PORT OF SEATTLE
MEMORANDUM
COMMISSION AGENDA
Item No.
6b
ACTION ITEM Date of Meeting
March 27, 2012
DATE: March 20, 2012
TO: Tay Yoshitani, Chief Executive Officer
FROM: Mike Ehl, Director, Airport Operations
Wayne Grotheer, Director, Aviation Project Management Group
SUBJECT: Cargo 5 Hardstand at Seattle-Tacoma International Airport (CIP C800254)
Amount of This Request: $3,230,000 Source of Funds: Existing Revenue Bonds
Total Project Estimated Cost: $45,906,000
ACTION REQUESTED:
Request Port Commission authorization for the Chief Executive Officer to prepare 100% design for
the Cargo 5 Hardstand at Seattle-Tacoma International Airport (STIA) to provide additional parking
for aircraft remaining overnight at the Airport. The amount of this request is $3,230,000. The
estimated total cost of the project is $45,906,000.
SYNOPSIS:
This project will provide additional remain-over-night (RON) parking positions that are critical to
meeting capacity demand, operational efficiency and safety at STIA.
STIA’s geographic location has traditionally been a determining factor in the accommodation of
RON aircraft by airline operators. Despite a reduction in overall aircraft operations of approximately
30% over the past decade, demand for RON parking has not decreased, and is not projected to do so
in the future. To accommodate anticipated future growth in RON demand within the very limited
space available, the Airport must convert underutilized airfield assets to the highest and best use.
The recommended site for additional RON development is the former United States Postal Service
(USPS) site. The Commission previously authorized both lease termination and building demolition
on this site. This project will design and construct the Cargo 5 RON hardstand to provide additional
RON parking positions needed to meet the anticipated demand and to provide flexibility to
accommodate irregular schedules of passenger aircraft. At least eight, with the possibility of ten,
additional RON parking positions will be created by this project.
The design will be done primarily in-house by Port staff with assistance of consultants for specialty items.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
March 20, 2012
Page 2 of 7
BACKGROUND:
By virtue of being located in the northwest corner of the continental United States, a high number of
departures are scheduled by the airlines to leave early in the morning in order to reach their
connections and destinations at desirable times. Many of the morning departure aircraft return to
STIA at night to fuel and prepare for the next day’s early morning flight. As a result of the high
number of morning departures, more passenger aircraft remain overnight at STIA than there are
terminal gates available. Off-gate hardstand positions are needed to accommodate these RON aircraft
so they are available for the morning peak traffic demand. After the first wave of early departures
from the terminal gates is complete, the off-gate RON aircraft are moved to the vacant gates for a
second wave of morning departures. Without additional hardstands, to accommodate off-gate RON
aircraft, airlines would have to park these aircraft at another airport and fly them in for the early
morning departures, which is a costly and inefficient proposition. In the absence of sufficient RON
parking capacity, airlines would most likely not schedule additional morning departures. Without
sufficient available RON hardstands, STIA cannot meet the demands of the airline customers.
Factors influencing the supply and demand of RON positions are difficult to manage and predict as
airline flight and aircraft maintenance schedules change frequently throughout the peak travel season
and occasionally unscheduled or irregular operations also occur. Until now, STIA has met RON
demand, with increasing difficulty, by managing more frequent parking and towing of aircraft onto
and off STIA controlled common use gates and hardstands. This includes the hardstands in the cargo
area which are prioritized for cargo use and are becoming increasingly less available. Agreements
between airlines can be negotiated to allow RON parking of one airline’s aircraft within the lease
area of a second airline. These lease agreements between airlines do not provide STIA with
sufficient control over these areas to guarantee the availability of RON when needed.
The existing E-100 security gate and the Midfield Checkpoint will both be relocated to the north side
of Cargo 5 as a result of this project. Relocating E-100 will provide a more efficient entrance to the
airfield and enhance safety by moving the vehicle access to the airfield away from the areas of high
aircraft movement. Relocating the Midfield Checkpoint will provide for proper grading for the
project, and will also allow for faster vehicle access between the hardstand and the terminal area.
The Cargo 5 RON is being accomplished in three phases. The first phase was the termination of the
lease with the USPS and this has been accomplished. The second phase is to demolish the USPS
building. A contract to demolish the USPS building has been awarded and the demolition work is
scheduled to be complete by mid-2012. The third and final phase is the design and construction of
the hardstand.
A Part 150 Noise and Land Use Compatibility Study, of which the feasibility of a ground run-up
enclosure (GRE) is one element, is currently underway. Several potential sites have been identified
for a GRE, should it be warranted, including Cargo 5. The development of the hardstand facility is
compatible with the GRE, if it were to be built at this location, but would likely result in the loss of
two to three RON parking positions. Some pavement removal would likely be required in order to
construct wall foundations for the GRE. The cost for pavement removal, replacement of RON, and
other associated items for a GRE is not included in the development of Cargo 5 RON.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
March 20, 2012
Page 3 of 7
PROJECT JUSTIFICATION:
Project Objectives:
The project objective is to construct a Cargo 5 hardstand for additional RON parking positions in
order to meet the expected demand and to provide flexibility to accommodate irregular schedules of
passenger aircraft.
PROJECT SCOPE OF WORK AND SCHEDULE:
Scope of Work:
The hardstand will include the following items:
o Full access across hardstand to and from Taxiway A
o Grading modifications of existing service road including new entrance to Swissport Cargo
o Retention walls on the north and south sides of Cargo 5
o New airfield guidance signs
o Adjacent taxiway lighting improvements as required
o Fuel truck parking on east end of hardstand
o Applicable fuel system components
o Ramp lighting
o Flush gutter system
o Flush fire hydrants
o In ground 400Hz system power source for each RON position
o New security gate and guard shack to replace current E-100
o Relocation of midfield security access point
Schedule:
Commission Authorization for Hardstand Design March 2012
Commission Authorization to Advertise March 2013
Advertise April 2013
Notice to Proceed July 2013
Construction Complete August 2014
FINANCIAL IMPLICATIONS:
Budget/Authorization Summary:
Capital
Expense
Total
Original Preliminary Budget
$ 28,097,000
$ 0
$ 28,097,000
Current Budget
$ 45,906,000
$ 0
$ 45,906,000
Previous Authorizations
$ 11,831,213
$ 0
$ 11,831,213
Current Request for Authorization
$ 3,230,000
$ 0
$ 3,230,000
Total Authorizations, including this Request
$ 15,061,213
$ 0
$ 15,061,213
Remaining Budget to be authorized
$ 30,844,787
$ 0
$ 30,844,787
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
March 20, 2012
Page 4 of 7
Project Cost Breakdown: This Request Total Project
Construction
$ 0
$ 30,316,246
Construction Management
$ 305,000
$ 3,121,979
Design
$ 1,525,000
$ 1,979,652
Project Management
$ 1,270,000
$ 1,705,598
Administrative and Soft Costs
$122,000
$ 905,498
Lease Buy-out
$ 0
$ 4,995,000
State & Local Taxes (estimated)
$ 0
$112,000
Total
$ 3,230,000
$ 45,906,000
Budget Status and Source of Funds:
Aircraft RON Parking USPS Site (CIP #C800254) is included in the 2012-2016 capital budget
and plan of finance. The source of funds for this project will be existing revenue bonds and
future revenue bonds.
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
$45,906,000
Business Unit (BU)
Airfield
Effect on business performance
NOI after depreciation will increase since capital and
operating costs will be recovered through landing
fees
IRR/NPV
N/A
CPE Impact
$0.19 in 2015; however, no change from business
plan forecast as this project was included in the plan
Lifecycle Cost and Savings:
The estimated life expectancy for this project is 20 years for pavements, 15-20 years for the
security guard shack, 40 years for utilities, 20 years for 400 MHz power system and 30 years for
electrical panels and transformers.
The preliminary annual operation and maintenance cost for Cargo 5 Hardstand is $150,000 for
the first year with a 3% increase per year thereafter.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
March 20, 2012
Page 5 of 7
STRATEGIC OBJECTIVES:
This project supports the Port’s strategy to “Ensure Airport and Seaport Vitality.”
ENVIRONMENT AND SUSTAINABILITY:
Benefits include the following:
Energy conservation lighting may be used to reduce energy use, as well as benefits for
off-airport glare, and light pollution.
Utilizing 400 Hz power, versus auxiliary power units (APUs) or ground power units,
supports the Port’s Century Agenda Goal to Reduce carbon emissions from all Port
operations by 50% from 2005 levels and reduce aircraft-related carbon emissions at Sea-
Tac by 25%. Using 400 Hz power at RON positions is consistent with previous decisions
to reduce noise and emissions.
The estimated annual emission savings of utilizing 400 Hz power, versus APUs, for a
cumulative 14,600 hours of 737 operations is:
Hydrocarbon 1.8 tons/yr.
Carbon Monoxide 31 tons/yr.
Nitrous Oxides 8 tons/yr.
Carbon Dioxide 5,300 tons/yr.
The emissions reductions result in 500,000 gallons of fuel being saved. These reductions
are estimated assuming eight RONs per night, with each aircraft using 400 Hz power (in
lieu of APUs) for five hours per night.
Existing guard shack may be reused and green construction may be used to build the new
guard shack.
Alternative materials may be used in concrete, such as fly ash and slag.
During periods of non-peak activity, the new hardstand may reduce the need for
passenger aircraft to RON at the distant north cargo hardstands, which are designed and
utilized for air cargo operations. This improved proximity to the terminal will reduce the
travel distance from RON spaces to the terminal, reducing cost and carbon emissions, and
will be a more efficient and safe operation for the airlines.
BUSINESS PLAN OBJECTIVES:
Additional hardstand capacity is in alignment with the future goals of the Airport to anticipate
and increase both passenger and cargo aircraft growth and demand. This is part of the Airport’s
goal in having a world class airport that meets the needs of customers.
TRIPLE BOTTOM LINE SUMMARY:
The development of the hardstand will provide a long-term solution for RON operations at the
Airport. It will increase airline efficiency and reduce emissions.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
March 20, 2012
Page 6 of 7
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS:
1. Alternative 1 – Do Nothing: Operational alternatives include the airlines not adding
morning departure flights, foregoing market share, or parking aircraft at another airport
overnight. None of these support the strategic objective to ensure Airport vitality, and
would either increase the cost of additional morning departures for the operating airlines
or result in lost opportunity for additional revenue from additional morning departures.
This is not a practical or recommended alternative.
2. Alternative 2 – Build RON Elsewhere: An additional capital alternative considered was
the construction of additional passenger terminal facilities with aircraft gates to
accommodate additional on-gate RON positions. Airport staff conducted a decision
analysis to determine the best location for the construction of new RON hardstands. Six
sites were compared (Air Cargo IV, Delta Air Lines Cargo, USPS, Fire Station, United
Airlines Maintenance Building, United Airlines Cargo Building) against nine criteria
including cost, long-term plan compatibility, operational flexibility, and tenant impact.
All sites considered are currently occupied by an existing facility and the USPS site was
determined to be the best location for RON hardstand. This alternative is not
recommended.
3. Alternative 3 – Build RON at the USPS Site: The USPS site was chosen over the other
sites, primarily because it is a sufficiently large site, the use of which for RON parking is
consistent with the Comprehensive Development Plan (CDP) and because the USPS is an
older building with diminished reuse value in comparison to the other sites at the Airport.
In addition, the USPS site provides the most number of RON positions, and it is less
expensive to develop per RON position than the other sites analyzed. The USPS lease
termination and buyout has already occurred and the building is currently being
demolished. The construction of RON at this site is consistent with previous
Commission actions. Therefore, development of RON positions at the USPS site is
the recommended alternative.
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST:
Attachment A – Overview of the Cargo 5 Hardstand site.
PREVIOUS COMMISSION ACTION:
On July 26, 2011, the Port Commission authorized the Chief Executive Officer to advertise and
execute a construction contract for the USPS Building Demolition. The estimate for construction
work is $5,536,000 and for Port Construction Services (PCS) to self-perform the work in
conjunction with small works contractors and issue small works contracts in support of the USPS
Demolition Project at Seattle-Tacoma International Airport (Airport). The estimate for the PCS
construction work was $67,000.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
March 20, 2012
Page 7 of 7
On August 26, 2008, the Port Commission authorized the Chief Executive Office to direct staff
to amend the USPS lease to develop a cell phone lot, prepare 100% demolition design of the
USPS Air Mail Center Facility at Seattle-Tacoma International Airport, 15% design of RON
aircraft parking positions and terminate USPS building lease. The amount authorized was
$6,226,213. The total amount of the previous authorizations $11,831,213.
