PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA             Item No.      6c 
ACTION ITEM               Date of Meeting    July 24, 2012 

DATE:    July 18, 2012 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:   Michael Ehl, Director, Airport Operations 
Wayne Grotheer, Director, Aviation Project Management Group 
SUBJECT:  North Satellite and North Satellite Transit System (STS) Lobbies Renovation 
at Seattle-Tacoma International Airport (CIP #C800556) 
Amount of This Request:  $ 32,000,000    Source of Funds:  Airport Development Fund 
and future bond proceeds 
Est. State / Local Sales Tax:       $ 0 
Est. Total Project Cost:   $194,300,000 
ACTION REQUESTED: 
Request authorization for the Chief Executive Officer to design, perform construction support
and project management services and overall project support in an amount not to exceed
$32,000,000 for the renovation of the North Satellite passenger terminal and the Satellite Transit
System station lobbies (North Satellite / Concourse C / North Baggage Claim) at Seattle-Tacoma
International Airport for an eventual total estimated project cost of $194,300,000. 
SYNOPSIS: 
Alaska is seeking to improve its "Curb to Seat" customer service experience at the Airport. This
concept includes upgrades to the main concourse and STS levels of the North Satellite and
adding a lounge for their premium passengers. In order to meet Alaska's projected demand at the
North Satellite over the next 10 years, additional aircraft gates are also needed. Alaska's
conceptual vision is the foundation for this part of the NorthSTAR program. 
At the conclusion of the airline moves associated with the airline reallocation provision of the
current Signatory Lease & Operating Agreement (SLOA), Alaska Air Group (Alaska) will be the
only airline operating out of the North Satellite. Alaska will relocate most of its operations to the
North Satellite. To meet Alaska's requirements for growth, the Port will renovate the concourse
level of the North Satellite and will construct a rooftop structure in which Alaska will build a
new Alaska Board Room facility for its premier passengers. Alaska will also renovate leased
portions of the North Satellite ramp and STS levels for use by its operations personnel. This
request is for both the funding of design and project management services, and the

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 18, 2012 
Page 2 of 7 
commencement of these services, associated with the North Satellite renovation that is part of the
more comprehensive North Sea-Tac Airport Renovations (NorthSTAR) program. This request
does not pertain to improvements to the Main Terminal, Concourse C, and Concourse D that are
also part of the NorthSTAR program. 
The current cost estimate for Port work at the North Satellite and North STS Lobbies Renovation
project is $194.3 million. The North Satellite was built over 40 years ago and will require
modernization, renewal, or replacement of its basic communications systems, roofing system,
mechanical, electrical, plumbing, and heating/air conditioning (HVAC) systems along with
seismic upgrades. Some of these costs are included in the 2012-2016 capital budget and plan of
finance. Additional costs will be included in future capital budgets and plans of finance. The
Airport Development Fund is the initial source of funds for NorthSTAR, but funding for the
entire NorthSTAR program will require a future bond issue. The estimated cost per enplanement
(CPE) impact is $0.75-$1.00. 
BACKGROUND: 
The North Satellite is over 40 years old and has had only limited upgrades to the building and its
infrastructure. The basic building's mechanical, electrical, plumbing, and communication
systems need modernization, renewal, and replacement. Additionally, the proposed renovation
provides the opportunity to seismically reinforce the building to comply with current building
codes. The Airport capital program has three related projects for the North Satellite that are still
in the planning stage  (1) replacement of the HVAC system, ceiling and lighting; (2) structural
reinforcement for seismic resistance; and (3) replacement of the North Satellite roof. 
Port staff intends to combine all of the work described above into one design package due to the
complexity and interrelationships between project elements and the need to maintain operations
during the extensive construction that will be required. Alaska's financial contribution will be
required for some of the project elements consistent with Port policy. Alaska will also do the
finish work within the new lounge to be constructed and within employee areas under this
project. 
The funding in this request will be used for Port staff and consultants. This authorization will
allow the Port to proceed with previously authorized design, construction support, and project
management services. 
The North Satellite includes regulated materials that must be identified and properly managed
during the project. Port Construction Services crews and consultants will conduct the regulated
materials survey as an early task, although removal of regulated materials is not part of the initial
authorization. 
There are specific concurrence milestones between the Port and Alaska Airlines in the
completion of construction documents for this project. The next such milestone will occur at the
15% conceptual design submittal. While these concurrence points are not a formal restriction on
the Port's ability to proceed, they will help validate the Port's and Alaska's continued alignment.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 18, 2012 
Page 3 of 7 
There are additional North Satellite project elements that Port staff expects to manage separately
and for which we will seek separate Commission authorization in the future: 
Relocation of Alaska employees to remodeled space in the North Satellite by Alaska, 
which may include building improvements that are reimbursable consistent with Port
policy; and 
Baggage system upgrades within the North Satellite, the baggage tunnel connecting the
North Satellite and the Main Terminal, and Concourse D. 
Finally, Alaska's program to improve the "Curb to Seat" experience includes various
improvements to the Main Terminal, Concourses C and D, and the airfield taxi-lane areas, all
included in the NorthSTAR program. These individual projects will be evaluated and managed
separately. Staff will seek separate Commission authorization for these projects in the future.
The authorization requested in this memo is for commencement of NorthSTAR program
management services and for commencement of design services for the North Satellite project. 
The terms under which Alaska will participate in NorthSTAR have been established via an
April 5, 2012, letter. The airline project approval process outlined in SLOA will be followed, but
Alaska will also be offered an unprecedented level of project involvement given the importance
of this program to our largest airline tenant. 
PROJECT JUSTIFICATION: 
Since its construction in 1971 infrastructure improvements to the North Satellite have been
limited to minor plumbing and electrical upgrades. The remainder of the outdated infrastructure
and interior finishes need renewal and replacement to improve the building's utilization, increase
operational efficiencies, reduce energy consumption, improve sustainability and sustainable asset
management, enhance customer comfort and service, and ensure compliance with current
building codes. The renovation will accommodate Alaska Air Group's goal to improve the
customer's experience from drop-off to gate and its expansion into the North Satellite as part of
Sea-Tac's airline re-alignment program, as well as the eventual future expansion of the satellite. 
Project Objective: 
Upgrade North Satellite and North STS stations to accommodate additional aircraft and
passengers, improve customer service, improve seismic safety, and renew/replace aging
infrastructure. 
PROJECT SCOPE OF WORK AND SCHEDULE: 
Scope of Work: 
The scope of the program management support contract will include project management, cost
estimation, cost control, and scheduling work for NorthSTAR.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 18, 2012 
Page 4 of 7 
This request includes the following design elements at the North Satellite and, as noted below,
certain elements at Concourse C and the Main Terminal: 
Renovation of concourse level finishes, structure, and amenities 
Addition of three aircraft gates (North Satellite) 
Seismic upgrades 
Addition of a lounge building structure for Alaska's premium passengers 
North Satellite Train System lobby remodel (including the North Satellite, Concourse C
and the Main Terminal) 
Upgrades, renewal and replacement of mechanical, electrical, plumbing, vertical
transportation, and communication systems 
Aircraft taxi lane changes around the North Satellite 
Schedule: 
Design & Program Management Contracts in Place          August 2012 
Design Complete                              February 2014 
Commission Authorization to Bid First Phase of Work        Winter 2013* 
Construction Start                                  Winter 2013* 
Construction Complete                            Winter 2016* 
*  Port staff needs to validate the current schedule with the recently selected design and
program management consultants. Dates assume early construction start of some project
elements to speed the project, hence the overlap between design and construction phases
above. 
FINANCIAL IMPLICATIONS: 
Budget/Authorization Summary:             Capital    Expense    Total Project 
Original Budget                            $0         $0           $0 
Related project budgets                  $46,500,000         $0    $ 46,500,000 
New project budget                        TBD       TBD    $147,800,000 
Revised project budget                       TBD       TBD    $194,300,000 
Previous Authorizations                 $ 1,000,000    $500,000    $ 1,500,000 
Current request for authorization            $32,000,000         $0    $ 32,000,000 
Total Authorizations, including this request     $33,000,000    $500,000    $ 33,500,000 
Remaining budget to be authorized               TBD        TBD          TBD 
Total Estimated Project Cost                   TBD       TBD    $194,300,000

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 18, 2012 
Page 5 of 7 

Project Cost Breakdown:               This Request             Total Project 
Construction                               $0                    TBD 
Design and Construction Support           $17,000,000              $17,000,000 
Project Management                  $ 5,400,000             $ 5,800,000 
Permitting                          $ 3,100,000               $ 3,100,000 
RMM - Expense                        $0            $ 200,000 
Port Soft Costs                        $ 6,500,000               $ 7,400,000 
Undefined Cost  to be determined                $0             $160,800,000 
Total                               $32,000,000              $194,300,000 
Budget Status and Source of Funds: 
The 2012-2016 capital budget and plan of finance included two projects, C102161 North
Satellite Seismic ($19 million), and C800377 North Satellite HVAC ($27.5 million), which are
elements of this broader North Satellite program. These two related project budgets totaling
$46.5 million will be consolidated into the North Satellite Renovation and North STS loop
lobbies project (C800556). The total cost for this project that was not included in the 2012-2016
capital budget and plan of finance totals $147.8 million. Some portion of this total budget of
$194.3 million will be transferred to a new CIP (C800544) created to manage overall program
costs. The funding source for this current authorization request will be the Airport Development
Fund (augmented as needed with the issuance of commercial paper). Funding the total project
will require a future bond issue, planned for 2013. The total cost projections (using Alaska's
estimate) for the NorthSTAR program have been included in the financial projections provided
to the airlines as part of the current SLOA negotiations. 
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        TBD  approximately $200 million 
Business Unit (BU)          Terminal 
Effect on business performance  NOI after depreciation will increase 
IRR/NPV             N/A 
Estimated $0.75-$1.00 CPE in 2016, this project was
CPE Impact 
not included in the capital budget and plan of finance. 
Lifecycle Cost and Savings: 
Annual operating and maintenance costs will be analyzed during the completion of the final
project definition notebook.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 18, 2012 
Page 6 of 7 
STRATEGIC OBJECTIVES: 
This project promotes the Port's business goals to "Ensure Airport and Seaport Vitality" and "Be
a Catalyst for Regional Transportation Solutions." This is one of a number of projects that are
directly tied to the One-Time Reallocation (Airline Realignment) program, that are in concert
with Alaska's Master Plan to consolidate its gate operations onto the North Satellite and
Concourses C and D. 
ENVIRONMENTAL SUSTAINABILITY: 
This project will incorporate environmental sustainability elements that are being analyzed
currently in the NorthSTAR sustainability study with a goal of reducing energy consumption and
lifecycle costs of the North Satellite. This will be further evaluated, as well as opportunities to
seek third party environmental certifications (e.g., LEED Certification), and incorporated into the
project definition and design of the project. 
BUSINESS PLAN OBJECTIVES: 
This project improves operations, building safety, and customer service at what will be the
primary location for the Airport's largest airline tenant. 
TRIPLE BOTTOM LINE SUMMARY: 
This project will increase the long-term ability of the Airport to serve a growing number of
passengers and airlines. Long-term vitality of the Airport benefits the regional economy and
nearby communities. The sustainable aspects of this project will benefit the local environment. 
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS: 
Alternative 1) Do nothing. This alternative would not add capacity, improve customer service,
increase seismic safety, or reduce lifecycle costs for the North Satellite. It would also not be
consistent with Alaska's vision to upgrade the "Curb to Seat" experience for the customer. This
alternative is not recommended. 
Alternative 2) Proceed with project definition, scoping, and design for the renovation of the
North Satellite and limited work to the North STS stations located in the Satellite, Concourse C
and the Main Terminal. Work includes remodeling the concourse, addition of three aircraft gates,
addition of a lounge for Alaska's premium passengers, upgrade/renewal/replacement of
mechanical, electrical, plumbing, and communication systems, seismic safety upgrades, addition
of elevators and escalators, and a remodel of the satellite transit train lobbies (including
Concourse C and the Main Terminal). This alternative is recommended. 
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: 
None.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 18, 2012 
Page 7 of 7 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
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. 
June 26, 2012 - The Port Commission was briefed on the NorthSTAR program by
Wayne Grotheer, Director Aviation Project Management Group.