PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6e 
ACTION ITEM 
Date of Meeting     January 12, 2016 
DATE:    January 5, 2016 
TO:      Ted Fick, Chief Executive Officer 
FROM:   Dave McFadden, Managing Director, Economic Development 
Tim Leonard, Capital Project Manager, Capital Development 
SUBJECT:  Harbor Marina Corporate Center Roof and HVAC Units Replacement
(CIP #C800196) 

Amount of This Request:    $5,728,000       Source of Funds:  General Fund 
Est. Total Project Cost:      $6,200,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to advertise for construction
bids, execute a public work construction contract, and fund the construction phase for the
Terminal 102 Harbor Marina Corporate Center (HMCC) Roof and Heating, Ventilation, and Air
Conditioning (HVAC) Units Replacement Project for an estimated cost of $5,728,000, bringing
the current authorization for this project to $6,200,000 for a total estimated project cost of
$6,200,000. 
SYNOPSIS 
The Harbor Marina Corporate Center is a four-building complex adjacent to the Harbor Island
Marina at the south end of Harbor Island. The site supports the maritime industry with industrial
and general office and warehouse uses, and the buildings collectively are about 80 percent
occupied. The existing roofing system on the four buildings is approximately 88,000 square feet
and is nearing the end of its service life. This project replaces roofing, existing rooftop gas
piping, and about one-fifth of existing HVAC rooftop units. 
Replacement of HVAC units along with the roof results in cost savings and reduces impact to
tenant operations. Also included in the construction scope is a roof downspout stormwater
treatment system to be installed by Port of Seattle Marine Maintenance. Design funding was
authorized in July 2015. This authorization initiates the project's construction phase. 
BACKGROUND 
The Harbor Marina Corporate Center at Terminal 102 contains a total of approximately 138,000
square feet of flex office, warehouse, storage, and retail space. The tenant base is mixed with a
few large tenants  Virtuoso, Mountaineers Books, and Puget Sound Institute of Pathology  

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
January 5, 2016 
Page 2 of 7 
occupying a third of the total leasable square footage. Other tenants include the Department of
Homeland Security and several businesses that support the maritime industry. 
The four roofs currently contain 69 gas-fired HVAC units. Two prior HVAC improvement
projects replaced 48 and 7 of the rooftop units in 2006 and 2010, respectively. The remaining 14
HVAC units, as well as the gas piping system on the roofs that serves all of the HVAC units, are
now at the end of their service life. The Port will install the new gas-fired HVAC units and
associated piping per current City of Seattle building codes and these will have a 15-year typical
service life. 
In 2014, the Port had a condition study performed for the corporate center roofs by Cornerstone
Architectural Group. The assessment determined that the roof systems were at the end of their
service life and in poor condition due to observed cracking and open seams in the surface roof
membrane, metal coping deficiencies, flashing failures, inadequate fall protection, and poor
surface drainage resulting in large areas of ponding water. A follow-up investigation performed
by Cornerstone in April 2015, involving thermal imaging, open roof cuts for sample removal,
and moisture testing, revealed localized areas of moisture penetration into the roof substrate
layers and degraded timber roof decking. Cornerstone rated the roof to be in "failing" condition
with a maximum of two years of remaining viable life with average maintenance. While tenant
space maintenance issues due to roof leakage have been routine to date, this will become a
serious concern if the current moisture infiltration into the roof substrate and resultant increased
rotting of timber materials is not addressed soon. A delay in replacement of the existing building
roofs would also likely result in higher long-term costs, due to replacement of an increased
amount of rotted timber substrate material and potential mold remediation.  The proposed
replacement roof will reuse the existing roof's insulation material, and be installed per the City
of Seattle building codes, with a 25-year minimum warranty life.
The current asset strategy for Harbor Marina Corporate Center is to maximize occupancy,
aggressively manage costs, and to hold the property until the various major projects (e.g. the
boring of the viaduct replacement tunnel and subsequent removal of the viaduct) that are
negatively affecting access to the property are completed. Today, due to the very difficult access
issues to the property caused by these projects, rental rates are depressed and occupancy is lower
than desired and both would generate a significant discount in property value were we to decide
to sell now. The payback period for this project is less than 8 years and seems to be a reasonable
investment as the project is currently generating a positive operating cash flow and will likely
become an attractive location in the post-viaduct environment.  With the expected increases in
property values, it might be prudent to consider disposition at that time. 
Long-term planning assumes that the HMCC will continue to be a viable commercial office
space property for the Port; therefore, this request does not affect any long-term development
plans. This project is included in the 2016 Plan of Finance.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
January 5, 2016 
Page 3 of 7 
PROJECT JUSTIFICATION AND DETAILS 
The proposed project will preserve revenues associated with the leased space at HMCC, extend
the life of the building structures, and minimize Port liability. Deferring or forgoing this work
would result in continued deterioration of the HVAC and roof system components. Eventually
this could lead to additional leakage, energy loss, detrimental impacts to operations, and the need
for more costly replacements. In addition, it could lead to loss of rent and revenues. Proactive
asset stewardship is the key to reducing the total cost of ownership to the Port over time. 
Project Objectives 
Preserve the structural integrity of the building structure 
Preserve future revenues from the building 
Complete project on time and within budget 
Incorporate environmentally sustainable improvements into the project design and
construction where practical 
Minimize disruptions to facility operations, tenants, and customers 
Scope of Work 
The construction scope of work for the HMCC Roof and HVAC Units Replacement Project
includes the installation of: 
Additional rooftop insulation and new energy-efficient replacement roofing system; 
New energy-efficient HVAC units; 
New rooftop gas piping system; 
Rooftop fall protection system; and 
Stormwater treatment system for rooftop runoff. 
Schedule 
The project's design and construction schedule: 
Commission Approval for Design                                 July 2015 
Permit/Design Complete                                   December 2015 
Commission Approval for Construction                           January 2016 
Advertise for Bids                                            January 2016 
Construction                                May 2016 through November 2016 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original Budget                      $6,350,000          $0    $6,350,000 
Previous Authorizations                  $472,000          $0     $472,000 
Current request for authorization            $5,728,000          $0    $5,728,000 
Total Authorizations, including this request     $6,200,000          $0    $6,200,000

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
January 5, 2016 
Page 4 of 7 
Remaining budget to be authorized               $0          $0          $0 
Total Estimated Project Cost              $6,200,000          $0    $6,200,000 
Project Cost Breakdown                     This Request       Total Project 
Construction                               $4,700,000         $4,700,000 
Construction Management                     $515,000         $515,000 
Design                                    $25,000          $290,000 
Project Management                          $18,000          $200,000
Permitting                                   $22,000           $47,000 
State & Local Taxes (estimated)                   $448,000          $448,000 
Total                                      $5,728,000         $6,200,000 
Budget Status and Source of Funds 
This project was included in the 2016 capital plan and related Plan of Finance under CIP
#C800196  T102 Roof HVAC Replacement in the amount $6,350,000. 
The project will be funded by the general fund.
Financial Analysis and Summary 
CIP Category             Renewal/Enhancement 
Project Type              Renewal & Replacement 
Risk adjusted discount rate     N/A 
Key risk factors             Costs could exceed the estimated amounts. 
Future revenues generated by these buildings could
decrease. 
Project cost for analysis        $6,200,000 
Business Unit (BU)          Economic Development  Central Harbor Management
Group 
Effect on business performance   This project is a renewal and replacement project and,
accordingly, preserves Net Operating Income (NOI),
rather than creating new NOI. 
Preserves HMCC NOI of approximately $580K per
year. 
Depreciation expense will increase an average of
approximately $248K per year based on a 25-year
service life for the roof and a 15-year service life for
the HVAC system. 
IRR/NPV             The NPV is the present value of the project cost.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
January 5, 2016 
Page 5 of 7 
Lifecycle Cost and Savings 
Lifecycle cost analyses were performed during the design process to identify the lowest total cost
of ownership for replacement roofing and HVAC systems and determine which ones were
appropriate for the HMCC buildings. Associated annual operating and maintenance costs are
expected to decrease for the HMCC buildings as a result of the replacement and installation of
the proposed systems.
STRATEGIES AND OBJECTIVES 
This project supports the Port's Century Agenda strategy to "position the Puget Sound region as
a premier international logistics hub" by doubling the economic value of the maritime cluster and
be the greenest and most energy efficient port in North America by: 
Investing in and preserving a valuable Port asset. 
Providing maritime businesses and moorage customers close proximity to businesses
located in the HMCC buildings. 
Maintaining long-term revenue-generating capability of the T102 HMCC. 
Reducing overall energy consumption by replacing old, outdated equipment with
energy-efficient equipment and controls. 
Fulfilling lease commitments and obligations to the Port's tenants. 
Proactively providing stormwater treatment of rooftop runoff 
TRIPLE BOTTOM LINE 
Economic Development 
Preserving existing assets defers high-impact and high-cost asset replacement, and, therefore,
reduces environmental impacts while supporting economic vitality by reducing Port costs and
generating construction-related jobs. The project team will work with the Office of Social
Responsibility to maximize the participation of small businesses on this project. 
Environmental Responsibility 
A"green" vegetative roof option as well as the addition of rooftop photovoltaic systems was 
included in a predesign roofing options analysis, but both were determined to be infeasible due to
inadequate existing structural capacity to support the resultant additional roof load. Although the
Port is not required to install any stormwater treatment in conjunction with the new roofs, this
project has been identified as an opportunity to proactively address an existing stormwater runoff
contaminants concern that is exacerbated from the high volume of traffic utilizing the nearby
overhead West Seattle Bridge. The proposed system will consist of an oyster-shell-filled barrel
installed inline at as many of the 20 existing roof downspout locations as are feasible. This type
of system has been successful at Terminal 91 and the use of oyster shells as a filter material has
proven to be an effective and a low-cost means of reducing heavy metals in stormwater runoff at
Marine Maintenance's Horton Street facility. Additionally, the barrels are a space efficient
solution (as opposed to larger "splash boxes" for example) and should only require a relatively
simple replacement of the oyster shell filter material annually.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
January 5, 2016 
Page 6 of 7 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative #1: Increase the maintenance inspections and repair of the existing roofing system,
subject HVAC units, and rooftop gas piping, and delay replacement of the same indefinitely. 
Pros: 
Lower initial investment cost 
Cons: 
Continued moisture infiltration into roof substrate layers 
Accelerated degradation of timber roof decking 
Increased risk of mold within roofing system and tenant ceilings 
Increased risk of HVAC system failures 
Higher long-term replacement costs due to less existing roof materials being salvageable 
and escalating construction costs 
Increased likelihood and severity of tenant disruptions due to roof leaks, HVAC system
failures, and potential mold issues 
Ongoing safety risk due to inadequate existing fall protection system 
Existing rooftop gas piping system will remain non-compliant with current code
standards 
Alternative #2: Proceed with the design and replacement of the roofing system, remaining
HVAC units, and rooftop gas piping system. 
Pros: 
Preservation of existing asset and generated revenues 
Minimizing roof replacement cost by maximizing salvage percentage of existing roof
insulation and decking materials 
Reduced maintenance costs 
Elimination of moisture infiltration into roofing system thereby greatly reducing risk of
future tenant disruptions due to leak or mold issues 
HVAC system performance will remain reliable 
Decreased safety hazard due to improved fall protection system 
The rooftop gas piping will be compliant with current code 
Treatment of roof stormwater runoff where none currently exists 
Cons: 
Higher initial investment cost 
This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
1)  T102 site aerial photo 
2)  Proposed roof downspout stormwater treatment conceptual drawing

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
January 5, 2016 
Page 7 of 7 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
July 14, 2015  Commission approved design funding for the Harbor Marina Corporate Center
Roof and HVAC Units Replacement (CIP #C800196)