TemplaterevisedJanuary10,2019.

COMMISSION

AGENDAMEMORANDUM ItemNo. 8b

ACTIONITEM DateofMeeting September24,2024



DATE: September16,2024

TO: StephenP.Metruck,ExecutiveDirector

FROM: JeffWolf,Director,AviationCommercialManagement

EileenFrancisco,Director,AviationProjectManagement

SUBJECT: Rental Car Facility (RCF) Customer Service Building Re‐Demising Preliminary

Funding(#C801209)



Amountofthisrequest: $2,000,000

Totalestimatedprojectcost: $11to$19million



ACTIONREQUESTED

Request Commission authorization for the Executive Director to (1) execute a project‐specific

design services contract, and (2) complete preliminary project work for the RCF Customer

Service Building Re‐Demising project at Seattle‐Tacoma International Airport (SEA) for a total

authorizationof$2,000,000.



EXECUTIVESUMMARY

TheRCFbeganoperationsinMay2012andtheoriginalten(10)‐yearconcessionagreement,a

componentof thelease, expiresinMay2027,asanadditionalfive (5)yearswas approved by

Commissionin 2021 as part of Covid relief efforts.This project supports the rebidding of the

concession agreement securing a vital source of non‐aeronautical revenues for SEA.The

project will also renovate the existing restrooms in the Customer Service Building, located on

the fifth floor of the RCF, improving the customer and worker experience as the heavily used

restrooms need refurbishment.Due to the concession agreement re‐bid schedule, and the

need to procure a project‐specific  design services contract, Port staff have deferred the

completion of project definition.This will be completed through the  requested preliminary

designeffortandbeforeadditionalauthorizationbytheCommissionisrequested.



JUSTIFICATION

This project supports the Century Agenda strategic goal to advance this region as a leading 

tourism destination and business gateway by 1) continuously improving the operational

efficiency and customer experience at SEA, and 2) by meeting the region's air transportation

needsbydeliveringvitalfacilitiesandinfrastructureinasustainableandcost‐effectivemanner.

TheRCFisamajorfacilityandistheprimaryoperatinglocationformostrentalcarprovidersat

SEA.Re‐bidding the tenant areas will allow forimprovementsto the operationalefficiencyof

COMMISSIONAGENDA–ActionItemNo.8b Page2of5

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TemplaterevisedJune27,2019(DiversityinContracting).

the facility considering the changes in market positions of the rental car companies over the

last 15 years. The renovation of the restrooms will improve the customer and worker

experience.In2023,approximately4.6millionpassengersutilizedtheRCFandgenerated$46.5

million in concession/land rent revenues to the Port, and $41.6 million in customer facility

charge(CFC)revenues.CFCsarefeespaidbycustomersandremittedtothePortaspartofeach

rentalcartransactiontohelpfundrepaymentofthedebtusedtoconstructtheRCFaswellas

otheroperatingexpenses,suchasthebusingsystemtoandfromtheairportterminal.



DiversityinContracting

TheprojectteamisworkingwiththeDiversityinContractingDepartmenttosetanaspirational

goalforwomenandminoritybusinessenterprises(WMBE)participationinthedesignservices

contract.



DETAILS

The RCF supports the majority rental car operations at SEA (note: some smaller companies

operate“off‐airport”and don’tutilizethefacility exceptforbusing operations) andopenedin

May2012.ThePortandtherentalcarindustryhaveathirty‐yearleasewithanaccompanying

15‐year concession agreement (originally the concession agreement was ten years, but as

noted above, was extended to 15 years).The existing concession agreement expires in May

2027anddefinestheblocks of operatingspaceforeach rental cartenantutilizingthefacility.

This project supports the rebidding of the RCF concession agreement that will determine the

blocksofspaceforeachtenantforthenext15years.Thisprojectwillbuildnewblocksforeach

tenant, including new space withinthe Customer Service Building locatedonthe fifth floor of

the facility and the primary customer‐facing operating areas for rental car companies.Each

tenant is responsible for their own tenant improvements, while the Port is responsible for

improvementstothebasebuilding.



The project will also renovate the existing customer restrooms located within the Customer

Service Building, and potentially include other renewal/replacement scope, which will be

determinedas part of the preliminarydesigneffort associated with this request.A high‐level

conditionassessmentisbeingconductedonthebuildingandshouldbecompletebyearly2025

to also help inform the upcoming design  effort.Additionally, there have been a few code

revisions since the building was designed and the work may  require additional regulatory

upgrades.The preliminary overall budget for this project is $10.5 million and may not be

adequatetosupportthecompletionofthework.Withthis request,Portstaffplantocomplete

preliminarydesigntodefinethescopeofthe improvements,includinganypotentialregulatory

requirements,beforesecuringadditionalfundingandpursuingprojectauthorization.



ScopeofWork

Thescopeof work includesinterior walls/finishes, HVAC, lighting,restrooms,utilities,signage,

and other regulatory improvements. The project is planned to be delivered through the

traditional design‐bid‐build project delivery approach.However, it may be appropriate to

COMMISSIONAGENDA–ActionItemNo.8b Page3of5

MeetingDate:September24,2024

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TemplaterevisedJune27,2019(DiversityinContracting).

deliver a portion of the work through a tenant reimbursement agreement.This will be

determinedaspartofthepreliminarydesigneffort.



Schedule

Construction of the improvements needs to begin by June 2027 in support of the new

concessionagreement.



Activity

Designstart Q22025

Commissionprojectauthorization Q32025

Constructionstart Q22027

In‐usedate Q42028



CostBreakdown ThisRequest TotalProject

Design $2,000,000 $1.9‐$3.4million

Construction $0 $9.1‐$15.6million

Total $2,000,000 $11‐$19million



ALTERNATIVESANDIMPLICATIONSCONSIDERED



Alternative1–NoAction,theexistingconcessionagreementexpires

CostImplications:$46.5millioninannualconcession/landrentrevenuesatrisk

Pros:

(1) NocapitalinvestmentrequiredbythePort.

Cons:

(1) ThePortdoesnotmeetitscontractualobligationstotherentalcarindustry.

(2) Putsatrisktheconcessionrevenuesderivedfromrentalcaroperations.

(3) Customerrestroomsarenotrenovatedandcontinuetodegrade.



Thisisnottherecommendedalternative.



Alternative2–Completeimprovementsforre‐bidonly(norestroomupgrade)

CostImplications:$11million

Pros:

(1) MinimalcapitalinvestmentrequiredbythePort.

(2) ThePortmeetsitscontractualobligationstotherentalcarindustry.

(3) Preservestheconcessionrevenuesderivedfromrentalcaroperations.

Cons:

(1) The customer restrooms are not renovated and would be completed later as a

separatemajormaintenanceprojectwithhigheroverallcoststothePort.

COMMISSIONAGENDA–ActionItemNo.8b Page4of5

MeetingDate:September24,2024



TemplaterevisedJune27,2019(DiversityinContracting).



Thisisnottherecommendedalternative.



Alternative3–Completeallimprovements

CostImplications:$13.5million

Pros:

(1) ThePortmeetsitscontractualobligationstotherentalcarindustry.

(2) Preservestheconcessionrevenuesderivedfromrentalcaroperations.

(3) Thecustomerrestroomsarerenovatedimprovingcustomerservice.

Cons:

(1) RequireshighercapitalinvestmentbythePort.



Thisistherecommendedalternative.



FINANCIALIMPLICATIONS



CostEstimate/AuthorizationSummary Capital Expense Total

COSTESTIMATE 

Originalestimate $10,545,410 $0 $10,545,410

AUTHORIZATION 

Previousauthorizations $0 $0 $0

Currentrequestforauthorization $2,000,000 $0 $2,000,000

Totalauthorizations,includingthisrequest $2,000,000 $0 $2,000,000

Remainingamounttobeauthorized $9‐$17million $0 $9‐$17million



AnnualBudgetStatusandSourceofFunds

Thisproject#C801209wasincludedinthe2024‐2028capitalbudgetandplanoffinancewitha

total budget of $10,545,410.This project will be primarily funded by the  Customer Facility

Charge(CFC)revenues.Portionsofworksupporting theSmallOperatorAreaarenoteligiblefor

CFC use, as the agreement with the rental car companies obligates the Port to pay for Small

OperatorAreaimprovements.



FinancialAnalysisandSummary

Projectcostforanalysis $11to$19million

BusinessUnit(BU) RentalCars

Effectonbusinessperformance

(NOIafterdepreciation)

NOIafterdepreciationwilldecrease.

IRR/NPV(ifrelevant) N/A

CPEImpact N/A



COMMISSIONAGENDA–ActionItemNo.8b Page5of5

MeetingDate:September24,2024

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TemplaterevisedJune27,2019(DiversityinContracting).

FutureRevenuesandExpenses(Totalcostofownership)

PerthetermsoftheleaseagreementtheoperationandmaintenancecostsfortheRentalCar

Facility are borne by the rental car industry.Completing the project improvements and

supportingthenewconcessionagreementprotectsSEA’srentalcarconcessionrevenues.



ADDITIONALBACKGROUND

ThePorthascompletedwork,orhasotherworkunderway,attheRCFoverthepastfewyears.

Thisincludesthefollowingprojects:

 RCF Pavement Remediation (#C800977): This project has two phases of work.Phase 1

includestheinstallationofa perimeteranti‐climbsecurityfenceandpavementremediation

andwascompletedinAugust2021.Thepavementremediationincludedtheoverlayofthe

S160

St.busentrance andthereplacementof the expansionjointsandseveral concrete

panels on the fifth floor of the facility.Phase 2 includes the replacement of the

weatherproofingmembrane in the employee parking area on the fifthfloorofthefacility.

Thisworkiscurrentlyunderwayandisanticipatedtobecompletedthisyear.

 RCFSecurity Improvements (#C801110): This project provided security enhancements that

included architectural barriers and egress‐only doors in the external stair towers,

preventingpedestrianaccessfromgroundlevel.ThisworkwascompletedinMay2022.

 RCF Boiler Skid 1 and 2 Replacement (#C801325): This project will replace the two boiler

skids that are theprimary source of heat for the Quick Turn‐Around (QTA)buildings.This

workisanticipatedtobecompletebyQ32026.

 RCFQTAFireSuppression(#C801412): Thisprojectwillreplacethefiresuppressionsystems

in all four of the QTAs in the  facility.The fire suppression uses an aqueous film‐forming

foamthatcontainsperandpoly‐fluorinatedalkylsubstances (PFAS)thathavebeenbanned

inWashingtonState.Preliminaryprojectworkiscurrentlyunderway,andPortstaffplanto

requestCommissionprojectauthorizationbyQ12025andcompletetheworkbymid‐2026.



ATTACHMENTSTOTHISREQUEST

(1) Presentationslides

