COMMISSION 
AGENDA MEMORANDUM                        Item No.          10a 
ACTION ITEM                            Date of Meeting       June 27, 2023 

DATE:     June 16, 2023 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Rick Duncan, Director, Aviation Business & Properties 
Eileen Francisco, Director, Aviation Project Management Group 
Ben Brookman, Managing Director of Airport Affairs, Alaska Airlines 
SUBJECT:  SEA Gateway/North Main Terminal Redevelopment Program (C801204) - FGMP &
Phase B Supplemental Construction Funding 
Amount of this request:               $46 million 
Total estimated project cost:         $546 million 
ACTION REQUESTED 
Request Commission authorization for the Executive Director to 1) authorize $46,000,000 of
supplemental funding to meet current building code requirements and complete Phase B
construction, 2) approve the Final Guaranteed Maximum Price of $546,000,000 for the overall
program, and 3) execute a Tenant Reimbursement Agreement (TRA) with Alaska Airlines, Inc.
(Alaska) for this portion of the work of the North Main Terminal Redevelopment Program at
Seattle-Tacoma International Airport.
EXECUTIVE SUMMARY 
This request is to authorize an increase of the Program budget by $46 million to meet current
building code requirements in the construction work area and approve the Final Guaranteed
Maximum Price (FGMP) for the overall Program at $546 million. Phase B construction redevelops
Alaska’s ticket lobby in Zones 6 & 7, reconfigures Security Screening Checkpoint #5, and updates
associated building systems and finishes. 
On March 28, 2023, staff reported to the Commission that establishing the final Phase B
construction cost and the FGMP for the overall Program had been delayed until the full extent of
the additional work required was established. At that time, the estimated cost to complete these
items, including associated Port and Alaska soft costs, was $50 million. 
JUSTIFICATION 
Under this authorization, the Program team is pursuing construction funding for these additional 
scope items, which include: 

Template revised January 10, 2019.

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Meeting Date: June 27, 2023 

1.  Providing 2-hr fire rating compliance at vertical utility shafts within the Program scope of
work. 
2.  The addition of fire sprinklers inside Skybridges 2 through 6 to allow occupancy of the
newly constructed tenant and operational spaces on the Bridge/Promenade level. 
3.  The addition of a two-way communication system at several elevator lobbies within the
Program footprint that have been identified as areas of refuge for mobility limited 
individuals. 
4.  The addition of supplementary electrical infrastructure required to support connection to
an emergency backup power system being installed by a future project. 
5.  Renovating the restrooms adjacent to Security Screening Checkpoint #5 to comply with 
emergency exiting requirements. 
6.  Providing additional exit signage at Baggage Claim. 
These code-related items were originally intended to be addressed by future projects currently
being planned. The Authority Having Jurisdiction (AHJ) determined that they needed to be shifted
instead to this Program’s scope of work to allow occupancy once the work is completed. 
Other key work elements related to the baggage handling system, signage and wayfinding, HVAC 
and smoke control have continued to evolve during design and the updated costs for these have 
been added to the Program scope. 
Phase A design is currently at 100% and Phase B design is at 90%. The budget reconciliation by
the Port’s third-party estimator has been completed with <5% variance between their estimate
and the cost model provided by the Design Build team. 
Finally, this Program also supports the Port’s Century Agenda’s strategic goal of “Advancing this
region as a leading tourism destination and business gateway” by: 
•       Continuously improving operational efficiency and customer experience at the Airport. 
•       Strengthening the competitiveness of the Airport in the regional and global marketplace. 
•       Meeting  the  region’s  air  transportation  needs  by  delivering  vital  facilities  and 
infrastructure in a sustainable and cost-effective manner. 
Diversity in Contracting 
Diversity in Contracting has established a Women/Minority Business Enterprise (WMBE)
aspirational goal of 15% for the Port’s consultant support procurement. Alaska has separately
established a 20% WMBE/Small Business Enterprise (SBE) combined goal for their consultant
support and for construction. 


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

             COMMISSION AGENDA – Action Item No. 10a                                 Page 3 of 8 
Meeting Date: June 27, 2023 
Currently the Port’s consultant support services contract is achieving 26% WMBE utilization, and
Alaska’s consultant support and construction teams are attaining 15% SBE/WMBE utilization. The 
Design Build team is approximately 50% complete with buying out the project scope and are
increasing their WMBE/SBE outreach to attain this goal. 
DETAILS 
Alaska is completing this work under a multi-phased Tenant Reimbursement Agreement (TRA)
using the Progressive Design Build (PDB) project delivery method. 
The construction work is divided into two distinct phases. 
Phase A (Q4 2022 – Q2 2026) 
•    Construct approximately 24,000 square feet of new tenant and operational space on the
Bridge/Promenade level. 
•    Install structural upgrades and provide building systems infrastructure throughout the
Baggage Claim level to support the construction of the Bridge/Promenade level. 
•    Install ADA compliant ramps at nine Baggage Claim exit doors. 
•    Relocate three entry doors on the Departures Drive to improve passenger flow. 
•    Create ‘bump-outs’ at the window walls on the Ticketing level to provide additional space
for passenger check-in and bag drop. 
•    Remove asbestos containing material and install fire sprinklers throughout the work
areas. 
•    Upgrade/refresh architectural finishes, signage, and lighting throughout the work areas. 
Phase B (Q3 2023 – Q3 2026) 
•    Remove the Mezzanine level above Alaska’s existing ticketing Pods. 
•    Reconfigure the northernmost section of the Mezzanine. 
•    Reconfigure Alaska’s Ticketing areas and Checkpoint #5. 
•    Remove asbestos containing material and install fire sprinklers throughout the work
areas. 
•    Upgrade/refresh architectural finishes, signage, and lighting throughout the work areas. 
The Program team is implementing the Sustainable Design Approach (SDA) approved by the
Sustainability Environment and Climate (SEAC) Committee on February 21, 2023. The Program is 
also applying strategies toward the achievement of a United States Green Buildings Council’s
(USGBC) Leadership in Energy and Environmental Design (LEED) Silver Certification for
Commercial Interiors on Phase B construction. 
Schedule 
The PDB project delivery method includes several overlaps between many of these design and
construction milestones, with the result that some activities in both Phase A and Phase B will
take place concurrently. 

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

             COMMISSION AGENDA – Action Item No. 10a                                 Page 4 of 8 
Meeting Date: June 27, 2023 

Activity 
Phase A construction start                                                  2022 Quarter 4 
Execution of TRA #3                                                       2023 Quarter 1 
In-use date – Phase A                                                       2024 Quarter 2 
Commission authorization revised Phase A construction & TRA #4          2022 Quarter 4 
Execution of TRA #4                                                       2023 Quarter 2 
Commission authorization initial Phase B construction & TRA #5            2023 Quarter 1 
Execution of TRA #5                                                       2023 Quarter 3 
Final Guaranteed Maximum Price (FGMP), Phase B construction & TRA #6   2023 Quarter 2 
Execution of TRA #6                                                       2023 Quarter 3 
Phase B construction start                                                  2023 Quarter 3 
Phase B In-Use-Date                                                      2026 Quarter 2 
This multi-phased approach allows Alaska to continue to develop work packages quickly, while
affording both Alaska and the Port clear project decision points to ensure alignment of scope,
schedule, and budget. 
The reimbursement of project funds to Alaska is also occurring in phases (as outlined above).
Each of these decision points includes a TRA or TRA amendment to memorialize the agreement
between the Port and Alaska. 
• On April 27, 2021, the Commission authorized up to $10 million for both Alaska and Port
costs to complete up to 30% design and an associated TRA with Alaska.
• On  November 9, 2021, the Commission  authorized  an additional $21.5  million to
complete the remaining design of the overall program and an associated TRA with Alaska.
• On December 14, 2021, the Commission authorized an additional $149.5 million for Phase
A construction and an associated TRA with Alaska.
• On October 25, 2022, the Commission authorized $159.5 million to construct the revised
scope of Phase A and enabling work to facilitate Phase B construction and an associated
TRA with Alaska.
• On March 28, 2023, the Commission authorized $159.5 million for Phase B construction 
and final design for new scope addressing code compliance and an associated TRA with
Alaska.
• This request seeks authorization for a further $46 million for Phase B construction to
address several pre-existing building code compliance issues in the construction work
area and approve the Final Guaranteed Maximum Price (FGMP) for the overall Program
at $546 million. 



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

             COMMISSION AGENDA – Action Item No. 10a                                 Page 5 of 8 
Meeting Date: June 27, 2023 

Cost Breakdown 
Previous           This            Program
Requests        Request           Total 
Complete PDD and 30% Design            $9,000,000             $0        $9,000,000 
Design – Phases A and B                  $16,900,000               $0       $16,900,000 
Phase A Construction                    $140,500,000              $0      $140,500,000 
Phase A Supplemental Construction       $75,000,000              $0       $75,000,000 
Phase B Construction                    $176,900,000               $0      $176,900,000 
Alaska Soft Cost                            $22,700,000               $0       $22,700,000 
Port Soft Cost                              $34,900,000                $0       $34,900,000 
Port-held Contingency                    $21,000,000              $0       $21,000,000 
Code-Related Design                      $3,100,000              $0        $3,100,000 
Phase B Supplemental Construction                $0     $46,000,000       $46,000,000 
Total                                       $500,000,000     $46,000,000      $546,000,000 
Itemization of Additional Funding Request 
Address Existing Code Compliance Issues: 
Provide Additional Infrastructure for Emergency Power System                $5,000,000 
Provide 2-way Communication at Elevator Areas of Refuge                    $2,000,000 
Allowance for Vertical Utility Shaft Repairs                                      $3,500,000 
Renovate Restrooms Next to Security Screening Checkpoint #5                $6,000,000 
Install Fire Sprinklers Inside Skybridges 2-6                                        $2,000,000 
Provide Additional Exit Signage on Baggage Claim Level                         $500,000 
Design Development: 
Baggage Handling System                                                $1,000,000 
Digital Signage and Wayfinding                                               $3,500,000 
Structural Upgrades (Terrazzo Flooring and SSCP #5 Reconfiguration)          $6,000,000 
HVAC / Smoke Control                                                    $6,500,000 
Fall Protection                                                                     $1,000,000 
Security Blast Film                                                                   $500,000 
Cost of Scope Transfers from Adjacent Projects                                $4,000,000 
Washington State Sales Tax (WSST)                                           $4,500,000 
TOTAL                                                             $46,000,000 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1 – Complete construction of Phase A and limit Phase B construction to work already
started. 
Cost Implications: ~$350 million 
Pros: 
(1)   Reduces the Port’s capital expenditure. 

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

             COMMISSION AGENDA – Action Item No. 10a                                 Page 6 of 8 
Meeting Date: June 27, 2023 
(2)   Eliminates scope, schedule, and budget uncertainties due to inflation and supply chain
disruptions. 
Cons: 
(1)   Does not achieve the desired capacity improvement on the Ticketing level or at Security
Screening Checkpoint #5. 
(2)   Does not implement desired technology improvements. 
(3)   Does not address all existing code inadequacies. 
(4)   Does not provide all base building infrastructure upgrades. 
(5)   Design and soft costs associated with Phase B construction would need to be expensed. 
This is not the recommended alternative. 
Alternative 2 – Proceed with Phase A and Phase B to complete the full North Main Terminal
Redevelopment Program scope. 
Cost Implications: $546 million 
Pros: 
(1)   Achieves the desired capacity improvements on the Bridge/Promenade and Ticketing
levels and at Security Screening Checkpoint #5. 
(2)   Upgrades the restrooms adjacent to Security Screening Checkpoint #5. 
(3)   Implements the desired technology improvements. 
(4)   Addresses existing code and ADA inadequacies. 
(5)   Provides base building infrastructure upgrades. 
Cons: 
(1)   Risk of continuing scope, schedule, and budget uncertainties due to inflation and supply
chain disruptions. 
This is the recommended alternative. 
FINANCIAL IMPLICATIONS 
Cost Estimate/Authorization Summary               Capital        Expense              Total 
COST ESTIMATE 
Early estimated program cost                  $350 - $450 million                $0   $350 - $450 million 
Current estimated program cost                     $541,000,000       $5,000,000        $546,000,000 
AUTHORIZATION 
Previous authorizations                              $495,000,000       $5,000,000         $500,000,000 
Current request for authorization                      $46,000,000                $0          $46,000,000 
Total authorizations, including this request            $541,000,000        $5,000,000         $546,000,000 
Remaining amount to be authorized                           $0               $0                   $0 


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

             COMMISSION AGENDA – Action Item No. 10a                                 Page 7 of 8 
Meeting Date: June 27, 2023 
Annual Budget Status and Source of Funds 
This project, CIP C801204, was included in the 2023-2027 capital budget and plan of finance with
a budget of $400,000.000. A budget increase of $141 million was transferred from the
Aeronautical Allowance1 CIP (C800753) resulting in zero net change to the Aviation capital
budget. The funding sources will be revenue bonds and Airport Development Fund (ADF). This
project received Majority in Interest (MII) airlines approval on December 13, 2021. The budget
increase was submitted to the airlines for additional Majority-In-Interest approval on May 22,
2023, and received a YES vote on June 23, 2023. 
Financial Analysis and Summary 
Project cost for analysis              $546,000,000 
Business Unit (BU)                  Terminal Building 
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                       $1.33 in 2027 
Future Revenues and Expenses (Total cost of ownership) 
It is anticipated that there will be increased costs to ongoing operating and maintenance work
performed by Aviation Maintenance (AVM) in the new North Main Terminal space. AVM will
continue to work through design challenges while also anticipating increased O&M costs. 
ATTACHMENTS TO THIS REQUEST 
(1)   Presentation slides 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
March 28, 2023 – North Main Terminal Redevelopment Program – Phase B Construction
Funding  Authorization  (C801204)  which  authorized  $156,400,000  for  Phase  B
construction, transfer of $1,559,000 from the Main Terminal Low Voltage Program,
$3,100,000 for final design addressing existing building code compliance, and to execute
a fifth Tenant Reimbursement Agreement with Alaska Airlines, Inc. (Alaska). 
October 25, 2022 – North Main Terminal Redevelopment Program – Phase A Supplemental 
Construction  Funding  Authorization  (C801204)  which  authorized  an  additional
$159,500,000 to continue Phase A construction, and to  execute a fourth Tenant
Reimbursement Agreement with Alaska Airlines, Inc. (Alaska). 

1 The Aeronautical Allowance is included in the Capital Improvement Plan to ensure funding capacity for
unspecified projects, cost increases for existing projects, new initiatives, and unforeseen needs. This ensures funding
capacity for unanticipated spending within the dollar amount of the Allowance CIP. 

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

             COMMISSION AGENDA – Action Item No. 10a                                 Page 8 of 8 
Meeting Date: June 27, 2023 
December 14, 2021 – North Main Terminal Redevelopment Program – Phase 1 Construction
Funding Authorization (C801204) which authorized $149.5 million for construction of the
Phase 1 Enabling Work of the North Main Terminal Redevelopment Program at Seattle-
Tacoma International Airport, and to execute a third Tenant Reimbursement Agreement
with Alaska Airlines, Inc. (Alaska) to complete the Phase 1 construction work. (Note: Phase
1 is now known as Phase B.) 
November 9, 2021 – North Main Terminal Redevelopment Program – Full Program Design
(C801204) which authorized $21.5 million for the remaining design for all phases of the
North Main Terminal Redevelopment Program,  and execution of a second Tenant
Reimbursement Agreement with Alaska Airlines. 
April 27, 2021 –  North Main Terminal Redevelopment Program –  Preliminary Design
(C801204) which authorized up to $10 million in support of the North Main Terminal
Redevelopment Program to complete a Project Definition Document, 30% design and to
execute a Tenant Reimbursement Agreement with Alaska Airlines. 












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