COMMISSION 
AGENDA MEMORANDUM                        Item No.          10b 
ACTION ITEM                            Date of Meeting     December 14, 2021 

DATE:     December 3, 2021 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Jeff Moken, Interim Director, Aviation Business and Properties 
Wayne Grotheer, Director, Aviation Project Management Group 
SUBJECT:  North Main Terminal Redevelopment Program  Phase 1 Construction Funding
Authorization (C801204) and approval of a third Tenant Reimbursement Agreement
with Alaska Airlines 
Amount of this request:                $149.5 million 
Total estimated project cost:              $400 million 
ACTION REQUESTED 
Request Commission authorization for the Executive Director  to fund $149.5  million for 
construction of the Phase 1 Enabling Work of the North Main Terminal Redevelopment Program 
at Seattle-Tacoma International Airport, and to execute a third Tenant Reimbursement
Agreement with Alaska Airlines, Inc. (Alaska) to complete the Phase 1 construction work. 
EXECUTIVE SUMMARY 
Alaska desires to redevelop the north end of the Main Terminal at the Airport to increase
passenger throughput and security screening capacity and to improve the overall passenger
experience. This request is to authorize funding for the construction of Phase 1 Enabling Work, 
which includes converting the currently undeveloped Bridge/Promenade level into usable space
for Alaska and other Port tenants, which will add approximately 20,000 square feet (about 
office,  ticket counters), and remodel approximately 6,500 square feet of space in the central
mezzanine area. These space additions  are anticipated to be offset by a reduction of
approximately 16,500 square feet of space that will be demolished in the future Phase 2 
construction, if approved. The amount of this request is $149.5 million - $140.5 million for
construction and $9 million for associated Port and Alaska staff costs. The current cost estimate
provided by Alaska for the full program is $400 million; the Port's independent cost estimate is
within 10% of Alaska's, and this will continue to be evaluated and refined as the design
progresses. This Phase 1 scope is considered value-added to the Port, even if Phase 2 work is not
completed should Alaska choose to not proceed further with the Phase 2 work, or Commission
choose to not authorize that future portion of this project. 

Template revised January 10, 2019.

COMMISSION AGENDA  Action Item No. __10b__                             Page 2 of 8 
Meeting Date: December 14, 2021 
JUSTIFICATION 
The ticketing area used by Alaska at the north end of the Main Terminal regularly experiences
serious overcrowding during peak departure periods throughout the day and is in critical need of
code upgrades and an aesthetic refresh. 
Although previous work has been done by Alaska to alleviate passenger queuing and processing 
gridlock, more than 10 years later the ticketing area is again in need of modernization to address
existing and projected passenger volume increases, keep pace with technology advances and
improve the overall passenger experience. Alaska runs a very efficient operation in their current
leased area, accommodating 53.8% of the airport's passengers (market share report as of
September 2021) in approximately 34.1% of the ticketing capacity (as a percentage of leasable
square footage of ticket counters) at SEA. 
The Port anticipates completing similar building system and architectural improvements for the
remainder of the ticketing level to the south under the upcoming Main Terminal Improvements
Program, which is currently in the Program Definition Document phase. Working groups of key
Port stakeholders and members of the Main Terminal Improvements team meet regularly with
the North Main Terminal Redevelopment team to review changes and updates as the design
progresses. 
Lastly, with only 5 lanes in its current configuration, Security Screening Checkpoint #5 has long
been unable to accommodate increased passenger volumes, regularly resulting in a processing
bottleneck during peak travel periods that creates further delays for departing passengers. A
portion of the offices being built as part of this Phase 1 Enabling Work will be replacement for
approximately 6,500 square feet of existing offices on the north end of the terminal that will be
eliminated to make way to increase Checkpoint #5 to 7 lanes. 
This program supports the Port's Century Agenda's strategic goal of "Advancing this region as a
leading tourism destination and business gateway" by: 
Continuously improving operational efficiency and customer experience at the Airport. 
Strengthening the competitiveness of the Airport in the regional and global marketplace. 
Meeting the region's air transportation needs by delivering vital facilities and 
infrastructure in sustainable and cost-effective manner. 
Diversity in Contracting 
Diversity in Contracting has established a Women/Minority Business Enterprise (WMBE) goal of
15% for the Port's consultant support procurement. Alaska has separately established a 20%
WMBE goal for their consultant support and for construction. 


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

COMMISSION AGENDA  Action Item No. __10b__                             Page 3 of 8 
Meeting Date: December 14, 2021 
DETAILS 
Alaska is completing this work under a multi-phased Tenant Reimbursement Agreement (TRA)
using the Progressive Design Build (PDB) project delivery method. 
To execute the program, Alaska procured through a competitive process the following services: 
1.  Progressive Design-Builder 
2.  Project Management Support Services (Tenant Relocations) 
3.  Project Controls Management 
4.  Operational Readiness, Activation and Transition (ORAT) Support Services 
5.  Financial and Cost Support Management (TRA) 
6.  Project Manager Baggage Improvements 
7.  Project Labor Agreement Administrator 
The construction work is currently broken down into two distinct phases. 
Phase 1 
Develop the currently unused Promenade Level for Alaska check-in, bag drop and
operations spaces and locations to accommodate most of the tenants that will be
displaced during Phase 2 work 
Buildout existing locations in the Main Terminal to accommodate the remaining tenants
displaced during Phase 2 work 
Modifications/upgrades to existing building systems (HVAC, Baggage Handling System,
Low Voltage etc.) to support the newly built Promenade spaces, to mitigate future
operational impacts and control costs in Phase 2 
Phase 2 
Abatement and demolition of a portion of the Mezzanine Level above Alaska ticketing 
Abatement, demolition, and reconfiguration of the north Main Terminal Ticketing Level 
Reconfiguration of the northern-most Mezzanine level 
Expand Security Screening Checkpoint #5 from 5 to 7 screening lanes 
Installation of new building systems and providing code upgrades/modifications to
existing building systems (smoke control, fire suppression and ADA) to support the
reconfigured spaces on the Mezzanine, Ticketing and Baggage Claim levels 
This division of the scope is advantageous because it: 
Provides for a clear 'offramp' decision point at the end of Phase 1 in the event either the
Port or Alaska decides not to continue with the Phase 2 scope of work. However, if this
off-ramp is taken, the code upgrades, regulated materials abatement, and HVAC, Smoke
Control and Fire Suppression System modifications would then need to be incorporated
into the future Main Terminal Improvements Program that will be brought before the
Commission for approval in the future. 

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

COMMISSION AGENDA  Action Item No. __10b__                             Page 4 of 8 
Meeting Date: December 14, 2021 
Provides fully functional, value-added leasable space, including new check-in and bag
drop locations for Alaska on the Promenade if the decision is made not to proceed with
the Phase 2 scope of work.
Staff presented a briefing to the Sustainability Environment and Climate (SEAC) Committee on
11/18/21 to provide an update on the status of the Sustainable Design Approach (SDA) for the
overall program and seek guidance in regard to next steps. As the majority of the sustainability
effort for this program is concentrated in the Phase 2 scope of work, the team anticipates
returning to SEAC with a fully developed SDA in Q1 2022. 
The Port and Alaska are continuing to refine Alaska's overall program budget of $400M, including: 
reconciliation of Alaska's estimate with the Port's Independent 3rd Party estimate 
agreement for cost-sharing between Alaska and the Port 
agreement on a Final Guaranteed Maximum Price (FGMP) from Alaska's PDB by the end
of Q2 2022 
Schedule 
The PDB project delivery method involves overlap between many of these milestones, with the
result that some activities in both Phase 1 and Phase 2 will take place concurrently. 
Activity 
Execution of TRA #1                                         2021 Quarter 4 
Commission full program design and TRA #2 authorization    2021 Quarter 4 
Commission construction Phase 1 and TRA #3 authorization   2021 Quarter 4 
Execution of TRA #2                                         2021 Quarter 4 
Construction start  Phase 1                                   2022 Quarter 1 
Execution of TRA #3                                         2022 Quarter 1 
In-use date  Phase 1                                         2023 Quarter 1 
Commission construction Phase 2 and TRA #4 authorization   2022 Quarter 3 
Execution of TRA #4                                         2022 Quarter 3 
Construction start  Phase 2                                  2022 Quarter 4 
In-use date  Phase 2                                         2025 Quarter 2 
To provide clear project decision points and to ensure there are key concurrence milestones
between the Port and Alaska, the reimbursement of project funds to Alaska is projected to
happen in phases (as outlined above). The first TRA, to complete up to 30% design, was approved
by Commission, on April 27, 2021, for an authorization of up to $10M for both Alaska and Port
costs. The second TRA, authorized by Commission on November 9, 2021, provided an additional
$21.5M to complete the remaining design of the overall project. The third TRA, represented in
this request, will authorize $150 million to construct Phase 1 of the project, also via a TRA. Staff
anticipates returning to Commission in Q3 2022 to request authorization of the remainder of
construction via a TRA. This multi-phased authorization and TRA approach allows Alaska to

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

COMMISSION AGENDA  Action Item No. __10b__                             Page 5 of 8 
Meeting Date: December 14, 2021 
continue to develop work expeditiously, while affording both Alaska and the Port clear project
decision points to ensure alignment of scope, schedule, and budget. 
Cost Breakdown                 Previous Requests       This Request         Total to Date 
Complete PDD and 30% Design         $9,000,000                $0          $9,000,000 
Design  Phases 1 and 2                $16,900,000                 $0          $16,900,000 
Phase 1 Construction Cost                       $0      $140,500,000         $140,500,000 
Alaska Soft Cost                          $3,300,000         $5,200,000            $8,500,000 
Port Soft Cost                             $2,300,000         $3,800,000            $6,100,000 
Total                                     $31,500,000      $149,500,000         $181,000,000 

ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternatives Considered: 
Alternative  1    Delay  Alaska's  Program  and  combine  with  the  Port's  Main  Terminal
Improvements Program 
Cost Implications: ~$1.2  $1.5 billion (estimated combined cost of Alaska and Port Programs) 
Pros: 
(1) Delays capital investment for another 14-16 months, allowing for a single project for the
entire Main Terminal 
(2) Potentially allows for improved cost certainty 
(3) Reduces technical challenges of systems integration and schedule coordination between
adjacent projects 
Cons: 
(1) Does not allow Alaska to manage their own operational impacts 
(2) Delays needed congestion relief 
(3) Does not meet Alaska's target completion date 
(4) Costs will continue to escalate 
(5) Coordinating Alaska TRA and Port Capital work would be challenging 
(6) Significantly reduces the advantages of the PDB project delivery method 
This is not the recommended alternative. 




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

COMMISSION AGENDA  Action Item No. __10b__                             Page 6 of 8 
Meeting Date: December 14, 2021 
Alternative 2  Remove Alaska's scope of work and the Port completes the expansion of Security
Screening Checkpoint #5 and only the necessary code upgrades in the north end of the Main
Terminal. 
Cost Implications: ~$125  $150 million 
Pros: 
(1) Reduces the Port's capital expenditure 
(2) Potentially increases cost certainty 
Cons: 
(1) A new design team would need to be procured by the Port, further delaying the work 
(2) Does not address congestion relief at Alaska ticketing in Zones 6 & 7 
(3) Tenants in Zone 7 Ticketing/ATO still need to be relocated 
(4) Delays architectural visioning upgrades in Zones 6 & 7 
(5) Costs continue to escalate 
(6) Does not allow Alaska to manage their own operational impacts in Zones 6 & 7 
This is not the recommended alternative. 
Alternative 3  Proceed with full scope of Phase 1 construction for Alaska's Program 
Cost Implications: $149.5 million 
Pros: 
(1) Allows Alaska to manage their own operational impacts 
(2) More closely aligns with Alaska's target completion date and avoids the cost escalation
penalty with Alternatives #1 & #2 
(3) Provides needed congestion relief sooner 
(4) Retains advantages of the PDB project delivery method 
Cons: 
(1) Represents a considerable capital investment 
(2) Does not provide optimal cost certainty 
This is the recommended alternative. 
FINANCIAL IMPLICATIONS 
Cost Estimate/Authorization Summary                   Capital   Expense                Total 
COST ESTIMATE 
Early estimated program cost                $350 - $450 million      $TBD   $350 - $450 million 
Current estimated program cost                    $400 million      $TBD          $400 million 
AUTHORIZATION 

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

COMMISSION AGENDA  Action Item No. __10b__                             Page 7 of 8 
Meeting Date: December 14, 2021 
Previous authorizations                             $31,500,000         $0          $31,500,000 
Current request for authorization                   $149,500,000         $0         $149,500,000 
Total authorizations, including this request          $181,000,000         $0         $181,000,000 
Remaining amount to be authorized                       TBD        $0                 TBD 
Annual Budget Status and Source of Funds 
This project was included in the 2022-2026 capital budget and plan of finance with a budget of
$350 million. 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 on November
12, 2021 and received a YES vote on December 13, 2021. 
Financial Analysis and Summary 
Project cost for analysis              $400 million 
Business Unit (BU)                  Terminal Building 
Effect on business performance    NOI after depreciation will increase due to inclusion of
(NOI after depreciation)             capital (and operating) costs in airline rate base. 
IRR/NPV (if relevant)                N/A 
CPE Impact                       $.47 in 2023 and $.97 in 2025 
Future Revenues and Expenses (Total cost of ownership) 
It is anticipated that there will be increased costs to ongoing operating and maintenance
work performed by Aviation Maintenance (AVM) in the new North Main Terminal space. 
AVM will continue to work through design challenges while also anticipating increased
O&M costs. 
Further design is needed to evaluate and better define these impacts for Electrical and Electronic
Systems, Facilities Systems and Grounds as well as Custodial Services. AVM will continue to work
with the program team to ensure that Port standards are incorporated in the future design.
ADDITIONAL BACKGROUND 
Many of the mechanical, smoke control, fire suppression and architectural updates being
incorporated into the design for the North Main Terminal Redevelopment Program will be
applied throughout the rest of the facility by the Main Terminal Improvement Program, which is
currently in the Project Definition phase.
The ongoing collaboration between these programs will facilitate continuity of systems and
architectural updates and finishes throughout the Main Terminal, Ticketing and Baggage Claim
Levels. 
In addition, this program is also continuing to collaborate on boundary, scope, and schedule
coordination with: 

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

COMMISSION AGENDA  Action Item No. __10b__                             Page 8 of 8 
Meeting Date: December 14, 2021 
Baggage Optimization Program 
Main Terminal Low Voltage Upgrades 
Terminal Security Enhancements 
ATTACHMENTS TO THIS REQUEST 
(1)   Presentation 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
November 9, 2021  North Main Terminal Redevelopment Program  Full Program Design
(C801204) which authorized $21.5 million for the remaining design for all phases of the
North Main Terminal Redevelopment Program,  and execution of a second Tenant
Reimbursement Agreement with Alaska Airlines 
April 27, 2021   North Main Terminal Redevelopment Program   Preliminary Design
(C801204) which authorized up to $10 million in support of the North Main Terminal
Redevelopment Program to complete a Project Definition Document, 30% design and to
execute a Tenant Reimbursement Agreement with Alaska Airlines. 











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