PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.       5i 
ACTION ITEM             Date of Meeting    July 24, 2012 

DATE:    July 20, 2012 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:   Wayne Grotheer, Director, Aviation Project Management Group 
SUBJECT:  Construction of the South Satellite Concessions Project (CIP # C800412) and 
South Satellite Additional Gate Lobby Project (CIP # C800466) 

Amount of This Request:  $378,200      Source of Funds: Airport Development Fund 
Est. State and Local Taxes: $210,700      Est. Jobs Created: 27 
Est. Total Project Cost:    $4,257,900 
ACTION REQUESTED: 
Request Commission authorization for the Chief Executive Officer to (1) execute a contract with
the low responsive and responsible bidder for the combined South Satellite Concessions Project
(CIP #C800412) and South Satellite Additional Gate Lobby Project (CIP #C800466) in the
amount of $1,771,981, as required by Resolution No. 3605, as amended, Section 4.2.3.4., due to
the bids being greater than 10 percent over the engineer's estimate; (2) increase the budget for
the South Satellite Concessions Project (CIP #C800412) by $207,200 to $2,742,900 to cover
additional costs related to the bid; and (3) increase the budget for the South Satellite Additional
Gate Lobby Project (CIP #C800466) by $171,000 to $1,515,000 to correct design
deficiency. The total amount requested for additional budget funding is $378,200. 
SYNOPSIS: 
This project will relocate gate podiums, demolish underutilized restrooms, construct a new duty
free shell space, demolish the existing duty free store, upgrade the finishes throughout the gate
lobby areas, modify existing infrastructure to accommodate the change in use, and create a food
and beverage shell for future build out by a tenant. It will create one large contiguous hold area
for the wide-body gates S-10  S16, adding nearly 1,500 square feet of seating capacity and
allows for more efficient and comfortable use of the space by passengers.
On June 27, 2012, the Port of Seattle bid the South Satellite Concessions Project and South
Satellite Additional Gate Lobby Project as a Major Public Works project. The engineer's 
estimate was $1,569,249. On July 17, 2012, the Port of Seattle received 3 bids ranging from
$1,771,981 to $1,837,000, see table below. Bids were greater than 10% over the engineer's

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 20, 2012 
Page 2 of 6 
estimate; therefore, in accordance with Resolution No. 3605, as amended, staff is seeking
Commission approval to execute this contract. 
Contactor                            Bid 
PCL Construction Services, Inc.                       $1,771,981.00 
Pease construction, Inc.                              $1,791,822.00 
Regency NW Construction, Inc.                      $1,837,000.00 
Staff analyzed the engineer's estimate of $1,569,249 and found the following items: 
Inadequate estimation of mobilization and demobilization costs related to the phasing
requirements of the project to ensure continuity of operations; 
Additional badging costs for work in the international facility. 
Based on the reasons stated above, and because the bidders were within 4% of each other, which
appears representative of the marketplace, and because all three bids were above the engineer's
estimate, Port staff believes the low bid represents a fair and reasonable price. 
In addition, as preparatory investigations to complete gate podium moves have been undertaken,
design deficiencies are requiring additional funds in the amount of $171,000 to complete this
project element. The design specified outdated communications infrastructure and needs to be
improved to meet current standards. 
BACKGROUND AND PROJECT SCOPE: 
The west end of the South Satellite will be reconfigured to create a new, efficient space for both
airline and retail operation. The projects will also relocate gate podiums, demolish underutilized
restrooms and exterior stairs, remediate regulated materials, construct a new duty free shell
space, demolish the existing duty free store, upgrade the finishes throughout the gate lobby areas,
modify existing infrastructure to accommodate the change in use, and create a food and beverage
shell for future build out by a tenant. The projects will create one large contiguous hold area for
the wide-body gates S10  S16, adding nearly 1,500 square feet of seating capacity and allowing 
for more efficient and comfortable use of the space by passengers.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 20, 2012 
Page 3 of 6 
FINANCIAL IMPLICATIONS: 
The total estimated cost of both projects is $4,257,900, and is divided between CIP #s C800412,
C800466, and expense as shown below: 
Budget/Authorization Summary: C800412         Capital       Expense    Total Project 
Original Budget                         $2,020,200       $515,500     $2,535,700 
Budget Increase                          $207,200           $0       $207,200 
Updated Budget                       $2,227,400      $515,500     $2,742,900 
Previous Authorizations                    $2,020,200       $515,500      $2,535,700 
Current request for authorization                $207,200            $0       $207,200 
Total Authorizations, including this request        $2,227,400       $515,500      $2,742,900 
Remaining budget to be authorized                 $0           $0           $0 
Total Estimated Project Cost                $2,227,400       $515,500     $2,742,900 
Project Cost Breakdown:                   This Request       Total Project 
Construction                                $176,800         $1,717,200 
Construction Management                     $10,000         $313,000 
Design                                       $0          $262,000 
Project Management                          $4,800         $273,000 
Permitting                                    $500           $17,000 
State & Local Taxes (estimated)                    $15,100          $160,700 
Total                                      $207,200         $2,742,900 
Budget Status and Source of Funds: 
The capital budget for this scope of work was included in the 2012-2016 capital budget and plan
of finance under CIP# C800412 in the amount of $2,535,700. The capital budget increase of
$207,200 will be transferred from the Non-aeronautical New Projects Allowance CIP
(C800152), a business plan prospective project, resulting in no net change to the Aviation capital
budget. The funding source will be the Airport Development Fund. 
Financial Analysis and Summary: 
The financial analysis below is based only on the costs directly associated with the new
concessions.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 20, 2012 
Page 4 of 6 
CIP Category             Revenue/Capacity Growth 
Project Type              Business Expansion 
Risk adjusted discount rate     9% 
Key risk factors             Delay in realized revenues due to construction or other
schedule delays. Achieving sales targets. 
Project cost for analysis        Duty free: $1.47 million 
Food and beverage: $1.07 million 
Total $2.54 million 
Business Unit (BU)          Aviation Business Development/Concessions 
Effect on business performance  New duty free revenues (first full year): $416,000/year 
New food and beverage revenues (first full year):
$340,000/year 
IRR/NPV             Duty Free:     Food/beverage:  Total: 
NPV $800,000   NPV $1.1M    NPV $1.9M 
Payback 5 years  Payback 5 years  Payback 5 years 
IRR 12%     IRR 15%     IRR 13% 
CPE Impact             N/A 
This summary has not been updated to reflect the additional cost. 
Capital        Expense     Total Project 
Budget/Authorization Summary: C800466 
Original Budget                         $1,344,000           $0     $1,344,000 
Budget Increase                           171,000           $0       171,000 
Updated Budget                       $1,515,000          $0     $1,515,000 
Previous Authorizations                    $1,344,000           $0      $1,344,000 
Current request for authorization                $171,000            $0       $171,000 
Total Authorizations, including this request        $1,515,000            $0      $1,515,000 
Remaining budget to be authorized                 $0           $0           $0 
Total Estimated Project Cost                $1,515,000           $0     $1,515,000 
Project Cost Breakdown:                   This Request       Total Project 
Construction                               $171,000          $991,000 
Construction Management                        $0          $145,000 
Design                                      $0          $159,000 
Project Management                            $0         $162,000 
Permitting                                     $0            $8,000 
State & Local Taxes (estimated)                       $0           $50,000 
Total                                     $171,000         $1,515,000 
Budget Status and Source of Funds: 
The budgeted cost for this scope of work was included in the 2012-2016 capital budget and plan
of finance under CIP# C800466. The budget increase of $171,000 will be transferred from the
Aeronautical New Project Allowance CIP (C102165), a business plan prospective project,
resulting in no net change to the Aviation capital budget. The funding source will be the Airport
Development Fund.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 20, 2012 
Page 5 of 6 
Financial Analysis and Summary: 
CIP Category             Revenue/Capacity Growth 
Project Type              Business Expansion 
Risk adjusted discount rate     N/A 
Key risk factors             N/A 
Project cost for analysis        $1,344,000 
Business Unit (BU)          Terminal 
Effect on business performance  Increase NOI 
IRR/NPV             N/A 
CPE Impact             Less than $.01, but no change to business plan forecast
as this project was included. 
This summary has not been updated to reflect the additional cost. 
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS: 
Award Contract: Based upon our technical analysis of the factors which affected the bid prices
and the consistency of high bids across all the bidders, Port staff believes this bid price from PCL
is fair and reasonable. Staff recommends the Commission authorize for contract award. 
Do Not Award Contract: Staff evaluated re-scoping and then re-advertising the contract which
would delay the project and cause delay to the tenant build out of the new duty free location,
taking its opening beyond the high traffic summer season resulting in a loss of revenue. This is
not a recommended alternative. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
November 2, 2010  commission authorized the execution of an IDIQ professional
services contract for design services in the amount of $400,000 in support of
anticipated capital improvement projects related to South Satellite concession and Gate
Lobby Projects at Seattle-Tacoma International Airport. No funding was associated
with this authorization. 
January 25, 2011  commission authorized both design services and the use of Port
crews in support of the Additional Gate Lobby Project at Seattle-Tacoma International
Airport (CIP # C800466). This authorization was for $414,000 of a total estimated
project cost of $1,257,000. 
March 8, 2011  Commission authorized design services in support of the South
Satellite concessions Project (CIP # C800412) at Seattle-Tacoma International Airport.
This authorization was for $350,000 of a total estimated project cost of $2,199,000. 
March 27, 2012  Staff briefing about plans for interim concessions leasing (2012  
2014), including Requests for Proposal for a new duty free operator and new fullservice
restaurant.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 20, 2012 
Page 6 of 6 
June 5, 2012  Commission authorized 
A: For CIP # C800412, (1) advertise for construction bids and execute construction
contracts and (2) execute contracts to purchase furnishings and casework for the South
Satellite Concessions Project at Seattle-Tacoma International Airport (Airport). This
authorization was for $2, 185,700 
B: For CIP # C800466, (1) advertise for construction bids and execute construction
contracts and (2) execute contracts to purchase furnishings and casework for the South
Satellite Additional Gate Lobby Project at the Airport. This authorization is for
$930,000 of a total estimated project cost of $1,344,000. 
The total combined authorization request for both projects is for $3,115,700 of a total
combined estimated project cost of $3,879,700.