PORT OF SEATTLE 
MEMORANDUM 

COMMISSION AGENDA                   Item No.:  6A 
ACTION ITEM 
Date of Meeting:      December 7, 2010 
DATE:      November 19, 2010 
TO:         Tay Yoshitani, Chief Executive Officer 
FROM:     Joe McWilliams, Managing Director, Real Estate Division 
SUBJECT:   Sale of easements to Puget Sound Energy for north and south sections of
Woodinville Subdivision Rail Corridor 
PROCEEDS OF SALE:    $13,752,393 minus closing costs 
ACTION REQUESTED: 
Approve the sale and conveyance to Puget Sound Energy ("PSE") of those certain permanent
easement rights to the Woodinville Subdivision rail corridor substantially as described in Exhibit
B and Exhibit C to the Easement Purchase and Sale Agreement and authorize the Chief
Executive Officer to execute all documents necessary for sale and conveyance of said easement
rights. 
SYNOPSIS: 
Commission authorization is requested to proceed with the sale and conveyance of certain
easement rights in the north and south sections of the Woodinville Subdivision rail corridor to
PSE for $13,752.393. This request is consistent with the regional transaction between the Port,
City of Redmond, King County, Sound Transit, Cascade Water Alliance and PSE ("Regional
Partners") to share in the costs of the acquisition of the Woodinville Subdivision rail corridor
(aka "Eastside Corridor"). The Port and PSE will split the closing costs. Closing is anticipated by 
or before December 31, 2010. PSE staff has indicated that it is critical that the transaction closes
by the end of the year as the funds budgeted for purchase of the easement rights in 2010 will not
be available in 2011. 
BACKGROUND: 
The Port acquired the Eastside Corridor on December 18, 2009, from BNSF Railway. Prior to
finalizing the acquisition, the Port and the Regional Partners agreed that they all had an interest
in obtaining rights to use the Eastside Corridor and share in the cost of acquiring it for public
ownership. This agreement was memorialized in a Memorandum of Understanding dated
November 11, 2009. On February 23, 2010, the Commission authorized a Memorandum of
Understanding between the Regional Partners regarding the appraisal of the Eastside Corridor.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
November 19, 2010 
Page 2 of 4 

In June 2010, the Port and the City of Redmond reached agreement for the sale of a portion of
the Redmond Spur segment of the Eastside Corridor for $10,000,000. That segment of the
Eastside Corridor is now owned by the City of Redmond and is not included in the easements for
the north and south sections of the Eastside Corridor which the Port wishes to convey to PSE. 
While the other Regional Partners are negotiating other aspects of the transaction that do not
involve PSE, the Port and PSE staff have reached agreement for the sale of certain permanent
easement rights in the north and south sections of the Eastside Corridor. The terms of the
purchase and sale of said easement rights are set forth in the Easement Purchase and Sale
Agreement. The Port-owned property, commonly known as the Woodinville Subdivision, is
legally described in Exhibit A of the Easement Purchase and Sale Agreement. The easement
rights to the north section are described in Exhibit B (referred to as the "North Rail Line
Easement"). The easement rights to the south section are described in Exhibit C (referred to as
the "South Rail Line Easement"). 
NORTH RAIL LINE EASEMENT: 
The easement would give PSE the right to use the Easement Area for construction, operation,
maintenance, repair, replacement, improvement, removal, enlargement of one or more utility
systems to transmit, distribute and sell electricity and gas. 
The Port would be obligated to indemnify PSE for "any and all loss, liability, claim, damage and
expense suffered or incurred by reason of" Port's negligence; Port's failure to make available its
interests in the Easement Area to accommodate reactivated freight rail service; breach of any
representation, warranty or agreement of Port set forth in the easement agreement; the Port's
failure to perform any obligation required by the easement agreement; and the class action
lawsuit, Lane v. Port of Seattle, Case No. 10-2-25591-5. 
SOUTH RAIL LINE EASEMENT: 
The easement would give PSE the right to use the Easement Area for construction, operation,
maintenance, repair, replacement, improvement, removal, enlargement of one or more utility
systems to transmit, distribute and sell electricity and gas. 
The Port would be obligated to indemnify PSE for "any and all loss, liability, claim, damage and
expense suffered or incurred by reason of" Port's negligence; Port's failure to make available its
interests in the Easement Area to accommodate reactivated freight rail service; breach of any
representation, warranty or agreement of Port set forth in the easement agreement; the Port's
failure to perform any obligation required by the easement agreement; and the class action
lawsuit, Lane v. Port of Seattle, Case No. 10-2-25591-5.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
November 19, 2010 
Page 3 of 4 

SCOPE OF PURCHASE AND SALE AGREEMENT: 
Anticipated Closing Date: On or before December 31, 2010. 
Sale Price: $13,752,393 to be paid to the Port 

If at any time subsequent to closing, a final judicial decree (or similar judicial order or
government action) and/or reactivation of freight (or similar action or process) nullifies all or any
portion of the Port's acquisition of the Port-owned property, commonly known as the
Woodinville Subdivision, and consequently, affects all or any portion of the easement rights,
upon 15 days' written notice from PSE, the Port will reimburse PSE the full amount of the
purchase price. If such action nullifies only a portion of the Port's acquisition of the Woodinville
Subdivision, and consequently, only a portion of the easement rights, the full reimbursement will
be reduced by the appraised value of the affected portion. Reimbursement by the Port of the
purchase price would terminate the easement agreements and consequently the Port's
indemnification obligations. 

OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: 
Easement Purchase and Sale Agreement between Port and PSE  draft form. 
Exhibit A (legal description of the Property to which the Port is conveying easement
rights)  to be prepared by PSE 
Exhibit B (North Rail Line Easement)  draft form 
Exhibit C (South Rail Line Easement)  draft form 
PREVIOUS COMMISSION ACTION: 
November 5, 2009, Port Commission authorized execution of a Memorandum of
Understanding between the Port and the Regional Partners Regarding Acquisition of the
Woodinville Subdivision. 
February 23, 2010, Port Commission authorized a Memorandum of Understanding
between the Regional Partners Regarding Joint Appraisal of the Woodinville
Subdivision. 
June 8, 2010, First Reading of Resolution No. 3638 declaring certain real property
located in the City of Redmond and unincorporated King County as surplus and no longer
needed for Port purposes and authorizing the Chief Executive Officer to execute all
documents necessary for the transfer to the City of Redmond. 
June 22, 2010, public hearing and Second Reading and Final Passage of Resolution No.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
November 19, 2010 
Page 4 of 4 

3638, as amended declaring certain real property located in the City of Redmond and
unincorporated King County (a portion of the Redmond Spur segment of the Woodinville
Subdivision) surplus and no longer needed for Port purposes, and authorizing the Chief
Executive Officer to execute all documents necessary for its transfer to the City of
Redmond.