The Port of Seattle recently awarded a design-build contract to Clark Construction for the new International Terminal at Sea-Tac Airport. The construction contract will be worth as much as $407 million dollars when it is finally negotiated. Clark Construction also built Concourse A for the Port in 2004.
The Port of Seattle has been in the conceptual design phase of an expanded International Arrivals Facility (IAF) at Sea-Tac for some years. The present IAF was built in the 1970s in the south satellite and has been servicing the dramatic increase in international flights. The existing federal inspections area (commonly known as “customs”) is beyond its peak capacity. The IAF is a big part of Sea-Tac’s growth. Equidistant to Asia and Europe, Seattle has seen air service from both continents grow 50% in the past five years. In the past two years, new services from Hong Kong, Shanghai, Seoul, Tokyo, and London have been inaugurated. According to the Port of Seattle, the regional economic impact of each new international flight is $75 million dollars annually.
The aging infrastructure is struggling to accommodate the growth. While billions of dollars in improvements have been made to many of Sea-Tac’s terminals, facilities, and runways in recent decades, only minor improvements have been made to the south satellite and the IAF since they opened in 1973. The IAF is already operating well over its designed passenger processing capacity during peak arrival times. Customs lines often stretch 90 minutes or more, and the deplaning is sometimes held until lines subside. U.S. Travel Association Research suggests that 43% of the international visitors to the U.S. tell others to avoid visiting our country due to its frustrating entry process. What is bad for business in Seattle may offer growth opportunities to Seattle’s competitors: Los Angeles, San Francisco, Vancouver, Denver, Minneapolis, St. Paul, Chicago, and Atlanta—all of which have made significant investments in their international arrival facilities in recent years.
The Port of Seattle’s plan for the IAF is to have a 960-foot aerial walkway to access the terminal, where customers will be walking above taxiing airplanes. The project is set to begin mid- to-late 2016, and major construction will begin in 2017. Seven gates will be added to the existing eleven, and there will be two more baggage carousels.
Controversy remains over who will pay for the terminals. The total cost of the upgrades to the terminals could run more than $600 million dollars. That cost will be covered by what is called “Passenger Facility Charges” (PFCs), essentially a per-head tax on passengers moving through the airport. This is a common way of paying for capital investments.
The Alaska Air Group has protested having to cover costs for the International Terminal’s upgrade, since few Alaska customers use the facility. Alaska describes this practice as “grossly unfair.” Alaska is also critical of the cost of the terminal which is forecast to cost “a whopping $608 million dollars,” an alarming increase from the already high cost of $344 million originally proposed. To put that in perspective, this is more than the total cost that went into building CenturyLink Field adjusted for today’s dollars.
Comment: Alaska flies primarily domestic flights, while its main competitor at Sea-Tac, Delta, flies primarily international flights. Alaska has made it very clear that it does not want its customers to pay for a facility that will be used primarily by its chief competitor. In the meantime, this public works infrastructure project is proceeding to construction and design.