PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6c 
ACTION ITEM 
Date of Meeting     January 6, 2015 
DATE:    December 30, 2014 
TO:      Ted Fick, Chief Executive Officer 
FROM:   James R. Schone, Director, Aviation Business Development 
Wayne Grotheer, Director, Aviation Project Management 
Janice Zahn, Assistant Director, Engineering 
SUBJECT:  Doug Fox Site Improvements (CIP #C800451) 
Amount of This Request:         $427,000   Source of Funds:   Airport Development
Fund 
Est. Total Project Cost:          $6,930,000 
Est. State and Local Taxes:        $424,800 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to: 
1.  Authorize an additional $427,000 to complete the construction of the Doug Fox Site
Improvements project at Seattle-Tacoma International Airport, and 
2.  issue change orders to extend the construction contract duration by up to 180 days to
complete changed work associated with the operations building. The total amount of thi s
request is $427,000 for a total project cost of $6,930,000. 
SYNOPSIS 
Nearly consuming the entire construction contingency budget, a number of issues during
construction have delayed the completion of the Doug Fox Site Improvements project by up to
six months. The delays are attributed to: 
A value engineering effort, 
Delayed cover inspections by the WA State Department of Labor and Industries, and 
Anticipated delays with the remaining work. 
The $427,000 requested increases the project soft costs to complete and closeout the project,
covering the cost impacts resulting from the six month schedule delay, and provides additional
construction contingency to cover risks associated with the remaining project work.  The
construction contract time extension of up to 180 calendar days is needed to reconcile the
impacts to the contractor's construction schedule. Staff is currently evaluating entitlement for
cost impacts associated with the schedule delays that have already been completed and will issue

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 30, 2014 
Page 2 of 7 
separate change order(s) as appropriate. The six month delay has also impacted the tenant and
has resulted in a request for rent relief. Staff will be requesting Commission authorization for
rent relief under a separate action at a later meeting. 
BACKGROUND 
The Doug Fox parking lot (see Attachment A) is currently operated by a third party operator 
(ATZ, Inc.) as an off-site surface parking lot at Seattle-Tacoma International Airport (Airport).
The lot has been utilized primarily for automobile parking since its development well over
twenty years ago.
Original Design and Construction Authorization 
In February 2012, the Port of Seattle Commission authorized the design and construction of the 
Doug Fox Site Improvements project that included stormwater and pavement improvements. In
May 2012, the Port of Seattle Commission authorized the design of the Doug Fox Parking Lot
Service Upgrades project that included pavement restoration, lot lighting, improved signage, and
potentially operations and customer service facilities. At that time the two projects were
consolidated into one combined project for a total project budget of $6,123,000. 
Following Commission approval of design funds, staff initiated a public request for proposals
(RFP) process for a new operator in anticipation of the expiration of the then-current lease
agreement in September 2012. As a result of that RFP process, ATZ was selected and Port staff
initiated negotiations that were  concluded in early 2013. The Commission approved the new
lease with ATZ in July 2013 and ATZ's new agreement commenced on October 1, 2013. The
agreement is for five years with two, five-year options based on mutual consent. 
Addition Authorization 
In July 2013, the Port of Seattle Commission also authorized the construction of the Doug Fox
Site Improvements project that included stormwater management facilities, pavement
restoration, lot lighting, improved signage, a new operations building, a new covered entrance
and exiting facility, demolition of the existing building, and supporting utilities for a total project
budget of $5,118,000. In September 2013, the bids were opened for the project, and since the
lowest responsive bid exceeded the engineer's estimate by more than ten percent, additional
authorization by the Port of Seattle Commission was required. In October 2013 , the Port of
Seattle Commission authorized the additional budget to support the bid, for a total project budget
of $6,503,000, and the contract was executed with the successful bidder later that month. 
Issues Behind Delay 
The critical path for completing the project includes the construction of a new operations
building, the demolition of the existing building, and the construction of a new covered entrance
and exiting facility. At the time the construction contract was executed  the project was
anticipated to be complete by the end of September 2014. A number of issues have delayed the
construction and there is anticipated or potential risk in completing the remaining work that
results in a forecasted completion date of March 2015 (six months of delay). The issues causing
the delay include the following:

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 30, 2014 
Page 3 of 7 
Delayed procurement of the operations building in order to conduct a value engineering
exercise given the high bid cost for this portion of the work. Several options were
evaluated over a two-month period resulting in the change of the design for the
operations building.
Delayed cover inspections of the operations building required by Washington State
Department of Labor and Industries, due to their staffing constraints, which extended the
manufacturing and shipping dates of the modular building.
Anticipated  additional delays in obtaining beneficial occupancy of the operations
building due to additional work required to correct a design omission (connection for
building fire alarm system) and in delayed tenant occupancy of the building once it is
available for use. 
Anticipated additional delays with the demolition of the existing building and
construction of the new covered entrance and exiting facility. These include: 
o  Risks for unknown conditions during the demolition of the existing building, 
o  Completion of the utility work for the new covered entrance and exiting facility, 
o  Completion of the power and communication systems for the ATZ security
camera system, 
o  Weather delays for the remaining pavement work as the construction work
extends into the wet weather months, and 
o  Beneficial occupancy/tenant occupancy of the new covered entrance and exiting
facility. 
New Authorization Request 
Staff requests authority to execute multiple change orders to extend the construction contract
duration by up to 180 days due to changed work associated with the operations building. Staff is
currently evaluating entitlement for cost impacts associated with the schedule delays that have
already been completed and will issue separate change order(s) as appropriate. 
The project has nearly consumed the original construction contingency budget of $400,000 based
on the costs already incurred and those projected to be spent. The major issues that have
occurred to date include an unknown non-uniform existing pavement section, unknown utility
conflicts with the utility improvements in South 170th Street, errors and omissions with the
power and communication systems for the new covered entrance and exiting facility, and
resultant contractor overhead costs for the extended construction duration.
The requested increase includes additional soft costs (design, project management, construction
management, testing/inspection, construction safety, survey, central procurement office,
administration, and environmental) to cover the six month delay to complete construction. The
additional construction contingency is to cover potential risks anticipated to complete the
remaining contract work. These funds are necessary in order to complete and close out the

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 30, 2014 
Page 4 of 7 
project.  The current project costs, including the remaining contract commitments, are
anticipated to exceed existing authorized funds by year-end 2014. 
PROJECT JUSTIFICATION AND DETAILS 
The lease and construction of the upgrades by the project provides the Airport has the
opportunity to increase parking revenues from this improved facility. The facility represents an
important element of the Port's Airport parking business with annual Port revenues regularly
surpassing $2 million. 
Project Objectives 
The Port's objective is to increase revenues generated from the facility. An enhanced customer
experience will result from the improvements enabling the facility to offer a more competitive
parking product in the Airport parking market. 
Scope of Work 
The scope of work for the project includes stormwater management facilities, pavement
restoration, lot lighting, improved signage, a new operations building, new customer service
facilities (cashier booths, canopy over entrance/exit lanes), demolition of the existing building,
and supporting utilities. 
Proposed Schedule 
Construction Notice to Proceed: January 2014 
Construction Complete: February/March 2015 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original Budget                      $6,073,000      $50,000    $6,123,000 
Budget Changes                      $771,287      $35,713     $807,000 
Current Revised Budget                 $6,844,287      $85,713    $6,930,000 
Previous Authorizations                 $6,417,287      $85,713    $6,503,000 
Current request for authorization              $427,000          $0      $427,000 
Total Authorizations, including this request     $6,844,287       $85,713    $6,930,000 
Remaining budget to be authorized               $0          $0          $0 
Total Estimated Project Cost              $6,844,287      $85,713    $6,930,000 
Project Cost Breakdown                     This Request       Total Project 
Design Phase                               $87,000         $1,234,000 
Construction Phase                           $337,842         $5,271,200 
Sales Tax                                   $2,158          $424,800 
Total                                       $427,000         $6,930,000

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 30, 2014 
Page 5 of 7 
Budget Status and Source of Funds 
The Doug Fox Site Improvements (#C800451) project is included in the 2015-2019 capital
budget and plan of finance with a total capital budget of $6,453,000. Additional budget of
$477,000 was transferred from the Non-Aeronautical Allowance (#C800405) to provide a total
budget of $6,930,000. As a result of this transfer, there is no change to the total Airport capital
budget. The funding source for this project is the Airport Development Fund. 
Financial Analysis and Summary 
This financial analysis is more fully explained in the accompanying request for Commission
authorization related to an amendment to the lease with ATZ, Inc. The information shown below
matches the accompanying memo. 
CIP Category           Revenue/Capacity Growth 
Project Type             Business Expansion/New Business Development 
Risk adjusted Discount rate   8% 
Key risk factors            Construction risks: the project may encounter unexpected
delays due to unforeseen issues, such as contaminated
soils, which may increase the cost of the project and/or
cause schedule delays. 
Financial risks: general economic conditions will impact
the parking market and if general economic declines occur
in the future, future incremental revenues may fall short of
forecasts. 
A timeframe of 15 years was included in the financial
analysis, covering the initial five-year lease and two fiveyear
extensions. There is risk associated with a potential
future conversion of the property to non-parking use, and
lease terms associated with future extensions. 
Project cost for analysis      $6.93 million 
Business Unit (BU)         Landside 
Effect on business         The financial analysis assumes that with construction of the
performance            project improvements at the facility, annual revenues to the
Port will increase. Current revenues to the Port are
approximately $2 million to $2.5 million per year. Within
five years of implementation of the improvements, annual
revenues are anticipated to increase by close to $1.5 
million. Within ten years, annual revenues are anticipated to
exceed $5 million. 
IRR/NPV            NPV: $1.24 million 
IRR: 9% 
Payback: 10 years 
CPE Impact            None

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 30, 2014 
Page 6 of 7 
Lifecycle Cost and Savings 
The tenant is responsible for the ongoing maintenance and operations costs for the facility per
the terms of the lease. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1)  Reduce the project scope. Under this alternative staff would take the steps
necessary to execute change orders to the project to reduce the scope in order to keep the total
project costs under the existing authorized amount. This would result in a partially completed
facility that would have a negative impact on the incremental revenues and the overall financial
performance. In addition, the Port of Seattle would not meet its commitments per the terms of
the lease. This is not the recommended alternative. 
Alternative 2)  Authorize additional funds. Under this alternative the Commission authorizes
the additional funds necessary to complete the project. This would result in a completed facility
that would support achievement of the forecasted financial performance. In addition, the Port of
Seattle would meet its commitments per the terms of the lease.  This is the recommended
alternative. 
ATTACHMENTS TO THIS REQUEST 
Attachment A  Doug Fox Parking Lot Vicinity Map and Site Photos 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
On December 2, 2014, the Port of Seattle Commission was presented, but deferred taking
action to authorize an additional $427,000 to complete construction and to issue changes
orders to extend the construction contract by up to 180 days to complete changed work. 
On October 8, 2013, the Port of Seattle Commission authorized the Chief Executive Officer
to execute a major public works construction contract with the low responsive and
responsible bidder for an additional $1,385,000 for a total authorization of $6,503,000. 
On July 9, 2013, the Port of Seattle Commission authorized the Chief Executive Officer to:
(1) advertise, award, and execute a major public works contract for the Doug Fox Site
Improvements project; and (2) execute a Developer Extension Agreement with the Valley
View Sewer District for an additional $3,322,000, for a total authorization of $5,118,000. 
On June 4, 2013, the Doug Fox Site Improvements project was presented to the Port
Commission but no final action was taken. 
On March 5, 2013, the Port Commission postponed consideration of the Doug Fox Site
Improvements project. 
On May 22, 2012, the Port Commission authorized the Chief Executive Officer to: (1) 
increase the scope of the Doug Fox Site Improvements project to include resurfacing,
lighting, building, and road signage; (2) to execute utility agreements; and (3) to complete the
design of the project for an additional $768,000, for a total authorization of $1,796,000.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
December 30, 2014 
Page 7 of 7 
On February 4, 2012, the Port Commission authorized the Chief Executive Officer to
complete the design and to utilize Port Construction Services crews for the construction of
the Doug Fox Site Improvements project in the amount of $1,028,000.