PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.    6c_attach_b 
ACTION ITEM 
Date of Meeting    December 8, 2015 
Attachment B: 

Subject: North Satellite Renovation & North Satellite Transit Station Lobbies (NSAT) Project (CIP
#C800556) at Seattle Tacoma International Airport 

SYNOPSIS 
The NorthSTAR program, which is a collaboration of the Port and Alaska Air Group (AAG), intends to
create and promote a user-friendly "curb-to-seat" passenger experience through the integration of
facility improvements, technology, and airline services. The Port and AAG share common goals for the
North Satellite (NSAT) including: improved passenger experience, increased customer level of service,
passenger comfort, and compliance with applicable codes to ensure life safety.  A key factor in
renovating and expanding the North Satellite is meeting the Port's and AAG's vision, project objectives,
and programming requirements. 
Port staff is requesting an increase in project authorization of $98,100,000 for additional preconstruction
services (up to $1,200,000) and to commence preliminary  construction work. To allow for this
preliminary  construction  work,  port  staff  is  requesting  authority  to  amend  the  General
Contractor/Construction Management contract with Hensel Phelps. This amendment would include a
revision to an existing limit on the value of any preliminary construction work (currently, no more than
10% of the estimated MACC). Finally, in order to secure flexibility as to when specific preconstruction
services and preliminary  work are authorized,  Port staff does not intend to include all of the
preconstruction service and preliminary construction work in a single amendment, but instead is
requesting the authority to execute change orders to the amended contract to authorize individual
elements of the scope identified in this memo, all within the revised budget limit. As the final design
and permitting of the base building expansion and renovation is being completed, undertaking the
preliminary work package allows preparatory construction to begin and continuing preconstruction
services benefits the constructability and maintains the overall project schedule. A portion of the
additional preconstruction services covers efforts to reconcile the estimated cost of the project support
the value engineering efforts, develop an optimal construction phasing plan, and will also cover the
delays experienced in completing the 60% design phase. This would bring the total authorization for the
project to $161,218,800. 
Staff also requests authorization to execute a project specific contract for construction auditing services 
as per the requirements of the Regulatory Code of Washington  (RCW)  for the  General
Contractor/Construction Manager contract with Hensel Phelps. 


Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 8, 2015 
Page 2 of 10 
On March 17, 2015, the Commission previously authorized the use of Port Crews for preliminary
construction and during the NSAT building expansion. Port crews may also perform portions of the
work now being requested. 
Based on the completion of 60% design and reconciliation of the estimated cost, the preliminary NSAT
project cost estimate has increased by $79.5 million from $421.7 million established in March 2015 to
$501.2 million, a growth of 19%. The growth in the estimated cost and initial value engineering cost
reductions  are detailed below. Though value engineering efforts continue, there are insufficient
reductions to achieve the original project budget. However, the project team is not recommending the
budget be increased until bid results for the preliminary work are received in February 2016 to validate
whether actual market conditions, subcontractor pricing, and labor or subcontractor shortages have
escalated as currently estimated. These data will be essential to finalizing the estimated cost of the
project. Staff currently forecasts the estimated cost of the project to range between $470,000,000 and
$490,000,000 as of the date of this memo and will update the Commission in March 2016 after actual
preliminary work bid results and market conditions have been analyzed and the design has progressed
further toward completion. 
This project is being coordinated with the Sustainable Airport Master Plan (SAMP) and will not be
adversely affected by future development recommendations of SAMP. 
BACKGROUND 
In August 2014, the Commission approved a budget of $405,532,944 which increased the project scope
to expand the building by five additional aircraft gates to a total of twenty gates, and the use of a
General Contractor/Construction Manager contractor for the North Satellite construction. In March
2015, the Commission approved the current budget of $421,682,944 with the addition of $14,400,000
for expansion of the baggage handling system within the expanded portion of the building and transfer
of the previously authorized Satellite Transit System tunnel leak repair project. Commission also
authorized use of $4,900,000 of the NSAT budget in March 2015 for preparatory work for construction
offices, relocating loading bridges, a dynamic display system for the north loop of the satellite train
system, and reimbursement to Puget Sound Energy for a natural gas connection to the satellite. 
At the completion of the 30% design phase in October 2014, thirteen (13) additional scope items were
added to the project for further refinement and evaluation during 60% design and the revised 60%
project budget is now estimated at $501.2 million. The possibility existed that added costs might be
covered within the design allowance or other project contingencies of the estimate during 60%
development. The potential impact of these scope additions on the budget has been continually 
identified as a risk in the Q4 2014 and 2015 NorthSTAR Quarterly Updates to the Commission. With
the completion of the 60% design, the current project cost estimate would increase the budget by $79.5 
million or 19%.This revised estimate has been reconciled by the Port with the designer's and the
General Contractor/Construction Manager's  independent estimates.  The result has been a more
accurate, but higher estimated cost to accomplish the project. 
The most significant contributing factor to the increased current budget estimate, representing about half
of the $79.5 million increase, is the thirteen added scope items now estimated at $35.4 million, up $5.4

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 8, 2015 
Page 3 of 10 
million from the $30 million estimated at the completion of 30% design. Market conditions in
combination with the more developed 60% design represent the other major factors contributing $33.8
million in increases that include: updated subcontractor pricing, labor inefficiencies due to now known
project logistics, construction worker travel time and new security requirements, impact of the market
conditions that continued to strengthen since the 30% estimate, increased knowledge of construction
methods and means and constructability impacts/costs, further progression of the design from 30% to
60% resulting in more accurate cost estimating, increased materials quantities identified in the more
detailed design, and establishing more detailed level of finishes. A final factor is the increased asbestos
remediation resulting from more extensive fireproofing overspray removal required based on several
design decisions.
An extensive value engineering effort is being conducted with over 50 items identified for review. The
priority focus is on scope items that maintain the base program objectives followed by items that require
more analysis due to modifications to Port standards and/or program objectives. Evaluation factors
include construction cost savings, maintenance/life cycle cost impacts, passenger experience,
operational impacts, additional design fee impacts, and schedule impacts. To date, approximately $18.5 
million in cost savings have been identified and are being incorporated into the project with minimal
impact to the schedule.  The Port is continuing validation of the estimated cost ranging from $470-490
million with the General Contractor/Construction Manager contractor. Uncertainty in the final projected
budget will remain, though value engineering efforts continue to seek additional cost reductions, until
the General Contractor/Construction Manager Contractor bids the project and the Port and Contractor
negotiate the maximum allowable construction cost (MACC). 
In accordance with the Letter of Understanding between the Port and Alaska Airlines Group (AAG)
dated April 5, 2012, the Port will seek AAG's concurrence for various project elements, in particular, for
construction phasing and the project budget. The Port continues to collaborate with AAG to optimize 
the construction phasing and the revised project budget and is working to obtain AAG's concurrence on
both aspects prior to this action. 
PROJECT JUSTIFICATION AND DETAILS 
In order  to maintain the overall project schedule  and realize the benefit of the General 
Contractor/Construction Manager contracting methodology, staff is recommending the preliminary work
design and construction package move forward  separate from and ahead of the base building
design/construction package. The preliminary work package includes preparatory work in advance of 
the more extensive Phase 1 building expansion and the subsequent Phase 2 renovation of the existing
building.  The preliminary work package allows construction to begin while the final design and
permitting of the base building and extension is completed thus maximizing resources to maintain the
project schedule.  The cost estimate for the preliminary work is $98.1 million. This  construction
authorization is in addition to the $3.5 million previously authorized on March 24, 2015 for relocation of
loading bridges, for a total of $101.6 million construction authorization. 
Staff will solicit and contract for project specific independent construction auditing services. The use of
existing Indefinite Delivery Indefinite Quantity (IDIQ) contracts were considered but are not viable

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 8, 2015 
Page 4 of 10 
options due to the duration of this project and the General Contractor/Construction Manager contract
with Hensel Phelps.
Staff requests the preconstruction services being provided by Hensel Phelps continue until the Phase 1
construction of the building is underway, currently forecast to begin July 2016.  Significantly more
hours have been spent on preconstruction services than originally anticipated due to delays incurred 
concluding the 60% design and additional effort required for reconciling the cost of the project,
conducting value engineering efforts, and optimizing the construction phasing plan. An additional cost
of $1,200,000 is estimated for these preconstruction services. The cost for the audits and additional
preconstruction services are both included in the $98.1 million authorization request and the overall
budget. 
Project Objectives 
Extend the length of NSAT by approximately two hundred forty feet to improve customer
service and accommodate additional aircraft and passengers. 
Seismically strengthen NSAT and expand the existing infrastructure. 
Balance and integrate NSAT functional areas and requirements (concessions, holdrooms,
amenities, airline operations and airline services) through a renovation and expansion of the
NSAT's terminal area to achieve acceptable levels of service. 
Align near term and forecasted airport-wide gate use and capacity by providing a total of 20
contact gates at NSAT. 
Optimize gate door contact points, loading bridges and aircraft parking positions, including fuel
hydrants and other support utilities. 
Meet or exceed current sustainability goals of the Century Agenda with potential LEED
certification. 
Create a "frictionless" and stress-free passenger experience within NSAT. 
Create an exciting and attractive facility integrating hold-rooms, diverse amenities and numerous
concessions. 
Maintain and promote a Northwest sense of place through the design of architecture and
connected technologies. 
Scope of Work 
This request includes the following elements associated with the requested authorizations: 
Preliminary work to relocate  existing passenger loading bridges and aircraft positions,
reconfigure fuel pits, relocate gate infrastructure, re-route site utilities, construct access stairs for
ground boarded aircraft, mass excavation, shoring, concrete panels and drill shaft foundations,
purchase and install a section of fixed loading bridge, selective demolition, construct a
waterproof enclosure the north end of the building, and purchase the structural steel, vertical
circulation components, major electrical and mechanical equipment, fuel hydrants, curtainwall
system and other long-lead items for the entire project.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 8, 2015 
Page 5 of 10 
Conduct independent construction auditing to comply with the requirements of RCW 39.10.385
(11) to confirm the proper accrual of costs as outlined in the General Contractor/Construction
Manager contract with Hensel Phelps. 
Additional preconstruction services for Hensel Phelps to continue to undertake cost estimating
and validation, participate in value engineering, construction phasing, and subcontractor bidding
for construction. 
Ongoing key elements associated with the overall NSAT renovation and expansion is: 
Renovation of concourse level finishes, structure, and amenities 
Expansion of the NSAT STS, baggage and concourse levels by up to nine structural bays 
Addition of 5 new NSAT aircraft gates with passenger loading bridges to be provided by AAG
(for a total of 20) 
Seismic reinforcement 
Addition of an Alaska Airlines premium traveler lounge (Alaska Board Room) 
NSAT Train System lobby enhancements construction (including the NSAT, Concourse C and
Main Terminal stations) 
Expansion, renewal and replacement of mechanical, electrical, plumbing, vertical transportation,
and communication systems 
Aircraft taxi lane changes around the NSAT 
Significant sustainability features and components 
Design development of the north end ramp level to integrate baggage operations with other ramp
and building requirements. 
Schedule 
Preliminary Work Package Design Completion              2nd Quarter 2016 
Preliminary Work Package Construction Start               2nd Quarter 2016 
Preliminary Work Package Construction Complete            4th Quarter 2017 
Base Building 90% Design Complete                    3rd Quarter 2016 
Base Building 100% Design Compete                   4th Quarter 2016 
Base Building Construction Start                        4th Quarter 2017 
Base Building Construction Complete                    4th Quarter 2020 

FINANCIAL IMPLICATIONS 
Budget/Authorization Summary            Capital      Expense     Total Project 
Original Budget                     $194,300,000     $5,000,000   $199,300,000 
Previous budget increase                $221,582,944      $800,000   $222,382,944 
Proposed budget increase                       $0          $0          $0

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 8, 2015 
Page 6 of 10 
Revised budget                     $415,882,944     $5,800,000   $421,682,944 
Previous Authorizations                 $62,118,800     $1,000,000    $63,118,800 
Current request for authorization            $95,600,000     $2,500,000    $98,100,000 
Total Authorizations, including this request    $157,718,800     $3,500,000   $161,218,800 
Remaining budget to be authorized         $258,164,144     $2,300,000   $260,464,144 
Total Estimated Project Cost             $415,882,944     $5,800,000   $421,682,944 
Note: The estimated cost of the project is currently forecasted at $470-490 million. The final estimated
project cost will be determined after the Port and Contractor negotiate the final Maximum Allowable
Construction Cost (MACC) based on actual bid results. 
Project Cost Breakdown                        This Request      Total Project
Budget 
Construction Phase                           $90,415,000     $334,344,600 
Design Phase                                    $0      $58,386,744 
State & Local Taxes (estimated)                    $7,685,000      $28,951,600 
Total                                       $98,100,000     $421,682,944 
Budget Status and Source of Funds 
This project is included in the 2016  2020 capital budget and plan of finance with a budget of $415.8 
million. The possible  budget increase,  if  approved,  would  be transferred from the Aeronautical
Allowance CIP (C800404) resulting in no net change to the Aviation Division capital program. The
project will be funded with a combination of Airport Development Fund, revenue bonds and Passenger
Facility Charge revenues (PFCs). 
The terms under which AAG will participate in the Port's NorthSTAR Program costs have been
established via an April 5, 2012, Letter of Understanding between the Port and AAG. The airlines will
be briefed in the second or third quarter of 2016 with regard to the increase in budget. The formal
majority-in-interest (MII) project approval process outlined in the Signatory Lease and Operating
Agreement (SLOA) may be utilized, with the Port submitting a ballot to the airlines seeking approval of
the increased project budget. Under SLOA, the Port as an option may elect to use Management Reserve
funds in lieu of the MII approval process. The requested authorization for the Preliminary Work
Package is within the current MII approved amount.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 8, 2015 
Page 7 of 10 
Financial Analysis and Summary 
CIP Category             Renewal and Replacement 
Project Type              Terminal Infrastructure 
Risk adjusted discount rate     N/A 
Key risk factors             N/A 
Project cost for analysis        $422M 
Business Unit (BU)          Terminal 
Effect on business performance  NOI after depreciation will increase 
IRR/NPV             N/A 
CPE Impact             $1.32 by 2021. The actual CPE impact for this project
could be lower depending on the amount of PFCs applied
to construction costs and on revenue bond debt service. 
Lifecycle Cost and Savings 
An adequate estimate of staff hours and materials expense to operate the expanded and renovated NSAT
building is still in development as the project elements are being refined and specifically defined
regarding product, materials, and equipment. However, staff will provide an accurate estimate as design
progresses. It is already understood that the additional expansion area will incur additional maintenance
expense.  A key objective of the project is installing sustainable materials and to maximize the
maintainability of the new equipment.   The complete renovation/replacement of the mechanical, 
electrical, baggage and other major systems  provides an opportunity to achieve life cycle cost
efficiencies and savings. 
STRATEGIES AND OBJECTIVES 
This project supports the Port's Century Agenda objective of meeting the region's air transportation
needs at Sea-Tac Airport for the next 25 years. This project also supports the Aviation Division's
strategy of anticipating and meeting the needs of our tenants, passengers, and the region's economy. 
The NSAT expansion is also in alignment with Airport master plan development objectives that identify
the NSAT as the most logical location for near-term expansion of Airport capacity. 
TRIPLE BOTTOM LINE 
Economic Development 
This project will increase the long-term ability of the Airport to serve the airlines and AAG's future
growth. With the airport facing record growth, this project cost effectively adds new gates to benefit the
airport-wide gate shortfall. It also meets AAG's growth needs by expanding the satellite and renovating
the existing building with entirely new systems. 
Environmental Responsibility 
The North Satellite renovation project allows the Port unique opportunities to incorporate sustainable
features into the design and construction of the facility. The project scope has been developed to meet

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 8, 2015 
Page 8 of 10 
the project objectives, the Port Century Agenda goals, and the Airport's Environmental Strategy. Port
staff has engaged AAG in developing the environmental aspects and process. Each scope item has been
evaluated individually based upon the total cost of ownership for the expected life of the facility. The
specific scope features include: 
Energy conservation for building infrastructure. 
Water conservation for the facility including rainwater harvesting for use in the building. 
Construction and operations waste minimization. 
Incorporation of new technology. 
Exceed current building codes.
This project intends to pursue Leadership in Energy and Environmental Design (LEED) for this project
and will continue to evaluate other environmental initiatives as the design progresses. 
Community Benefits 
Project managers are coordinating with the Office of Social Responsibility to maximize small business
participation opportunities including, but not limited to,  Small Contractors and Suppliers (SCS)
participation in accordance with Small Business Resolution No. 3618. 

ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternate 1 - Current Schedule: Proceed with current expansion/design project scope and phasing with
or without AAG concurrence. This is the recommended alternative. 
PROS: 
Maintains Port's programmatic objectives including addition of necessary gates, improved
NSAT customer services and operations, increased non-airline revenues, etc.
Achieves Port functional and design objectives.
Savings will be achieved by value engineering. 
CONS: 
Project current cost estimate exceeds approved $421 million budget and is forecasted to range
between $470,000,000 and $490,000,000. 
Project current cost estimate is greater than 10% above the budget approved in the MII, requiring
airline MII vote or use of SLOA management reserve.
Working on AAG concurrence but proceeding without AAG could risk damage to airline/airport
relationships. 
Alternative 2 - Defer project budget and Preliminary Work Package authorization until January 2016. 
PROS: 
Provides additional time to further reconcile the budget cost estimate before seeking
authorization, and provides time for AAG concurrence if not already obtained.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 8, 2015 
Page 9 of 10 
CONS: 
Delays construction start 4-8 weeks at an estimated cost of $2 - $4 million.
Alternative 3 - Redesign NSAT project to existing budget. 
PROS: 
Maintain existing budget. 
CONS: 
Requires significant elimination or reduction of core project scope items.
Will not achieve all project objectives/quality/passenger experience goals, operational and
business goals, or LEED Certification.
Redesign delay estimated at 12 months and $15 - $20 million.
Total scope reduction may still not result in budget savings needed to maintain budget.
ATTACHMENTS TO THIS REQUEST 
None 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
November 24, 2015  NorthSTAR Program status update and NSAT budget briefing 
July 14, 2015  NorthSTAR Program status update 
April 28, 2015  NorthSTAR Program status update 
March 28, 2015  The Commission authorized three NSAT related items: 
o  Expand the baggage handling system increasing the project scope for $14,400,000 and
authorizing $1,954,000 to complete the design. 
o  Entering into a developer agreement with Puget Sound Energy and authorizing $200,000
in reimbursement for the design and construction of underground gas infrastructure. 
o  Authorized $5,300,000 to 
Prepare four locations to accommodate temporary passenger loading bridges, to
construct temporary construction offices. 
To complete construction of a Satellite Transit System (STS) North loop Dynamic
Display system. 
$600,000 in expense funds for regulated materials management for AAG's tenant
improvement project. 
Approval to use Port crew labor and small works contractors to complete early
project work. 
January 27, 2015  NorthSTAR Program Status Update 
January 6, 2015  The Commission authorized (1) $5,000,000 preconstruction services; (2)
execution of a General Contractor/Construction Manager contract for preconstruction services;
and (3) transfer of scope, $1,750,000 budget and authorization for STS station roof replacement
to the North Satellite Renovation and Expansion project. 
October 28, 2014  NorthSTAR Program Status Update

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 8, 2015 
Page 10 of 10 
August 5, 2014  Commission authorized an estimated $191,323,143 to expand the NSAT by 8
additional gates, an additional $15,717,800 for design completion, and use of the General 
Contractor/Construction Manager alternative public works contracting procedure for NSAT
expansion construction procurement. 
July 22, 2014 - NSAT Expansion Briefing. 
April 16, 2014  Seattle-Tacoma International Airport Capital Program  Briefing. 
January 14, 2014  NorthSTAR Program status update and initial NSAT Expansion briefing. 
September 24, 2013  NorthSTAR Program status update. 
September 24, 2013  The Commission authorized staff to: (1) advertise, award, and execute a
major public works contract for the construction of the NSAT Refurbish Baggage System
Project; and (2) authorize the use of Port crews. 
June 25, 2013 NorthSTAR Program status update. 
May 28, 2013, Commission authorized the execution of separate service agreements for
Construction Management Services and Commissioning Services, of approximate values of $10
million and $1.5 million. 
April 9, 2013  The Commission authorized the Chief Executive Officer to enter into a project
labor agreement covering the NorthSTAR program's five major construction projects. 
March 26, 2013 NorthSTAR Program status update. 
December 11, 2012  The Commission was briefed on the Vertical Conveyance Modernization
Project Aero Phases 1 and 2 and the possibility of adding the specified elevators and escalators to
the NorthSTAR program. 
July 24, 2012 - Commission authorized $32,000,000 for the design of the NorthSTAR NSAT 
Renovation and NSTS Lobbies project. 
June 26, 2012 - The Port Commission was briefed on the NorthSTAR program by Wayne
Grotheer, Director Aviation Project Management Group. 
April 10, 2012 - The Commission authorized the execution of consultant contracts for design and
construction support services; program management services; and the completion of site surveys
for regulated materials management, in the amount of $1,200,000.