Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8c
ACTION ITEM
Date of Meeting
May 10, 2022
DATE: April 20, 2022
TO: Stephen P. Metruck, Executive Director
FROM: Jeff Moken, Interim Director, Aviation Business & Development
Denise Trogdon, Sr. Property Manager, Aviation Business & Development
SUBJECT: Five Year Extension to the GSA/TSA Main Lease and GSA/TSA C1 Building Lease
ACTION REQUESTED
Request Commission authorization for the Executive Director to execute Lease Amendment No.
27 and No. 28 (Exhibit A attached) of the existing Main Lease and Lease Amendment No. 5 (Exhibit
B attached) of the C1 Building Lease with the General Services Administration (GSA) for the
current non-operations occupancy of Transportation Security Administration (TSA).
EXECUTIVE SUMMARY
GSA has two leases for TSA’s non-operations occupancy in the terminal at Seattle-Tacoma
International Airport – the Main Lease, largely comprised of breakrooms and training spaces
throughout the airport and the C1 Building lease, which covers TSA’s consolidated administration
offices. GSA is funded for lease costs of not more than 5-year terms and at the expiration of each
5-year term, an amendment to extend each lease for an additional 5 years must be executed.
The two leases are written on GSA templates and GSA must keep the two leases as separate
documents. Lease Amendment No. 27 of the Main Lease and Lease Amendment No. 5 of the C1
Lease extend the co-terminus terms for 5 additional agreement years and update the rental
rates; Lease Amendment No. 28 of the Main Lease includes additional space in the IAF, effective
May 10, 2022.
JUSTIFICATION
Supporting the GSA/TSA with these lease extensions provides the Port additional time to develop
the C1 Building project scope, schedule, and budget, and allows GSA/TSA the time it requires to
vacate the C1 Building with the intent to move some functions off airport or other location yet
to be determined within the airport. The lease extensions also support the Port’s Century Agenda
goal to meet the region’s air transportation needs at Sea-Tac Airport for the next 25 years and
encourages the cost-effective expansion of domestic and international passenger and cargo
service. We achieve this objective through assisting our TSA partners in managing office space
COMMISSION AGENDA – Action Item No. _8c__ Page 2 of 5
Meeting Date: May 10, 2022
Template revised June 27, 2019 (Diversity in Contracting).
and facilities to increase organizational efficiencies that ultimately will facilitate improved
security at the Airport.
LEASE SUMMARY COMPARISON
The current terms and proposed amended terms of the two leases are as follows:
Main Lease
Current terms
Amended terms
Term
11/1/2018-1/20/2022
1/21/2022-1/20/2027
SF Leased
7,935 sf – 2 years; reduced
to 6,917 sf for 2 years
6,701 sf*
Rent Annually
$1,101,774.75 – year 1
$1,295,468.10 – year 2
$1,129,269.42 – year 3
$1,187,372.22 – year 4
$4,713,884.49 – Total rent
$988,732.55 – year 1
$1,102,984.00 – year 2
$1,198,607.87 – year 3
$1,266,421.99 – year 4
$1,419,003.76 – year 5
$5,975,750.17 – Total rent
C1 Building Lease
Current terms
Amended terms
Term
1/22/2019-1/20/2022
1/21/2027
SF Leased
10,756 sf – 2 years; reduced
to 6,335 sf for 2 years
6,335 sf*
Rent
$1,493,470.60 – year 1
$1,756,024.56 – year 2
$1,034,252.10 – year3
$1,087,466.10 – year 4
5,371,213.36 Total rent
$934,729.25 – year 1
$1,042,741.00 – year 2
$1,133,141.45 – year 3
$1,197,251.65 – year 4
$1,341,499.60 – year 5
$5,649,362.95 – Total rent
*Change in leased sf due to consolidation of TSA functions and C1 project enabling
move
FINANCIAL IMPLICATIONS
By extending the two Leases for an additional five years and increasing the negotiated rental
rate (based on Finance and Budget rate forecast), the Port will realize total revenue over the
five-year term extension of $11,625,113.12. This lease extension does not financially obligate
the Port in any measurable way.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Allow the leases to expire and tenant to stay provisionally in a holdover state
COMMISSION AGENDA – Action Item No. _8c__ Page 3 of 5
Meeting Date: May 10, 2022
Template revised June 27, 2019 (Diversity in Contracting).
Cost Implications: No increase in rental revenue
Pros:
(1) Provides the Port with flexibility to terminate the leases with 30 days’ notice.
(2) Potential for return of terminal space that could be occupied by a tenant not otherwise
accommodated.
Cons:
(1) The Port would miss the opportunity to secure rental revenue for at least a full year, at
the proposed increased rate.
(2) GSA/TSA by policy does not permit holdovers.
(3) Does not support TSA’s mission in managing its facility efficiencies supporting the critical
security function they provide at the Airport.
This is not the recommended alternative.
Alternative 2 – Execute the 5-year lease extension for each lease.
Cost Implications: Increased rental revenue over extended lease term.
Pros:
(1) Satisfies the occupancy needs of TSA to fulfill their critical security function at Sea-Tac.
(2) Progressively increased rental revenue over the 5-year term provides commitment from
GSA/TSA for space.
(3) Provides for increases to current rental rate and ultimately non-aeronautical revenue.
Cons:
(1) The space will not be available to potential tenants not otherwise accommodated in the
terminal.
This is the recommended alternative.
ATTACHMENTS TO THIS REQUEST
(1) Exhibit A – Lease Amendment No. 27 and No. 28 to GSA Main Lease
(2) Exhibit B – Lease Amendment No. 5 to GSA C1 Building Lease
(3) Exhibit C – Plan depicting spaces leased
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
Main Lease #000307
• On May 12, 2009, Commission approved Amendment 18 to extend the lease for an
additional three (3) years and increase the rental rate, covering hold over period that
expired on October 31, 2010
COMMISSION AGENDA – Action Item No. _8c__ Page 4 of 5
Meeting Date: May 10, 2022
Template revised June 27, 2019 (Diversity in Contracting).
• On October 5, 2010, Commission approved Amendment to extend the lease for an
additional three (3) years and increase the rental rate
• On October 8, 2013, Commission approved Amendment No. 1 to extend the term of the
lease for two additional agreement years and reduce the leasehold from 3,768 square
feet to 1,844 square feet.
• On October 9, 2018, Commission approved Amendment No. 25 of the existing Main Lease
to extend the term of the lease for three additional agreement years and increases the
current rental rates.
C1 Building Lease #000995
• On January 15, 2008, the Port Commission executed a 10 (ten) year Lease Agreement
(Lease) with the United States General Services Administration (GSA), on behalf of the
Transportation Security Administration (TSA) for the construction of tenant
improvements in the C1 Building
• On January 31, 2006, the Port Commission authorized the C1 Project to spend $800,000,
as part of a $25,300,000 request for the C1 Building Interim and Final Baggage Screening
Systems project to design and build tenant improvements in the C1 Building on behalf of
the TSA.
• On October 24, 2006, the Port Commission authorized an additional $488,000 to the C1
Project for a total of $1,288,000 for the TSA tenant improvements. This amount is
expected to be fully reimbursed back to the C1 Project by the GSA/TSA, as a part of the
10-year lease agreement with the Port.
• On August 14, 2007, the Port Commission authorized a $6,000,000 Tenant
Reimbursement CIP (CIP C800154). As part of that authorization, Port staff is required to
bring any project requesting funds more than $200,000 before the Commission for
specific authorization.
• On February 24, 2015, Commission approved Amendment No. 1 to construct
administrative office space and tenant improvements, to prepare contract documents;
perform construction services; execute and award outside professional services
agreement; advertise and award major and small works contracts; pre-purchase material
and equipment; provide contract administration and execution on behalf of GSA and TSA
for the construction of tenant improvement requiring an authorization of $1,312,000 of
Tenant Reimbursement CIP funds.
COMMISSION AGENDA – Action Item No. _8c__ Page 5 of 5
Meeting Date: May 10, 2022
Template revised June 27, 2019 (Diversity in Contracting).
• On October 9, 2018, Commission approved Amendment No. 2 of the existing Main Lease
to extend the term of the lease for three additional agreement years and increases the
current rental rates.
