PORT OF SEATTLE
MEMORANDUM
COMMISSION AGENDA
Item No.
5e
Date of Meeting
April 5, 2011
DATE: March 25, 2011
TO: Tay Yoshitani, Chief Executive Officer
FROM: Michael Ehl, Director Airport Operations
Wayne Grotheer, Director, Aviation Project Management
SUBJECT: Common Use Expansion Podiums at Seattle-Tacoma International Airport.
(CIP# C800276)
Amount of This Request: $425,000 Source of Funds: Airport Development Fund
State and Local Taxes Paid: $33,000 Total Estimated Cost: $3,018,000
ACTION REQUESTED:
Request Commission authorization for the Chief Executive Officer to procure new Common Use
Podiums for Gates S1, S6, S7, S8 and S9 located at the South Satellite of the Seattle-Tacoma
International Airport (Airport) and utilize Port crews to demolish the existing podiums and
install the new podiums. This authorization is for $425,000 out of a total project cost of
$3,018,000.
SYNOPSIS:
Seattle-Tacoma International Airport has undertaken a major program to install "Common Use"
equipment at several locations in the Airport that may be used interchangeably by participating
airlines as a productivity and cost-savings measure. "Common Use" equipment allows the
Airport to handle more passengers and support future growth within the current terminal
footprint without major capital investment. Typical "Common Use" equipment includes
common gate areas and ticket counters. This project will replace Delta Air Lines (Delta)
proprietary check-in counters, boarding podiums and boarding gate reader stands at the South
Satellite Gates S6, S7, S8 and S9 and boarding gate reader stands at Gate S1. The scope also
includes demolition of four existing check-in counters and four existing boarding gate podiums.
This authorization will provide for the purchase of new podiums to meet Port of Seattle (POS)
standards. The demolition of existing podiums and installation of the new podiums will be
completed by Port Construction Services Crews. A future request will seek authorization to
advertise for a construction contract to install the infrastructure and common use equipment for
the new podiums. This request to replace proprietary podiums with POS podiums now, before
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
March 25, 2011
Page 2 of 5
the follow on equipment project, originated from Delta. This will enable Delta to have this work
complete closer to when its new club opens.
BACKGROUND:
As a productivity and cost-savings program, the Airport has installed “Common Use” equipment,
such as common gate areas and ticket counters, at several locations in the terminal that can be
used interchangeably by participating airlines. By creating a flexible, common-use environment,
more airlines are able to use the existing facilities without major capital investment, which helps
hold down their costs. The Airport is further able to handle more passengers and support future
growth within the current terminal footprint.
In August 2009, Port Commissioners authorized the procurement of both a designer and design
work for this project to install common use equipment in the South Satellite at the Airport. At
that time, the project schedule indicated completion by the end of 2011. Delta has since
requested that the new Port standard podiums be installed at the Delta leased gates sooner to
more closely coincide with the opening of the new Delta Sky Club in summer 2011. The
existing Delta casework no longer suits its needs. Delta will install its proprietary equipment in
the Port casework, including new Gate Information Displays (GIDS), until this project installs
common use equipment as construction is completed at a later date.
PROJECT JUSTIFICATION:
The purpose of this project is to replace proprietary check-in counters, boarding podiums and
boarding gate reader stands at Delta’s South Satellite Gates S6, S7, S8 and S9. We will also be
purchasing two boarding gate reader stands for Gate S1, which will complete all the casework
purchases by this project. It will be more cost effective to purchase the casework for Gate S1
when we purchase the casework for the other gates even though it is not part of Delta’s request.
Project Objectives:
Update gate podium and check-in counter facilities at Delta leased gates to meet current Port
standards. Reduce airline expenses through more efficient use of resources necessary to manage
boarding and check-in processes.
PROJECT SCOPE OF WORK AND SCHEDULE:
Scope of Work:
At the completion of this project Gates S-1, S-6, S-7, S-8, S-9 will be newly equipped with Port
standard gate check-in counters, boarding podiums and boarding gate reader stands.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
March 25, 2011
Page 3 of 5
Schedule:
Commission Authorization April 2011
Purchase casework May 2011
Construction begin July 2011
Construction complete August 2011
Request to authorize remaining work August 2011
FINANCIAL IMPLICATION:
Budget/Authorization Summary:
$3,018,000
$0
$3,018,000
$506,000
$425,000
$931,000
$2,087,000
Budget Status and Source of Funds:
This project is included in the 2011-2015 capital budget and plan of finance as a committed
project, CIP #C800276. The funding source will be the Airport Development Fund.
Financial Analysis and Summary:
CIP Category
New/Enhancement
Project Type
Renewal & Replacement
Risk adjusted Discount rate
N/A
Project Cost Breakdown:
This Request
Total Project
Construction Costs
$87,000
$1,574,000
Port furnished equipment
$259,000
$563,000
Sales tax
$33,000
$210,000
Outside professional services
$0
$221,000
Aviation PMG and other soft costs
$46,000
$450,000
Total
$425,000
$3,018,000
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
March 25, 2011
Page 4 of 5
Key risk factors
N/A
Project cost for analysis
$3,018,000
Business Unit (BU)
Terminal
Effect on business performance
NOI after depreciation will increase
IRR/NPV
N/A
CPE Impact
CPE will increase by $.02 by 2013. However, no
change to business plan forecast as this project was
included. The asbestos abatement costs, depending on
the timing will cause a short-term increase in CPE by
$.01-$.04 in 2011and 2012. Asbestos abatement costs
are included in the annual operating budget.
ENVIRONMENT AND SUSTAINABILITY:
New podiums will allow Delta to utilize its latest technology for passenger processing and
notifications, improving passenger processes by using new Delta equipment not supported by its
existing casework.
STRATEGIC OBJECTIVES:
This project promotes the Port’s strategic goals to “Ensure Airport and Seaport Vitality” and “Be
a Catalyst for Regional Transportation Solutions” by providing the airlines with the tools and
equipment to increase on-time performance. Flexible gate and ticket counters will improve the
Airport’s asset base since more airlines will be able to use existing facilities for their operations.
Since deregulation, air carriers are continually vying for increased market share, which drives
constant change in their facilities requirements. By creating a flexible, common-use
environment, carriers and the Airport will spend fewer capital dollars recreating facilities as
market conditions change. More carriers are able to share the same gate facilities, including
communications hardware, without constant redesign and construction dollars spent to customize
the operating environment to their specific proprietary needs. This also helps increase total
Airport through-put rates, in a finite sized terminal, as passenger volumes increase.
TRIPLE BOTTOM LINE SUMMARY:
This project standardizes gate check-in amenities. This gives the airlines opportunities to operate
their boarding and check-in operations more efficiently with updated technology, assisting in
achieving economic, social, and environmental success.
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS:
ALTERNATIVE 1: Require Delta to update the casework and reimburse them for the costs.
This option was proposed to Delta, and declined by Delta.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
March 25, 2011
Page 5 of 5
ALTERNATIVE 2: Do nothing. This alternative would yield inconsistent casework furniture in
the Satellite and would not accommodate new Delta equipment.
ALTERNATIVE 3: The Port will provide the Port standard casework at the South Satellite, to
optimize continuity throughout the SSAT and to accommodate growth and operations by all
carriers that use these facilities. Installing the Port standard podiums ahead of time will provide
a cost effective way for Delta to install their proprietary equipment. This is the recommended
action.
PREVIOUS COMMISSION ACTION OR BRIEFING:
August 25, 2009, Port Commissioners authorized the procurement of a designer, design work,
and procurement of some equipment for this project to install common use equipment in the
South Satellite at the Airport.
August 3, 2010, Port Commissioners authorized the professional services Indefinite Delivery
Indefinite Quantity (IDIQ) contract for airport ticket counter, gate podium and other passenger
processing casework and infrastructure design services.
January 25, 2011, Port Commissioners authorized to move forward with design, advertisement
and execution of a major construction contract for the Concourse D Common Use Expansion
Project.