Guidebook for Evaluating Terminal Renewal Versus Replacement Options (2012)

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Conditions and Environment for Terminal Redevelopment P a r t 2

4-1 Exhibit 4-1 illustrates the typical life cycle for an airport terminal building. The service life of the terminal begins after construction is completed, at which point operating conditions, levels of service, and reliability are at their highest levels, and routine maintenance is able to sustain “near original” terminal conditions. Over the course of the terminal’s service life, deterioration of the terminal’s condition naturally occurs with age and use, eventually requiring refurbishment or renewal of the terminal building to extend its service life. As importantly, since a terminal is designed to perform specific functions, the service life of a terminal is as much affected by its ability to perform those functions as by the condition of the building’s equipment, components, and systems. Consequently, the service life of a terminal facility can also be reduced by opera- tional, technological, and regulatory changes that denigrate its functionality. Many terminal buildings successfully undergo a series of renewal cycles during which building components and systems are refurbished, and even undergo significant changes to the original layout of interior spaces. However, depending on the initial design of the terminal and its age, subsequent terminal renewals may decrease levels of satisfaction even as the terminal’s service life is extended. Decreased satisfaction levels may result from compromises to budgets, expecta- tions, and/or mission capabilities. Eventually, over the course of repeated renewal cycles, a com- peting alternative to replace an existing terminal will present better value in terms of benefits outweighing costs. Table 4-1 lists common factors that motivate terminal redevelopment planning. The “location in process procedure” identifies the specific step within the four-step process in which the trigger would be applied or acted upon. Meanwhile, the “evaluation tool or procedure” identifies the method(s) that can be used to analyze the terminal condition related to the trigger. Building Age and Physical Condition The age and condition of a terminal are often cited individually as well as in conjunction with other functional deficiencies as factors that motivate terminal redevelopment planning. As buildings near the end of their service lives, in particular, buildings that have undergone previous renewals, each cycle of renewal returns less value in terms of long-term flexibility to accommodate constantly evolving airline initiatives, new technologies, security protocols, and customer expectations. When undertaking terminal renewals, airport operators must accommodate local and national building code requirements, life safety standards, and Americans with Disabilities Act (ADA) requirements when the scope or extent of renewal plans require increased or full compliance with the latest codes and standards. In many cases, seismic, exit, fire suppression, and ADA C h a p t e r 4 Common Motivations

4-2 Guidebook for evaluating terminal renewal Versus replacement Options requirements may result in significant costs for planned renewal actions. Table 4-2 associates the factors addressed by different national building, fire, and life safety codes in determining require- ments to bring an existing facility into compliance with current codes. Air Service Changes Changes to an airport’s air service, in terms of volume, market types, or fleet mix, may chal- lenge the capabilities of a terminal. Examples of air service change scenarios that affect terminal capabilities include: • Declining air service resulting in excess terminal space; alternatively, increasing air service cre- ating demand for new terminal space that may challenge the capabilities of an existing terminal layout to efficiently expand. • Market shifts, such as increased local boardings, which increase demand for landside terminal facilities; similarly, increased hub activity from an airline increases terminal apron and taxi- lane congestion. • Introduction or increase in international service requiring U.S. Customs and Border Protec- tion (CBP) facilities. International routes may also be served by larger aircraft and have longer ground times compared to domestic routes, and thus could increase demand for airport gates. • The widespread use of regional (Airplane Design Group II) aircraft, which requires ground boarding facilities or specially adapted passenger boarding bridges; alternatively, greater aircraft wingspans, which improve aircraft fuel efficiency, reduce terminal apron and gate capacity. Air service changes affecting an airport are typically beyond the control of the airport operator. They can be caused by an airline’s national network plans, actions at competing airports, local agreements that affect the airport’s operating hours, and even federal legislation in cases where an airport operates under a slot control or perimeter controls, such as the Wright Amendment Sources: U.S. Department of Transportation, Office of Asset Management, Life-Cycle Analysis Primer, August 2002; Ricondo & Associates, Inc., June 2011. Prepared by: Ricondo & Associates, Inc., June 2011. Exhibit 4-1 Terminal Building Life Cycle

Trigger Category Typical Triggers Location in Process Procedure Evaluation Tool or Procedure Building Age and Physical Condition Life cycle of building and systems past service life midpoint Step 1 Prioritized Facility Condition Assessment; Facility Condition Index Regulatory changes in ADA, EPA, etc. Building code changes - Code requirements triggered by new construction - Building code changes (e.g., life safety, seismic) Air Service Changes New or increased international flights Steps 1 and 2 Gap Analysis; Terminal Requirements; Concept Layout Planning Recent declines or increases in airport activity Changes in activity type (e.g., greater percentage of business or tourist activity) Significant change in connecting vs. O&D passengers Functional Obsolescence Changes in passenger and aircraft service equipment and procedures Steps 1 and 2 Gap Analysis; Terminal Requirements; Concept Layout Planning - Passenger and baggage check-in - Passenger aircraft boarding and deboarding processes - Increased demand for common use facilities - Regional aircraft passenger loading bridge requirements - Landside and airside concession locations - Restroom sizing and locations - Airline lounge requirements and locations - Aircraft size and seating capacity changes - Vertical circulation requirements Changes in passenger and baggage security processing and equipment New concepts in concession services Airport and airline employee security control requirements Facility energy efficiency, 'green' and other LEED initiatives Optimizing Use of Multiple Terminal Buildings Declining or increasing activity levels by airlines leading to poor facility utilization Steps 1 and 2 Airport Activity Forecasts; Gap Analysis; Terminal Requirements; Concept Layout Planning Changes in activity resulting from airline code sharing and alliances Changes in activity by larger airlines resulting in relocations of smaller airlines Imbalance in terminal roadway and curbside demand Imbalance and congestion on taxiways resulting from aircraft gate capacity constraints Table 4-1 Motivations for Terminal Redevelopment (continued on next page)

Trigger Category Typical Triggers Location in Process Procedure (Chapter 5) Evaluation Tool or Procedure Related Airport Development and Airport Master Plan Non-terminal airport development that affects the operation or site conditions of the terminals Step 1 Airport Master Plan, Capital Improvement Program Changes to airfield that constrain or expand terminal area site conditions Changes to landside entrance and exit roadways or new automated people mover systems Facility development adjacent to the terminal Passenger Activity Forecasts and Civic Aspirations Changes in passenger levels of service caused by changes in activity levels Step 1 Gap Analysis; Terminal Requirements - Master Plan forecasts - FAA TAF - Local and regional socioeconomic growth projections Civic aspirations caused by changes (usually decreases) in passenger levels of service Civic aspirations related to terminal image and passenger services offered Availability of Funding Availability of additional funds from: Steps 1, 2, and 3 Financial Capacity Analysis; Concept Planning; Financial Analysis of Options - AIP entitlement and discretionary grants - PFCs - Other special purpose federal programs - State and local sources, including private sector Changes in activity levels affecting ability to carry or sell debt Airline Agreements Terminal development initiated by airlines Steps 1, 2, and 3 Gap Analysis; Terminal Requirements; Concept Layout Planning; Financial Analysis of Options Terminal development constrained by conditions and controls in Airline-Airport Use and Lease Agreements Notes: ADA = Americans with Disabilities Act AIP = Airport Improvement Program EPA = Environmental Protection Agency FAA = Federal Aviation Administration LEED = Leadership in Energy and Environmental Design O&D = Origin and destination PFC = Passenger facility charge TAF = FAA Terminal Area Forecast Source: Ricondo & Associates, Inc., June 2011. Prepared by: Ricondo & Associates, Inc., June 2011. Table 4-1 continued

Common Motivations 4-5 limitations on Dallas Love Field or federal legislation controlling slot and perimeter rules that limit air service at Reagan Washington National Airport. Often, an airline’s initiative to develop air service at an airport triggers terminal redevelop- ment. In such cases, the airline becomes the principal advocate, oftentimes assuming manage- ment over the redevelopment process. The Dallas Love Field Modernization Program and the Terminals 3 and 4 redevelopment at John F. Kennedy International Airport in New York are examples of airline-led terminal redevelopment programs. Functional Obsolescence Since terminals are designed to perform specific functions, the service life of a terminal is as much affected by its ability to perform those functions as it is by the age and condition of the terminal’s infrastructure. Functional obsolescence results from the normal evolution of air- line operations in terms of new aircraft; the technology used for passenger transactions and to improve customer service; regulatory changes affecting safety, security, and the environ- ment; and value-added services and concession programs intended to meet changing passenger demographics and expectations. A terminal’s original design can constrain an airport’s ability to respond to changes in how passengers and other users interface with the terminal, for example: • Inability of the building’s structural design in terms of column grids, floor-to-floor heights, and floor loads to adapt to changed terminal operational requirements • Inability of a terminal floor plan in terms of building depth or number of building floors to adapt to changed or added terminal operational requirements Certain areas of nearly every terminal have become particularly vulnerable to changes that have occurred within the past decade, including: • The increased use of self-service terminal equipment in the ticket lobby, off-site check-in alternatives, and airline consolidation • Pre-security concession areas • Security screening checkpoints • Baggage handling system areas and explosives detection system areas for screening checked baggage • Facilities and equipment used to board aircraft • U.S. CBP facilities Code Standards Compliance Based on: IBC BOCA NFPA ADA Building Area x x x Construction Cost x x Notes: ADA = Americans with Disabilities Act BOCA = Building Officials and Code Administrators International IBC = International Building Code NFPA = National Fire Protection Association Source: Ricondo & Associates, Inc., June 2011. Prepared by: Ricondo & Associates, Inc., June 2011. Table 4-2 National Code Basis for Requiring Updated Compliance for Building Alterations

4-6 Guidebook for evaluating terminal renewal Versus replacement Options Optimal Use of Multiple Terminal Buildings Air service and regulatory changes force airport operators to rebalance terminal interior spaces and find new uses for excess space. The operators of airports with multiple terminals are being challenged to consolidate operations into fewer terminal buildings in response to airline consolidations. These alternatives often result in the consideration to mothball older terminal facilities, but capital investments in remaining terminals are still required. Related Airport Development and Airport Master Plan Other development projects included in an airport’s Master Plan or Capital Improvement Program (CIP) or tenant project requests can trigger terminal redevelopment. The design and construction of landside automated people mover systems or improvements to a runway system are examples in which terminal redevelopment can be triggered by airport development adjacent to the terminal area. In such cases, the adjacent development may constrain future development opportunities for an existing terminal and, as a consequence, the airport operator may initiate a terminal redevelopment plan to restore compromised capabilities and capacity needed to sup- port growth. In other cases, an adjacent development may cause terminal redevelopment to be expedited to enhance the terminal’s interface with adjacent improvements and leverage benefits from investments made in the adjacent development (e.g., the integration of a terminal station for a landside automated people mover system). Civic Aspirations Civic aspirations can also trigger terminal redevelopment. If passenger level of service is declining because of terminal age or growth in activity, policy makers may be motivated to improve the general attractiveness of the terminal as a “front door” to the community and con- tribute to regional efforts to attract new businesses and tourism or to increase land values. Availability of Funding In most cases, and particularly for smaller airports, the availability of federal AIP entitlement or discretionary grants can reduce local costs to a level that allows the airport operator to initiate or reconsider deferred terminal redevelopment programs. Airline Agreements While airline agreements do not typically create facility needs, they most often become the legal vehicle for initiating redevelopment. In some instances, an airport operator’s desire to equalize the rental rates charged to the airlines can accelerate plans to renew or redevelop ter- minal facilities.

5-1 Internal and external conditions that create the operating environment of an airport, which most often pertain to the airport’s business and facility conditions, are contributing factors that influence terminal redevelopment planning in general and the evaluation of competing options, specifically. While contributing factors can be generally categorized, the importance of any factor depends on its specifics and stakeholder priorities. Business Conditions Governance Governance pertains to the ownership, management, and funding structure of an airport. It also pertains to the levels of responsibility and approval authority within an airport operator’s organization. Airports typically operate under the jurisdiction of a city, county, or state govern- ment, or as a semi-autonomous authority established by legislative mandate. • Airports owned and operated within municipal, county, or state governments typically have a manager or director hired by and reporting to the first or second tier of the governmen- tal entity, such as the mayor or commissioner of public works. Often an advisory board is appointed to monitor airport conditions and performance. • Airports run by authorities typically report to a board appointed by a governing body (such as the mayor’s or governor’s office). In some cases, the board is elected. In almost all cases, the airport board is responsible for hiring key airport personnel and approving major operational changes, the annual CIP, and significant capital investments. • An airport’s organizational structure commonly divides staff responsibilities into discrete branches that have individual operating budgets and reporting structures. Branches may include Executive Staff, Properties and Finance, Operations, and Facilities. Airlines and other key stakeholders can and should also have a place in the governance of an airport if their airport agreements grant review and approval rights for capital development. The form of governance influences the evaluation process in several ways, but principally structures the evaluation process as well as the contributions and roles of participants. Reference • ACRP Report 36: Airport/Airline Agreements—Practices and Characteristics, 2010, provides information and guidance on issues related to governance in project development. Historical/Current Market Conditions Market conditions are considered in the airport’s aviation activity forecasts and can be affected by the economics of the community served by the airport (destination airport, international or C h a p t e r 5 Contributing Factors and Guiding Principles that Influence the Evaluation Process

5-2 Guidebook for evaluating terminal renewal Versus replacement Options domestic markets) or the business strategy of the airlines serving the airport (hub operation, international or domestic markets). While nearly all communities view airports as contributing to economic growth and community improvement, communities experiencing strong economic expansion have different considerations than communities with a shrinking economic base. Historical and current market conditions influence the evaluation process in terms of financial capability, level of risk, and operational requirements. An airport’s market dictates its operational characteristics, for example, international (such as New York’s John F. Kennedy International Airport), regional (such as Wichita Mid-Continent Airport) or hub (such as Phoenix Sky Harbor International Airport) operations. Aviation Activity Forecasts Historically, forecasts have provided the principal basis for determining the nature and timing of improvements to terminal facilities. Significant terminal improvement programs should be supported by recently prepared and approved activity forecasts. The Federal Aviation Adminis- tration (FAA) prepares its Terminal Area Forecast (TAF) annually for airports receiving FAA and contract airport traffic control tower services. Forecasts are also prepared periodically by airport operators as part of Master Plans or other planning updates, and for various financial analyses, such as those prepared in support of the issuance of revenue bonds. Evidence of and predictions for growth offer information on the nature of terminal facilities that will be needed at an airport, along with the airport’s abilities to support investments in terminal facilities. Under current economic conditions, many airports are confronted with declining, stagnant, or slow growth forecasts, which affect the timing of decisions to rehabilitate or replace terminal buildings approaching obsolescence. References • ACRP Report 25: Airport Passenger Terminal Planning and Design: Vol. 1: Guidebook and Vol. 2: Spreadsheet Models and User’s Guide, 2010. • FAA Terminal Area Forecast Summary, published annually. Strategic Plan Airports typically have a Master Plan, if not a formal Strategic Plan, that describes the airport operator’s goals and objectives for the airport and defines a roadmap to provide the aviation services desired by the community, the airlines, and general aviation users. The strategic vision and near-term goals and objectives adopted by an airport’s governing body guide the organization of the airport’s resources and development of the airport’s capital infrastructure, including the terminal. The airport operator’s vision should address the needs of all relevant stakeholders, from airlines to concessionaires, and would include/address the fol- lowing issues: maintaining costs at a competitive level and ensuring that airside, terminal, and landside functions are operationally reliable, efficient, and easily navigated by passengers and aesthetically pleasing. The airport’s Strategic Plan or Master Plan forms the basis for evaluating terminal redevelopment options using a business-driven approach. Reference • ACRP Report 20: Strategic Planning in the Airport Industry, 2009. Financial Capacity Financial capacity pertains to an airport operator’s financial resources available to undertake future capital development. A financial capacity analysis is particularly critical during initial

Contributing Factors and Guiding principles that Influence the evaluation process 5-3 planning stages as it contributes, from a financial standpoint, to defining the overall size and scope of a capital program. It also helps an airport operator achieve the appropriate balance among capital needs, financial performance, and airport user fees. When analyzing the finan- cial capacity of an airport enterprise, the unique conditions of the airport must be considered (e.g., the overall market tolerance for higher airport rates and charges may be different from one airport to another). Generally, as the overall cost and scope of the development increases, more scrutiny over justifications should be expected from stakeholders (i.e., the project’s operational benefits must justify the financial commitment to implement the project). Identifying and understanding existing airport operator funding and financial commitments are a key first step in measuring the remaining financial resources available to fund prospective capital development. Revenue Growth and Diversification In today’s challenging financial environment, airport operators are seeking opportunities to improve their revenue streams through non-aeronautical sources, such as: enhanced terminal concessions, automobile parking, compatible commercial or industrial on-airport development, and other non-traditional sources. With respect to terminal redevelopment, airport operators are increasing the value to customers from the traditional sources of non-aeronautical business units (retail, food and beverage, customer services, wireless/information technology, and adver- tising) by using new presentation concepts, diversifying brands, and target marketing. Reliance primarily on airline or other aeronautical revenues can increase an airport operator’s financial risk, especially during economic downturns when airlines can least afford increased airport rates and charges. This financial risk could be in the form of decreases in aeronautical activity or even losses of service to other airports offering more reasonable rates and charges. Many airport operators have internal goals to reduce their reliance on aeronautical revenue. In general, an airport operator with higher revenue diversification has more flexibility in approach- ing capital development, and may be viewed more favorably by the investment community when seeking to issue debt to fund capital development. Reference • ACRP Synthesis 19, Airport Revenue Diversification, 2010, provides additional guidance and inputs regarding the overall importance of revenue diversification. Facility Conditions Facility conditions refer to the physical state and capabilities of the terminal, including age, inventory of spaces, level of service, operational functionality, space utilization, and revenue generation. Airlines have significant interest in the condition of terminal facilities as it affects profitability and the perceived service offered to its customers. Airport operators have signifi- cant interest in the condition of terminal facilities as it directly relates to their capability to provide good and uniform levels of service to passengers and other tenants. Facility conditions should also be considered in terms of the terminal’s ability to accommodate changing technolo- gies, operating requirements, and business strategies. The following subsections provide a more detailed discussion of aspects relating to facility conditions. Inventory of Facility Conditions Inventorying facility conditions pertains to the visual and operational conditions, age, and the currency of facilities, systems, and equipment at the airport. Currency refers to a comparison of exist-

5-4 Guidebook for evaluating terminal renewal Versus replacement Options ing infrastructure to industry-standard infrastructure. Factors considered when assessing inventory conditions include the asset’s age in relation to its predicted life cycle. An inventory of terminal con- ditions should be prepared periodically with notes on maintenance costs, frequency of repair, and position in the component’s life cycle. The inventory of conditions should be updated in preparation for analyzing terminal redevelopments and as part of annual updates to the airport’s CIP. Functionality In addition to a terminal approaching the end of its infrastructure service life, terminal rede- velopment may be motivated by changed operational and functional requirements that cannot be reasonably accommodated by an existing facility. Examples of operational changes include changes in airline lobby ticketing from agent-assisted services to self-ticketing kiosks, increasing acceptance of common use facilities, heightened security, airline consolidation, global alliances, and hub and spoke airline networks. From the preceding list, two areas of change continue to have profound effects on terminals: • Changes in systems or equipment, specifically those resulting from technological advances, contribute to accelerating obsolescence of existing terminal infrastructure. Examples of recent changes include numerous airline initiatives to expand wireless communication systems, which enable individuals to complete transactions using smart phones, often bypassing fixed infrastructure. In some cases, existing terminal infrastructure can limit benefits from adopt- ing new technologies; for example, older designed baggage handling systems that do not have automated sortation capabilities are unable to support centralized explosives detection screen- ing systems or fully incorporate potential benefits from common use check-in technology. • Regulatory changes can have pronounced effects on how passengers experience terminal infrastructure. Significant examples include security changes regarding the screening of pas- sengers and their baggage as well as the processing of international passengers arriving into the United States. References • ACRP Report 25: Airport Passenger Terminal Planning and Design: Vol. 1: Guidebook and Vol. 2: Spreadsheet Models and User’s Guide, 2010. • ACRP Report 10: Innovations for Airport Terminal Facilities, 2008. Capital Improvement Program Airport operators typically prepare two high-level annual budgets: one for planned operating expenditures (i.e., operating expenses and revenues) and another for required and/or desired capital investments. The latter budget is typically referred to as the CIP, which details desired investments planned for the next 5 to 10 years. The level of capital investment depends on a number of factors, including: • Age and condition of facilities, equipment, and systems • Need for new or expanded facilities based on capacity needs • Sustainability initiatives • Regulatory requirements • Market and service area changes • Technology • Current and future funding availability, including affect on bond ratings • Stakeholder input and concurrence/approvals • Follow-on effects on operation and maintenance (O&M) costs • Economic environment

Contributing Factors in Evaluation Principles to Guide Evaluation Tools for Evaluation Business Conditions Governance Authority vs. Municipal Airline Agreement - Control over CIP All levels of management should be engaged at strategic milestones of the terminal renew/replace analyses. Reference - ACRP Report 36: Airport/Airline Agreements— Practices and Characteristics, 2010 Historical/Current Market Conditions Aviation Activity Airline(s) Hub or Focus City International Service Evolving activity characteristics should be used in defining terminal adequacy and need. References - ACRP Report 25: Airport Passenger Terminal Planning and Design: Vol. 1: Guidebook and Vol. 2: Spreadsheet Models and User's Guide, 2010. Aviation Activity Forecasts Demand Stability/Assumptions - Passenger Characteristics (Origin and Destination (O&D) Share) - Fleet Mix Historical aviation activity and anticipated growth is the primary driver of level of service and future facility requirements. References - ACRP Report 25: Airport Passenger Terminal Planning and Design: Vol. 1: Guidebook and Vol. 2: Spreadsheet Models and User's Guide, 2010 - FAA TAF - Airport Master Plan Strategic Plan Mission Statement Vision Statement Airport’s Strengths, Weaknesses, Opportunities, and Threats (SWOT) Definition of Strategic Issues Long- and Short-Term Goals, Strategies, and Action Plan Performance Indicators A proactive approach should be undertaken to define the airport‘s future and formulate a roadmap to guide the organization from its current state to the airport operator's vision for the future. A Strategic Plan is prepared to assess the airport’s actual performance and compare it with its potential performance in order to define its needs. Reference - ACRP Report 20: Strategic Planning in the Airport Industry, 2009. Tools - Scenario Planning - SWOT Analyses - Top Rated Objectives Financial Capacity Quantifying Current Funding Commitments and Future Funding Availability - FAA Airport Improvement Program (AIP) Grants (Entitlement and Discretionary) - Other Federal Funding (e.g., TSA) - Passenger Facility Charges (PFC) (Pay-As-You- Go and Leveraged) - Customer Facility Charges (CFC) - State or Local Government Funds - General Airport Revenue Bonds - Other Debt - Airport Discretionary Funds (Cash) - Third-Party/Private Funding Ensure that an appropriate balance is maintained among an airport’s capital needs, an airport enterprise’s ability to pay for capital projects, and the reasonableness of rates and charges to airport tenants. Tools - Debt Capacity Analysis - Rates and Charges Models - Cash Flow Models - Sensitivity Analyses - Benefit-Cost Analyses/Justification - Industry Financial Metric Benchmarking Key Metrics - Airline Cost per Enplaned Passenger - Debt Service Coverage Ratios - Bond Ratings - Other Financial Ratios/Metrics - Airport Operator Liquidity - Balance Sheet Table 5-1 (1 of 2) Summary of Contributing Factors that Influence Terminal Redevelopment Planning (continued on next page)

Contributing Factors in Evaluation Principles to Guide Evaluation Tools for Evaluation Revenue Growth and Diversification Other Airport Competition Off-Airport Competition Aeronautical vs. Non-aeronautical Revenue Maximizing Use of Airport Assets Reference - ACRP Synthesis 19: Airport Revenue Diversification, 2010. Facility Conditions Mission Capability - Landside - Airfield - Terminal Apron - Aircraft Parking/Terminal Servicing - Functionality Passenger Level of Service and Capacity See Strategic Plan. Project objectives must be clearly defined and adhere to the justifications for the project. References - FAA and International Air Transport Association Design Guidelines - ACRP Report 25: Airport Passenger Terminal Planning and Design: Vol. 1: Guidebook and Vol. 2: Spreadsheet Models and User's Guide, 2010 Tools - ACRP Report 25: Vol. 1: Guidebook and Vol. 2: Spreadsheet Models and User's Guide (Facility requirements spreadsheet), 2010 - Gap Analyses Inventory Conditions Asset Age and Condition Life Safety and Security Compliance Building Performance/Utilization - Energy Use, Environmental, and Other Regulatory Issues - Space Utilization and Function References - Building and Life Safety Codes - Design Guidelines Tools - Building Information Modeling - Facility Engineering Assessments CIP Development Activity Timing Land Availability Design Alternatives Costs - One-Time: facility investment; value of existing assets employed or replaced; residual value. - Recurring: O&M; Personnel Benefits - Enhanced Revenues - Direct Savings - Efficiency Increases - Other Quantifiable and Non-quantifiable Outputs Link facilities to the airport’s business strategy. All reasonable alternatives to satisfy a given program objective must be investigated. Alternatives must be considered in terms of their life-cycle (total) costs and benefits. Provide clear definition of the project and document factors and assumptions used to make the decision. References - ACRP Report 49: Collaborative Airport Capital Planning Handbook, 2011 - International Facility Management Association, White Paper on Strategic Facility Planning Tools - Brainstorming - Life-Cycle (Total Cost) Analyses - Benefit-Cost Analyses Source: Ricondo & Associates, Inc., June 2011. Prepared by: Ricondo & Associates, Inc., June 2011. Table 5-1 (2 of 2) Summary of Contributing Factors that Influence Terminal Redevelopment Planning

Contributing Factors and Guiding principles that Influence the evaluation process 5-7 The extent of planning and cost-estimate preparation for the CIP depends on the project. Sources of estimates include: • Equipment pricing • Planning stage rough order-of-magnitude estimates; design stage cost estimates Planning for a renewal or replacement terminal project must consider both related and unre- lated CIP projects as some may be incorporated in the project while others may be made unnec- essary or require rescheduling. Table 5-1 summarizes the contributing factors discussed above. Reference • ACRP Report 49: Collaborative Airport Capital Planning Handbook, 2011.