COMMISSION 
AGENDA MEMORANDUM                        Item No.          10d 
ACTION ITEM                            Date of Meeting       April 27, 2021 
DATE:     March 19, 2021 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Wayne Grotheer, Director Aviation Project Management 
James Jennings, Director Aviation Business and Properties 
SUBJECT:  C1 Building Expansion Design Authorization (CIP# C800845) 
Amount of this request:                  $81,000,000 
Total estimated project cost:            $340,000,000 
ACTION REQUESTED 
Request authorization to (1) execute a contract for Program Management and Project
Management support, not-to-exceed the amount of $14,000,000; (2) execute a contract for
Construction Management support, not-to-exceed the amount of $15,000,000;  (3) execute a
contract for Special Inspections and Testing, not-to-exceed the amount of $1,000,000; (4)
authorize the remainder of the design budget;  (5) execute an amendment to the C1 Building
Expansion Design Services contract, in the amount of $17,880,000, for a new contract total of
$24,080,000; (5) for the Executive Director to execute a change order to Contract MC-0320161
General Contractor/Construction Manager (GC/CM) Preconstruction Services Agreement for the
remaining preconstruction services portion of the GC/CM contract with Turner Construction
Company for work to be performed at Seattle-Tacoma International Airport (SEA). The amount
of the change order is $1,000,000 for a revised total Not-to-Exceed (NTE) contract amount of
$3,500,000, and (6) authorize enabling construction work and early work packages. 
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). The project will also redevelop the existing concourse level footprint,
which is largely blocked off from the general public, to provide additional concessions, services
and amenities to the travelling public. 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

Template revised January 10, 2019.

COMMISSION AGENDA  Action Item No. _10d_                               Page 2 of 9 
Meeting Date: April 27, 2021 
restrooms, create circulation and seating for the traveling public, and expand the existing Gate
C3 hold room. 
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.
To support the goal of staying on budget, the team brought the GCCM on board concurrently
with the designer. The GCCM has been providing many preconstruction services including
estimating input through design development and not just at design milestones or after the
design is complete. Staff is currently working with the GCCM to provide early estimates based on
the current concept that is being developed. The goal of the project team is to leverage the
construction expertise and cost knowledge from the GCCM to make the best design choices and
not require re-design to meet established budget. 
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 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. 
Environmental 
The C1 project is 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: 
Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. _10d_                               Page 3 of 9 
Meeting Date: April 27, 2021 

1.  Integrate sustainability early in the capital process by establishing a team of projectspecific
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 early in the design process. 
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. 
JUSTIFICATION 
Over the last decade, leasable space post-security at the Airport has become almost non-existent
due to the continued growth of airlines and tenants' operational and administrative needs. Staff
has 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. 
Despite the 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. Prior to COVID, the demand for
increased airport dining and retail space post-security 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 our peak, Concourses C and D were
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. 
In previous requests, the project team was authorized to procure two separate contracts, one
for a Designer and the other for a General Contractor / Construction Manager (GC/CM). A limited
design request was made to Commission in early 2020, after consultation with the airlines, due
to unknowns related to the emerging COVID-19 demand, thus the amounts requested and
Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. _10d_                               Page 4 of 9 
Meeting Date: April 27, 2021 
authorized  meant that the current design contract is only funded through 30% design
development. The team anticipates completing the 30% design and exhausting those funds in
Q4 2021. The current authorization will allow the project team to fully fund the design contract 
and allow staff to take advantage of early or enabling work identified by Port Staff, the Designer,
and the GCCM. Early and enabling work will allow the team to deliver the project quicker. An
accelerated delivery will help the project stay on budget and reduce soft costs. 
Diversity in Contracting 
The 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 both the design contract and for the GCCM contract. The GCCM goal may be modified as
design progresses and the scopes of work are further developed.
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 Transportation Security Administration (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 the Airport 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
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 C3 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, Offices, and Premium Lounge
space. 
(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 
Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. _10d_                               Page 5 of 9 
Meeting Date: April 27, 2021 
(9)   New post security Meditation room 
Schedule 
Commission design authorization               2020 Quarter 2 
Design start                                       2021 Quarter 1 
Commission construction authorization          2022 Quarter 4 
Construction start                                2022 Quarter 4 
In-use date                                       2027 Quarter 2 
Cost Breakdown                                     This Request           Total Project 
Design                                                $41,500,000            $51,000,000 
Construction                                           $39,500,000          $289,000,000 
Total                                                       $81,000,000           $340,000,000 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1  Delay Authorization until January 2022 
Cost Implications: $0 - Likely to add time and cost to the project. 
Pros: 
(1)   Less Port capital will be invested now. making it easier to "off ramp" the project. 
(2)   Project team will have more time to get a positive MII. 
(3)   Project is currently funded through the end of 2021. 
Cons: 
(1)   Project will not be able to take advantage of GCCM suggestions to deliver the project
quicker. 
(2)   Project has no contingency. Any issues will stop progress until a new Authorization can
be approved. 
(3)   Project  Management  team  is  currently  staffed  by  1.5  Full  Time  Employees  for
2021. Additional support is needed for a project this large, including project controls. 
(4)   Construction Management team will have insufficient funds to provide the necessary
staffing for a project of this magnitude. 
This is not the recommended alternative. 



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

COMMISSION AGENDA  Action Item No. _10d_                               Page 6 of 9 
Meeting Date: April 27, 2021 
Alternative 2  Reduce Authorization 
Cost Implications: Will reduce Authorization by $40 Million - Likely to add time and cost to the
project. 
Pros: 
(1)   Less capital is committed to the project up front. 
(2)   Project team will have more time to get a positive MII. 
(3)   Project is currently funded through the end of 2021. 
Cons: 
(1)   Project may not be able to take advantage of GCCM suggestions to deliver the project
quicker. 
(2)   Project team will have to prioritize project support for PM and for CM. 
This is not the recommended alternative. 
Alternative 3  Request Authorization per the Memo 
Cost Implications: $81 million 
Pros: 
(1)   Project will be able to take advantage of GCCM ideas to deliver the project more quickly. 
(2)   Project will be able to identify and start planning for enabling work that will allow for a
quicker delivery. 
(3)   The project will be adequately staffed. 
Cons: 
(1)   $81 million is a substantial commitment to the project during a time of reduced
revenues. 
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                         $11,600,000               $0     $11,600,000 
Current request for authorization               $73,074,000      $7,926,000     $81,000,000 
Total authorizations, including this request      $84,674,000      $7,926,000     $92,600,000 
Remaining amount to be authorized          $247,102,000       $298,000   $247,400,000 
Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. _10d_                               Page 7 of 9 
Meeting Date: April 27, 2021 

Annual Budget Status and Source of Funds 
This project is included in the 2021-2025 capital budget and plan of finance with a budget of
$340,000,000. The funding sources will include the Airport Development Fund and future
revenue bonds. This project was submitted to the airlines for Majority-In-Interest approval due
on April 26, 2021. 
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. 
Non-aeronautical Investment Analysis 
The following table shows the allocation of capital costs based on rentable square footage. For
non-aero purposes, 54.5% of the rentable square footage, equating to $185 million in capital
cost, establishes the basis of the non-aero portion of the project. The lower part of the table
identifies an incremental revenue increase from $12.1 million in 2028, which assumes first year
of occupancy at 60% of available non-aero office, to $15.5 million in 2031, the year by which all
space is assumed to be fully leased. This new revenue, attributed to airport dining, retail, and
office lease, generates the positive Net Present Value of $44.4 million, which signifies a good
investment. Given that the existing space is currently generating revenues, the NPV is netted
against a base case (do nothing).
Non-aero Investments
$ in 000s    Non-aero         Aero            Total
C1 rentable sqft                                69,773         58,245         128,018
C1 rentable sqft %                             54.50%         45.50%
Project Cost                             $     185,308  $     154,692  $    340,000 
Payback (years from opening)                      11
NPV (40 years)                          $     145,500
NPV Inrcemental to Base               $      44,400
2028        2031
Incremental Non-aero Revenue        $      12,073  $      15,466
Incremental Non-aero O&M           $        504               571
Net Operating Income                 $      11,569  $      14,895


Aeronautical Rate Base Impacts 

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

COMMISSION AGENDA  Action Item No. _10d_                               Page 8 of 9 
Meeting Date: April 27, 2021 
Under the terms of SLOA IV, the Airport's terminal space is allocated between aeronautical and
non-aeronautical cost centers based on rentable square feet. Terminal rents are established
based on the total cost center costs. Therefore, in looking at the impacts of a project like C1 that
adds significant square footage, it is important undertake a two-step analysis that accounts for
changes in the total terminal space distribution, and therefore the entire terminal cost center
distribution between aeronautical and non-aeronautical changes. 
The table below shows that before the C1 Building Expansion, 77.31% of the terminal costs are
allocated to the aeronautical rate base. This suggests that $21.3 million of the C1 incremental
revenue would be allocated to the aeronautical rate base. After the project completion, 76.68%
of the terminal costs are allocated to the aeronautical rate base. This effectively shifts $2.5 million
of costs from the aeronautical rate base to the non-aeronautical side. Thus, in 2028, after project
completion, the net impact of the C1 project is to attribute $18.9 million in incremental revenue
to the aeronautical rate base. 





The table below shows that starting in 2028, the project will effectively increase the CPE by $0.68,
however by full occupancy the CPE declines to $0.62. It also shows that starting in 2028, the
average terminal rental rate will increase because of the C1 Building Expansion, however, by full
occupancy the rate of increase declines. Overall, the project will result in a slight reduction in
debt service coverage of ($0.01) starting in 2028. 



Summary 
Overall, from a financial perspective, the project is a favorable non-aeronautical investment with
relatively modest impacts on the average airline terminal rental rate while delivering needed
airline office and lounge space.  While the project generates a slight decrease in debt service
Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. _10d_                               Page 9 of 9 
Meeting Date: April 27, 2021 
coverage through 2031, assuming growth in NOI and level debt service, debt service coverage is
expected to increase beyond 2031. 
ATTACHMENTS TO THIS REQUEST 
(1)   Presentation slides 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
May 26, 2020  Design and GCCM Authorization 
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).