Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8k
ACTION ITEM
Date of Meeting
April 26, 2022
DATE: April 14, 2022
TO: Stephen P. Metruck, Executive Director
FROM: Wayne Grotheer, Director Aviation Project Management Group
Laurel Dunphy, Director Airport Operations
SUBJECT: Addition of Wide Body Gate at Concourse N (C800556)
Amount of this request:
$0
Total estimated project cost:
$5,000,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to execute a major public works
construction contract to provide full functional wide body aircraft capacity at the Concourse N
gate N16. This construction contract will provide flexibility to accommodate a wider array of
aircraft to support wide body gate service.
EXECUTIVE SUMMARY
Alaska Airlines (Alaska) has become part of the oneworld airline alliance, and partner airlines
require the ability to enplane international flights, both wide-body and narrow-body aircraft, at
common use gates in direct proximity to Alaska’s major terminal operations. The airport has also
identified a need for additional airport-wide operational capacity. This project will meet these
needs by upgrading and reconfiguring two existing Concourse N gates (N16 & N17) to allow them
to flex into one gate (N16A) capable of wide body aircraft operations. This work to add wide-
body common use capabilities is being completed as part of the original North Satellite
Modernization at Concourse N project.
JUSTIFICATION
Approval of a major public works construction contract will enable the quick execution of gate
modifications to be made at the Concourse N gates (N16 & N17) to meet airline and customer
service needs for wide-body operations in 2022.
Diversity in Contracting
Project staff has engaged with Diversity in Contracting and have established an aspirational goal
of contracting 12% of construction cost to women and minority owned business enterprises.
COMMISSION AGENDA – Action Item No. __8k__ Page 2 of 7
Meeting Date: April 26, 2022
Template revised June 27, 2019 (Diversity in Contracting).
DETAILS
The modernization of Concourse N was recently completed in partnership with Alaska Airlines as
part of the 2014 Commission authorized NSTAR Program. Alaska Airlines, having entered into
the oneworld airline alliance in 2021 with other international carriers, has requested that the
facility not only accommodate Alaska’s current domestic fleet, but also include wide-body aircraft
operations. As the original Commission authorization included requirements for flexible carrier
operations, and Alaska Airline’s oneworld airline alliance urgently requires operational
consolidation with Alaska’s operations, this follow-on work to add wide-body common use
capabilities is being completed as part of the original North Satellite Modernization at Concourse
N project. Completing this work as part of the Concourse N modernization results in contract
cost and schedule savings by leveraging the remaining Concourse N modernization budget
authorization and design work already completed. The oneworld airline alliance has also
requested a consolidated wide-body operation at SEA and supports this request.
Scope of Work
This project will increase capacity as needed for the following systems at the Concourse N gate
N16 to allow functional Wide Body gate service.
(1) replace 400Hz aircraft electrical power units and conductors;
(2) replace PC Air aircraft heating and cooling units and infrastructure piping;
(3) replace and relocate existing lighting poles with 80’ poles;
(4) add one additional SafeDock unit to align with wide body position;
(5) refresh lead-in striping lines and safety envelopes as required;
(6) replace/reinforce gate area apron structures and panels
Schedule
The North Satellite Modernization project opened the completed Concourse N on schedule in
the summer of 2021. The project construction contractor demobilized from the project in 2021
Quarter 4. This request will enable execution of a new Major Works construction contract to
effect modifications enabling Wide Body service within the 2022 calendar year. The complexities
of constructing this project while maintaining Alaska’s active operations and maintaining a high
level of customer experience has been a continuous challenge and remains one of the highest
risks.
Activity
Commission design authorization
2012 Quarter 2
Design start
2021 Quarter 2
Commission construction authorization
2022 Quarter 2
Construction start
2022 Quarter 2
In-use date
2022 Quarter 4
COMMISSION AGENDA – Action Item No. __8k__ Page 3 of 7
Meeting Date: April 26, 2022
Template revised June 27, 2019 (Diversity in Contracting).
Cost Breakdown
This Request
Total Project
Design
$0
$1,730,000
Construction
$0
$3,270,000
Total
$0
$5,000,000
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Airport Operations requested the team evaluate all possible locations to convert 2 narrow body
gates into 1 widebody gate Concourse N. Combining N16 and N17 provided the maximum
number of fleet types, up to a Boeing 777. In the future, N14 and N15 can be combined into a
single widebody gate and accommodate up to a Boeing 787.
Alternative 1 – Defer N16 wide body common use modification to 2023
Cost Implications: The project that completed Concourse N possesses authorization to design,
advertise, and to deliver project and construction management services in 2022. Therefore, it
will be most cost effective to use the current, contracted design team.
Pros:
(1) None
Cons:
(1) Operational schedule impact for both normal and construction durations in 2023.
(2) Additional schedule and repeated authorization to design and advertise this scope of
work.
This is not the recommended alternative.
Alternative 2 – Do not complete this scope
Cost Implications: $5M saved
Pros:
(1) Save money
Cons:
(1) Operational impacts and oneworld customer dissatisfaction at SEA
This is not the recommended alternative.
Alternative 3 – Convert N16 for wide body common use aircraft position
Cost Implications: $5M
Pros:
(1) Allows for common use departure gate increase at SEA
(2) Satisfies oneworld customer request
(3) Completing this scope now is less expensive than commencing at a later date
COMMISSION AGENDA – Action Item No. __8k__ Page 4 of 7
Meeting Date: April 26, 2022
Template revised June 27, 2019 (Diversity in Contracting).
Cons:
(1) Construction impact of gates N15 and N16 in late summer 2022
This is the recommended alternative.
FINANCIAL IMPLICATIONS
No additional project funding is required to complete this scope and less savings will be returned.
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Revised estimate
$679,916,127
$20,209,105
$700,125,232
AUTHORIZATION
Previous authorizations
$691,916.127
$20,209,105
$712,125,232
Current request for authorization
$0
$0
$0
Total authorizations, including this request
$691,916,127
$20,209,105
$712,125,232
Remaining amount to be authorized
$0
$0
$0
Annual Budget Status and Source of Funds
This project is included in the 2022-2026 capital budget and plan of finance with a budget of
$691.9 million. The funding sources include the Airport Development Fund, revenue bonds and
Passenger Facility Charge revenue (PFCs).
Financial Analysis and Summary
Project cost for analysis
$712,125,232
Business Unit (BU)
Terminal Building
Effect on business performance
(NOI after depreciation)
NOI after depreciation will increase due to inclusion of
capital (and operating) costs in airline rate base.
Increasing use of PFCs reduces Port revenue as capital
costs are excluded from airline rate base.
IRR/NPV (if relevant)
N/A
CPE Impact
$0.86-$1.45 depending on amounts of PFCs applied to
ongoing revenue bond debt service
The funding plan includes approximately $126 million of PFCs to fund construction costs. Capital
costs funded with PFCs are excluded from the airline rate base and therefore do not impact
passenger airline cost per enplaned passenger (CPE). The funding plan also includes the use of
PFCs to pay some level of ongoing PFC-eligible revenue bonds debt service. Debt service paid by
PFCs is also excluded from the airline rate base.
COMMISSION AGENDA – Action Item No. __8k__ Page 5 of 7
Meeting Date: April 26, 2022
Template revised June 27, 2019 (Diversity in Contracting).
ATTACHMENTS
(1) Presentation
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
North Sea-Tac Airport Renovations (NorthSTAR) (CIP #C800544)
May 14, 2019 – NorthSTAR Program status update
February 26, 2019 – NorthSTAR Program status update
November 13, 2018 – NorthSTAR Program status update
July 31, 2018 – NorthSTAR Program status update
May 22, 2018 – NorthSTAR Program status update
Jan 30, 2018 – NorthSTAR Program status update
Oct 24, 2017 – NorthSTAR Program status update
July 25, 2017 – NorthSTAR Program status update
April 25, 2017 – NorthSTAR Program status update
January 24, 2017 – NorthSTAR Program status update
September 13, 2016 – Request Commission authorization for the Chief Executive Officer to
(1) increase the North Satellite Renovation & North Satellite Transit Station Lobbies
(NSAT) project scope and budget; (2) increase authorization for project design; (3) amend
design service agreement with URS that exceeds 50% of the value of the original contract;
and (4) increase authorization for Preliminary Work Package #2 (PWP #2) construction.
August 9, 2016 – NorthSTAR Program Status Update
May 24, 2016 – Commission authorized Chief Executive Officer to 1) increase the North
Satellite project scope and budget; 2) increase authorization for NSAT design and overall
project support; 3) amend service agreements with Jacobs Project Management
Company and AECOM; and 4) authorize the use of port crews and small works contactors
to perform work for the project.
February 23, 2016 – NorthSTAR Program status update
November 24, 2015 – NorthSTAR Program status update
July 14, 2015 – NorthSTAR Program status update
April 28, 2015 – NorthSTAR Program status update
January 27, 2015 – NorthSTAR Program status update
October 28, 2014 - NorthSTAR Program status update
August 19, 2014 - NorthSTAR Program status update
May 27, 2014 – NorthSTAR Program status update
January 14, 2014 – NorthSTAR Program status update
September 24, 2013 – NorthSTAR Program status update
June 25, 2013 –NorthSTAR Program status update
April 9, 2013 – The Commission authorized the Chief Executive Officer to enter into a project
labor agreement covering the NorthSTAR program’s five major construction projects.
March 26, 2013 –NorthSTAR Program status update
June 26, 2012 – The Commission received a briefing on the status of the Airline Realignment
Program and budget restructuring in association with the NorthSTAR Program.
COMMISSION AGENDA – Action Item No. __8k__ Page 6 of 7
Meeting Date: April 26, 2022
Template revised June 27, 2019 (Diversity in Contracting).
April 10, 2012 – Authorizations for the North Sea-Tac Airport Renovations program for: 1)
preliminary project funding; 2) execution of consulting contracts for design/construction
support services and project management services; and 3) use of Port crews and
consultants to conduct regulated materials management surveys and field support
services for preliminary project planning tasks.
North Satellite Renovation & North Satellite Transit Station Lobbies (CIP #C800556)
March 10, 2020 – The Commission authorized
increase the North Satellite Modernization Project budget by $40,000,000 ($32 million
capital and $8 million expense) for a total project authorization of $712,125,232.
August 15, 2017 – The Commission authorized
Increase the authorized budget by $107,000,000 capital and $500,000 expense and
authorize the remaining $261,547,392 capital and $8,800,000 expense, amending the
Hensel Phelps (HP) contract by $161,563,526 for the final MACC to complete the project
in Q3 2021. Authorize execution of all pending and future change orders to the HP
contract within the authorized budget and project scope to avoid potential delays.
Authorize Port crews to support NSAT construction and authorize Port staff to enter
into a TRA with AS for the reimbursement of AS and Port responsible design efforts and
improvements.
June 27, 2017 – The Commission authorized four NSAT related items:
increase project authorization for the North Satellite Renovation & North Satellite
Transit Station Lobbies Project by $200,000,000; execute Preliminary Work Amendment
#3 (PWA #3) with Hensel Phelps (HP) for up to $200,000,000; authorize Port staff to
execute all change orders to the HP contract within authorized budget and project
scope without returning for additional Commission authorization; and authorize Port
Construction Services (PCS) to execute small works contracts and use Port crews to
support NSAT construction
September 13, 2016 – The Commission authorized four NSAT related items:
the increase of project scope and budget (capital) by $7,000,000 for the revised third
floor layout to better accommodate the signature restaurant, provide 3,000 additional
square feet of future airport related leasable space, and increase AS premium traveler
lounge as requested by 4,850 square feet.
Increase authorization by $1,000,000 for project design.
Amend design service agreements with AECOM that exceed 50% value of the original
contract.
Increase authorization by $30,000,000 to accommodate Preliminary Work Package #2
construction.
May 24, 2016 - The Commission authorized four NSAT related items:
Increase of project scope and budget (capital and expense) by $121,219,098 for 30% &
60% design scope additions and risk contingencies
Increased authorization of $11,000,000 for continued NorthSTAR Program/Project
Management services and NSAT design and overall project support.
Amend service agreements with Jacobs Project Management Co. and AECOM.
COMMISSION AGENDA – Action Item No. __8k__ Page 7 of 7
Meeting Date: April 26, 2022
Template revised June 27, 2019 (Diversity in Contracting).
Authorize the use of port crews and small works contractors.
December 8, 2015 – The Commission authorized $98,100,000 for the following:
Additional Pre-Construction services ($1,200,000)
Construction auditing services
Preliminary Construction work
March 24, 2015 – The Commission authorized three NSAT related items:
Expand the baggage handling system increasing the project scope for $14,400,000 and
$1,954,000 to complete the design.
Entering into a developer agreement with Puget Sound Energy and $200,000 in
reimbursement for the design and construction of underground gas infrastructure.
$5,300,000 to Prepare four locations to accommodate temporary passenger loading
bridges, to construct temporary construction offices; To complete construction of a
Satellite Transit System (STS) North loop Dynamic Display system; $600,000 in expense
funds for regulated materials management for AS’s tenant improvement project; and
Approval to use Port crew labor and small works contractors to complete early project
work.
August 5, 2014 – The Commission authorized expansion of the NSAT, $191,323,143 budget
increase, $15,717,800 to complete the design, execute amendments to existing
consulting contracts; execute future consulting contracts and use of and to advertise for
General Contractor/Construction Manager (GC/CM) alternative public works contractor.
July 22, 2014 - NSAT Expansion Briefing
April 22, 2014 – Seattle-Tacoma International Airport Capital Program - Briefing
January 14, 2014 – NSAT expansion briefing.
May 28, 2013, Commission authorized the execution of separate service agreements for
Construction Management Services and Commissioning Services, of approximate values
of $10 million and $1.5 million.
December 11, 2012 – The Commission was briefed on the Vertical Conveyance
Modernization Project Aero Phases 1 and 2 and the possibility of adding the specified
elevators and escalators to the NorthSTAR program.
July 24, 2012 - Commission authorized $32,000,000 for the design of the NorthSTAR NSAT
Renovation and NSTS Lobbies project.
April 10, 2012 - The Commission authorized the execution of consultant contracts for design
and construction support services; program management services; and the completion of
site surveys for regulated materials management, for $1,200,000.
