COMMISSION AGENDA MEMORANDUM Item No. ACTION ITEM Date of Meeting DATE: May 19, 2025 TO: Stephen P. Metruck, Executive Director FROM: Keri Stephens, Director, Aviation Facilities and Capital Programs Mark Leutwiler, Interim Director, Airport Operations Eileen Francisco, Director, Aviation Project Management 8f May 27, 2025 SUBJECT: S Concourse Evolution Base Building Remaining Design Funds and Facilitating Projects Construction Briefing Amount of this request: Total estimated project cost: $ 125M $1.9B - 2.2B ACTION REQUESTED Request Commission authorization for the Executive Director to (1) increase funding to complete S Concourse Evolution base building design, (2) execute a professional services contract for design services and construction bid packages for the A6 Widebody Remediation, (3) advertise and execute construction contracts for Cargo 3, Cargo 6, and gate D6, (4) advertise and execute a program specific contract for special testing and inspection, (5) modify the existing United Airlines lease for the cargo 3 maintenance facility, (6) transfer scope and budget of $25M from CIP C801375 to CIP C801203 for gate A6 Widebody Remediation. The total amount of this request is $125,000,000. EXECUTIVE SUMMARY The S Concourse Evolution (SCE) project at Seattle-Tacoma International Airport (SEA) is part of Upgrade SEA program. This project will extend the life of the S Concourse by upgrading structural, seismic, and building systems to meet modern standards while enhancing the customer experience. A multi-phased construction approach, along with facilitating projects, mitigates operational impacts by offsetting lost gate and holdroom capacity through short-term improvements at multiple SEA locations. The S Concourse Expansion (SCE) Project is a critical infrastructure renewal effort at SEA, addressing the 50-year-old facility's seismic, structural, and code compliance needs while enhancing the passenger experience. This project is essential to maintaining SEA's operational efficiency and ensuring the concourse meets current safety and service standards. SCE project will renew this important regional facility through two main objectives: Template revised January 10, 2019. COMMISSION AGENDA - Action Item No. 8f Meeting Date: May 27, 2025   Page 2 of 7 Extend the useful life and bring the facility up to current code including structural and seismic upgrades Re-purpose space left vacant by services relocated to the International Arrivals Facility (IAF) and enhance the passenger experience by increasing amenities, expanding dining and retail (ADR) opportunities, and elevating the level of service. This project does not increase the number of gates or increase the overall capacity at SEA but focuses on sustaining and enhancing existing infrastructure to meet long-term operational demands. JUSTIFICATION The South Concourse facility at SEA was opened in 1973 and is owned and operated by the Port. The facility depends on building systems that are well past their useful service lives, and further development of the facility has been limited by the authorities having jurisdiction, owing to concerns stemming from current building code minimum requirements. The building systems and materials used in the original construction, due to their age and manufacture, are difficult to maintain. The facility also contains areas of encapsulated regulated materials, such as asbestos, complicating maintenance, renovation, and development. Since the South Concourse was constructed, passenger volumes and aircraft operations have increased dramatically, security regulations have expanded, passenger level of service expectations have evolved, and airlines and retailers have changed their marketing strategies. Diversity in Contracting The SCE project includes a 12% DBE requirement for the design contract, a 26% WMBE requirement for project management and controls, and WMBE requirements of 24% and 27% for the two existing IDIQ design contracts supporting the facilitating projects. The project team will ensure these commitments are met. A 5% WMBE requirement has been included for the Gate D6 construction contract. The project team is working with Diversity in Contracting to identify the WMBE requirement for the construction contract for the work at Cargo 3 and Cargo 6. DETAILS The SCE project will modernize airport facilities to support long-term operational needs while minimizing disruptions. Phased construction will ensure that no more than three (3) positions for large international aircraft at S Concourse will be closed at any given time. Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. 8f Meeting Date: May 27, 2025 Page 3 of 7 Several facilitating projects are necessary to mitigate operational impacts during construction and provide long-term benefits to SEA's infrastructure. These projects will utilize existing airport infrastructure when possible. The D6 Conversion project is a phased project that includes gates D4-D9 to support converting the existing Vertical Circulation Ramp to a Passenger Loading Bridge (PLBs) at D6. The project provides flexibility for airport operations during the S Concourse construction phases. PLBs will also be replaced at gates D5 & D7 as they have reached end of useful life. Modification to airfield striping and Safedock guidance systems from Gates D4-D9 will optimize aircraft maneuvering and operations to ensure safety of passengers and employees. The Cargo 3 project builds a Cobus parking area to support increased bussing operations for the hardstand and remote holdroom needs to offset the gate and holdroom closures during the SCE project. To effectuate this facilitating project, the UA maintenance building lease agreement will need to be amended (reduced) to support the Cobus parking area. For UA operations, employee parking will be relocated to the southeast of the UA maintenance facility to ensure continued access and efficiency for airline staff. The Cargo 6 hardstand project will convert the aircraft parking from cargo only to being able to support both cargo and passenger operations. The work at Cargo 6 will include pavement replacement, re-striping and operational lighting to improve safety and efficiency. This construction approach was developed to balance several competing factors, including minimizing disruptions to airport operations, cost efficiency, schedule alignment, customer experience, airline support, and long-term compatibility to SEA's facility planning objectives. Scope of Work S Concourse  Completion of the S Concourse base building design to support the full remodel of the facility. Major design dates are: o 60% Design is expected on 10/08/2025 o 90% Design is expected on 08/04/2026 o 100% Design is expected on 12/17/2026 Cargo 6 Hardstand  Construction necessary to re-purpose the existing hardstand for passenger operations: o Utility Modifications. o Additional Security and Lighting per Code. o Apron pavement replacement as required. Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. 8f Meeting Date: May 27, 2025 Page 4 of 7 Cargo 3 Cobus and Employee Shuttle Storage Area  Construction necessary to re-purpose an existing parking area for storage of GSE during SCE project: o Modify Perimeter Fencing. o Lighting for the parking area to support employee shuttles and Cobus parking. Gate D6 Passenger Loading Bridge (PLB) Conversion  Equipment procurement and Construction to restore a gate currently configured for overramp bussing back to an aircraft contact gate: o Remove existing D6 passenger ramp and bus parking and install a PLB. o Modify adjacent passenger loading bridges as needed to support the D6 conversion for aircraft parking to meet all safety requirements. Gate A6 Conversion to Support Widebody Aircraft  Design and construction to reconfigure gate A6 by modifying the following: o Move A7 and A8 PLBs to provide more space at A6. o Modify existing international arrival pod to provide more space for aircraft nose. o Modify utilities to provide additional space for ground support equipment. Schedule Activity Commission Final Design Authorization - SCE Construction Authorization - Cargo 3 & 6, Gate D6 Q2 2025 Q2 2025 Construction Start - Cargo 3 & 6, Gate D6 Q3 2025 Construction Authorization- SCE Early Works Q4 2025 Construction Start - SCE Early Works Q1 2026 In-use Date - Cargo 3, 6, D6 Q2 2026 Full In-use Date - SCE Q2 2038 Cost Breakdown Design Construction Total ALTERNATIVES AND IMPLICATIONS CONSIDERED Template revised June 27, 2019 (Diversity in Contracting). This Request Total Project $85M $40M $125M $125M $1.7B-$2.0B $1.9B-$2.2B COMMISSION AGENDA - Action Item No. 8f Meeting Date: May 27, 2025 Page 5 of 7 Alternative 1 - Only receive construction authorization for facilitating projects at Cargo 3, Cargo 6, and Gate D6. This would include no additional funding to complete design at this time. Cost Implications: $40M. Pros: (1) Smaller capital investment. Cons: (1) (2) Reduced program flexibility to keep base building design on track. Impact on schedule. This is not the recommended alternative. Alternative 2 - Proceed with authorization for remaining design funding and construction authorization at Cargo 3, Cargo 6, Gate D6 and transfer budget and scope for gate A6. Cost Implications: $125M Pros: (1) Maintains program schedule on track. Cons: (1) Large capital investment. This is the recommended alternative. FINANCIAL IMPLICATIONS The current estimate range is expected to be $1.9-2.2B. Cost Estimate/Authorization Summary Capital Expense Total COST ESTIMATE Original estimate Previous changes - net Current change Revised estimate $1B $870M $0 $1.9B - $2.2B $0 $0 $0 $0 $1B $870M $0 $1.9B - $2.2B AUTHORIZATION Previous authorizations Current request for authorization Total authorizations, including this request Remaining amount to be authorized $127,750,000 $125,000,000 $252,750,000 TBD $0 $0 $0 $0 $127,750,000 $125,000,000 $252,750,000 TBD Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. 8f Meeting Date: May 27, 2025 Page 6 of 7 Annual Budget Status and Source of Funds The South Concourse Evolution project, CIP C801203, was included in the 2025-2029 capital budget and plan of finance with a budget of $1,870,000,000. The funding sources would be revenue bonds, Airport Development Fund (ADF), the Bipartisan Infrastructure Law (BIL) grant funding through the FAA-AIP program, and future Passenger Facility Charge. Financial Analysis and Summary Business Unit (BU) Project cost for analysis Infrastructure grants NPV incremental to Base Non-aero net cashflow in 2034 Terminal Building Terminal Building $1.9B $225M $(223M) $(16.7M) $2.2B $225M $(339.5M) $(23.4M) $74.84 $88.20 Incremental Terminal Rental Rate CPE Impact in 2034 $3.73 $4.40 Financial analysis was prepared in May 2024 using the assumptions from Project Design Definition phase. Financial analysis was based on space data of aero/non-aero from Project Definition Document (PDD) in 5/2024. Updated financial analysis will be performed to reflect updated space at the 60% design. Future Revenues and Expenses (Total cost of ownership) The cost savings of keeping the current terminal operational would likely present no long-term savings even with discounting the risk of a potential catastrophic failure; the terminal is still in need of upgrades driven by code and safety. Balancing the deferral of these costs against the structural, seismic, and operational needs of the terminal is not recommended. ATTACHMENTS TO THIS REQUEST (1) Presentation slides PREVIOUS COMMISSION ACTIONS OR BRIEFINGS May 13, 2025 - The Commission was briefed on S Concourse Evolution and informed of an upcoming funding request to advance design, scope additions, and construction. May 14, 2024 - The Commission authorized to Prepare design and construction bid packages for S Concourse facilitating project, Procure long-lead items. Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. 8f Meeting Date: May 27, 2025 Page 7 of 7 October 22, 2022 - The Commission authorized to procure a Designer, GC/CM, Project Management/Controls Support, and Commissioning Agent for SCE. September 27, 2022 - The Commission was briefed on S Concourse Evolution and project status. April 13, 2021 - The Commission was briefed on SSAT Renovation Renewal PDD. Template revised June 27, 2019 (Diversity in Contracting).