Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
10c
ACTION ITEM
Date of Meeting
April 13, 2021
DATE: March 1, 2021
TO: Stephen P. Metruck, Executive Director
FROM: Laurel Dunphy, Director, Airport Operations
Eileen Francisco, Director, Aviation Facilities and Capital Programs
Dawn Hunter, Director, Aviation Commercial Management
SUBJECT: South Satellite Renovation and Renewal (CIP# C801203) Project Definition
Amount of this request:
$2,750,000
Total estimated project cost:
$1,000,000,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to develop the Project Definition
Document to finalize the scope, schedule, budget, and project delivery method for the preferred
South Satellite Renovation and Renewal project alternative at the Seattle-Tacoma International
Airport. The amount being requested under this authorization is $2,750,000. This project was
included in the Aviation Plan of Finance with a target placeholder budget of $1,000,000,000.
EXECUTIVE SUMMARY
The Aviation Division and the airlines at the Seattle-Tacoma International Airport (SEA) have long
identified the need to renovate and upgrade the South Satellite facility to improve the level of
service and to correct building code deficiencies. Previous planning efforts, conducted in 2017,
were undertaken to identify alternatives for further development.
Due to the complexity of the project in terms of scope, budget, and schedule uncertainties, there
is a need to further refine the elements of a preferred alternative through the development of a
Project Definition Document (PDD). Additionally, the PDD will identify potential project risks
before proceeding with the full design and implementation of the project, and will provide the
appropriate information for the Commission to consider prior to authorization of design and
construction.
COMMISSION AGENDA – Action Item No. _10c_ Page 2 of 7
Meeting Date: April 13, 2021
Template revised June 27, 2019 (Diversity in Contracting).
JUSTIFICATION
The South Satellite concourse was designed and built in the early 1970’s, with an additional
limited expansion to the west in the late 1980’s. The building’s program included Federal
Inspection Services (FIS) for processing of international passengers within its’ lowest two levels,
which in recent years has been overwhelmed, leading to the development of the International
Arrivals Facility. The South Satellite’s current building program needs to change dramatically with
the imminent opening of the International Arrivals Facility to modernize the building, efficiently
reallocate space, and maximize revenue growth.
This 1970’s era facility has had few upgrades to its building systems over the decades, leaving
most of them at or beyond the end of their useful service. Replacement of this exhausted
infrastructure provides an opportunity to update and upgrade systems with more energy
efficient and environmentally sustainable alternatives. For over a decade, the South Satellite has
also been serving far higher passenger loads than it was designed for, further taxing its building
systems and structural elements. Public facing spaces do not meet current airline industry (IATA)
passenger standards, and the facility infrastructure is nearing obsolescence.
This facility is long overdue for renovation. It is currently weight limited and has not been wholly
upgraded since constructed to meet current seismic codes. Many of the building systems have
been run to failure, are overstressed, or obsolete; or a combination thereof. The facility also
currently lacks acceptable ADA accessibility, meditation and quiet room space, gender neutral
restrooms, lactation suites, and adequate pet relief areas; all of which will be addressed in the
PDD.
To meet this complete renovation challenge, careful, realistic, and deliberate planning must be
carried out in the PDD. The PDD must provide a pathway to satisfy building code requirements
and modernize the building’s systems for greater comfort, operating efficiency, and reduced
environmental impacts. The PDD must also reprogram the public facing spaces of the building.
Construction will need to occur within the current building footprint while the facility remains
open, most likely creating operational impacts. The PDD will provide the planning and phasing
necessary to fully understand, prepare for, and mitigate those impacts. Due to the type and
complexity of construction it is projected that the cost per square foot and construction schedule
will be greater than the majority of projects we deliver.
The Port has made commitments over time to the foreign flag carriers and concessionaires that
the South Satellite would ultimately be updated following IAF completion. The findings of
previous South Satellite planning efforts are being used to inform the proposed PDD effort.
Unlike the previous planning that considered a range of unconstrained alternatives, the PDD will
be focused on developing one space and budget constrained alternative that provides a buildable
solution, designed around a realistic budget number, that will lead directly into design and
construction.
COMMISSION AGENDA – Action Item No. _10c_ Page 3 of 7
Meeting Date: April 13, 2021
Template revised June 27, 2019 (Diversity in Contracting).
Diversity in Contracting
The consulting firm exceeded the WMBE goal of 15% in their contract by 6% in their proposal for
the development of this PDD, with a total 21% participation rate.
DETAILS
The South Satellite concourse at SEA is surrounded by Concourses A and B to the east and north,
and the Delta Air Lines and Alaska Air Group maintenance facilities to the south. Its western
boundary is Taxiway A. The facility has been in operation since the early 1970’s, with one
expansion having occurred in the mid-1980’s. Further expansion is limited by numerous FAA
building restriction boundaries. The current effort is organized around a $1 billion target budget.
The proposed Project Definition Document is focused on refining a preferred alternative that
reflects the target budget. The PDD will address worn out building systems, structural
inadequacies, building space reprograming, certain customer experience inadequacies, and
expansions to retail and airline club space.
Scope of Work
This PDD will identify building systems needing to be renewed, replaced, or updated to bring this
facility into code compliance; reprogram the public facing areas within the South Satellite;
maximize duty free, retail, dining and club commercial opportunities; identify types, size and
locations of customer amenities to be included; address ADA deficiencies; provide a unified
architectural theme and accommodate future art installations.
There will be extensive outreach to address the needs of the airlines, concessionaires, code
compliance officials, and numerous Port departments. The PDD will develop a basis of design; a
project scope, schedule, and budget; a risk matrix and preferred acquisition method to construct
the project. The PDD effort will also consider construction phasing and staging within this active
facility. It will also include high level total cost of ownership and energy use analysis to minimize
future operating costs and environmental impacts. Renderings of the facility in its’ renewed and
renovated form will also be produced. The scope is focused on addressing multiple user and
operational demands, while maintaining the existing building footprint and a target budget of $1
billion.
Schedule
Activity
Commission PDD authorization
PDD start
PDD effort complete
MII Approval
Commission design phase authorization
COMMISSION AGENDA – Action Item No. _10c_ Page 4 of 7
Meeting Date: April 13, 2021
Template revised June 27, 2019 (Diversity in Contracting).
Cost Breakdown
Cost b
reakdown based on $1B target budget.
This Request
Total Project
Design
$2,750,000
$96,700,000
Construction
0
903,300,000
Total
$0
$1,000,000,000
ALTERNATIVES AND IMPLICATIONS CONSIDERED
The PDD would be focused on implementing the third, preferred alternative described below.
Alternative 1 – Proceed straight to design
Cost Implications: $96,700,000
Pros:
(1) Design could begin immediately
(2) Design would commence once a construction method is selected
Cons:
(1) Project scope would be developed during an active design process, leading to
potentially costly design revisions if anything is missed or overlooked very early in the
planning process.
(2) Much of the PDD process would need to be replicated within the design effort to answer
basic project questions, such as project scope and contracting method; it would just
happen on a more ad hoc basis.
(3) Care would need to be taken to address the requirements of all users during design, or
risk costly change orders or operational disruption later
This is not the recommended alternative.
Alternative 2 – Create bridging documents for a design/build effort
Cost Implications: $32,000,000
Pros:
(1) Would allow project design to proceed up to the 30% level
(2) Usually allows for more deliberate consideration of project requirements before
obtaining a design/build contractor
Cons:
(1) Ties the project to a design/build method of construction
(2) Usually leads to offering each of the design/build teams selected in the request for
qualifications a design stipend to cover the design costs associated with their proposed
designs, adding to design costs. However, if this option were chosen the Port could own
those design proposals, if properly contracted
COMMISSION AGENDA – Action Item No. _10c_ Page 5 of 7
Meeting Date: April 13, 2021
Template revised June 27, 2019 (Diversity in Contracting).
(3) Places more decisions in the design/build team’s sphere of influence, particularly
construction phasing and staging. Would ultimately require careful consideration of
liquidated damages to minimize operational disruptions
This is not the recommended alternative.
Alternative 3 – Develop a PDD that addresses current environmental, building code and IATA
standards; includes reprograming and reuse of space throughout the facility; expansion of retail,
dining, club and passenger amenity areas; evaluates operational impacts during construction;
completely renovates building systems and develops structural upgrades.
Cost Implications: $2,750,000
Pros:
(1) Engages all stakeholders in reprogramming space thru out the facility, maximizing retail,
dining, club and passenger amenity opportunities.
(2) Creates a roadmap to bring the facility into full compliance with current building codes,
creating a safe, efficient, structurally sound facility that is more comfortable and less
environmentally impactful.
(3) Develops a plan to improve the interior spaces of the facility, discussing public art
installations, providing a more engaging passenger experience, and readying the South
Satellite for decades more service.
Cons:
(1) The overall project target budget presents a challenge for stakeholders, designers and
builders. Planning to this budget will require an extremely disciplined approach by all
involved to be successful.
(2) Design level of the PDD will be lower than the other alternatives, which might introduce
greater design risk than the other alternatives.
(3) Overall a slower and more methodical approach, balanced against the need to
understand the entirety of the impacts to better prepare an operating facility.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
A previous SSAT planning effort, funded prior to 2018 under CIP# C800743, spent approximately
$3.2M. A precursor to the current PDD, carried out in 2019-2020, considered the facility’s
structural deficiencies and cost $403,000. It should be noted that these previous efforts have
been expensed, and are not included in the capital budget. The work produced in the previous
efforts form the baseline for the current proposed effort.
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$981,300,000
$18,700,000
1,000,000,000
COMMISSION AGENDA – Action Item No. _10c_ Page 6 of 7
Meeting Date: April 13, 2021
Template revised June 27, 2019 (Diversity in Contracting).
AUTHORIZATION
Previous authorizations
0
0
0
Current request for authorization
$2,750,000
0
$2,750,000
Total authorizations, including this request
$2,750,000
0
$2,750,000
Remaining amount to be authorized
$978,550,000
$18,700,000
$997,250,000
Annual Budget Status and Source of Funds
This project was included in the 2021 plan of budget and finance under committed CIP# C801203
in the amount of $1,000,000,000. This is the current project cost estimate. The initial $2,750,000
requested is to proceed with the planning and development of the preferred alternative.
Financial Analysis and Summary
Project cost for analysis
$1,000,000,000
Business Unit (BU)
Terminal Building
Effect on business performance
(NOI after depreciation)
The capital and operating costs will be allocated between
airline and non-airline cost centers based on rentable
square feet. There are opportunities to increase non-
aeronautical revenues by repurposing much of the
previous space devoted to international arrivals. The
estimated impacts on airline costs and non-aeronautical
business performance will be presented with the
completed PDD.
IRR/NPV (if relevant)
For non-aeronautical portion of investment: TBD upon
completion or PDD
CPE Impact
TBD upon completion of PDD.
Future Revenues and Expenses (Total cost of ownership)
Part of the PDD effort is to begin assessing what effect renovating and renewing the SSAT building
and building systems will have on operating costs and total cost of ownership. This analysis has
not yet been performed. This information will be shared with Commission during approval of the
PDD effort.
ADDITIONAL BACKGROUND
Commission actions have been taken in recent years to address certain deficiencies in the SSAT
facility. Carpet and casework upgrades occurred in 2015-2016. Project C800818 SSAT
Column/Beam Structural Improvements addressed live and dead load issues in certain areas of
the SSAT facility. This effort did not address all such issues, nor did it address lateral or wind loads.
Project C800376 SSAT HVAC addressed certain immediate needs not being met with the existing
HVAC system. The latter two efforts addressed immediate code related concerns, but not the
larger systems related issues present in the SSAT.
COMMISSION AGENDA – Action Item No. _10c_ Page 7 of 7
Meeting Date: April 13, 2021
Template revised June 27, 2019 (Diversity in Contracting).
ATTACHMENTS TO THIS REQUEST
(1) Presentation slides
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
September 8, 2020 – The Commission authorized up to $600,000 in change order funds to
Contract MC-0319530 South Satellite Infrastructure Upgrade for repair, replacement and
modifications to the heating hot water circulating pumps at the South Satellite (SSAT),
Seattle-Tacoma International Airport.
February 28, 2017 – The Commission authorized $4,300,000 to initiate programming and
develop design alternatives for the South Satellite Renovations Project using Port staff
and consultants, and advertise and execute a project-specific service agreement for
Project Management Services for the South Satellite Renovations Project
January 17, 2017 – The Commission authorized $1,300,000 for the design of the South
Satellite Heating Ventilation and Air Conditioning (HVAC) Upgrade project.
November 8, 2016 – The Commission authorized design and construction for the South
Satellite Structural Improvements project.
August 9, 2016 – The Commission approved the implementation of the 2017 – 2021 Long
Range Plan that included the planning for renovation of the SSAT as a priority action in
advancing this region as a leading tourism destination and business gateway.
March 14, 2016 – The Commission authorized award/execution of the major public works
construction contract for Phase Two of the South Satellite Interior Renovations project.
November 24, 2015 – The Commission authorized construction of Phase Two of the South
Satellite Interior Renovations project.
September 8, 2015 – The Commission discussed the IAF wrap-up and next steps including a
commitment to add a SSAT Renovation project to the 5-year CIP.
August 11, 2015 – The Commission led a Special Meeting, Roundtable with Airline
Representatives related to the International Arrivals Facility (IAF) and SSAT.
December 9, 2014 – The Commission authorized construction of Phase One of the South
Satellite Interior Renovations project.
August 5, 2014 – The Commission authorized design funds for the South Satellite Interior
Renovations project.