COMMISSION 
AGENDA MEMORANDUM                        Item No.          8c 
ACTION ITEM                            Date of Meeting      January 22, 2019 
DATE:     January 15, 2019 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Jeffrey Utterback, Director Real Estate and Economic Development 
Tim Leonard, Capital Project Manager 
SUBJECT: Fishermen's Terminal (FT) Redevelopment Phase I (CIP #C800525) 
Amount of this request:               $1,800,000 
Total estimated project cost:         $23,000,000 
ACTION REQUESTED 
Request Commission authorization for the Executive Director to (1) authorize an additional
$1,800,000 in design funding for Fishermen's Terminal (FT) Gateway Building improvements,
and (2) execute an amendment to the existing Architectural/Engineering Services contract for
Fishermen's Terminal Redevelopment for $1,000,000 to complete the final planning, design and
permitting of the Gateway Building and associated FT facility improvements. This brings the
total authorization to date to $6,250,000, out of an estimated project cost of $23,000,000. 
EXECUTIVE SUMMARY 
The FT Long-Term Strategic Plan was developed by the Port in 2016 in order to leverage
maritime/fishing/boating activities and related maritime industries located at the facility. The 
additional design funds requested will enable the completion of 100% design for the following
FT Redevelopment Phase I elements:
New "Gateway" Building (in the area of the existing vacant bank building and Net Sheds 7 & 
8) providing a minimum of 60k SF of new light industrial space for complementary maritime
businesses. We are targeting a LEED Certification for the proposed building. 
General associated FT facility improvements including parking restriping, lighting upgrades,
wayfinding signage, and new public interpretive displays. 
Improvements to public streets contiguous to FT as required by the City of Seattle. 
The "Gateway" building and associated improvements are funded in the 2019-2023Capital
Improvement Plan. 


Template revised April 12, 2018.

COMMISSION AGENDA  Action Item No. 8c                                   Page 2 of 8 
Meeting Date: January 22, 2019 
JUSTIFICATION 
The FT Long-Term Strategic Plan, and the associated proposed FT Gateway Building, support the
following  Economic  Development  Division  and  Maritime  Division  goals  developed  in
conjunction with a Port conducted stakeholder outreach program: 
1.  Improve overall financial returns that fulfill Port of Seattle commitments to the industry
and taxpayers. 
2.  Continue to grow the economic value of the fishing and maritime cluster including the
number of local jobs and business revenue. 
3.  Prioritize uses that support the commercial fishing industry, with a focus on anchoring
the North Pacific fishing fleet. 
4.  Prioritize development that maximizes utilization of facility assets. 
5.  Recognize and enhance FT as a living community landmark. 
Additionally, the homeporting of the fishing fleets at FT relies on an extensive network of
suppliers and trades in the area that are having an increasingly difficult time finding and
retaining acceptable light industrial space near their customers at FT. The FT Long-Term
Strategic Plan, and its associated Gateway Building project, will support the following five
planning concepts developed from FT stakeholders' input and an associated economic cluster
study performed by the Port: 
1.  Develop new light industrial space 
2. Draw more public to the terminal and enhance the public's experience while
maintaining the overall industrial character of the terminal 
3. Expand on FT's role in workforce development 
4.  Protect precious ground plane for industrial uses 
5.  Develop new parking management tools 
More specifically, the study that was done as part of the FT Long-Term Strategic Plan concluded 
that there is a limited supply of industrial property in Seattle in general, and Ballard Interbay in
particular, resulting in rising rents and building sale prices. The Port is in a position to relieve
some of this pressure while supporting the fleet and the maritime industrial sector by
developing additional industrial space at and around Fishermen's Terminal. 
The Ballard Interbay industrial submarket, which includes Fishermen's Terminal, has an
extraordinarily low vacancy rate of 0.6% at the end of 3Q2015, below the Puget Sound
industrial real estate market vacancy rate of 4.9%, and far below the national average of 6.7%.
As late as 3Q2018, the Ballard Interbay industrial submarket vacancy rate is 1.9% and the Puget
Sound vacancy rate now at 3.5%. 
The report also noted that the tenant profile for this space is made up of suppliers and vendors
that prefer light industrial facilities with a warehouse/shop area, office space, and either gradelevel
or dock-high loading capabilities. Of the suppliers polled, the median facility requirement

Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. 8c                                   Page 3 of 8 
Meeting Date: January 22, 2019 
was 5,000 square feet, and the largest was over 110,000 square feet. On a very regular basis,
Port staff are contacted by similar type companies inquiring about space at both FT and T91. 
Unlike other asset classes, industrial development does not lend itself to pre-leasing, except in
very specific situations that usually result in a Build-to-Suit arrangement. The types of tenants
that will occupy the Gateway Building will be smaller, locally based, single-locations businesses
that are looking to upgrade or enlarge from their current locations. Nearly all light industrial
developments initiate construction on a spec basis with no tenant agreements in place. This is
for a few reasons and relevant to this development  
- Smaller tenants can't/don't want to commit to a lease with a long lead schedule 
- The buildings are simple and without tenants the design and construction is quicker 
- Pre-leasing results in lower rents overall and greater tenant concessions 
We would estimate that we have contact with potential tenants with space needs that would
fill the Gateway Building several times over. Within the Seattle industrial areas, particularly in
the Ballard Interbay sub-market, there has been almost no new development since the early
1970's. Due to this fact, as well as incremental gentrification, vacancy for industrial properties is
continues to drop and rents are at an all-time high. 
Seattle manufacturing and light industries want to grow, but low vacancy and even higher rents
limit opportunities. Small businesses that focus on the fishing and maritime opportunities have
struggled to find or keep acceptable space in order to operate and serve this vital industry. In
order to meet this demand, our strategy is to take advantage of our own existing property and
develop new light industrial facilities on the working waterfront at Fishermen's Terminal. 
The project manager will work with the Director of Diversity in Contracting to determine
potential women and minority business participation opportunities, in accordance with the
terms of Resolution No. 3737.  The requirement of  a project labor agreement will be
determined as well in coordination with Labor Relations. 
DETAILS 
The proposed FT Gateway Building replaces the existing on-site former bank building and Net
Sheds 7 & 8 with a new light industrial building and associated site improvements. This project
is in accordance with the Port's FT Long-Term Strategic Plan objectives to add maritime related
businesses to FT, better enable the facility to serve the maritime industry, and improve its
economic viability.
Total project cost for the proposed Gateway Building is currently estimated to be $23,000,000 
and funding for its budget has been included in the Port's 2019 Plan of Finance. 
Since the initial design effort at FT began in 2016, the vacancy rates within the industrial sector
in the Interbay have remained less than 2% and show no signs of relief. The lack of acceptable

Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. 8c                                   Page 4 of 8 
Meeting Date: January 22, 2019 
space for businesses operating in this sub-market (Ballard-Interbay) is under constant threat of
gentrification. By taking advantage of our existing FT asset and developing new light industrial
space, the Gateway Building will be able to provide modern, well-designed and constructed
spaces to many of the small companies currently doing business in this area, much of it at FT
already. 
Since the initial start of the redevelopment process, approximately $1,450,000 has been spent
to date for planning, permitting and design in conjunction with the FT Redevelopment program 
and the following has been completed: 
State Environmental Policy Act (SEPA) review completed for the Fishermen's Terminal
Redevelopment program encompassing the anticipated site preparation work,
construction, and operational impacts from the originally proposed Gateway Building,
West Wall Building I, West Wall Gear Storage Improvements, and Seattle Ship Supply
Building projects (100%) 
Facility master planning: relevant as the initial design fee request was not based on
specific building but an overall concept. The master planning process needed to occur in
order to understand the site opportunity (90%) 
In-water permit for West Wall Stormwater Outfall Improvements issued by tribes and
multiple regulatory agencies (100%) 
Demolition permit for bank building and Net Sheds 7 & 8 issued by City of Seattle 
Relocation of Net Sheds 7 & 8 tenants (100%) 
Bid documents for demolition of existing bank building and Net Sheds 7 & 8 (90%) 
New Gateway Building design for previous Build-to-Suit maritime  tenant  (30%) -
although this deal was not finally completed, the work done to date is still largely
valuable and a significant portion of this will be re-used going forward 
Existing Ship Supply Building renovation design (30%) 
New West Wall I Building design (30%) 
West Wall open gear storage improvements design (30%) 
21st Avenue West public street improvements design (15%) 
Port outreach effort with stakeholders (30%) 
Final planning and design of the Gateway Building and related facility and public streets
improvements will begin immediately after Commission approval of the requested additional
design funding.  This effort will require some redesign of the previously completed Gateway
Building 30% design as noted. Upon completion of the planning and design work, the following
additional scope elements will be fully completed: 
Facility master planning (current and future elements included) 
Bid documents for demolition of existing bank building and Net Sheds 7 & 8 
New Gateway Building design 
21st Avenue West public street improvements design (if required) 

Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. 8c                                   Page 5 of 8 
Meeting Date: January 22, 2019 
Design outreach effort with stakeholders by Port 
Miller  Hull  Partnership,  LLC,  the  design  consultant  currently  under  contract  for  the  FT
Redevelopment program, will perform these services  and complete  full construction bid
documents from their current level. The proposed contract amendment amount for this work
is $1,000,000 which will increase Miller Hull's FT planning and design services contract to
$2,500,000 total.
Scope of Work 
FT Gateway Building site improvements are anticipated to include, but are not necessarily
limited to, the following: 
1.  Demolition and disposal of existing bank building and Net Sheds 7 & 8 
2.  Construction of new Gateway Building 
3.  Removal and replacement of associated on-site utility systems 
4.  Installation of stormwater treatment and management system(s) 
5.  Removal and replacement of on-site roadway and parking lot pavement 
6.  Upgrading  of  wayfinding  signage,  lighting,  landscaping,  provision  of  new  public
interpretive displays, and on-site parking management as applicable 
7.  Improvements to public streets contiguous to FT as required by the City of Seattle 
8.  Implementation of applicable environmental best management practices 
Estimated Schedule 
Activity 
Commission design authorization (initial         2016 Qtr 4 
design) 
Design start (initial design)                         2017 Qtr 1 
Commission construction authorization          2020 Qtr 2 
Construction start                                2020 Qtr 4 
In-use date                                       2022 Qtr 3 
Cost Breakdown                                               This Request      Total CIP 
Design/Permitting                                                 $1,800,000    $4,800,000 
Construction (to date: demolition of bank and net sheds 7 & 8)               $0   $18,200,000 
Total                                                                     $1,800,000   $23,000,000 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1  Suspend completion of FT Gateway Building design 
Pros: 
(1)   Retains Port capital for other priority projects and financial initiatives 

Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. 8c                                   Page 6 of 8 
Meeting Date: January 22, 2019 
(2)   Avoids temporary construction impacts to existing fishing and upland tenant business
operations. 
(3)   Retains use of Net Sheds 7 and 8 for on-site covered storage 
Cons: 
(1)   Suspended implementation of FT Long-Term Strategic Plan objectives of supporting
fishing and maritime clusters. 
(2)   Will delay improvement of long-term financial viability of FT. 
(3)   Potential loss of new major maritime business tenant(s) at FT. 
(4)   Will postpone the addition of needed light industrial space in the Ballard Interbay area
FT in an escalating price environment. 
(5)   Defer the replacement of existing vacant and dilapidated bank structure with new
building asset at site entrance. 
(6)   Delay the implementation of more efficient parking program. 
(7)   Postpone the enhancement of public awareness and enjoyment of FT. 
This is not the recommended alternative. 
Alternative 2  Approve remaining FT Gateway Building Design Funds 
Pros: 
(1)   Implementation of FT Long-Term Strategic Plan objectives of supporting fishing and
maritime clusters. 
(2)   Improvement of long-term financial viability of FT. 
(3)   Addition of major maritime business tenant(s) at FT. 
(4)   Replacement of existing vacant and dilapidated bank structure with new building asset
at site entrance. 
(5)   Addition of needed light industrial space in the Ballard Interbay area at FT. 
(6)   Improvement of on-site parking. 
(7)   Enhancement of public awareness and enjoyment of FT as Seattle amenity. 
(8)   The  property  would  support  the  creation  of  hundreds  of  new  jobs  in  the
maritime/manufacturing sector. 
Cons: 
(1)   Requires major Port investment of funds over shorter term. 
(2)   Requires demolition of Net Sheds 7 and 8 and existing vacant bank. 
(3)   Creates  temporary  construction  impacts  to  existing  fishing  and  tenant  business
operations. 
This is the recommended alternative. 



Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. 8c                                   Page 7 of 8 
Meeting Date: January 22, 2019 
FINANCIAL IMPLICATIONS 
Cost Estimate/Authorization Summary               Capital        Expense           Total 
COST ESTIMATE 
Original estimate                                          $0               $0               $0 
AUTHORIZATION 
Previous authorizations                          $4,325,000                0      $4,325,000 
Current request for authorization                $1,800,000                0      $1,800,000 
Total authorizations, including this request       $6,125,000                0      $6,125,000 
Remaining amount to be authorized           $16,875,000             $0    $16,875,000 
Annual Budget Status and Source of Funds 
This project was included in the 2019 Plan of Finance under CIP #800525 "FT Strategic Plan"
with a total project cost of approximately $23,000,000. 
This project will be funded by the Tax Levy. 
Pre-Design Financial Analysis and Summary 
Project cost for analysis              $23,000,000 
Business Unit (BU)                  Maritime Portfolio Management 
Effect on business performance     The new building, when complete, will provide
(NOI after depreciation)             incremental leasing revenue and potentially higher lease
rates for existing buildings at FT. Estimated stabilized net
operating income for the project is expected to be
approximately $1.5M per year (including depreciation).
IRR/NPV (if relevant) 
NPV: ($8.7M) 
IRR: 5.5-6% 
CPE Impact                        N/A 
Future Revenues and Expenses (Total cost of ownership) 
To be updated once a final design is proposed for Commission approval. 
ATTACHMENTS TO THIS REQUEST 
(1)   FT Gateway Building PowerPoint 
PREVIOUS RELATED COMMISSION ACTIONS OR BRIEFINGS 
September 26, 2017  The Commission authorized $1,325,000 construction funding for
the demolition of the existing bank building and Net Sheds 7 and 8. This work has not

Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. 8c                                   Page 8 of 8 
Meeting Date: January 22, 2019 
yet been advertised for bids, per direction by the Commission, pending finalization of a
Gateway Building tenant lease agreement. 
December 13, 2016  The Commission authorized $3,000,000 for initial planning and
design.   The  total  preliminarily  estimated  FT  Redevelopment  design  cost  was
$7,000,000. 
May 17, 2016 - Commission received a briefing on the planning strategies comprising
the Fishermen's Terminal Long-Term Strategic Plan. 
October 27, 2015 -  Commission received a briefing about the progress of the
stakeholder outreach program for the Fishermen's Terminal Long-Term Strategic Plan. 
August 11, 2015 - Commission received a briefing on the proposed scope and goals in
advance of the launch of the planning process. 














Template revised September 22, 2016; format updates October 19, 2016.