COMMISSION 
AGENDA MEMORANDUM                        Item No.          8c 
ACTION ITEM                            Date of Meeting       May 26, 2020 
DATE:     March 16, 2020 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Wayne Grotheer, Director Aviation Project Management 
James Jennings, Director Aviation Business and Properties 
Jeffrey Brown, Aviation Chief Operating Officer 
SUBJECT:  C1 Building Expansion Design Authorization (CIP# C800845) 
Amount of this request:              $10,800,000 
Total estimated project cost:        $340,000,000 
ACTION REQUESTED 
Request commission authorization for the Executive Director to (1) execute a contract for
Architecture and Engineering (A/E) design services in the amount not to exceed $6,200,000; (2) 
to utilize a General Contractor/Construction Manager (GC/CM) and to advertise and execute a
GC/CM construction contract for pre-construction services (3) and use port crews for preconstruction
activities for the C1 Building Expansion project at Seattle-Tacoma International
Airport  in an amount not to exceed $10,800,000  of a total estimated  project cost of
$340,000,000. 

EXECUTIVE SUMMARY 
The C1 Building Expansion project will construct four additional floors on top of the existing C1
Building, located adjacent to Gate C3 and between Concourses C and D at Seattle-Tacoma
International Airport (SEA). It will also redevelop the existing concourse level footprint, which is
largely blocked off from the public today, to provide additional concessions, services and
amenities to the travelling public. The C1 Building Expansion project will address current level of 
service deficiencies at SEA by adding four new floors to the existing three floors that currently
make up the C1 Building. Each new floor plate will be approximately 27,000 square feet. An
additional 5,000 square feet will be added to the existing building footprint for the construction
of a new loading dock.
The expansion of this existing building will provide new Airport Dining and Retail (ADR) options,
new premium club spaces, and new ancillary office space for tenants. The C1 Building Expansion
will also construct a post security Meditation Room, a Nursing Mothers Room, build new
restrooms, create circulation and seating for the traveling public, and expand the existing Gate
C3 hold room. 

Template revised January 10, 2019.

COMMISSION AGENDA  Action Item No. __8c__                             Page 2 of 12 
Meeting Date: May 26, 2020 

Project Status 
For the C1 Building Expansion the project team used a consultant to create a Project Definition
Document (PDD). With the completion of the PDD the project design is at approximately 10%.
The Project budget and schedule reflect the level of information that is available with a 10%
design effort. As the design effort progresses the budget and schedule certainty will increase to
reflect the level of information that becomes available with additional design. The layouts and
concepts that are illustrated in the PDD were created to provide the project team with an
understanding of the overall scope of the project and the viability of constructing the new floor
plates. The final layouts, con figuration of spaces, and finishes will be created by the project
design team. 
Even in light of the existing COVID-19 economic crisis, Port staff believe it makes sense to move
forward with this project now because the completion of construction is still several years out
into the future when passenger traffic will more than likely have recovered. It is important to
note that prior to COVID-19 SEA had severe space deficiencies, and there will be no financial
impact to the airlines until the project is completely constructed. But in an effort to be mindful
of the current economic uncertainty, this request is for a small portion of the overall design
costs. The full scope of the design and GC/CM costs total $77.4M, so this incremental approach
allows for overall project design to continue, while creating an opportunity to revisit the project
prior to full design authorization. Prior to the completion of initial design deliverables, the project
will be further discussed with the airlines and a Majority-In-Interest (MII) vote completed before 
Port staff returns to request additional funds to complete design. The initial request in this
authorization will allow the project team to procure a designer, begin design efforts, and procure
a General Contractor/Construction Manager for pre-construction services. 
Port staff will return to Commission to request the authority to amend the A/E design contract
for an additional estimated amount of $17.9M. 
Project Scope and Budget Controls 
The total program budget for the C1 Building Expansion program is $340M. At this early stage of
project development, the total program budget could range from 30% below to 50% above the
stated figure, but the staff goal for the C1 Building Expansion is to design to this budget. This
means that the project intends to modify scope or descope to meet the current Program budget.
To further assist in meeting the project budget, Aviation Project Management secured a second
construction cost estimate which came in within 10 percent of the original estimate. 
As stated above, the current cost estimate reflects the level of information available to the
project team at the current level of design. The project team has implemented several strategies

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

COMMISSION AGENDA  Action Item No. __8c__                             Page 3 of 12 
Meeting Date: May 26, 2020 
that will shore up the budget in the absence of the information that is available when a design is
100% complete. Those strategies are as follows: 
1.  All impacted Aviation Division departments were involved in the creation of the PDD.
Representatives for those departments provided comments both during information
gathering sessions and by commenting on the draft PDD.  The scope was modified or
updated based on the input from these key staff members and departments. The
Directors of each of these departments signed the final PDD agreeing to the scope
proposed in the PDD. Any changes to the PDD scope will be considered discretionary and
will be not be implemented without approval through the change management system
described in item 7 below. 
2.  The original cost estimate was prepared by a subconsultant to the Port's planning
consultant that prepared the PDD, with review by the Aviation Project Management
estimating manager. A second independent estimate was performed by a cost estimating
firm under a different contract to the Port. The firm doing the second estimate was
provided the PDD scope of work only and was not provided any information on the
original cost estimate. The two estimates are within 10% of each other. 
3.  Project  designer  will  be  directed  to  design  to  budget  and  produce  an  updated
construction estimate at all major design milestones. With this effort, the project would
seek to reduce scope, after conferring with Port Commission, if early assumptions and
pricing prove to be inaccurate. 
4.  Subject to further authorization by the Port Commission, the Port intends to procure  a 
General Contractor, Construction Manager (GC/CM) firm. We anticipate the Port and the
GCCM will elect to utilize an Electrical Contractor Construction Manager and Mechanical
Contractor, Construction Manager (EC/CM & MC/CM). The GC/CM, EC/CM, and MC/CM
will allow for early constructability input and additional project cost estimates from a
contractor at major design milestones. 
5.  Design review comments will be limited to identified key individuals representing the
different stakeholders. This will provide additional controls on scope creep. 
6.  Aviation Capital Programs and Aviation Project Management have implemented a formal 
change management system (applicable to all projects) that will require budget and
schedule impact analysis and formal approval for any discretionary scope increases 
beyond the scope established in the PDD. 
Key Risks 
The project team has identified Key Risks for the C1 Building Expansion project. These risks are
being strategically mitigated or they are being accounted for in the Project Risk Contingency. The
identified Key Risks are: 
1.  Complex phasing:  The C1 Building is currently occupied on all three existing levels.
Throughout the life of the project, these levels will be occupied to a greater or lesser
extent at different times during construction.  The mitigation strategy employed to

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

COMMISSION AGENDA  Action Item No. __8c__                             Page 4 of 12 
Meeting Date: May 26, 2020 
control this risk is the early procurement of the GCCM. The GC/CM will be a partner with
the project team and designer in creating a viable phasing plan and finding cost effective
solutions to phasing challenges.
2.  Operational constraints: The C1 Building is located at the intersection of Concourse C and
Concourse D. There is limited access for construction material laydown and the
construction equipment required to erect a new building. The project team employed
two different strategies to control this risk: early procurement of the GCCM and early
involvement of Airport Operations. The project team completed a Safety Risk Assessment
that addressed safety and operational concerns both during construction and in the final
configuration of the building. 
3.  Scope changes: The scope change risk has been addressed by the items listed above under
Project Scope and Budget Controls. 
4.  Baggage Optimization: The C1 Expansion was to benefit from a large scope of work being
performed by the Baggage Optimization project. Recent delays to Phase 2 construction
of that project have a potential to add both cost and time to the project. The C1 Expansion
project team is working with the Baggage Optimization team to mitigate impacts. 
5.  Airline Support:  The C1 Expansion project  is a long-term investment to remedy a
multitude of significant SEA deficiencies that will not have an impact on SEA costs until
put into service several years out into the future. Unfortunately, with the economic
uncertainties associated with the COVID-19 outbreak, it is possible our airline partners
may vote against this project, regardless of its merits and long-term benefits, but we are
working hard to gain airline support (particularly from Alaska/American because of their
proximity). 
Environmental 
The C1 project will be the first project that has been identified as a "Tier three project" under the
Port's new Sustainable Project Framework; and  the project team will execute design and
construction work consistent with the following Commission-approved approach: 
1. Integrate sustainability early in the capital process by establishing a team of project-
specific experts through the Sustainable Project Assessment and Review Committee
(SPARC). 
2. Convene subject matter experts to develop sustainable design approaches for the project
and operational team to consider and evaluate through project development. 
3. Select and apply the relevant Sustainable Evaluation Framework criteria to highlight
tradeoffs and benefits during development of the sustainable design approach. 
4.  Present SPARC recommendations to Commission along with the request for authorization
for design funds. 
5. Develop a Sustainable Design Strategy that includes the selected alternatives from the
Sustainable Design Approach. The Sustainable Design Strategy will be included in the final
construction authorization for the project. 
6. Track progress and recognize achievements of project teams. 

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

COMMISSION AGENDA  Action Item No. __8c__                             Page 5 of 12 
Meeting Date: May 26, 2020 

The project team worked with the Aviation Environmental department to convene and conduct
a SPARC meeting to identify ideas and analyses for the C1 Sustainable Design Approach (SDA). In
addition to pursuing certification for Silver level for the most current version of LEED Building
Design and Construction, the SDA requires the designer conduct the following analyses as the
design develops for the sustainability categories relevant to the project prior to the completion
of the 30 percent design deliverable:
Category        Analyses 
Energy/Carbon   Analyze energy use (electricity, liquid fuel, natural gas) and options for
reducing energy use by 5%, 10%, and 20% below Washington State Energy
Code. For each proposed option, analyze capital and total costs. AVENV will
calculate carbon emission and reduction estimates associated with proposed
options. 
Materials        Provide Port staff with technical specifications and amounts of concrete,
steel, and gypsum proposed for use on the project. Staff will analyze options
and provide recommendations to reduce embodied carbon for those
materials. 
Water         Analyze water use and cost and provide options to reduce water use by 10%
conservation     and 20% below Uniform Plumbing Code 2015 and Washington State
Amendments. Options include but are not limited to indoor water use,
outdoor water use, process water demand, and rainwater capture. Proposed
options must meet the Port's existing design standards. 
Transportation   Develop project-specific design options to support employees that commute
via active transportation, public transportation, or other non-drive alone
modes. Include cost estimates for all proposed options. 
Innovation       Analyze and propose any additional options that could be considered
innovative techniques. Designer must provide evidence of  past precedent
within the last three years and corresponding performance data for Port
review. 

General Contractor, Construction Manager (GCCM),  Preconstruction services 
This authorization will allow Port staff to retain the services of a GCCM for pre-construction
services. The GCCM may retain an ECCM and an MCCM and provide the following services that
will allow for better scheduling and cost control during the design phase of the project: 
1.  The GCCM will provide an extensive survey of existing conditions in the C1 Building.  As
built  documents  are  often  incorrect,  incomplete,  or  spread  over  multiple  project

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

COMMISSION AGENDA  Action Item No. __8c__                             Page 6 of 12 
Meeting Date: May 26, 2020 
documents. Early engagement and access to the site by the GCCM will allow for a more
informed and complete design from the Design Team. 
2.  The GCCM will provide a construction estimate at each major design milestone.  This
approach will assist with the project team's goal of scope and budget control. 
3.  The GCCM will provide essential input on project phasing. The C1 Building is an occupied
building in a difficult to access part of the airport. With early involvement, Port staff aims
to minimize change orders by providing the GCCM early input and access to the site and
design documents. 
Future authorizations will be sought for the finalize construction contract between the Port and
the GCCM. Port staff may also return for authorization that will allow for enabling work or early
work packages to be completed.
JUSTIFICATION 
Over the last decade, leasable space post-security at SEA has become almost non-existent due to
the continued growth of airlines and tenants' operational and administrative needs. Staffhas
identified the C1 Building area as a key location where the terminal can be expanded without the
consumption of additional real estate (building up rather than out). There are no other viable
options for expanding the terminal without significant negative impacts to existing capacity or
operational areas. 
Additionally, the demand for increased airport dining and retail space post-security has
significantly outpaced availability across the airport. Airport Dining and Retail services are crucial
to providing a high level of service and an important generator of non-aeronautical revenue. At
this time, Concourses C and D are underserved by approximately 30,000 square feet of Airport
Dining and Retail services. This shortage takes in to account the spaces that have opened or will
open as part of the current Airport Dining and Retail Re-Development. 
The C1 Expansion Project will grow Airport Dining and Retail services with two floors of new
space.  This additional square footage will provide a higher level of service to travelers and
generate additional non-aeronautical revenue.  The remaining three new floors will provide
space for two new premium lounges and additional office space. The office space will serve to
support existing tenants, airlines, and TSA in addition to creating support space for the new C1
Airport Dining and Retail spaces. The Port of Seattle has received general support from the airline
community, including letters of interest for large portions of the leasable space. 
Diversity in Contracting 
Project team has worked with the Diversity in Contracting team to conduct outreach and the
setting of a women- and minority-owned business enterprise (WMBE) aspirational goal of 12% 
for the design contract. The goals for the GCCM will be set for the future construction contract
once the plans have been developed and the trades involved in the project have been identified
with more certainty. 

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

COMMISSION AGENDA  Action Item No. __8c__                             Page 7 of 12 
Meeting Date: May 26, 2020 
DETAILS 
The C1 Building is an existing three-level structure that was built to house the C1 in-line baggage
screening system (on the baggage claim and bridge levels) that supports Alaska Airlines. The
current C1 Building houses the TSA in much of the concourse level space, which would be better
utilized for publicly accessible services and amenities. As part of this project, the TSA functions
will be relocated to make way for higher and better uses. 
Beyond being one of the few locations for SEA to expand its  footprint without further
encroaching on limited real estate, this will be the first project to utilize the Environmental
Sustainability Framework adopted by the Commission, and a great opportunity to embody the
Airport's new SEA brand. 
The Gate C3 Holdroom scope of work was previously authorized by Commission for design and
execution of a major works contract. However, the bids submitted exceeded the engineers
estimate. Since the C# Holdroom expansion is adjacent to the C1 Building expansion, the Aviation
division decided to cancel the procurement and combine both projects into one program. 
Scope of Work 
This project will add an additional four floors to the three floors C1 Building and expand the
existing holdroom at Gate C3. The new space will be used for ADR, O ffices, and Premium Lounge
space. 
Scope of Work includes: 
(1)   Four new floors 
(2)   New HVAC Penthouse 
(3)   Mechanical / Electrical / Plumbing Improvements 
(4)   Infrastructure for ADR, Tenant Offices, and Premium Lounge spaces 
(5)   Expansion of the C3 Holdroom 
(6)   Upgraded and added vertical circulation 
(7)   New restrooms 
(8) New nursing mothers' room 
(9)   New post security Meditation room 
(10)  Gate C3 Holdroom Expansion 
Schedule 
Activity 
Design start                                       2020 Quarter 4 
Commission construction authorization          2022 Quarter 4 
Construction start                                2022 Quarter 4 

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

COMMISSION AGENDA  Action Item No. __8c__                             Page 8 of 12 
Meeting Date: May 26, 2020 
In-use date                                       2027 Quarter 2 
Cost Breakdown                                      This Request           Total Project 
Design                                                  $7,060,000            $42,000,000 
Construction                                             $3,740,000            298,000,000 
Total                                                        $10,800,000           $340,000,000 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1  Redevelop and expand ADR space on the concourse level. Under this option, there
would be no vertical, hold room nor loading dock expansion.
Cost Implications: $100  $168 Million 
Pros: 
(1)   The project will deliver additional ADR space approximately 2.5 years sooner. 
Cons: 
(1)   The Port of Seattle will still be in dire need of office and club space. 
(2)   The complex phasing required in the earlier part of the large project will still be
required. Concession storage will still need to be moved, and TSA will still need to be
moved to the lower floors prior to the build out of the concession space. 
(3)   There still may be structural upgrades required as a result of adding more live load.
This is not the recommended alternative. 
Alternative 2  Leave the C1 Building as-is 
Cost Implications: $800,000 would be expensed (cost to date to develop PDD) 
Pros: 
(1)   No interruption of ADR level of service 
(2)   No interruption of tenant or ADR rent 
(3)   No additional capital Investment required 
Cons: 
(1)   Does not expand ADR level of service to meet current demand 
(2)   Does not create new leasing and revenue opportunities 
(3)   The level of service at the C# holdroom will continue to be sub-optimal. 
This is not the recommended alternative. 



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

COMMISSION AGENDA  Action Item No. __8c__                             Page 9 of 12 
Meeting Date: May 26, 2020 
Alternative 3  Expand C1 Building and C3 Holdroom and create new tenant and ADR space 
Cost Implications: $340 Million 
Pros: 
(4)   Will increase ADR level of service and mitigate current level of service inadequacies 
(5)   Will increase office and club space and mitigate current space deficiencies 
(6)   Creates new revenue opportunities 
Cons: 
(7)   Requires a substantial Capital investment 
(8)   During construction, there will be significant operational and level of service impacts. 
This is the recommended alternative. 
FINANCIAL IMPLICATIONS 
Cost Estimate/Authorization Summary               Capital        Expense           Total 
COST ESTIMATE 
Original estimate                               $331,776,000      $8,224,000   $340,000,000 
AUTHORIZATION 
Previous authorizations                            $800,000                0        $800,000 
Current request for authorization               $10,800,000                0     $10,800,000 
Total authorizations, including this request      $11,600,000                0     $11,600,000 
Remaining amount to be authorized          $320,176,000     $8,224,000   $328,400,000 
Annual Budget Status and Source of Funds 
This project is included in the 2020-2024 capital budget and plan of finance with a budget of
$50,000,000, which was reflected as a Status 2 project prior to any project specific scoping or
cost estimating. The capital budget increase of $290,000,000 will be transferred from the
Aeronautical Reserve CIP (C800753) resulting in zero net change to the Aviation capital budget. 
The funding sources will include the Airport Development Fund and future revenue bonds. 
Financial Analysis and Summary 
This project is an investment in additional terminal space that is intended to be used for both
aeronautical and non-aeronautical purposes. As a hybrid project, the financial analysis looks at
the projects as both a standalone non-aero investment and a terminal investment that flows
through airline rates and charges. Although the project should still be considered as a range,
$340M is what was used for the investment analysis. 
Non-aeronautical Investment Analysis 

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COMMISSION AGENDA  Action Item No. __8c__                            Page 10 of 12 
Meeting Date: May 26, 2020 
The table below shows the allocation of the capital costs based on the planned rentable square
feet. Since 61.8% of the rentable square feet is designated for non-aeronautical purposes,
61.8% of the capital cost ($210M) is the basis of the non-aeronautical investment analysis.  The
lower part of the table shows the new revenues ramping up from $13.5 million in 2027
(assumed first full year of occupancy) to 2030, the year by which all space is assumed to be fully
leased. This new revenue (airport dining and retail as well as office leases) is the basis of the
positive Net Present Value. Because the space is currently generating revenues, the NPV is
netted against a base case (do nothing). From a non-aeronautical investment perspective, the
positive NPV of $32.7 million indicates it is a good investment. 
Non-aero Investments
$ in 000s    Non-aero          Aero             Total
C1 rentable sqft                                      76,334            47,179         123,513 
C1 rentable sqft %                                   61.80%           38.20%
Project Cost                                  $     210,128  $        129,872         340,000 
Payback (years from opening)                           14
NPV (40 years)                              $     131,200
NPV Inrcemental to Base                    $      32,700
2027         2030
Incremental Non-aero Revenue             $     13,471                  23,796
Incremental Non-aero O&M                $         771              818
Net Operating Income                      $     12,700        $       22,978 

Aeronautical Rate Base Impacts 
At Sea-Tac, under the terms of SLOA IV, terminal space is allocated between aeronautical and
non-aeronautical cost centers based on rentable square feet. Terminal rents are set based on
the total cost center costs. Therefore, in looking at the impacts of a project like C-1 that adds
significant square footage, it is important to do a two-step analysis that accounts for the fact
that the total terminal space distribution changes, and therefore the entire terminal cost center
distribution between aeronautical and non-aeronautical changes. The table below shows that
before C-1, 76.69% of the terminal costs are allocated to the aeronautical rate base. This
suggests that $22.7 million of the costs of C-1 would be allocated to the aeronautical rate base.
After C-1, 74.05% of the terminal costs are allocated to the aeronautical rate base. This
effectively shifts $11.4 million of costs from the aeronautical rate base to the non-aeronautical
side. Thus, in 2027 the net impact of the project is to add $11.2 million to the aeronautical rate
base. 



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

COMMISSION AGENDA  Action Item No. __8c__                            Page 11 of 12 
Meeting Date: May 26, 2020 
Airline Rates and Charges
2027
($000s)      Aero          Non-aero          Total
Rentable sqft wihtout C1 sqft                       76.69%           23.31%
Rentable sqft WITH C1 sqft                         74.05%           25.95%
Project cost                                  $      251,777  $          88,223  $      340,000
Incremental Revenues WITHOUT C1 sqft            22,701           13,471          36,172
Terminal redistribution                            (11,488)
Incremental Revenues WITH C1 sqft                11,214            13,471          24,684
Incremental Debt Service                          21,407             7,501          28,908
Incremental O&M                                               771            771

The table below shows that in 2027, the project will effectively increase CPE by $0.38. It also
shows that the average terminal rental rate will decrease in 2027. Overall, the project will
result in a slight reduction in debt service coverage in 2027 (.05) with this narrowing to a 0.01
reduction by 2030. Assuming growth in net operating income and level debt service, the debt
service coverage would be expected to increase after 2030.
2020 Plan of Finance **       WITH C1 Renovation SQFT
(000s)     2027          2030          2027          2030      2027 Change  2030 Change
Terminal Revenue Requirement          $     288,941  $       343,261  $     298,116  $      350,458         9,176         7,196
Airline Rentable Space (normalized)               1,340           1,340          1,387           1,387         47.2             47.2 
Terminal Rental Rate                    $      215.70  $       256.25        $      214.98  $       252.72         (0.72)         (3.5)
Cost Per Enplanement (CPE)              $       19.40  $         22.34  $       19.78  $       22.66              0.38             0.32 
Debt service coverage                          1.82               1.85              1.77               1.84         (0.05)        (0.01)

Summary 
Overall, from a financial perspective, the project is favorable non-aeronautical investment with
relatively modest impacts on airline costs. It results in a slight decrease in the average terminal
rental rate. The project is anticipated to increase debt service coverage beginning in 2031. 
The above calculations were completed pre-Covid-19. The assumed passenger levels for 2027
and 2030, and the non-airline revenues to be generated from this facility upon completion may
vary, but staff continues to assume that the demand for this type of space will be strong by
2027.
ATTACHMENTS TO THIS REQUEST 
(1)   SPARC Environmental Notes 
(2)   Project Presentation 


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

COMMISSION AGENDA  Action Item No. __8c__                            Page 12 of 12 
Meeting Date: May 26, 2020 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
March 10, 2020  C1 Building Briefing and Introduction 
June 26, 2018  Authorization for Planning Funds 
January 26, 2016  The Commission authorized design of an expansion for the existing
Gate C3 passenger holdroom at Seattle-Tacoma International Airport. 
July 11, 2017  The Commission authorized (1) advertise and execute a construction
contract for the Gate C3 Holdroom Expansion project at Seattle-Tacoma International
Airport; and (2) use Port crews in executing the project 















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