PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA              Item No.      6b 
ACTION ITEM             Date of Meeting    June 25, 2013 

DATE:    June 17, 2013 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:   Melinda Miller, Director Real Estate Portfolio and Asset Management 
Mark Longridge, Capital Project Manager 
SUBJECT:  Design and Construction funding for Pier 66 Steam Replacement CIP# C800625 
Amount of This Request:    $1,350,000       Source of Funds:  Tax Levy 
Est. Total Project Cost:      $1,400,000 
Est. State and Local Taxes:   $100,000        Est. Jobs Created:      17 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to complete design, to
purchase construction materials and equipment, to utilize Port crews, to award contracts as
allowed by Washington law, and to construct the work necessary to install a stand-alone heat
source for building heat and domestic hot water at the Pier 66 Cruise Terminal and Bell Harbor
Conference Center for an estimated cost of $1,350,000 bringing the total authorized amount of
this project to $1,400,000. 
SYNOPSIS 
As of September 2, 2013, the Seattle Steam Company, which provides steam heat and hot water
to Pier 66 facilities, has informed the Port that it will no longer be able to provide service to
Pier 66 because the steam line serving the facility will be removed as part of the work being
conducted on the City of Seattle's seawall replacement project. This steam line is the only
source of heat and hot water to the Port's tenants at Pier 66. Without heat and hot water, events
would have to be cancelled and cruise ship operations would also be affected. The Port was
notified by Seattle Steam of this change on May 10, 2013, and has moved as quickly as possible
to develop a timely solution. This project was not anticipated in the 2013 Real Estate capital
budget. It will be funded by the tax levy. 
BACKGROUND 
Seattle Steam Company will cease service to the Port's properties at Pier 66 effective
September 2, 2013. According to Seattle Steam's May 10 notice, the steam line that serves
Pier 66 is suspended under the sidewalk on the west side of Alaskan Way, and the City of
Seattle's seawall replacement project will remove that sidewalk and the steam line with it. 

Template revised May 30, 2013.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
June 17, 2013 
Page 2 of 5 
According to Seattle Steam, the company had been working with the City of Seattle to devise a
solution to continue to provide thermal energy to Pier 66, but was not offered a new location for
the steam line. Therefore, Seattle Steam is permanently terminating the service. This steam
service is currently the sole source of building heat and domestic hot water for Pier
66. Anthony's Restaurant was informed via a similar letter on May 10 of the cessation of service
to their facility effective September 2, 2013. It is our understanding that the Aquarium,
Anthony's, and the Port are the only customers of Seattle Steam that are affected by the
impending removal of the steam line on the west side of Alaskan Way. 
PROJECT JUSTIFICATION AND DETAILS 
The current steam supply must be permanently replaced, and there cannot be a significant
interruption to the heat and water service to maintain the function of the building and tenant
occupancy. B ell Harbor International Conference Center (BHICC) contracts months in advance
with customers for events held at this venue. Should hot water not be available, the events
would need to be cancelled during the period the facility is without hot water. The cancelled
events would result in a loss of revenue to the Port. For the two months of September and 
October, the gross revenue loss to the BHICC would be $575,000 and affect 26,500 attendees. 
Event cancellation may also expose the BHICC to claims from customers for cancelled events.
Cancellation of events would result in a loss of wages to BHICC employees and income to
vendors providing services to events. Additionally, the cancellation of events would result in
damage to the Port's reputation as the owner of the BHICC.
Bell Street Cruise Terminal at Pier 66 is current homeport to both Norwegian Cruise Lines and
Oceania Cruises. The terminal also serves other cruise lines. The 2013 cruise season runs
through September, and an estimated 250,000 passengers and crew are expected to transit the
terminal this year. Pier 66 also serves yachts, military and research vessels and fishing vessels.
This terminal is not only an important source of revenue to the Port but also a major contributor
to the economy of the region. 
Project Objectives 
Install stand-alone heat and domestic hot water supply to the building to replace the current
steam service by September 2, 2013. 
Scope of Work 
Design and install natural gas fired hot water boilers and associated equipment, piping and
venting to adequately supply the building with heat and domestic hot water at or above the
current level.
The current favored location for this equipment is in the building's mechanical penthouse, along
with the existing mechanical equipment to process the incoming steam supply. This location,
while optimal for the long-term impact to the facility, poses some problems for access and
carries the potential issue of structural modifications to the building. These aspects are currently
being investigated, but this project scope, schedule and budget assume they can be overcome

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
June 17, 2013 
Page 3 of 5 
without significant structural modifications to the building. The current cost estimate does not
include any assumption for this work if it is found to be needed. The design of the mechanical
system will be performed by in-house engineering staff, supplemented by existing indefinite
delivery, indefinite quantity (IDIQ) design contracts as necessary. 
Immediate selection of equipment is required in order to perform required structural analysis,
assess space requirements, and determine requirements for lift. From initial market surveys, the
lead-time for the boilers is approximately eight weeks (order-to-delivery). 
The equipment and materials necessary for this system will be procured directly by the Port.
Due to the exceedingly tight schedule of this work, a policy waiver to limit competition of the
boiler and other related equipment is needed. The Port will obtain competitive quotes wherever
possible. 
The installation of this equipment will be performed by a combination of Port crews and existing
open order small works contracts. Using this hybrid approach will allow the needed flexibility to
complete the work quickly and maintain the flexibility to work around the active conference and
cruise schedules at the facility. 
Schedule 
The current deadline for completing this work is September 2, 2013. The Port is working with
Seattle Steam, the City of Seattle and other partners to see if there is any way to continue this
service beyond this date and allow more time to construct the necessary improvements, but no
later date has been agreed to at this time. 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original Budget                      $1,400,000          $0    $1,400,000 
Previous Authorizations                   $50,000          $0      $50,000 
Current request for authorization            $1,350,000          $0    $1,350,000 
Total Authorizations, including this request     $1,400,000          $0    $1,400,000 
Remaining budget to be authorized               $0          $0          $0 
Total Estimated Project Cost              $1,400,000          $0    $1,400,000 
Project Cost Breakdown                     This Request       Total Project 
Construction                                $963,000          $963,000 
Construction Management                      $77,000          $87,000 
Design                                   $111,000          $131,000 
Project Management                          $67,000          $87,000 
Permitting                                   $32,000           $32,000 
State & Local Taxes (estimated)                   $100,000          $100,000 
Total                                     $1,350,000         $1,400,000

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
June 17, 2013 
Page 4 of 5 
Budget Status and Source of Funds 
This project for $1,400,000 was not anticipated in the 2013 Real Estate capital budget and
related plan of finance because the Port was just recently notified that Seattle Steam would be
discontinuing service due to construction of the Elliot Bay Seawall replacement project. The
source of funds will be the tax levy. 
Financial Analysis and Summary 
CIP Category              Renewal/Enhancement 
Project Type               Renewal & Replacement 
Risk adjusted discount rate      N/A 
Key risk factors               Actual construction costs could exceed estimate,
especially if any structural work is required. 
Incremental maintenance costs could exceed estimate 
Project cost for analysis         $1,400,000 
Business Unit (BU)           Portfolio Management 
Effect on business performance   Depreciation expense will increase $70,000 per year based
on a 20-year useful life. No incremental revenue will be
generated but maintenance expense is expected to increase
by about $10,000 per year. 
IRR/NPV              The NPV is the present value of the project cost
($1,400,000). 

STRATEGIES AND OBJECTIVES 
This project provides a functioning facility to Port tenants in support of business plan strategies
that call for marketing Seattle as a homeport and port of call for cruise lines and maintaining real
estate assets. These strategies bolster the Port's Century Agenda strategy to advance the region
as a leading tourism destination and business gateway.
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1)  Do not make any changes to the building and instead pursue the continuation of
Seattle Steam Service. This alternative runs the significant risk of leaving the facility without
heat or hot water, disrupting and negatively impacting the Port's existing and future conference
and cruise commitments. This is not the recommended alternative. 
Alternative 2)  Design and construct the necessary improvements using a traditional design,
bid, build approach. This would not meet the required schedule and would cause significant
interruption of service to the buildings heat and hot water. This is not the recommended
alternative.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
June 17, 2013 
Page 5 of 5 
Alternative 3)  Design and construct only the necessary improvements to temporarily supply
the building with service on the expectation that Seattle Steam could restore service at the end of
the seawall construction (currently estimated in 2016). The cost of this temporary equipment
would likely approach that of a permanent installation, and there is no guarantee that Seattle
Steam will be able or willing to restore service once the seawall is complete. Given that the
alignment of the seawall project will demolish the majority of the existing steam line, it is
unlikely to be replaced. This is not the recommended alternative. 
Alternative 4)  Design and replace the current heat and domestic hot water supplied by Seattle
Steam with a stand-alone system. Design the new system with Port staff and existing
professional IDIQ contracts. Procure and install this equipment using a combination of Port
direct purchases, existing open order contracts, and Port crews to attain the required schedule and
minimize facility disruptions. This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
Seattle Steam letter dated May 10, 2013. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None.