Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8n
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
Dawn Hunter, Interim Chief Operating Officer
SUBJECT: C Concourse Expansion Budget Authorization and Transfer
(CIP# C800845)
Amount of this request:
$15,500,000
Total estimated project cost:
$324,500,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to (1) authorize up to an
additional $15,500,000 of the C Concourse Expansion budget to fund baggage transfer line
work, (2) transfer up to $15,500,000 in funds from the C Concourse Expansion Project (CIP#
C800845) to the Baggage Optimization Project (CIP# C800612), (3) request authorization to
execute a Project Labor Agreement.
EXECUTIVE SUMMARY
The C Concourse Building Expansion (CCE) was created to address shortfalls in Airport Dining
and Retail (ADR) capacity, public amenities, office space, and premium lounge space. The
project is located at the intersection of Concourses C and D and will add four floors to the
existing three floor structure.
At this time, the project is programmed to provide additional food and beverage space, retail
space, and lounge space. The public amenities being provided include new restrooms, a
meditation room, a sensory room, nursing suites, and an “outdoor” public lookout.
This authorization will transfer funds from the C Concourse Expansion to the Baggage
Optimization Project (BOP) for the design, construction, and phasing of baggage transfer lines
that are in the C Concourse Expansion footprint.
COMMISSION AGENDA – Action Item No. __8n__ Page 2 of 6
Meeting Date: April 26, 2022
Template revised June 27, 2019 (Diversity in Contracting).
JUSTIFICATION
The baggage system is a complicated system that requires specialized experience to design,
construct, and operate. Outages or impacts to one part of the system can have airport wide
effects. Because of the complexity and interdependency, the C Concourse Expansion project
has been working with the Baggage Optimization team to coordinate the relocation and
phasing of transfer lines that are inside of the CCE construction footprint. During these
partnering sessions it was determined that the most efficient way of executing the transfer line
relocations is for the BOP team to manage this scope of work.
The Baggage Optimization Project has the expertise required to execute this work expeditiously
with minimal disruptions to the larger baggage system. Transferring this scope and budget
would enable the CCE team to start enabling work in Quarter 2 of 2022 since the BOP team
would be able to leverage their knowledge and resources to remove and relocate transfer lines
much more quickly than the CCE team can accomplish.
The funds to be transferred are over and above what was originally estimated and scoped. The
original scope of the CCE project was to relocate exiting transfer lines and open them for use at
the end of the project. Since the project was initially conceived, the transfer line requirements
have changed. The project will now provide at least one transfer line for use by the airlines for
the duration of the project. This will necessitate complicated phasing and the demolition and
rebuilding of portions of the transfer lines multiple times. Because of this, the project will be
utilizing approximately two thirds of the program contingency to cover the additional cost. At a
later date, the project team may return to Commission to authorize a budget increase that will
replenish the program contingency.
Diversity in Contracting
Baggage Optimization Phase 2 has a WMBE goal of 2%. This is due to the nature of the scope of
work primarily being baggage conveyors and limited building work.
DETAILS
The preliminary scope of work to be executed by the Baggage Optimization Project includes:
(1) Temporary removal of the C94 transfer line
(2) Temporary reinstall of the C94 transfer line
(3) Permanent removal of the TX7 transfer line
(4) Design and construction of a new D1 transfer line
(5) Feasibility review, design and construction of a new permanent C94 configuration
Schedule
The following schedule represents the overall C Concourse Expansion Project:
COMMISSION AGENDA – Action Item No. __8n__ Page 3 of 6
Meeting Date: April 26, 2022
Template revised June 27, 2019 (Diversity in Contracting).
Commission design authorization
Design start
Commission construction authorization early
work packages
Construction start early work packages
Commission construction authorization
In-use date
Cost Breakdown
This Request
Total Project
Design
$2,100,000
Construction
$13,400,000
Total
$15,500,000
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Have the C Concourse Expansion Project perform the design and construction of
the baggage transfer lines
Cost Implications: Minimum of $15,500,000
Pros:
(1) Does not burden Baggage Optimization project with additional C Concourse Expansion
scope.
(2) No budget transfer required.
Cons:
(1) Risk of cost and schedule premiums since the C Concourse Expansion does not have
the applicable expertise to manage this portion of work.
(2) Increased potential for the C Concourse Expansion baggage work to cause issues to
the larger baggage system.
This is not the recommended alternative.
Alternative 2 – Transfer funds from the C Concourse Expansion to the Baggage Optimization
Project
Cost Implications: $15,500,000
Pros:
(1) Baggage Optimization has the correct skillset and experience to perform the scope of
work quickly and correctly.
COMMISSION AGENDA – Action Item No. __8n__ Page 4 of 6
Meeting Date: April 26, 2022
Template revised June 27, 2019 (Diversity in Contracting).
(2) Baggage Optimization understands the larger baggage systems and how and where to
tie into the system.
Cons:
(1) Both projects need close coordination for the phasing and timing to be successful.
There is a potential that one program could delay the other.
(2) Depletes program contingency.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$331,776,000
$8,224,000
$340,000,000
Transfer to BOP
($15,500,000)
$0
($15,500,000)
Revised Estimate
$316,276,000
$8,224,000
$324,500,000
AUTHORIZATION
Previous authorizations
$86,174,000
$7,926,000
$94,100,000
Current request for authorization
(Concourse C Expansion)
$15,500,000
$0
$15,500,000
Total Auth, including this request
(Concourse C
Expansion)
$101,674,000
$7,926,000
$109,600,000
Transfer of Authorization to BOP
($15,500,000)
$0
($15,500,000)
Remaining amount to be authorized
(Concourse C Expansion)
$230,102,000
$298,000
$230,400,000
COMMISSION AGENDA – Action Item No. __8n__ Page 5 of 6
Meeting Date: April 26, 2022
Template revised June 27, 2019 (Diversity in Contracting).
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
$340,000,000. The capital budget decrease of $8,224,000 would be transferred to the
Aeronautical Allowance CIP C800753. The expense budget would be included in the Aviation
Division’s annual operating expense budget. The funding sources will include the Airport
Development Fund and future revenue bonds. This project was approved by airlines through a
Majority-In-Interest (MII) vote in April 2021.
Financial Analysis and Summary
Project cost for analysis
$340,000,000*
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.
IRR/NPV (if relevant)
PV (40 years) for non-aero $44.5 million
CPE Impact
$0.68 in 2028
* Financial implication for this project has not changed, but the $15.5 million is being
transferred to the Baggage Optimization project.
Future Revenues and Expenses (Total cost of ownership)
As presented on April 27, 2021, when completed the project will generate incremental
nonairline revenues of $12 million by 2028 and over $15 million by 2031. Aeronautical revenues
will also increase as the allocated operating and capital costs (debt service) are included in
airline terminal rate base.
ATTACHMENTS TO THIS REQUEST
(1) Presentation
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
• April 12, 2022 - C Concourse Expansion Briefing
• March 8, 2022 – Authorization to execute a Service Agreement for a third-party
Commissioning Agent
• April 27, 2021 – C1 Building Project Additional Design and General
Contractor/Construction Manager Early Work Authorization – Special Inspection and
Testing Authorization
• May 26, 2020 – C1 Building Project Design and General Contractor/Construction
Manager Authorization
• March 10, 2020 – C1 Building Project Briefing and Introduction
• June 26, 2018 – C1 Building Project Authorization for Planning Funds
COMMISSION AGENDA – Action Item No. __8n__ Page 6 of 6
Meeting Date: April 26, 2022
Template revised June 27, 2019 (Diversity in Contracting).
• July 11, 2017 – The Commission authorized (1) advertise and execute a construction
contract for the Gate C3 Holdroom Expansion project at Seattle-Tacoma International
Airport; and (2) use Port crews in executing the project
• January 26, 2016 – The Commission authorized design of an expansion for the existing
Gate C3 passenger Holdroom at Seattle-Tacoma International Airport