical and electrical utilities of the original
concourse have remained largely unchanged since it was built.  Demand on the mechanical
systems has approximately doubled since 1971, primarily from additional cooling load caused
by new electronic systems, increasing passenger traffic, and small facility additions. Portions of
the HVAC system have failed recently due to age and condition. The resulting shutdown for
repairs to obsolescent fans caused a loss of cooling capacity in the SSAT for up to six weeks,
which compromised the passenger experience in the SSAT. Additionally the HVAC system needs
to be modified to accommodate additional Airport Dining and Retail (ADR) units to serve
increased passenger demand in the SSAT. 
Equipment installed as part of this project will most likely not be viable for the planned, larger
SSAT renovation project and the financial analysis assumes this outcome. Consequently, the
capital costs will be amortized over six years. 


Template revised September 22, 2016.

COMMISSION AGENDA  Action Item No. _6a__                               Page 2 of 6 
Meeting Date: January 17, 2017 
JUSTIFICATION 
The Aviation Division Business Plan includes the following strategies that this project supports: 
1.  Operate  a  world-class  international  airport  by  anticipating  and  meeting  needs  of
tenants, passengers, and the region's economy. 
2.  Facilitate/accommodate growth in international operations until a new International
Arrivals Facility (IAF) is completed. 
3.  Managing Airport Assets to minimize long-term total cost of ownership. 
4.  Lead the U.S. airport industry in environmental innovation and minimize the airport's
environmental impacts. 
South Satellite use and growth in passenger volume has increased dramatically in the last three
years. This growth has put a premium on having a smoothly operating and serviceable HVAC
system at the SSAT. The major elements of the system are the air handler and air distribution
boxes, which are now 44 years old  nearly twice their expected useful lives. 
Failures in 2015 of a critical air handler component, the cold deck supply fans, highlight the
need to upgrade at least key components before catastrophic failure causes the SSAT to lose
cooling and ventilation during the summer or heating and ventilation during the winter. 
The solution recommended in this action request takes into consideration that a holistic SSAT
renovation project is planned and that the following improvement projects are running
concurrently: 
South Satellite Structural Improvements (CIP #C800818) 
South Satellite Interior Renovations (CIP #C800549) 
Wi-Fi Enhancement (CIP #C800585) 
Combined, these projects represent a commitment of $31,400,000 and will maximize the level
of service the existing SSAT facility can provide. 
Small Business and Workforce Development 
The project manager will collaborate with the small business team in the Economic
Development  Division  to  maximize  small  business  opportunities  and  apprenticeship
opportunities for disadvantaged communities, as appropriate. 
DETAILS 
Scope of Work 
This project will replace key components of a portion of the SSAT HVAC system. The project will 
replace the constant volume penthouse air handler with a more energy efficient variable
volume system and replace the distribution boxes serving the concourse level. 


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

COMMISSION AGENDA  Action Item No. _6a__                               Page 3 of 6 
Meeting Date: January 17, 2017 
New, replacement equipment included: 
1.  HVAC air handler 
2.  cooling and heating coils 
3.  controls and variable frequency drives 
4.  terminal distribution boxes 
5.  motor control center 
This project will: 
1.  Improve HVAC reliability. 
2.  Provide additional HVAC capacity for concourse level areas and support new tenant
spaces. 
3.  Improve energy efficiency. 
4.  Facilitate maintenance. 
5.  Remove obsolete equipment and infrastructure. 
Within the design and construction phases, there will be opportunities for small and diverse
business utilization.
Schedule 
Activity 
Design start                                       2017 Quarter 1 
Commission construction authorization          2017 Quarter 2 
Construction start                                2017 Quarter 3 
In-use date                                       2018 Quarter 2 
Cost Breakdown                                     This Request           Total Project 
Design                                                  $1,300,000             $1,300,000 
Construction                                                     $0             $9,700,000 
Total                                                         $1,300,000             $11,000,000 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1  Maintain the status quo 
Cost Implications: $0 
Pros: 
1.  This alternative does not require a capital investment. 



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

COMMISSION AGENDA  Action Item No. _6a__                               Page 4 of 6 
Meeting Date: January 17, 2017 
Cons: 
1.  Quality  of  passenger  experience  at  Sea-Tac  Airport  will  continue  to  degrade,  as
adequate cooling to the SSAT concourse level spaces will not be provided.
2.  Could  potentially  lead  to  airlines  insisting  on  processing  departing  passengers  in
severely congested hold rooms on other concourses already being used for other flights.
3.  Does not provide capacity for much needed ADR development. 
4.  Does not provide a dependable or comfortable indoor environment for passengers and
airport users. 
This is not the recommended alternative. 
Alternative 2  Install one additional HVAC system and replace/upgrade all existing HVAC
systems at the SSAT including ductwork, terminal boxes, controls, ceilings, lights, and signage. 
Cost Implications: $40,000,000 capital cost 
Pros: 
1.  Solves all HVAC related issues at the SSAT and provides the best passenger experience. 
2.  Provides coordinated, energy efficient HVAC, lighting, and signage. 
Cons: 
1.  This alternative would be significantly more expensive, would be in advance of the
planned SSAT renovation project and may not be consistent with business plan goals. 
2.  This alternative will almost certainly trigger a requirement for building seismic upgrade
(estimated cost $25 million-$30 million) 
3.  Improvement may not be supportive of SSAT future development. 
4.  This alternative could not be completed in time to meet ADR development timetable. 
This is not the recommended alternative 
Alternative 3  Upgrade the existing HVAC System air handlers, fans, controls, and coils:
reconfigure the ducting and replace the distribution boxes 
Cost Implications: $11,000,000 ( $10,375,000 capital, $625,000  Environmental Remediation
Liability (ERL) for asbestos removal or encapsulation.) 
Pros: 
This alternative provides dependable indoor environmental quality in all seasons on the SSAT
Concourse level for the immediate future. 
This alternative allows the SSAT HVAC system to be operational during the "bridge-years" until
the planned SSAT renovation project. 
1.  This  alternative  aligns  with  the  Century  Agenda  goals  to  meet  the  region's  air
transportation needs at Seattle-Tacoma International Airport for the next 25 years and
encourage the cost effective expansion of domestic and international passenger service. 
2.  This alternative will provide the capacity for the new ADR spaces. 

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

COMMISSION AGENDA  Action Item No. _6a__                               Page 5 of 6 
Meeting Date: January 17, 2017 
3.  This alternative will provide the most energy efficient solution. 
Cons: 
1.  This project will only partially address the under capacity HVAC issue at the SSAT, but it
will provide enough capacity for additional tenant spaces. Additional air handlers are
needed to meet the current and future cooling loads. 
This is the recommended alternative. 
FINANCIAL IMPLICATIONS 
Cost Estimate/Authorization Summary              Capital        Expense           Total 
COST ESTIMATE 
Original estimate                                 $6,000,000        $150,000      $6,150,000 
Current change                                  4,375,000         475,000       4,850,000 
Revised estimate                                10,375,000         625,000      11,000,000 
AUTHORIZATION 
Previous authorizations                             300,000                0         300,000 
Current request for authorization                  1,000,000                0       1,000,000 
Total authorizations, including this request         1,300,000                0       1,300,000 
Remaining amount to be authorized            $9,075,000       $625,000     $9,700,000 
Annual Budget Status and Source of Funds 
The SSAT HVAC project (CIP #C800798) was included in the 2016-2020 capital budget and plan
of finance as a business plan prospective project with a total capital budget of $6,000,000. The
cost increase of $4,375,000 was transferred from the Aeronautical Allowance (CIP #C800753),
resulting in no net change to the capital budget. The environmental remediation will be funded
through the 2017 Operating Budget. Both the capital and expense portions of this project will
be funded by the Airport Development Fund. To resolve the reliability issue, the original scope
of work, for a budget of $6,000,000, was only to replace the equipment in the penthouse air
system. The current scope of work includes reconfiguring the duct system and replacing the
concourse air distribution boxes. The new scope resolves the reliability and capacity issue for
the Concourse HVAC system. 
Due to the planned complete renovation of the SSAT, the estimated life of these improvements
is approximately six years. 



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

COMMISSION AGENDA  Action Item No. _6a__                               Page 6 of 6 
Meeting Date: January 17, 2017 
Financial Analysis and Summary 
Project cost for analysis              $11,000,000 
Business Unit (BU)                  Terminal Building 
Effect on business performance     NOI after depreciation will increase 
(NOI after depreciation) 
IRR/NPV (if relevant)                N/A 
CPE Impact                       $0.02 in 2017, $0.07 in 2018 
Future Revenues and Expenses (Total cost of ownership) 
No future revenues or expenses are anticipated as a result of the completion of this project. 
ATTACHMENTS TO THIS REQUEST 
Presentation slides 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
November 8, 2016  The Commission authorized $3,450,000 for the preparation of
design and construction bid documents, the advertising and execution of a major works
construction contract, and the utilization Port crews for the South Satellite Structural
Improvements (CIP C800818). 
May 24, 2016    The Commission authorized the advertising and execution of
construction contracts for the Wi-Fi Enhancement Project (CIP #C800585) for an
estimated  cost  of  $7,239,000  and  to  increase  the  project's  overall  budget  to
$10,676,000 for additional scope. 
March 22, 2016  The Commission authorized a $6,256,000 construction contract for
the South Satellite Interior Renovations Project (CIP #C800549). 
July 24, 2012  The Commission authorized $6,500,000 for the redesign the SSAT HVAC
systems to meet current and future requirements. The design included adding an
additional  penthouse  system,  replacing  three  existing  systems,  reconfiguring  the
ductwork, and replacing all the distribution boxes. The 2012 estimated costs of these
improvements were about $37 million. The design effort was suspended in 2013 and
canceled in 2014 after staff determined that: 
The SSAT would require a seismic upgrade to facilitate any new systems. 
IAF and SAMP may change the use of SSAT. 
May 3, 2011    The Commission authorized the negotiation and execution of a
professional services contract for design services. No funding was associated with this
authorization. 
September 22, 2009  The Commission was briefing on the condition of the HVAC
systems of the North and South Satellites. 


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