PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.       4f 
ACTION ITEM 
Date of Meeting     April 14, 2015 
DATE:    April 6, 2015 
TO:      Ted Fick, Chief Executive Officer 
FROM:   James R. Schone, Director, Aviation Business Development 
Deanna Zachrisson, Business Leader, Airport Dining and Retail 
Wayne Grotheer, Director, Aviation Project Management Group 
SUBJECT:  Airport Dining and Retail Infrastructure Modifications (CIP #C800638) 
Amount of This Request:        $6,217,000   Source of Funds:  Airport Development
Fund, Future Revenue
Est. Total Project Cost:         $13,953,000 
Bonds 
Est. State and Local Taxes:        $821,000 

ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to (1) authorize award of a
job order contract for construction of portions of the infrastructure modifications associated with
the redevelopment of the Airport Dining and Retail (ADR) program and (2) authorize the use of
Port labor to construct portions of the infrastructure work and space modifications. The total
amount of this request is $6,217,000 out of an estimated total budget of $13,953,000. 
SYNOPSIS 
The Airport's offering of restaurants and shops will soon be in redevelopment as leases begin
expiring this year for the vast majority of units airport-wide. In order to support growth in
business opportunities, jobs and revenues, the ADR program redevelopment requires a number
of changes to the current space configurations of dining and retail units and the infrastructure
supporting these units. 
Much of this work needs to occur between the time existing leases expire and new leases
commence. The timely scheduling of this work will assure that the Port is able to minimize
transition time and costs for new businesses coming into the Airport as well as facilitate the
growth of new jobs. The upgrades for the ADR program will be a unique kind of construction
activity because it must be closely synchronized with the leasing of new spaces. Leasing is a
market-driven process often subject to unforeseen circumstances that may either accelerate or
delay the signing of agreements with future tenants. In order to achieve "just in time" preparation
of spaces for tenants to complete their build-outs, flexibility in the construction schedule will be
critical to the overall success of the redevelopment effort. Staff recommends the use of an
alternative form of contracting called the job order contract method of contracting for a

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
April 6, 2015 
Page 2 of 10 
significant portion of the modification work. It is the  best contracting vehicle for assuring 
flexibility during construction, when many other variables may affect the scheduling of work. 
BACKGROUND 
The overarching objective of this project is to ensure that appropriate utility points of connection
(e.g. water, waste, communications and electrical) are present at lease lines and accessible for
tenant build-outs in a timely fashion. In addition to the utility modifications, specific spaces will
be reconfigured for different and/or improved operational efficiency. The first phase of the
project is anticipated to begin in mid-2015 and continue based on leasing activity, likely through
2016. The scope includes modifications to thirteen dining and retail locations in the Main
Terminal. Two current dining/retail spaces also will be converted to children's play areas in
Concourses B and D. The aim of these changes is to realize a vision for a new ADR program that
creates an extraordinary customer experience; offers diverse, quality restaurants and shops; 
provides new economic opportunity for businesses and people and grows non-aeronautical
revenues for future investments in the airport. 
Contracting Considerations to Accomplish Unique ADR Work 
As detailed in the Alternatives section below, staff evaluated how contracting methods could
accommodate the needs of the overall redevelopment of the ADR program. After careful
consideration, staff recommends that the Port execute a job order contract for a significant
portion of the unit infrastructure upgrades. In the Central Terminal, the overall project includes
the re-configuration of food service spaces, replacement of an existing grease exhaust system and
the installation of two elevators to serve new restaurant spaces on the mezzanine level. This
scope of work is complex, entails more significant changes to the base building facility, and is
therefore beyond the capabilities of the job order contracting method. Therefore, the work in the
Central Terminal will be accomplished via a traditional public works contract. 
The job order contract as a contracting tool is designed to accommodate very specific project
conditions in which an overall project consists of a multitude of smaller repetitive projects that
are similar in scope and anticipated to occur over an extended period of time. The redevelopment
of the Airport Dining and Retail program is clearly consistent with these conditions. The scope
of the infrastructure work affects every part of the main terminal, but it does so in a staggered
and spread out manner throughout the facility. Also, construction is closely synchronized with
leasing activity. A job order contract will allow the Port to complete the construction with the
least amount of impact to customer service, sales and revenue streams and employment
continuity. This 'just in time' approach to infrastructure construction also helps new businesses
manage their unit design schedules more efficiently. 
By statute, a job order contract is awarded for one year with two optional renewal years. The
total contract length cannot exceed three years. Given the duration of the ADR program, staff
will likely return to request authorization for a second job order contract in 2018 as this proposed
contract expires. Also by statute, the job order contact has a not-to-exceed limit of $4,000,000
per year. This limit does not roll over to the option years, but is instead renewed at each option

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
April 6, 2015 
Page 3 of 10 
year. This means that the theoretical total not-to-exceed value and duration available to a job
order contract is $12,000,000 over a three year period. 
Utilizes Subcontractors for Multiple Small Projects 
A job order contract is competitively procured with a general contractor. The project is
completed through a series of work orders. For each work order, a scope of work is negotiated as
each location becomes available. Work orders on a job order contract may not exceed $350,000,
which makes this type of work suitable  for small construction firms  that will act as
subcontractors to the general contractor. By statutory requirement, the general contractor on a
job order contract may self-perform no more than 10% of the work. The general contractor will
use several smaller subcontractors to complete the work with the ability to rotate subcontractors
from work order to work order. 
Traditionally, the Port would procure one or more public works contracts for a project of this
size. However, a large public works contract offers less flexibility for schedule changes and
expedited mobilization of contractors as potentially required by leasing activity, which in turn
could lead to increased costs due to claims and change orders. 
As part of the competitive procurement process, general contractors are required to submit a
proposal, interview, and submit a line item multiplier. A line item multiplier is a percentage that
the general contractor will apply to each line of an estimate for a scope of work for each location
or group of locations submitted to the general contractor for pricing. Both the Port and the
general contractor will develop line item estimates and will then negotiate the final price and
material quantities. An example of this would be if the general contractor would be asked to
build a wall. If the Port's construction estimating tool, RS Means, lists drywall at $100.00 per
square foot, the contractor would add the drywall line item to their estimate and multiply the
$100.00 by their multiplier. For this example, we assume a multiplier of 1.05%. The cost for one
square foot of drywall would be $105.00. When the contract is awarded, the Port will provide
scopes of work to the contractor as spaces become available. The contractor will provide an
estimate for each portion of the work and apply their multiplier to a line item estimate. Once the
Port and the contractor have negotiated the estimate, the Port issues a work order against the
contract to complete the work. 
The specific characteristics of a job order contract as applicable to the dining and retail
redevelopment are: 
Flexibility/Efficiency 
A job order contract is awarded as a not-to-exceed contract limit. The pace and schedule of the
leasing activity will be the driving force behind the construction work. The Port will coordinate
the work as the spaces become available for tenancy. A traditional public works contract would
require that all scope, phasing, and scheduling be identified prior to advertisement, however,
with a job order contract, the Port will identify the types of scope that the contractor will

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
April 6, 2015 
Page 4 of 10 
encounter during the course of the project. With this form of contracting, the Port will be able to
meet the needs of the redevelopment and new tenants in a much more efficient and fluid manner. 
Port-Contractor Collaboration 
Similar to a design/build approach, the job order contract will allow the Port to work in close
collaboration with the contractor during scope creation and scheduling. The Port and the
contractor also can work closely to mitigate risks of disruption while working near on-going
operations and existing utilities. The Port can familiarize the contractor with each space and its
existing conditions in order to create a scope of work that accomplishes what the Port requires
and also benefits from the upfront input by the contractor. Once the scope is created, the Port and
the contractor will negotiate the final cost as described above. Port staff and the contractor will
evaluate each space and be able to determine the scope based on a collaborative site examination. 
This approach means that the contractor will have first-hand knowledge of a project rather than
preparing a bid based solely on drawings of a space as with a standard Public Works contract.
This process also allows the Port to take advantage of the contractor's experience and value
engineering ability. The estimate becomes a fixed price once the work order is issued. 
Increased Small Business Participation 
The infrastructure modification work is a collection of smaller projects. In a job order contract,
the prime contractor can only self-perform 10% of the work  by statute. This creates an
environment that fosters the use of small businesses. Job order contract firms typically rotate
between several small sub-contractors, often times changing sub-contractors from work order to
work order. Instead of one large sub-contractor being awarded large scopes of work, the job
order contract firm can spread the work to multiple small businesses. From 2012-2014, the
Airport's Noise Remedy Project, another program at the Port that is utilizing job order contracts,
(1 closing and the other just starting), have subcontracted approximately 60% of its executed
value with Small Business Enterprise (SBE) firms. 
Construction Cost Risk 
There are inherent risks of cost increases in every construction project regardless of contracting
method. This risk is managed in traditional construction contracting by completing design prior
to advertising for a construction contract. This thereby ensures a better understanding of the
project scope and resulting estimated cost. For this project, the specific risk with use of a job
order contract is that the not-to-exceed contract will be awarded before the completion of
infrastructure designs. After the award of the contract, construction costs could vary from
original estimates based on design requirements that are unknown today. In order to manage this
risk, staff has given careful consideration to developing project cost estimates that include a well
thought out construction contingency. 
PROJECT JUSTIFICATION AND DETAILS 
The redevelopment of the Airport Dining and Retail program over the next several years aims to
maximize the economic and community benefit of a traveler offering that currently generates
$220 million in gross sales and supports 1,600 jobs. Based on forecasts of anticipated passenger

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
April 6, 2015 
Page 5 of 10 
demand for food service, retail and personal services over the next ten years, a redeveloped
program with a fully maximized use of existing and future square footage will grow gross sales
resulting in higher revenues to the Port and an increase in local employment opportunities. 
In order to achieve this growth, the Airport must expand dining and retail capacity throughout
the terminal and also change the uses of some existing units to meet specific demand. All 
identified changes in use as well as the development of new locations have been evaluated and
have been projected to increase sales by meeting passenger demand for products and services. 
Project Objectives 
The objectives of this project include: 
Ensure that necessary utility points of connection and other required infrastructure are in
place for each unit to support operations 
Develop new or currently unused space or repurposing existing dining and retail space to
serve passenger demand and generate additional revenue 
Reconfigure existing space to operate more efficiently and assure the greatest capacity to
serve passenger needs 
Maximize the overall use of space in order to achieve the optimal mix of offerings in
every area of the Airport 
Carefully schedule work that could impact customer service, revenue generation and
airline operations in the terminal
Scope of Work 
With the exception of the portions of work in the Central Terminal, this project can be
characterized as a collection of smaller projects, mostly in or supporting tenant spaces, in the
Airport's main terminal, such as provision of water, waste lines, electrical and communications.
The more significant Central Terminal work, including space reconfiguration, new elevators and
mezzanine level development, will be planned for a future public works contract request. 
Schedule 
Activity                                Start              End 
Design                            Fourth Quarter 2014   Second Quarter 2016 
Phase I Construction                    Third Quarter 2015     Third Quarter 2017 
Phases II Central Terminal                 Third Quarter 2016     Third Quarter 2017 
Phase III, Phase IV (Others as needed)         Third Quarter 2016    Second Quarter2020

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
April 6, 2015 
Page 6 of 10 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original Budget                      $10,900,000          $0   $10,900,000 
Previous Budget Adjustments             $6,453,000         $0    $6,453,000 
Budget transfer                       -$3,400,000               -$3,400,000 
Revised Budget                     $13,953,000         $0   $13,953,000 
Previous Authorizations                 $2,991,000          $0    $2,991,000 
Authorization Transfer to CIP #C800612      ($375,000)          $0    ($375,000) 
Current request for authorization            $6,217,000          $0    $6,217,000 
Total Authorizations, including this request     $8,833,000          $0    $8,833,000 
Remaining budget to be authorized         $5,120,000         $0    $5,120,000 
Total Estimated Project Cost             $13,953,000          $0   $13,953,000 
Project Cost Breakdown                     This Request       Total Project 
Design                                      $0       $2,616,000
Construction                              $5,808,000        $10,516,000 
State & Local Taxes (estimated)                   $409,000          $821,000 
Total                                      $6,217,000        $13,953,000 
Financial Analysis and Summary 
CIP Category             Capacity/Revenue Growth 
Project Type              Business Redevelopment and Expansion 
Risk adjusted discount rate     7.5% 
Key risk factors                Coordination with other construction projects 
Delays in improved base building HVAC and
electrical capacity to support expansion 
Delays in needed leasing activity 
Project cost for analysis        $17,353,000 (full cost of project) 
Business Unit (BU)          Non-Aeronautical (Airport Dining and Retail) 
Effect on business performance  NOI after depreciation will increase 
IRR/NPV             15%/$21 million 
CPE Impact             No direct impact. However, potential reduction in CPE
due to increased revenue sharing 
Budget Status and Source of Funds 
This project, C800638, was included in the 2015  2019 capital budget with an estimated cost of
$10,900,000. On October 28, 2014, the commission authorized $2.8 million for design on a
revised cost estimate of $17,353,000 and approved the transfer of $3,400,000 to the Checked
Baggage Optimization project, C800612, (for scope relating to the elevators that will be
constructed as a part of that project). The sources of funds will include the Airport Development

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
April 6, 2015 
Page 7 of 10 
Fund and future revenue bonds. The Port plans to issue revenue bonds in 2015 to fund a number
of projects. 
Lifecycle Cost and Savings 
Long-term capital and operating costs will be minimized by incorporating energy and water
efficient equipment and components and sustainable materials with pre- and post-consumer
recycled content, wherever possible. These choices will support environmentally sustainable
development and conservation. They may also reduce initial acquisition cost and long-term
operations and maintenance costs.
There will be incremental maintenance costs associated with the facility-owned mechanical,
water, communication, and electrical utilities added to the lease line of each unit. However,
every tenant is responsible for providing ongoing maintenance for the materials and equipment
within their leased area in accordance with the Port's preventive maintenance program for dining
and retail. 
STRATEGIES AND OBJECTIVES 
This project supports the Port's Century Agenda goal to "advance the region as a leading tourism
destination and business gateway" by providing an extraordinary customer experience at the
Airport and also is an important contributor to the Port's goal to grow jobs by 100,000 by 2025. 
The project also supports the Aviation Division's strategies of operating  a world-class
international airport and maximizing non-aeronautical net operating income. The pursuit of this
redevelopment is consistent with specific guidance principles articulated by the Commission for
the Airport Dining and Retail program in a motion approved in February 2012 and reiterated in a
motion approved in November 2014.
ENVIRONMENTAL RESPONSIBILITY AND COMMUNITY BENEFITS 
The ADR program generates enormous benefit for the Airport and the broader community. The
program has been recognized by the Airports Council International North America (ACI-NA) for
its role in developing environmentally friendly practices. This includes the construction of
infrastructure to support sustainable operations, as well as tenant leasehold improvements that 
could minimize energy and water use. Airport staff will explore opportunities to  enhance
conservation opportunities, energy efficiencies, re-use and/or recycle materials, use sustainable
building materials, and look for voluntary opportunities to integrate LEED or other green
building practices 
The construction for this infrastructure work, as well as tenant construction that will follow, will
employ architects and engineers for the design as well as contractors for its construction, and
skilled laborers for ongoing maintenance and repairs. In particular, the job order contract
approach for construction work is tailor-made for the promotion of small business participation.
Staff will work closely with the Office of Social Responsibility to maximize these opportunities.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
April 6, 2015 
Page 8 of 10 
One of the most significant direct benefits of a prosperous and growing dining and retail program
is the number of local (and non-local) jobs that the program makes possible. Currently, there are
approximately 1,600 jobs in the dining and retail program. An analysis conducted as part of the
Airport Dining and Retail master plan forecasts that the program can grow job opportunities by
as much as 40% by 2025, presuming that investments are made in order to expand square
footage where possible, and to make more efficient use of the square footage currently utilized
by the program. Once operators are open for business, they continue to generate benefit for local
suppliers by way of wholesale product procurement for their businesses. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Port staff evaluated different alternatives for project construction and delivery. 
Alternative 1)  Require incoming tenants to complete unit infrastructure work as part of
their tenant improvements. 
The infrastructure work would be completed by each tenant's contractor. 
Pros: 
Designs for the infrastructure would be completed by each tenants' designers as a part of
the tenant improvements project. 
The cost for this work could be borne by the tenant. 
Cons: 
This alternative would have multiple designers and contractors preparing designs and
building similar infrastructure. It could require additional staff review time to ensure
compliance with Port standards. 
Tenants could be required to complete work outside of unit lease lines. This type of
investment by tenants in the past has been problematic from the standpoint of the ability
to anticipate total construction costs. The Port's current practice is to provide needed
infrastructure to the lease line. While this is not a uniform practice in airports, it is a
standard practice for other commercial environments. It may be difficult for tenants to
secure financing for supporting infrastructure outside of a unit lease line. 
This is not the recommended alternative.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
April 6, 2015 
Page 9 of 10 
Alternative 2)  Complete the work using multiple public works contracts. 
The infrastructure work can be completed by the award of multiple public works contracts for
portions of work in defined phases. 
Pros: 
Designs for every location would be completed and packaged for bidding. The estimates
will be based on more solid information gleaned from the design process. 
The actual cost of the total project will be known at bid opening, prior to the
commencement of construction. 
Cons: 
This infrastructure project is unique because it is driven by the leasing efforts of Port
staff. A public works contract does not have the flexibility to react to schedule changes - 
accelerations or delays in reaching leasing milestones. Due to the inability to quickly
adapt to change, risks increase for delays that translate into increased costs/claims for the
Port and new tenants, as well as extended closures of dining and retail locations.
This is not the recommended alternative. 
Alternative 3)  Complete the work using a job order contract. 
Pros: 
The job order contract will allow the Port to synchronize construction with leasing
activities. The work to secure tenants for new spaces is an unpredictable market-driven
activity. For this reason, it is not realistic to try to force the timing of lease execution to
coincide with the completion of construction work. Rather, spaces can be prepared in a
'just in time' fashion for incoming tenants, and also coordinated with tenant design. A
contractor under a job order contract can be mobilized quickly as work becomes
available. 
Cons: 
Using the job order contract, design takes place as the work progresses under the
contract, rather than prior to the execution of the contract. The risks associated with this
approach are unforeseen conditions that may be identified in project design that could
cause changes in costs from original estimates.
This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
Computer Slide Presentation

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
April 6, 2015 
Page 10 of 10 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
February 24, 2015  (Briefing) Airport Dining and Retail Outreach and Leasing Plans 
December 9, 2014  Phasing Proposal for Hudson Group Leased Units 
December 9, 2014  Phasing Proposal for HMSHost Leased Units 
December 9, 2014  Amendment to Lease and Concession Agreement Anton Airfoods 
November 25, 2014  Airport Dining and Retail Quality Jobs Motion/Guidance 
November 11, 2014  (Briefing) Airport Dining and Retail Quality Jobs 
October 28, 2014  Authorization to Design Airport Dining and Retail Infrastructure
Modifications 
September 30, 2014  (Briefing) Drivers for Phasing Plan Decisions 
May 27, 2014  (Briefing) Airport Dining and Retail Master Plan 
April 22, 2014  Terminal Utility Upgrades Design Services Contract (CIP #C800638) 
September 11, 2012  (Briefing) Airport Concessions Master Plan Update 
March 27, 2012  Briefing about Interim Concessions Leasing 
February 14, 2012  Commission Motion Concerning the Airport Concessions Program 
December 13, 2011  Aviation Concessions Program Principles and Practices 
July 26, 2011  Procurement for Concessions Planning and Leasing Services