COMMISSION 
AGENDA MEMORANDUM                        Item No.          10a 
ACTION ITEM                            Date of Meeting      March 23, 2021 
DATE:     March 16, 2021 
TO:        Stephen P. Metruck, Executive Director 
FROM:    James Jennings, Director, Aviation Business and Properties 
Wayne Grotheer, Director, Aviation Project Management 
SUBJECT:  Post IAF Airline Realignment (C801158) 
Amount of this request:            $  26,000,000 
Total estimated project cost:       $ 102,000,000 
ACTION REQUESTED 
Request Commission authorization for the Executive Director to (1) execute project specific
Service Agreements for project management, construction management, design services, and
testing and special inspections; (2) to utilize a General Contractor/Construction Manager (GCCM)
and execute a GCCM construction contract for pre-construction services; (3) to use port crews;
and (4) to execute a Memorandum of Agreement (MOA) between the Port of Seattle (Port) and
United Airlines in support of the Post IAF Airline Realignment Project at Seattle-Tacoma
International Airport (SEA). The total authorization request is $26,000,000. 

EXECUTIVE SUMMARY 
Concourse A at SEA has been used solely for flights that do not need to be cleared by United
States Customs and Border Protection (CBP). With the opening of the International Arrivals
Facility (IAF), these gates will have direct access to CBP clearance and thus having airlines with
preferential leasing rights of gates that do not need this capability is undesirable. United Airlines
currently has 3 gates preferentially leased on Concourse A but has no SEA operations that require
CBP clearance. Therefore, this project will relocate United Airlines' facilities, to Concourse B and
move Delta Air Lines' (who does have SEA operations that require CBP clearance) facilities, from
Concourse B into vacated facilities on Concourse A. Please note, specific gate assignments will be
determined in accordance with lease terms. 
This project will also reconfigure the ticket counters at Zone 4 by demolishing an Airport Dining
and Retail facility to make room for additional counters to support international airline
operations. 


Template revised January 10, 2019.

COMMISSION AGENDA  Action Item No. __10a__                             Page 2  of 6
Meeting Date: March 23, 2021 
JUSTIFICATION 
Under the 2018-2022 Signatory Lease and Operating Agreement ("SLOA IV") between the Port
and many Airlines, Article 5.2 allows the Airport, at its sole discretion, to reallocate Premises
(other than Gates) among the Airlines at SEA. This provision (commonly referred to as "Airline
Realignment") allows the airport to "rebalance" facilities to achieve an overall airport-wide
operational or capacity benefit. Over the last two years, the Port has negotiated the proposed
plan with significant engagement by all Airlines. The Airlines have reviewed and accepted the
recommended alternative. 
Our international gating policy (as enumerated in Exhibit D to SLOA IV) states that international
flights have priority for accommodation on international capable gates. United Airlines faces the
very distinct possibility of being forced off their preferential gates on Concourse A to hardstand
operations during the international peak. This would create significant inefficiencies for United
Airlines and diminish the benefit of their preferential rights as well as their overall level of service. 
Airline Realignment provides the following benefits: 
(1)  Allows  for  accommodation  of  increased  simultaneous  wide  body  international
operations associated with the IAF 
(2)  Improves overall international to domestic minimum connect times 
(3)  Limits domestic carrier preferential lease of international capable gates 
(4)  Ensures international flights have improved access to the Concourse A, IAF-connected
gates 
(5)  Ensures  enough  space  is  available  to  accommodate  the  contemplated  moves,  or
construct space without increasing the overall building footprint 
(6)  Minimizes the operational impacts to the Airlines 
Diversity in Contracting 
The project team has worked with the Diversity in Contracting team to understand the womenand
minority-owned business enterprise (WMBE) aspirational goals for the project management,
construction management, design, testing & special inspections and GCCM contracts. The goals
for  project  management,  construction  management  and  design  are  8%,  12%  and  15%
respectively. The testing & special inspections, and GCCM goals will be modified as design
progresses and the scopes of work are further developed. 
DETAILS 
Project Specific Service Agreements for Project Management, Construction Management, Design
Services and Testing and Special Inspections 
These authorizations are needed as internal resources are not readily available to effectively
manage this project. The total value of these contracts will be $20,000,000. 


Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. __10a__                             Page 3  of 6
Meeting Date: March 23, 2021 
GCCM Construction Contract for Pre-construction Services 
This authorization will allow Port staff to procure and engage the subject matter expertise of a
GCCM for pre-construction services. The GCCM may include additional disciplines to provide the
following services which will allow for better scheduling and cost control during the design phase
of the project: 
1.  The GCCM will provide an extensive survey of existing conditions at Concourses A and B.
As-built documents are often incorrect, incomplete, or spread over multiple project
documents. Early engagement and access to the site by the GCCM will allow for a more
informed and complete design from the Design Team. 
2.  The GCCM will provide a construction estimate at each major design milestone. This
approach will assist with the project team's goal of scope and budget control. The GCCM
will provide essential input on project phasing. Concourses A and B are occupied. With
early involvement, Port staff aims to minimize change orders and operational & customer
service impacts by providing the GCCM early input and access to the site and design
documents. 
Future authorization will be sought for the final construction contract between the Port and the
GCCM. Port staff may also return for authorization that will allow for enabling work or early work
packages to be completed. This project will require a Project Labor Agreement. 
Scope of Work 
This project will remodel ramp level operational space at Concourses A and B to prepare them
for airline use. Additional office and support space will be built on Concourse B for United Airlines.
Up to four (4) gates and accompanying casework at Concourse B will be reconfigured to comply
with Port standards. To support the additional ramp level spaces on Concourse B, upgrades will
be made to the existing ramp level restrooms and additional restrooms will be constructed to 
satisfy building code requirements. These will be non-public facing restrooms. There is currently
not enough Heating, Ventilation and Air Conditioning (HVAC) capacity (chilled and hot water) on
Concourse B to support the build-out of additional space. There is a future capital project planned
to upgrade the entire HVAC system on Concourse B. The Airline Realignment project will be
responsible for upgrades to the existing HVAC system only where new space will be created on
Concourse B. 
This project will also reconfigure the ticket counters at Zone 4 by demolishing an Airport Dining
and Retail facility to allow space for additional counters and baggage conveyors to support
international airline operations. 
United Airline's Baggage Service Office (BSO) will be relocated from its current location by
Baggage Claim 1 to the existing Central Employee Screening location. The Airline Realignment
project has included budget for the design and construction of this work and will transfer the
funds directly to the Checkpoint 1 project to complete. This transfer is necessary in order to keep
the Checkpoint 1 project on schedule as United's BSO existing space will be converted for
checkpoint use, to be completed by Checkpoint 1 project. 

Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. __10a__                             Page 4  of 6
Meeting Date: March 23, 2021 
United Airlines will self-perform the construction of their new lounge on Concourse B under a 
MOA with the Port. Under the SLOA IV provision, the Port is obligated to pay to relocate any
impacted airline, and endeavors to create a "like for like" condition in future spaces. 
Scope of Work                                   Capital, Expense, or Both 
Concourse B Ramp Expansion                              Capital 
Concourse B Ramp  Modify Vacated Space                 Expense 
UA BSO                                               Capital 
UA  B Gates Reconfigure & Casework                       Capital 
Concourse A Ramp  Leasable Space                       Expense 
Zone 4 CUSE Reconfiguration                               Capital 
POS Meter Shop Relocation                                Expense 
Concourse B Ramp Restrooms                             Both 
Concourse B HVAC Upgrades                              Capital 
Relocate POS Baggage Optimization Team                  Expense 
UA Lounge MOA                                      Both 
Schedule 
Activity 
Design start                                       2021 Quarter 3 
Commission construction authorization          2022 Quarter 3 
Construction start                                2022 Quarter 4 
In-use date                                       2024 Quarter 3 
Cost Breakdown                                     This Request           Total Project 
Design                                                 $26,000,000            $26,000,000 
Construction                                                     $0            $76,000,000 
Total                                                        $26,000,000           $102,000,000 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Several alternatives were reviewed that moved carriers to different locations. The preferred
alternative is described below. 
Alternative 1  Continue to operate as-is with United staying on Concourse A and Delta on
Concourse B 
Cost Implications: $0 
Pros: 
(1)   Lowest cost alternative 


Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. __10a__                             Page 5  of 6
Meeting Date: March 23, 2021 
Cons: 
(1) This alternative would not follow through with the Port's commitment to realign Airline
carriers to better support future IAF airline operations. 
(2) This alternative does not achieve any of the Port's criteria, except for minimizing the
financial impacts to the Airlines. 
(3) United Airlines would be subject to being bumped off their preferential gates by an
International carrier when Common Use availability is insufficient at time of peak
demand. 
(4) Concourse A international-capable gates, occupied by United Airlines, would be the last
available gates for use by international operations. 
(5) This would not align with airline negotiations which took close to two years to negotiate. 
This is not the recommended alternative. 
Alternative 2  Relocate United Airlines critical facilities from Concourse A to Concourse B and
move some limited Delta Air Lines offices from Concourse B to Concourse A, while also readying
the offices vacated by United on Concourse A for future occupancy by other tenants. 
Cost Implications: $102,000,000 
Pros: 
(1)   This alternative has been reviewed and accepted with the Airlines. 
(2)   Allows United, an exclusively domestic carrier at SEA, to free up more IAF-connected
gates for international use 
(3)   Best achieves the Port's airline realignment criteria 
Cons: 
(1)   Significant cost to airline cost centers without increased capacity benefits 
This is the recommended alternative. 
FINANCIAL IMPLICATIONS 
Cost Estimate/Authorization Summary              Capital        Expense           Total 
COST ESTIMATE 
Original estimate                                $35,000,000     $35,000,000     $70,000,000 
Current change                               $34,000,000    ($2,000,000)    $32,000,000 
Revised estimate                               $69,000,000     $33,000,000   $102,000,000 
AUTHORIZATION 
Previous authorizations                            $200,000               $0        $200,000 
Current request for authorization               $18,000,000      $8,000,000     $26,000,000 
Total authorizations, including this request      $18,200,000      $8,000,000     $26,200,000 
Remaining amount to be authorized           $50,800,000    $25,000,000    $75,800,000 

Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. __10a__                             Page 6  of 6
Meeting Date: March 23, 2021 
The Port will use one of its cost estimating consultants to do an independent estimate of the
project cost at 30% design, per Aviation Project Management procedures for projects greater
than $50,000,000. 
Annual Budget Status and Source of Funds 
This project, CIP C801158, was included in the 2021-2025 capital budget and plan of finance with
a capital budget of $35 million and an expense budget of $35 million for a total cost of $70 million. 
The refined budget estimate requires an overall cost increase of $32 million, with a $34 million
increase to the capital portion of the costs. Consequently, $34 million was transferred from the
Aeronautical Reserve CIP (C800753) resulting in zero net change to the Aviation capital budget.
The expense components are estimated to be $502K in 2021, $4.9M in 2022, $4.9M in 2023,
$17.5M in 2024 and $5.4M in 2025 and will be included in annual operating budgets. The funding
source will be Airport Development Fund for operating expense and future revenue bonds for
capital. 
Financial Analysis and Summary 
Project cost for analysis              $102,000,000 
Business Unit (BU)                  Gates 
Effect on business performance     NOI after depreciation will increase due to inclusion of
(NOI after depreciation)             capital (and operating) costs in airline rate base. 
IRR/NPV (if relevant)                N/A 
CPE Impact                       CPE of expenses between $.02-$.67 in 2021-2025 
CPE of capital $.18 starting in 2026 
Future Revenues and Expenses (Total cost of ownership) 
As a result of this project, approximately 7,500 additional square feet will be built and a significant
amount of space within the existing terminal will be remodeled.  Aviation Maintenance
anticipates that there will be impacts and an increase to the Operating & Maintenance (O&M)
costs associated with the mechanical systems and the Electronic Technicians. The extent of these
impacts and costs will be further determined during the design phase of the project. Impacts to
the electrical systems do not appear to be significant presently. 
ATTACHMENTS TO THIS REQUEST 
(1)   Presentation slides 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None 


Template revised June 27, 2019 (Diversity in Contracting).