PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      7d 
STAFF BRIEFING 
Date of Meeting    October 14, 2014 
DATE:    September 29, 2014 
TO:     Ted J. Fick, Chief Executive Officer 
FROM:    Mark C. Griffin, Director, Real Estate Development 
SUBJECT:  Policy briefing related to real estate development and construction work on Portowned
land leased to Port tenants 
SYNOPSIS 
The real estate development community is expressing increasing interest in Port-owned sites that
are available for development now that the real estate market has recovered from the economic
recession. Before bringing forward any additional proposed long-term ground lease agreements
for Commission approval, staff seeks policy guidance regarding the best way to facilitate desired
development while also ensuring fair opportunity is given to all contractors interested in
participating in the construction work on the leased property. This briefing explains the need for
policy guidance, reviews some of the Port's current practices, describes methods used by other
public agencies, offers a potential policy approach, and requests direction as to the elements that
should be considered for inclusion in any new policy. 
BACKGROUND 
Current status 
The Port owns a substantial portfolio of land that is available for development consistent with the
Port's goals to generate new revenue and spur regional economic development, including
providing opportunities for interested contractors to participate in construction activity. The
portfolio includes over 300 acres of property around the airport in Burien, Des Moines and
SeaTac and over 60 acres in Seattle.
With the rebound in the real estate market, staff has begun undertaking more competitive
solicitations (e.g., request for qualifications and proposals (RFQ/Ps)) to long-term ground lease
these sites and take advantage of the favorable market conditions by putting more of this
property into productive use. Staff is also seeing an increase in unsolici ted inquiries from
developers interested in long-tern leases of some of the available sites.
While Port-contracted construction work will continue to be subject to public works
requirements, currently there are no policies or requirements specifically related to construction
work contracted by the Port's tenants on Port-owned land. The Port also does not currently
impose on ground lease tenants any requirement to obtain an agreement with a labor
organization, nor award preference points in any competitive solicitation process to developers

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted J. Fick, Chief Executive Officer 
September 29, 2014 
Page 2 of 6 
who commit to obtaining an agreement with a labor organization. The Port does have labor
harmony provisions in most leases and does have an equal opportunity and non-discrimination
policy.
Labor harmony lease provisions 
Most of the Port's leases usually contain a provision intended to place the responsibility on
tenants to maintain the continuity of service, operations or work on leased property and avoid
disruption of labor. However, these provisions neither dictate the means or methods by which
labor harmony is achieved nor require tenants to enter into agreements with labor organizations.
The typical provision reads as follows: "Lessee agrees to use its best efforts to avoid disruption
to the Port, its tenants or members of the public, arising from labor disputes involving Lessee,
and in the event of a strike, picketing, demonstration or other labor difficulty involving Lessee,
to use its good offices, including the utilization of available legal remedies, to minimize and/or
eliminate any disruption to the Port, its tenants or members of the public, arising from such
strike, picketing, demonstration or other labor difficulty." 
Existing equal opportunity and nondiscrimination policy 
The Port Commission adopted Resolution 3668 on November 13, 2012 repealing Resolution
3166.  Resolution  3166, which was adopted in 1994, required submission of specific
documentation addressing affirmative action goals and reports by Port contractors, their
subcontractors, Port consultants and suppliers to Port contractors or their subcontractors. The
repeal of Resolution 3166 was in part a recognition of its inconsistency with state law after the
passage of Initiative 200. Resolution 3668 restates Port policy relating to non-discrimination and
equal opportunity in employment and subcontracting and its requirements are incorporated into
the Port's leases. 
Resolution 3668 requires tenants to ensure nondiscrimination against any persons on grounds of
age, race, color, national origin/ancestry, ethnicity, religion, disability, Family Medical Leave
Act (FMLA) use, pregnancy, sex/gender, sexual orientation, whistleblower status, military
affiliation, marital status, workers' compensation use, transgender status, political beliefs, or any
other protected status as guaranteed by local, state and federal laws. Resolution 3668 also
compels tenants to apply equal opportunity principles in employment and subcontracting. T he
Port, however, does not currently have a Commission resolution adopting an affirmative action
policy of preference in hiring persons based on their disadvantaged socio-economic status. 
Guidance requested 
Staff seeks guidance to help ensure fair opportunity to all parties interested in participating in
construction activity on Port-owned land when the anticipated development work will not be
done by the Port and will instead be completed by the Port's tenants/ground lessees. For
instance, does the status quo sufficiently promote fair opportunity for all parties interested in
construction work on the Port's land? If not, are there persons or groups that  are
underrepresented in construction jobs on tenant-owned projects such as small businesses, union
firms, women and persons of color and/or persons living in certain distressed zip codes? Policy

COMMISSION AGENDA 
Ted J. Fick, Chief Executive Officer 
September 29, 2014 
Page 3 of 6 
direction on this issue will enhance staff's ability to ground lease the available property and 
realize the desired revenue and economic development goals.
There is some urgency to address this issue. There are deals currently pending staff and
commission review and a business strategy to put other sites in the development pipeline while
market conditions are favorable. 
OTHER AGENCIES' APPROACH 
This section describes some methods that other public agencies have used for publicly-funded
and tenant/privately-funded construction work to ensure there is a common understanding of 
these methods. There is, however, no discussion of the Port-specific legal and business risks 
associated with these methods. To the extent the Commission would like one or more of these
elements included in a proposed policy, the Commission will be briefed on the legal and
business risks associated with the particular proposed policy details.
Staff researched how other public agencies, both locally and regionally, have addressed the issue
of fair opportunity in construction and development activity on publicly-owned land that is not
performed by the public agency. The local agencies surveyed included the City of Seattle, Ki ng
County, Seattle Housing Authority and Sound Transit. Several other port authorities were also
contacted including the ports of Tacoma, Oakland, and Long Beach. None of these agencies had
policies that explicitly addressed tenant-contracted work.  However, staff did learn some
pertinent information that may inform a new policy, which is summarized below. 
Project labor agreements 
A project labor agreement (PLA) is a pre-bid contract between the construction project owner
and a labor union (or unions) that establishes the union(s) as the collective bargaining
representative for all persons who will perform work on the project. A PLA generally requires all
bidders for the construction project to: (i) hire workers through the union hiring halls, (ii) follow 
specified dispute resolution procedures, (iii) comply with specific wage, benefit, seniority,
apprenticeship and other rules, and (iv) contribute to the union benefit funds. Typically, in return
for a project owner's promise to insist in its bid specifications that all successful bidders agree to
be covered by a PLA, the union promises labor peace through the life of the contract. The owner
of the construction will typically make assent to the terms and conditions of the PLA a condition
for award of the contract. Most often, contractors do not sign an agreement with a union and
employees of the contractor are not required to join the union, but all contractors and
subcontractors are required by the project owner to sign a letter of assent agreeing to recognize
the union(s) as the collective bargaining representative for those who will perform work on the
project and to abide by the terms and conditions of the PLA. 
The Port applies PLAs to construction projects owned by the Port on a case by case basis
consistent with the Port's PLA policy. As noted above, however, the Port has no policy or
practice of requiring bidders on projects owned by Port tenants to recognize union(s) as the
collective bargaining representative for workers performing work on tenant-owned projects.

COMMISSION AGENDA 
Ted J. Fick, Chief Executive Officer 
September 29, 2014 
Page 4 of 6 
According to research by staff, the Port of Oakland requires PLAs for certain of its maritime and
aviation tenants' projects but not for its commercial real estate division leases. Oakland requires
tenants to have their contractors abide by a PLA for maritime tenant projects that exceed
$150,000 in a 12-month period and aviation tenant projects that exceed either $50,000 or
$150,000 depending on the location at the airport. The PLA's application to some tenants' work
resulted from litigation that was settled by Oakland and the local building trades agreeing that
the PLA would be applied to some tenant work but not all tenant work. 
Community workforce agreements and hiring preference policies 
Like PLAs, typical community workforce agreements (CWAs) are pre-bid contracts between
local governments and unions that impose certain terms and conditions that contractors and their
subcontractors must assent to as a condition of contract award. In addition to the terms and
conditions that are typical of PLAs, CWAs also typically express hiring preference policies
aimed at incentivizing or requiring the hiring of a certain percentage of workers from "distressed
zip codes" as a way to ensure that people who live in zip codes where there is higher poverty,
lower graduation rates or higher unemployment than the rest of the region are given hiring
preference. CWAs are a means to achieve a workforce that is more socio-economically diverse
while also promoting racial diversity in a race neutral way. Some CWAs have hiring preference
policies that apply to the selection of apprentices by setting percentage goals for the hiring of
minority and women apprentices or percentage requirements for hiring graduates of a "preferred
entry" program aimed at assisting economically disadvantaged persons to compete for openings
in apprenticeship programs. A local government's expression of its hiring preference policies is
not necessarily tied to entering into agreements with unions, but the zip-code based hiring
preference policy appears more typically in agreements with unions.  Incorporating hiring
preference policies into competitive solicitation processes in which local governments award
points to potential developers based on their willingness to commit to hiring preference policies
is an alternative approach to expressing hiring preferences. 
According to research by staff, the Seattle Housing Authority (SHA) has a CWA for the
publicly-financed infrastructure elements of the Yesler Terrace redevelopment project. SHA
staff reports that only a few projects have been completed under the CWA at this point and that
maximizing contractor interest and bids for the projects subject to the CWA is a work in progress
given the current favorable market conditions for contractors. SHA requires neither a CWA nor
a PLA for the privately funded portion of the Yesler Terrace project. Instead, SHA sets
aspirational goals related to local hiring and utilization of women and minority-owned businesses
in its agreements for privately-funded development projects on SHA land. This appears to be an
example of SHA's hiring preference policy being incorporated directly into SHA's agreements
with developers as opposed to incorporated into SHA's agreements with unions that then become
assented to by the developer as a condition of lease award. 
In 2012, the City of Seattle approved a CWA for contractors and subcontractors on the Alaskan
Way seawall replacement project. The CWA is between the City and unions that are signatory to 
the CWA. According to the City's announcement of agreement, the CWA is intended to
establish labor-management peace and support timely construction of the seawall project while

COMMISSION AGENDA 
Ted J. Fick, Chief Executive Officer 
September 29, 2014 
Page 5 of 6 
also providing "an unprecedented agreement towards social equity, shared prosperity and
diversity for all Seattle communities."  The City's CWA includes the following elements:
recognition of the signatory unions by contractors as the sole and exclusive bargaining
representative of all craft employees within their respective jurisdictions who work on the
project; an aspirational goal to hire 15% of the workforce from economically distressed zip
codes; provide direct entry for graduates of pre-apprenticeship programs, with a goal of one
direct entry placement for each of five apprentices on the project; an aspirational goal that of the
15% of all project hours performed by apprentices, at least 21% percent of such apprentices will
be people of color, and 12% shall be women; an aspirational goal that 12% of all project hours
shall be performed by women and 21% of all project hours shall be performed by people of
color. 
Pre-apprenticeship programs serve community members who have historically been unsuccessful
in apprenticeships and do not have the life skills necessary to enter the pathway to a living wage
job or career by teaching them life skills and providing social support services. 
Some of the reasons that some unions and some communities of color have joined together to
request that local governments incorporate hiring preferences through pre-bid agreements
between local governments and unions whose terms must then be assented to by contractors who
win bids to perform public work are to: (i) increase access for community members who have
historically been unsuccessful in competing for openings in apprenticeship programs, (ii) 
facilitate a coordinated workforce system that links pre-apprenticeship programs typically
operated by non-profits with apprenticeship programs typically operated by unions, binding
contractors and unions together to increase hiring of historically under-represented workers
through the use of the purchasing power of local governments, (iii) facilitate on-going dialogue
and sharing of information about the contractors' needs for future apprentices, give the operators
of pre-apprentice programs information in advance to meet the needs of contractors, (iv)
supply on-going services to economically disadvantaged persons and its graduates may be more
likely to succeed in competing for openings in apprenticeship programs or otherwise finding
living wage jobs. 
Economically distressed zip codes require definition before a hiring preference policy is adopted.
For the seawall project, the City indicated that the term "economically distressed zip codes"
would be defined and prioritized by the City. One idea is that once a person has established
residency in a zip code that qualifies as economically distressed, whether because it has higher
than King County average unemployment or because it has higher levels of persons living in
poverty based on Census data, the person would be qualified for a hiring preference for a certain
period even if the person moved to an area that is not considered economically distressed. 
As noted above, the Port does not currently have a Commission-adopted policy that specifically
authorizes the Port to require that tenants adopt goals for hiring economically disadvantaged
persons, nor goals for hiring women and minorities on tenant-owned projects, nor goals for
hiring persons from certain zip codes.

COMMISSION AGENDA 
Ted J. Fick, Chief Executive Officer 
September 29, 2014 
Page 6 of 6 
STAFF SUGGESTED POLICY 
The following staff suggested policy is offered as a starting point for discussion by the
Commission. Staff expects that the Commission's comments and guidance will dictate the final
proposed draft of the policy. 
Proposed Policy Statement:
Ensure fair opportunity for all qualified contractors to win bids for construction work on real
estate development projects to be built by the Port's tenants. 
Proposed Policy Elements: 
The proposed policy would be implemented in the following manner: 
1.  Contractor Roster. 
a.      Advertise annually a list of Port properties that may be developed in the future
and invite all interested general contractors and subcontractors to submit their
names, contact information, statement of experience and qualifications, and their
interest in being considered by the Port's tenants. 
b.      Maintain a list of all general contractors and subcontractors who have responded
to the invitation. 
2.  Mandatory Distribution. Provide the list of interested contractors to the proposed tenant
prior to execution of any long-term (10+ years) lease agreement involving land development. 
3.  Competitive Solicitations & Direct Negotiations.
a.     Include mention of this policy in any competitive procurement documents (e.g.,
requests for interest/offers/qualifications/proposals) for a long-term lease
agreement involving land development. This policy would not be part of the
RFQ/P selection/evaluation criteria but part of the general provisions in the
procurement document.
b.     If there has been no competitive procurement of the proposed transaction, include
mention of this policy in any preliminary letter of intent, but not as a condition of
the deal. 
4.  Outreach. Encourage the proposed developer/Port tenant to meet with any interested firms
from the Port's rosterbut not as a condition of the deal. 

ATTACHMENTS TO THIS BRIEFING 
Powerpoint presentation 

PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
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