Template revised September 22, 2016.
COMMISSION
AGENDA MEMORANDUM
Item No.
9a
BRIEFING ITEM
Date of Meeting
June 12, 2018
DATE: June 5, 2018
TO: Stephen P. Metruck, Executive Director
FROM: Jeffrey Brown, Director Aviation Facilities and Capital Programs
Wayne Grotheer, Director, Aviation Project Management Group
SUBJECT: South Satellite (SSAT) Infrastructure Upgrades (CIP #C800798)
Amount of anticipated request:
$0
Total estimated project cost:
$52,232,000
EXECUTIVE SUMMARY
Construction of this project was authorized on August 8, 2017. At that time, the scope was
limited due to plans to fully renovate the South Satellite in the next three to four years. Since
then, the decision was made to delay the full renovation of the satellite 10 to 15 years. In
February, a single irregular bid of 180 percent of the engineer’s estimate was received for the
project and the solicitation was cancelled. Staff has since identified additional scope for the
project that better addresses the needs of the facility, improves constructability, and reduces
risk to both the Port and Contractor which should make it more attractive to potential bidders.
Staff will return to commission on June 26, 2018 for the authorization to proceed with design of
the added scope.
The following are some issues identified by the project team that resulted in the irregular bid:
1. Removing, storing, and reinstalling the existing paraline ceiling was expensive and
complicated for the contractor. The new approach, which directs the contractor to
remove and dispose of the old ceiling and replace with new, improves constructability
and reduces risk for the contractor while greatly improving the aesthetics of the SSAT.
2. Performing spot regulated materials management (RMM) abatement instead of full
abatement required the contractor to use additional personnel to maintain the work
area in a safe working condition at all times. The full RMM abatement will speed up the
demolition and allow for easier maintenance in the future, saving the Port money in the
long term.
COMMISSION AGENDA – Briefing Item No. _9a___ Page 2 of 9
Meeting Date: June 12, 2018
Template revised September 22, 2016; format updates October 19, 2016.
This project will improve the effectiveness and reliability of the Heating Ventilation and Air
Conditioning (HVAC) system for the SSAT, a terminal that has seen dramatic passenger growth.
Scope of work for the previous authorization included replacement and upgrade of the existing
air handler and HVAC system, reinstallation of the existing ceiling, and partial RMM abatement.
The additional HVAC capacity will also accommodate the expansion of Airport Dining and Retail
(ADR), providing needed customer amenities. Maintaining comfortable heating and cooling is a
basic necessity for a satisfying customer experience. While the Port is interested in undertaking
a major renovation of the SSAT within the next 10 to 15 years, the inadequacy of the HVAC
system today and its risk of failure make this investment necessary.
The expanded scope of work for this project includes replacement and upgrade of the existing
air handler and HVAC system (prior scope), replacement of the ceiling, lighting, sprinkler
system, and signage on the concourse, Satellite Transit System (STS), and mezzanine levels, and
above the escalators, replacement of the carpet on the concourse level, and full RMM
abatement in areas where work will be performed. The additional scope increases the budget
by $38,307,000, for a total estimated project cost of $52,232,000. Staff anticipates returning to
Commission in October 2018 to request this funding after the 90 percent design is complete
and request authorization to advertise the bid package for construction.
Equipment installed as part of this project may not be compatible for the future SSAT
renovation project and the financial analysis for this project is based on this premise. Given
what we know today about a likely SSAT renovation project schedule, the HVAC improvements
would have a life of at least 10 to 15 years; consequently, the capital costs will be amortized
over this period. This project is the first and most critical phase of the shorter-term SSAT
program to address the immediate needs of the facility. Staff anticipates returning to
Commission Q4, 2018 to brief Commission on additional project/s necessary to support the
SSAT facility.
The SSAT was constructed in 1971 and the core mechanical and electrical utilities of the original
concourse have remained largely unchanged since it was built. Demand on the mechanical
systems has approximately doubled since 1971, primarily from additional cooling load caused
by new electronic systems, increasing passenger traffic, and small facility additions. Portions of
the HVAC Air Handler system failed recently due to age and condition, the outage during
equipment repairs caused a complete loss of cooling capacity in the SSAT for approximately six
weeks.
JUSTIFICATION
In coordination with the Aviation Division’s original plan to completely re-construct the SSAT
facility within the next few years, the scope of this project was minimized to just the essential
infrastructure (concourse level HVAC) where failure was eminent. As a result of the irregular bid
in the first quarter of 2018, and the decision to delay major renovation at the SSAT for the next
10 to 15 years, the team reevaluated the project scope to address shortcomings and
COMMISSION AGENDA – Briefing Item No. _9a___ Page 3 of 9
Meeting Date: June 12, 2018
Template revised September 22, 2016; format updates October 19, 2016.
constructability issues. The project team determined that in our effort to minimize project
scope, we added substantial complexity, risk, and created difficult working conditions for the
construction contractor. The additional scope, as proposed in this request, mitigates risk and
constructability issues for the contractor while providing for the necessary operational integrity
of the HVAC, Lighting, and Fire Sprinkler system at the SSAT.
SSAT use and growth in passenger volume has increased dramatically since 1971 when first
constructed such that the existing HVAC system is only capable of providing 70% of the building
load. This growth has put a premium on having a smoothly operating and serviceable HVAC
system at the SSAT. The major elements of the system are the air handler and air distribution
boxes, which are now 47 years old - nearly twice their expected useful lives.
Failures of the cold deck supply fan in 2015 resulting in a six week total loss of cooling, highlight
the need to upgrade key system components before catastrophic failure causes the SSAT to
lose cooling and ventilation during the summer or heating and ventilation during the winter.
This project addresses the immediate operational needs at the SSAT and strives to minimize
scope that could be rendered obsolete by any future all-encompassing renovation project at
the SSAT.
DETAILS
Scope of Work
This project will replace key components of a portion of the SSAT HVAC system. The project will
replace the constant volume air handler serving the Concourse level with a larger capacity and
more energy efficient variable air volume system and replace the obsolete distribution boxes
serving the concourse level.
This project will replace the hot and cold deck fans, coils, and controls with an energy efficient
new air handler, coils, and controls. It will also install new ducting and diffusers to support
additional ADR requirements along with replacing the ceiling, lights, fire sprinkler system,
signage, and carpet.
Completion of this project will increase the heating and cooling energy efficiency approximately
15 to 20 percent on the SSAT concourse level system. Calculations estimate electric savings of
163,300 kilowatt hours per year on motor power and natural gas savings of 20,600 therms per
year for heat for a total energy savings of 26,168 therms per year and reduced greenhouse gas
emissions of 110 metric tons/year. This represents a savings of approximately 0.2% of the total
airport energy consumption and 0.5% of the total airport greenhouse gas emissions. The new
lighting will be more energy efficient, reducing energy consumption by over 50%. These efforts
are in line with the Century Agenda Goals to be the greenest, and most energy efficient port in
North America.
COMMISSION AGENDA – Briefing Item No. _9a___ Page 4 of 9
Meeting Date: June 12, 2018
Template revised September 22, 2016; format updates October 19, 2016.
The old paraline ceiling will be replaced with a new metallic ceiling that will greatly improve the
aesthetics of the SSAT. The old ceiling is severely damaged and the particular style is no longer
manufactured.
In addition to the replacement of the old paraline ceiling, the project will install new lighting
that is energy code complaint and will improve the aesthetic look of the concourse for
passengers.
As part of replacing the ceiling the signage of the South Satellite will also be updated. Currently,
the signage is suspended from the paraline ceiling and this is an efficient time to replace the
signage. The new signage will improve the appearance of the concourse and better direct
passengers. To complement the new signage master plan that is being developed, electricity
will be provided to all signs for LED lighting.
The project will perform full RMM abatement instead of spot abatement; this increases the
Expense budget by $3,033,000, for a total RMM expense of $4,323,000. There are two reasons
for conducting full RMM abatement in the plenum area of the concourse:
• It removes the requirement for and future cost of conducting RMM abatement in
the future for this portion of the building. If only spot abatement was performed
now and full abatement conducted in the future, e.g. for a full South Satellite
renovation, substantial additional costs would be incurred to perform the
abatement. Abatement costs are rising at about 10 percent per year.
• Currently, RMM abatement is required just to enter the paraline ceiling, regardless
of the reason, this includes maintenance and inspections. Performing full abatement
will remove this time consuming, intrusive and costly requirement allowing
maintenance staff easier access to vital pieces of infrastructure equipment.
The current fire sprinkler system is almost 50 years old (installed in 1971). Per National Fire
Protection Association (NFPA) 25, 10 percent of fire sprinkler heads are required to be tested
after 50 years. If a sprinkler head fails the test, all sprinkler heads in the area sampled must be
replaced. There is also a large portion of the fire sprinkler piping that is schedule 10 pipe, which
is thinner than schedule 40, which would be used today. Schedule 10 pipe failures in this and
other areas of the airport have highlighted the need to replace the thinner piping. Replacing the
aging system as part of the project removes the requirement to test the sprinkler heads.
Carpet will also be replaced on the concourse as it is quite worn and in need of replacement.
The cost of replacing the worn carpet is about the same that it would cost to protect it with
plastic sheeting and plywood during construction.
New, replacement equipment includes the following:
1. HVAC Air Handler
2. Cooling and Heating Coils and heating water piping
3. Controls and Variable Frequency Drives
COMMISSION AGENDA – Briefing Item No. _9a___ Page 5 of 9
Meeting Date: June 12, 2018
Template revised September 22, 2016; format updates October 19, 2016.
4. Terminal Distribution Boxes
5. Diffusers
6. Motor Control Center
7. Light Fixtures
8. Electrical infrastructure for lights and signage
9. Fire Sprinkler System
10. Signage
11. Ceiling
12. Carpet
This project will:
1. Improve HVAC reliability.
2. Provide additional HVAC capacity for concourse level areas and new tenant spaces.
3. Improve energy efficiency.
4. Facilitate maintenance.
5. Replace obsolete equipment and infrastructure.
6. Improve lighting throughout the SSAT.
7. Improve signage from the STS level to the concourse and gates, which improves
passenger experience.
8. Replace the aging and vulnerable fire sprinkler piping.
Small Business
Aviation Project Management has been partnering with the Port’s small business group to
ensure proper outreach via PortGen to small businesses and those owned by women and
minorities (WMBE firms). These activities range from email outreach and presentations, to
those businesses that may be interested in the opportunities this project presents.
Schedule
Updated schedule only applies to the new scope added and not previous authorizations.
Activity
2018 Quarter 2
2018 Quarter 4
2019 Quarter 1
2021 Quarter 3
Cost Breakdown
This Request
Total Project
$1,142,000
$3,029,000
$37,165,000
$49,203,000
$38,307,000
$52,232,000
COMMISSION AGENDA – Briefing Item No. _9a___ Page 6 of 9
Meeting Date: June 12, 2018
Template revised September 22, 2016; format updates October 19, 2016.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Cancel the project and continue to utilize the failed system.
Cost Implications: $1,050,000 (expense design, capital investment for communications
equipment relocation)
Pros:
(1) Reduced capital expenditure
Cons:
(1) This alternative does not provide a dependable indoor environment to facilitate airline
operations.
(2) This alternative would significantly degrade the quality of passenger experience at
Sea-Tac.
(3) This alternative would potentially lead to airlines insisting on processing departing
passengers in severely congested hold rooms on other concourses already being used
for other flights.
(4) This alternative does not provide reliable HVAC capacity (currently 30 percent under
capacity) for the increasing number of flights and additional tenant spaces.
(5) This alternative does not provide capacity for any additional tenant space
development.
(6) No capacity for the addition of new airport dining and retail space, resulting in
reduced customer experience and Port revenues.
This is not the recommended alternative.
Alternative 2 – Replace and upgrade the existing air handler and HVAC system (penthouse and
concourse level), replace the ceiling, lighting, fire sprinkler system, signage, carpet, and perform
full RMM abatement (concourse level only).
Cost Implications: $42,000,000
Pros:
(1) This alternative provides dependable indoor environmental quality in all seasons for
the foreseeable future.
(2) This alternative improves overall appearance of the SSAT concourse, which is
consistent with the Century Agenda goals for making Sea-Tac the West Coast
“Gateway of Choice” for international travel.
(3) Smaller capital investment than also upgrading the ceiling and lighting in the STS and
mezzanine levels.
(4) This alternative will provide the capacity for existing (being remodeled) and new
tenant spaces.
(5) New signage will help passengers find where they are going easier.
(6) Shorter construction timeline than also updating the STS and mezzanine levels.
COMMISSION AGENDA – Briefing Item No. _9a___ Page 7 of 9
Meeting Date: June 12, 2018
Template revised September 22, 2016; format updates October 19, 2016.
(7) Added HVAC capacity for the addition of new airport dining and retail space and retail
space providing for a better customer experience and increased revenues.
(8) This alternative will improve energy efficiency in the HVAC system and result in a 50%
reduction in energy use for the lights. This alternative supports the Century Agenda
goal to, “Be the greenest, most energy efficient Port in North America.”
Cons:
(1) Depending on when full renovation of the SSAT occurs, the upgrades from this project
could only be used for 10 to 15 years.
(2) This alternative will only update the concourse level, leaving the STS, mezzanine, and
escalator ceilings, lighting, and sprinkler system in poor condition and at end of the
useful life.
This is not the recommended alternative.
Alternative 3 – Replace and upgrade the existing air handler and HVAC system (penthouse and
concourse level), replace the ceiling, lighting, sprinkler system, and signage on the concourse,
STS, and mezzanine levels, and above the escalators (not in the Federal Inspections Services or
International Corridor). Replace the carpeting on the concourse level and conduct full RMM
abatement wherever work is being performed.
Cost Implications: $52,232,000
Pros:
(1) This alternative provides dependable indoor environmental quality in all seasons for
the foreseeable future.
(2) This alternative improves the overall appearance of the SSAT, from the STS level to the
concourse, which is in line with the Century Agenda goal for making Sea-Tac the West
Coast “Gateway of Choice” for international travel.
(3) This alternative will provide the capacity for the existing (being remodeled) and new
tenant spaces.
(4) New signage will help passengers find where they are going easier.
(5) This alternative will improve energy efficiency in the HVAC system and will result in a
50 percent reduction in energy use for the lights. This alternative supports the Century
Agenda goal to “Be the greenest, most energy efficient Port in North America.”
Cons:
(1) This alternative has the highest capital investment
(2) This alternative has the longest construction timeline
(3) This alternative has the largest impact to operations with work being performed while
airline operations continue.
(4) Depending on when the full renovation of the SSAT occurs, the upgrades from this
project may only be used for 10 to 15 years.
This is the recommended alternative.
COMMISSION AGENDA – Briefing Item No. _9a___ Page 8 of 9
Meeting Date: June 12, 2018
Template revised September 22, 2016; format updates October 19, 2016.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
$6,000,000
$150,000
$6,150,000
$6,635,000
$1,140,000
$13,925,000
$35,274,000
$3,033,000
$38,307,000
$47,909,000
$4,323,000
$52,232,000
$12,635,000
$1,290,000
$13,925,000
$0
$0
$0
$12,635,000
$1,290,000
$13,925,000
$35,274,000
$3,033,000
$38,307,000
Annual Budget Status and Source of Funds
The SSAT HVAC project (CIP #C800798) was included in the 2018-202 capital budget and plan of
finance as a business plan prospective project with a total capital budget of $11,210,000. The
total cost increase of $35,274,000 was transferred from the Aeronautical Allowance (CIP
#C800753), resulting in no net change to the capital budget. The environmental remediation
will be funded through the annual operating budget process. The capital portion of this project
will be funded with the Airport Development Fund and short-term revenue bonds. This project,
with a budget of $10.3 million, was approved by the airlines through a Majority-in-Interest (MII)
vote on February 2017. The cost increase will require an additional MII vote.
Financial Analysis and Summary
$47,909,000
Terminal Building
NOI after depreciation will increase
N/A
$0.24 CPE in 2022
Future Revenues and Expenses (Total cost of ownership)
This project replaces existing equipment that is old and dated. Regulated Materials Abatement
performed as part of this project will allow appropriate preventive maintenance to be
performed on the equipment. This will increase O&M costs somewhat for this system. Aviation
Maintenance expects to be able to absorb this increase within current budget. The new system
will provide improved customer service and reliability.
No future revenues are anticipated as a result of the completion of this project.
COMMISSION AGENDA – Briefing Item No. _9a___ Page 9 of 9
Meeting Date: June 12, 2018
Template revised September 22, 2016; format updates October 19, 2016.
ATTACHMENTS TO THIS REQUEST
(1) Presentation slides
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
November 28, 2017 – The Commission authorized $1,425,000 additional, for a total project
cost of $13,925,000.
August 8, 2017 – The Commission authorized $11,200,000 for the advertisement, bid, and
award the construction contract for the South Satellite HVAC Upgrade project. Month D,
November 8, 2016 – The Commission authorized $3,450,000 for the preparation of
design and construction bid documents, the advertising and execution of a major works
construction contract, and the utilization Port crews for the South Satellite Structural
Improvements (CIP C800818).
July 24, 2012 – The Commission authorized $6,500,000 for the redesign the SSAT HVAC
systems to meet current and future requirements. The design included adding an
additional penthouse system, replacing three existing systems, reconfiguring the
ductwork, and replacing all the distribution boxes. The 2012 estimated costs of these
improvements were about $37 million. The design effort was suspended in 2013 and
canceled in 2014 after staff determined that:
(1) The SSAT would require a seismic upgrade to facilitate any new systems.
(2) IAF and SAMP may change the use of SSAT.
May 3, 2011 – The Commission authorized the negotiation and execution of a professional
services contract for design services. No funding was associated with this authorization.
September 22, 2009 – The Commission was briefing on the condition of the HVAC systems
of the North and South Satellites.