PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA              Item No.:       6c 
ACTION ITEM             Date of Meeting:   April 23, 2013 

DATE:     April 12, 2013 
TO:       Tay Yoshitani, Chief Executive Officer 
FROM:    Joe McWilliams, Managing Director, Real Estate Division 
SUBJECT:  Resolution 3679, Second Reading and final passage amending Unit 1 of the
Comprehensive Scheme of Harbor Improvements to declare the Terminal 91 West
Yard parcel surplus; authorize the sale of a portion of the West Yard to King
County for construction of the South Magnolia combined sewer overflow facility,
authorize the sale of the remainder of the West Yard to the City for expansion of 
park facilities; and delete the West Yard parcel from Unit 1 of the Comprehensive
Scheme 

Net proceeds to the Port from sale of the entire West Yard parcel:        $8,399,504 
Net proceeds to the Port from sale of the Tank Area and related easements:  $3,203,614 
Net proceeds to the Port from the Terminal 91 easements:              $55,083 
ACTION REQUESTED: 
Request Public Hearing and Second Reading and Final Passage of Resolution No. 3679, as
amended: A Resolution of the Port Commission of the Port of Seattle declaring surplus and no
longer needed for port district purposes approximately 5.39 acres of Port-owned real property
located in the City of Seattle, commonly known as the T-91 West Yard; amending the
Comprehensive Scheme to reflect that the property is surplus to the needs of the Port and is 
deleted from Unit No. 1; and further authorizing the sale of said real property to the Ci ty of
Seattle and King County. 
SYNOPSIS: 
Staff proposes to enter into a tri-party purchase and sale agreement with King County (County)
and the City of Seattle (City) pursuant to the Intergovernmental Disposition of Property Act.
The proposed agreement will transfer a portion of the Port's Terminal 91 West Yard parcel to the
County to enable construction of its South Magnolia combined sewer overflow (CSO) facility.
The City will purchase the remainder of the West Yard parcel for expansion of park facilities.
The proposed agreement would be entered into based on a settlement agreement between the
Port and County in lieu of the County proceeding with condemnation of the portion of the West
Yard parcel it needs to construct and operate the CSO facility. The settlement agreement
requires the Port to convey the property interests the County needs even if the proposed sale to

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
April 12, 2013 
Page 2 of 5 
the City is not completed. Prior to authorizing the sale of the property to the County and City,
the Commission must first declare the property surplus. 
BACKGROUND: 
Throughout the City during periods of heavy rainfall, storm water flows can exceed system
capacity. This leads to spills of untreated sewage into Puget Sound and other local waters.  A 
National Pollutant Discharge Elimination System (NPDES) Waste Discharge Permit issued to
the County by the Washington State Department of Ecology (DOE) requires that the County
begin construction of the CSO facility by the end of 2013 as part of a larger mandate to control
overflows from the older combined sewer and storm water systems across its network. 
The County has identified portions of the Port's Terminal 91 West Yard parcel as necessary for
construction and operation of the CSO facility (the "Tank Area"), as follows: 
(i)     A fee interest of approximately 34,254 square feet for the subsurface storage tank and
above ground ancillary building, as depicted on Exhibit A; 
(ii)    A permanent pipeline and access easement of approximately 5,285  square feet as
depicted on Exhibit B; 
(iii)    A permanent surface/aerial easement of approximately 20,206 square feet as depicted on
Exhibit C; and 
(iv)   A temporary construction easement of approximately 142,750 square feet as depicted on
Exhibit D. 
The remainder of the West Yard parcel, approximately 200,275 square feet (the "West Yard
Remainder") asdepicted on Exhibit E, will be sold to the City, subject to the three West Yard
easements to be conveyed to the County described above. 
The County is also seeking three other related easements that affect other portions of Terminal
91 for construction and operation of the CSO facility. These three easements are: 
(i)     A permanent pipeline easement of approximately 797 square feet on a portion of the
Terminal 91 uplands, as depicted on Exhibit F; 
(ii)    A temporary construction easement of approximately 10,523 square feet on a portion of
the Terminal 91 uplands, as depicted on Exhibit G; and 
(iii)    A temporary construction easement for pipe assembly on a portion of the shortfill area of
Piers 90/91, as depicted on Exhibit H. This easement may not ultimately be needed
depending on the drilling method chosen by the County's contractor.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
April 12, 2013 
Page 3 of 5 
On June 5, 2012, the County began condemnation proceedings in King County Superior Court in
order to meet the NPDES permit schedule. Pursuant to these proceedings, the Commission
approved a stipulated order for immediate possession and use of the Tank Area on November 13,
2012. 
Concurrent with the County's condemnation action, staff continued discussions with the County
and City on a sale of the entire West Yard parcel. Such a sale would obviate the County's
condemnation suit and would facilitate the City's and local community's interest in development
of a park on the West Yard Remainder. Following a mediation conference on March 19, 2013,
the Port, County and City reached agreement to sell the West Yard parcel. The settlement
agreement requires that if the Seattle City Council does not approve acquisition of the West Yard
Remainder, the Port will still convey the Tank Area to the County in fee and grant all the related
easements. In return, the County will dismiss the condemnation action.
The proposed purchase and sale agreement would be entered into pursuant to Chapter 39.33 
Revised Code of Washington, (Intergovernmental Disposition of Property Act) which permits a
political subdivision of the State of Washington to sell real property interests to the State or any
municipality or any political subdivision thereof on such terms and conditions as may be
mutually agreed upon by the proper authority of the State and/or the subdivisions concerned. 
PURCHASE AND SALE AGREEMENT PROVISIONS: 
The key terms of the proposed purchase and sale agreement include: 
Purchase Price. The Port will receive a total of $8,454,587 assuming a sale of the entire
West Yard parcel and granting of the related easements. If the Port conveys only the Tank Area
and related easements to the County, the Port's total compensation will be $3,258,587. 
Environmental Release. The County will release and discharge the Port from claims
under $400,000 arising from the presence of hazardous substances on the Tank Area identified in
the environmental reports completed on the West Yard parcel. Similarly, the City will release
and discharge the Port from claims under $1,000,000 arising from the presence of hazardous
substances on the West Yard Remainder identified in the environmental reports completed on the
West Yard parcel. Any potential claims for remediating identified hazardous substances by the
County and City against the Port above these amounts will be controlled by applicable
environmental laws. 
This provision provides the Port with a release from the known contaminants on the site
identified in the Phase 2 environmental site assessment obtained by the County (Shannon &
Wilson, Inc. dated May 11, 2012) and a related technical memorandum obtained by the Port 
(Landau & Associates dated November 9, 2012) that reviewed the results of the Shannon &
Wilson report. The Port, however, does have exposure for potential claims that may arise for
contamination not identified and/or above that identified in the two reports.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
April 12, 2013 
Page 4 of 5 
Removal of West Yard from Agreed Order. The West Yard parcel is currently subject
to and part of a DOE Agreed Order No. DE 8938 ("Agreed Order").  The Port reached
agreement with DOE to remove the West Yard parcel from the Agreed Order effective upon fee
conveyance of the Tank Area to the County and/or conveyance of the West Yard Remainder to
the City.
FINANCIAL IMPLICATIONS: 
The proposed values of the various property interests resulted from negotiations during the
mediation session between the Port and County and later agreed to by the City based on the
appraisal prepared for the County by Anthony Gibbons, MAI dated March 6, 2013 and the
appraisal prepared for the Port by Darrin Shedd, MAI dated March 6, 2013. Recognizing that
both appraisals were prepared pursuant to the condemnation action in which the County would
have condemned easements over a portion of the West Yard parcel, the parties agreed in the
context of a fee simple sale on a total value of $8,399,504 for the West Yard parcel. This value
reflects a base land value of $45 per square foot for the fully useable/developable portions of the
West Yard parcel and discounts for those portions of the property (e.g., the riprap and the Port's
Smith Cove Park) that are not fully useable/developable.
The value of the other Terminal 91 easements sought by the County total approximately $55,083. 
However, the Port's total compensation for these easements will depend on whether the County's
contractor actually needs the pipeline assembly temporary construction easement and on the
actual duration of the temporary construction easement for the permanent pipeline.
Under Alternative 3 below, the Port will receive a total of approximately $8,454,587 ($8,399,504
+ $55,083) from selling the entire West Yard parcel to the County and City and granting the
related easements to the County.
Under Alternative 2 below, the Port completes only the County portion of the proposed
agreement (i.e., transfers the Tank Area fee interest and grants the related easements). T he
County's takeof the West Yard parcel under this scenario is valued at $3,203,614. This value
reflects the damage to the Port's continuing ownership of the West Yard Remainder from the
property interests to be conveyed to the County.  When combined with the Terminal 91
easements, the Port will receive a total of approximately $3,258,697 ($3,203,614 + $55,083) 
under Alternative 2. 
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS: 
Alternative 1: Proceed to a valuation trial with the County instead of the settlement
agreement 
The Port grants the County possession and use but proceeds to trial to determine the value of the
County'srequired property interests. This alternative results in additional legal expense. In
addition, this alternative creates uncertainty regarding the sale of the West Yard Remainder.
Development of the West Yard parcel becomes further restricted with the CSO facility in place,
because the CSO facility is located within the area of the West Yard that can actually be

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
April 12, 2013 
Page 5 of 5 
developed given the shoreline setback provisions that apply to the site as a whole. The Port
would be left with a significantly encumbered remainder parcel with limited future development
options. This is not the recommended alternative. 
Alternative 2:  Convey the Tank Area to the County per the settlement agreement but
maintain ownership of the West Yard Remainder 
The Port avoids a valuation trial by complying with the terms of the settlement agreement in
conveying the Tank Area fee and related easements to the County while maintaining ownership
of the West Yard Remainder. Under this scenario, the Port does not incur the additional legal
and other expenses associated with a valuation trial. However, like Alternative 1, the Port would 
be left with a significantly encumbered remainder parcel with limited future development
options. This is not the recommended alternative. 
Alternative 3: Sell the entire West Yard parcel 
The Port sells the entire West Yard parcel to the County and City. This alternative results in the
greatest benefits for the Port (i.e., the most compensation, least uncertainty about future
development options, and avoids additional legal and other expenses), enables the County's
construction of a necessary public facility without additional delay, and facilitates the City's and
community's interest in an expanded Smith Cove park on the site. This is the recommended
alternative. 
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: 
Exhibits A  H: Depictions of the proposed fee and easement interests 
Resolution No. 3679 with Exhibit A 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
December 7, 2010  Staff briefing on the County's need to construct to the CSO project. 
November 13, 2012  Stipulated Order for Immediate Possession and Use. 
April 9, 2013  Request first reading of Resolution No. 3679