PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA                      Item No.         3a 
ACTION ITEM 
Date of Meeting        June 3, 2014 
DATE:      May 23, 2014 
TO:         Tay Yoshitani, Chief Executive Officer 
FROM:     Michael Burke, Director Seaport Lease and Asset Management 
Anne Porter, Capital Project Manager 
SUBJECT:  Terminal 5 Facility Modernization Project Design Funding 
Amount of This Request:   $4,700,000                  Source of Funds: General Fund 
Est. Total Project Cost: Range from $180,000,000 to $250,000,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to direct staff to conduct
planning, perform site investigations, evaluate scope elements, develop design documents, select
consultants, execute consultant contracts, publish environmental review documents, apply for
permits, and prepare construction documents as part of the Terminal 5 Facility Modernization
Project for an estimated cost of $4,700,000, that is in addition to the previously divisionauthorized
amount of $300,000 for a new total authorization of $5,000,000.
SYNOPSIS 
On May 13, 2014, Commission was briefed on the opportunity to modernize Terminal 5
infrastructure to prepare for larger container vessels and allow the Port to remain competitive in
the container business.  This memo requests Commission approval for $4,700,000 for initial 
design, permitting, and project management funding in addition to the previously divisionauthorized
amount of $300,000 for a new total authorization of $5,000,000.  This amount is not
expected to be the final design funding authorization for the project, but will be enough to
complete initial planning, site investigations, permit documentation, and up to 30% design. 
BACKGROUND 
Terminal 5 began operating as a container terminal in 1964. Since that time, the Port invested in
significant environmental cleanup and facility improvements to create a 182-acre state-of-the-art
international container terminal, which was completed in 1997. The site is currently leased and 
is operated by Eagle Marine Services, a subsidiary of American President Lines.
Vessels calling at the Port of Seattle have grown in size from 4,800 TEUs in 1997 to 10,000
TEUs today with 18,000+ TEUs currently operating globally.   To maintain the Port's
competitive  position  and  preserve  jobs,  dock  and  infrastructure  upgrades  are  needed  to

Template revised May 30, 2013.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 23, 2014 
Page 2 of 5 
modernize the terminal for handling current and future classes of container vessels including the
capability for installing larger dual-hoist cranes.
PROJECT JUSTIFICATION AND DETAILS 
Project Objectives 
Project objectives include ensuring the dock is capable of handling two EEE class vessels by
mid-2018. The proposed capital improvements will maintain the economic and job benefits from
the cargo business at Terminal 5. 
Scope of Work 
The scope of work includes planning, site investigations, evaluation of scope options, 
development of design documents, and preparation of environmental review documents.  Key
elements of the project include crane rail strengthening, structural repairs to the existing dock,
fender   system   replacement,   berth   deepening,   slope   stabilization,   and   electrical
supply/distribution.   In  addition,  storm  water  upgrades  may  be  necessary  to  meet  code
requirements. O ther  needs  will  be  evaluated  during  design  such  as  pavement  overlay,
infrastructure upgrades, beneficial use of site for sediment disposal, mitigation, water supply
conveyance, demo or salvage of existing cranes, and other terminal improvements or operating
equipment. 
Schedule 
Design and construction phases will vary for each element of the scope due to compliance
requirements, operational constraints, or availability of the terminal area. The design team will
evaluate the scope of work to determine a cost-effective approach to efficiently implement the
work. 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary                    Capital        Expense    Total Project 
Original Budget                                         $0              $0              $0 
Previous Authorizations                           $300,000              $0        $300,000 
Current request for authorization                  $4,700,000               $0      $4,700,000 
Total Authorizations, including this request       $5,000,000               $0      $5,000,000 
Remaining budget to be authorized                    TBD            TBD            TBD 
Total Estimated Project Cost                  $180,000,000              $0   $180,000,000
to                                 to
$250,000,000                   $250,000,000 
Project Cost Breakdown                               This Request           Total Project 
Construction                                                       $0                    TBD 
Construction Management                               $500,000                  TBD 
Design                                                  $2,700,000                  TBD

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 23, 2014 
Page 3 of 5 
Project Management                                   $1,000,000                 TBD 
Permitting                                                  $500,000                   TBD 
State & Local Taxes (estimated)                                   $0                   TBD 
Total                                                        $4,700,000         $180,000,000 to
$250,000,000 
This is a preliminary estimated range of the project cost.  The project team will provide an
updated total project cost in future funding requests. 
Budget Status and Source of Funds 
This project, Terminal 5 Facility Modernization, was not specifically included in the capital
budget and 2014 Draft Plan of Finance.  The $5,000,000 required for funding the design and
permitting portion of this project is available under CIPs C800132  T-5 Upgrade 600' of
Existing Docks  and C800002  Contingency Renewal & Replacement. 
The design and permitting portion of this project will be funded by the General Fund. 
Financial Analysis and Summary 
CIP Category                   Renewal and Replacement 
Project Type                     Infrastructure Upgrade 
Risk adjusted discount rate       NA 
Key risk factors                    Future market and revenue potential for Terminal 5 is
unknown. 
Source of funding for overall project cost is not yet
determined. 
Amounts spent for design and permitting will be
expensed if the overall project is not executed. 
Project cost for analysis           Current Request - $4,700,000 for Design & Permitting 
Prospective Project Cost $180,000,000 to $250,000,000 
Business Unit (BU)               Containers 
Effect on business performance   Current Request: 
The $4,700,000 for design and permitting will be
capitalized as incurred and ultimately rolled into the
overall project costs and be depreciated. If the overall
project is not executed, then the amount spent will be
written off as an operating expense.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 23, 2014 
Page 4 of 5 
Effect on business performance,  Prospective Project Cost 
cont.                                 Based on the range of prospective project costs presented,
annual depreciation would increase by $6,000,000 to
$8,333,333 per year based on a rough approximation of
average service life of 30* years. Net Operating Income
after Depreciation would decrease by the corresponding
amount. 
Note*: Actual depreciable life will depend on actual
assets created and relative cost of each. 
IRR/NPV                   The NPV is the present value of the project cost. 
Lifecycle Cost and Savings 
Modernizing our existing assets readies them for current and future changes, extends their useful
service life, and preserves the economic vitality of our operations. 
STRATEGIES AND OBJECTIVES 
This project will support the Port's Century Agenda Strategic Objective to grow Seaport annual
container volume to more than 3.5 million TEUs. 
TRIPLE BOTTOM LINE 
Modernizing Terminal 5 for larger vessels is key to the Port meeting its Century Agenda
strategies of increasing container volume in Seattle to 3.5 million TEUs and doubling the value
of exports from Seattle. Environmental sustainability principles will be employed consistent
with Port policy. In addition, procedures set forth in the Port's Small Contractors and Suppliers
Program and other small business participation opportunities in support of the Century Agenda
goals or requirements will be established, accordingly. 
Economic Development 
Terminal 5 modernization will allow the Port to keep pace with current trends in order to stay
relevant as the shipping industry changes. The project represents an investment in  effectively
stewarding competitiveness of the region for market share. 
Environmental Responsibility 
This project will provide the opportunity to apply environmental sustainability principles
associated with the new improvements, including: 
Practices to avoid and minimize potential negative environmental effects; 
Upgrading the drainage system to better manage storm water; 
Improvements aimed to balance one-time capital improvement and annual maintenance and
operational costs.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 23, 2014 
Page 5 of 5 
Community Benefits 
This project benefits the local community by preserving existing jobs and adding new living
wage jobs in construction and terminal operations.
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1)  No action. Delay or cancellation of the project work would reduce our ability
to compete for West Coast container volumes. This is not the recommended alternative. 
Alternative 2)  Request Commission authorization for individual projects within the larger
program. This action would not allow maximum efficiency of a coordinated design approach,
resulting in increased construction and soft costs. This is not the recommended alternative. 
Alternative 3)  Proceed with action request. Modernize the facility for current and future class
container vessels. This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
PowerPoint Presentation. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
May 13, 2014  Commission was briefed on the Terminal 5 Facility Modernization
project.