PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6a 
ACTION ITEM 
Date of Meeting    November 24, 2015 
DATE:    November 16, 2015 
TO:      Ted Fick, Chief Executive Officer 
FROM:   Wayne Grotheer, Director, Aviation Project Management Group 
Michael Ehl, Director, Aviation Operations 
SUBJECT:  South Satellite Interior Renovations project at Seattle-Tacoma International
Airport (CIP #C800549) 
Amount of This Request:        $2,435,000   Source of Funds:   Airport Development
Fund 
Est. Total Project Cost:          $4,356,000 
Est. State and Local Taxes:        $265,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to execute a contract to
construct Phase Two of the South Satellite Interior Renovations project at Seattle-Tacoma
International Airport. This request is for $2,435,000  of a total estimated project cost of
$4,356,000. 
SYNOPSIS 
This project will make interior renovations to the mezzanine and departure levels of the South
Satellite. The elimination of large, bulky backstands; modernization of boarding door portals and
the upgraded finishes will help travelers feel they are in a lighter, more inviting and updated
facility. Our airline customers have told us these changes are an important part of making the
Airport the West Coast "Gateway of Choice" for international travel.
Phase Two of this project includes: 
New podiums and backstands 
New door portals 
New wall panels in the escalator banks and concourse level 
Phase One included: new carpet, new vending alcoves, removal of old unused signage,
consolidation of payphones, replacement of water fountains to include new dual water bottle
filling stations and fountains, and new paint. Construction was completed in June 2015. 


Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
November 16, 2015 
Page 2 of 7 
In November 2014, the airlines approved this project through a majority-in-interest vote. The
airline carriers still agree this project is in the best interest of the Port, airlines and traveling
public, by providing a better overall passenger experience. 
A new project is planned to renovate the South Satellite, however the earliest it could be
completed is 2023. At a meeting of the International Sea-Tac Airline Managers Association
convened on October 7, 2015 the international carriers in attendance unanimously reaffirmed
their support for the completion of Phase Two now. 
BACKGROUND 
The South Satellite was constructed in the early 1970s, at the same time as the North Satellite, 
and is in need of renovation similar to the NorthSTAR project. In 2014 ten of the eleven carriers
that operate at the South Satellite sent letters to the Airport Managing Director requesting
modifications and upgrades to the terminal to enhance the overall customer experience. An
$18M project that would include most of the airline requested modifications and upgrades had
been proposed in earlier years. After reviewing the initial scope of that project, staff determined
that the project could complete some scope items quickly to improve customer experience while
others were more appropriate to include in a future comprehensive renovation of the South
Satellite. 
This project emerged as a way to provide targeted reasonably priced improvements that could
meet the short term needs of the airlines and traveling public until the more comprehensive
renovations would be undertaken in the future. Certain improvements, like paint, vending alcove,
casework replacement, new wall panels and door portals could be completed relatively quickly
and inexpensively when compared to more expensive and intrusive work like ceiling or lighting
replacement. Since any of these improvements would be difficult to save during a complete
renovation, a smaller targeted investment makes more sense now, in order to meet the needs of
the airlines and travelers. 
The project was broken into two phases. The first phase, authorized in December 2014 included
work that required little design and could be completed quickly, such as wall paint and carpet
replacement. This phase was completed June 2015 with a budget savings of approximately
$600,000 from the estimated cost of $1,900,000. The second phase (this request) required more
detailed design and construction activity phasing based on operational activities and thus is only
now ready to proceed. 
PROJECT JUSTIFICATION AND DETAILS 
The South Satellite, with the exception of the west end, was last updated in the 1990s, when new
carpet was installed. Many of the original 1970s finishes remain today. Passengers flying
through or departing from the South Satellite, the international gateway to and from the Puget
Sound region, should be provided with the experience expected from a major modern
international airport, with newer clean modern finishes.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
November 16, 2015 
Page 3 of 7 
The gate podium casework is outdated, does not allow light into the interior of the satellite and
does not match the new gate standards established in 2013. The white wall panels were part of
the original construction, and the pink wall panels on some interior public walls installed in the
1980s are old and outdated. The gate boarding door portals which serve as entrances to the
loading bridges are original to the building and should be replaced with new doors with modern 
signage door and security hardware. 
Project Objectives 
Improve the declining tenant and customer satisfaction and feedback related to the look and feel
of the departure experience in the South Satellite. 
Scope of Work 
This project will make interior renovations to the mezzanine and departure levels of the South
Satellite. These Phase Two improvement include: 
New podiums and backstands 
New wall panels in the escalator well and on the concourse level 
New gate boarding door portals 
Schedule 
Commission Authorization for Design                       3rd Quarter 2014 
Commission authorization for Construction Phase One             4th Quarter 2014 
Phase One Work Complete                            2nd Quarter 2015 
Commission Authorization for Construction Phase Two            3rd Quarter 2015 
Issue Notice to Proceed Phase Two                          1st Quarter 2016 
Construction Complete                                3rd Quarter 2016 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary             Capital     Expense   Total Project 
Original Budget                     $18,900,000    $1,829,000    $20,729,000 
Budget Adjustments                 ($15,674,000)    $(699,000)   $(16,373,000) 
Revised Budget                     $3,226,000    $1,130,000     $4,356,000 
Previous Authorizations                 $1,331,000     $590,000     $1,921,000 
Current request for authorization            $1,895,000      $540,000     $2,435,000 
Total Authorizations, including this request     $3,226,000    $1,130,000     $4,356,000 
Remaining Budget to be Authorized               $0         $0          $0 
Total Estimated Project Cost               $3,226,000    $1,130,000     $4,356,000 
Project Cost Breakdown                     This Request       Total Project 
Design Phase                                  $0          $971,000 
Construction Phase                          $2,228,000         $3,120,000 
State & Local Taxes                           $207,000          $265,000 
Total                                      $2,435,000         $4,356,000

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
November 16, 2015 
Page 4 of 7 
Budget Status and Source of Funds 
The South Satellite Interior Renovations project, CIP #C800549 was originally included in the
2014 capital plan with a budget of $18.9 million. The scope and budget was reduced when it
became clear that the South Satellite would need a full renovation sooner than originally
anticipated. The capital budget of $3,197,000 was included in the 2016  2020 capital budget and
plan of finance. The figure above reflects a recent shift from expense to capital to reach the
current capital budget of $3,226,000. Due to the planned renovation of the South Satellite, these
improvements will have an economic life of approximately 4-6 years. The expense budget
increase (reflecting scope items that do not qualify as capital improvements) were included in the
2015 operating budget. The funding source for both capital and operating costs will be the
Airport Development Fund (ADF). 
Financial Analysis and Summary 
CIP Category             Renewal/Enhancement 
Project Type              Renewal and Replacement 
Risk adjusted discount rate     N/A 
Key risk factors             N/A 
Project cost for analysis        $4,356,000 
Business Unit (BU)          Terminal 
Effect on business performance  NOI after depreciation will decrease 
IRR/NPV             N/A 
CPE Impact             $0.03 in 2017 
Lifecycle Cost and Savings 
The existing conditions in the South Satellite have been in place for 20 to 40 years. The life
expectancy for these systems and finishes has been exceeded, in some cases drastically. The new
systems and finishes are not expected to have significant repair over their life span. Preventative
maintenance costs will be consistent with the current maintenance program. 
STRATEGIES AND OBJECTIVES 
This project supports the Century Agenda strategy of "advancing this region as a leading tourism
destination and business gateway" by providing targeted improvements to the departure level of
the South Satellite. 
TRIPLE BOTTOM LINE 
Economic Development 
This project represents an investment in our current facilities and supports the long-term vitality
of the airport, airlines and Airport tenants. This project also provides an opportunity to help 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 and cargo
service through providing a pleasing experience for passengers.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
November 16, 2015 
Page 5 of 7 
Environmental Responsibility 
The project design team has specified materials for use in this project that can be sourced locally,
recycled and re-used or refurbished. 
Community Benefits 
Updating the South Satellite will improve the experience of millions of international and
domestic visitors that travel through the facility each year. The project manager will collaborate
with the Office of Social Responsibility (OSR) to maximize small business participation. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1)  Status Quo  Cancel Phase Two of the project. 
Cost Estimate: This would save $3.4M but approximately $160,000 in design fees would need to
be expensed. 
Pros: 
This alternative would result in capital savings. 
No construction disruption to a building planned to be renovated in 6 years. 
Cons: 
No updates to the oldest building at the Airport that has not undergone a major
renovation. 
The airlines have already approved and are expecting these interim improvements. 
Approximately $160,000 will need to be expensed that could otherwise be amortized
over 5 years as capital cost. 
This is not the recommended alternative. 
Alternative 2)  Eliminate the door portals from the scope of this project. 
Cost Estimate: $850K 
Pros: 
This alternative would result in capital savings. 
Potential cost savings if the door portals will only be removed/replaced as part of a future
South Satellite renovation project. 
Cons: 
Uncertain if the portals would be retained in a major renovation. 
Approximately $3K is being spent per year on repairs to the doors. 
The project team investigated ways to improve the portals in the short term but there are
no viable alternatives, as they are made of plastic laminate and cannot be painted.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
November 16, 2015 
Page 6 of 7 
The international air carriers have clearly expressed displeasure with the condition of the
facility. 
This is not the recommended alternative. 
Alternative 3)  Do not replace the podiums and backstands. 
Cost Estimate: $1.9M 
Pros: 
This alternative would result in capital savings. 
Potential cost savings if the podiums and backstands will only be removed/replaced as
part of a future South Satellite renovation project. 
Cons: 
The existing podiums are dated and are not uniform in appearance across the concourse. 
Uncertain if the podiums and backstands would be retained in a major renovation. 
Lost revenue if the carriers decide to take their business elsewhere. 
This is not the recommended alternative. 
Alternative 4)  Delete concourse wall panels from the scope of this project. 
Cost Estimate: $900K 
Pros: 
This alternative would result in expense savings. 
Potential cost savings if the wall panels will only be removed/replaced as part of a future
South Satellite renovation project. 
Cons: 
Uncertain if the wall panels will be retained in a major renovation. 
Lost revenue if the carriers decide to take their business elsewhere. 
This is not the recommended alternative. 
Alternative 5)  Delete only the escalator wall panels from the scope of this project. 
Cost Estimate: $200K 
Pros: 
This alternative would result in expense savings.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
November 16, 2015 
Page 7 of 7 
Potential cost savings if the wall panels will only be removed/replaced as part of a future
South Satellite renovation project. 
Cons: 
Uncertain if the wall panels will be retained in a major renovation. 
Lost revenue if the carriers decide to take their business elsewhere. 
This is not the recommended alternative. 
Alternative 6) - Proceed with all components of Phase 2. 
Cost Estimate: $3.4M 
Pros: 
Making the changes carriers have requested. 
Add the appearance of additional light coming into the now dark and dreary South
Satellite. 
The international airlines that serve the Airport have unequivocally voiced their support
for this project moving forward and believe these improvements are necessary now to get
through the next 5 years until construction of a major renovation begins. 
Cons: 
Uncertain if any portion of this project will be retained in a major renovation. 
This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
PowerPoint presentation 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
December 9, 2014  The Commission authorized construction of Phase One of this
project. 
August 5, 2014  The Commission authorized design funds for the South Satellite
Interior Renovations project.