7b Presentation Maritime and EDD Capital Budgets
Item No. 7b Maritime and Economic Development Meeting Date: November 13, 2018 2019-2023 Capital Improvement Plan (CIP) Sustaining the Working Waterfront November 13, 2018 1 The Port Advances Public Priorities and Values Maritime Industries, Transportation, Environment, Economic and Workforce Development are Top Priorities Budget Timeline 2019 Business Budget Maritime and AV, CS, EDD, Maritime and MD/EDD CIP, 2nd Reading & Plan and CIP Development Economic Budget Economic 1st Reading for Final Passage Development Briefing Development Briefings and Development 2019 Budget, Business Plan Study Session CIP and Capital of 2019 Draft Plan of and Budget Work Session Finance & Tax Budget Briefings Levy Briefing May/June June July Sept./Oct. November 7 November 13 November 27 3 Budget Discussion Overview of Capital Improvement Plan (CIP) Maritime and Economic Development 2019-2023 CIP Draft Plan of Finance & Tax Levy Briefing Capital Funding 1st Reading of 2019 Budget 4 Working Waterfront Principles Keep deep water facilities and industrial lands serving maritime uses and preserving family wage jobs for all communities Support financial sustainability of the Port Increase environmental sustainability in the Port's operations and activities Partner in projects that improve the transportation mobility of people and goods in the region Remain consistent with NWSA goals Expand people's connection to the waterfront 5 Capital Improvement Plan Priorities Asset Financial Community and Stewardship: Sustainability: Environment: Maintaining the Port's capital Investing in projects that support Stewarding our environment assets and modernizing maritime industries and the Port's responsibly, partnering with Seattle's working waterfront long term funding capacity surrounding communities, and promoting social responsibility 6 Executive Director Recommendation: 2019-2023 Projects Funded with 3% Annual Levy Increase 2019 to 2023 CIP ($ in millions) 3% Annual Levy Increase Asset Stewardship Financial Sustainability Community & Environment Readiness to Proceed Asset Community & Stewardship, $millions Environment, $49.9 $58.4 Fishermen's Terminal Gateway Building x 4 $23.0 Bell Harbor Conference Center Modernization x 4 $9.9 Fishermen's Terminal Docks 3, 4 & 5 Fixed Pier Improvements x 4 $6.1 Salmon Bay Marina Docks D & E Replacement x 4 $5.9 Pier 66 HVAC Systems Upgrade x 4 $2.9 Terminal 117 Restoration x 3 $17.9 Fishermen's Terminal Maritime Innovation Center x 3 $10.5 New Cruise Facility (Assumes 50% Tenant Cost Share) x 2 $100.0 Terminal 91 Uplands Development x 2 $39.0 Terminal 91 Berth 6 & 8 Redevelopment x 2 $35.0 Waterfront Electrification x 2 $30.0 Harbor Mooring Dolphins x 1 $3.6 Small Projects/Projects Underway - - - - $24.7 Contingency - - - - $40.0 Total Funded with 3% Annual Levy Increase* $348.5 Financial Sustainability, *Current total estimated funding with 3% annual levy increase is $340M $175.5 Readiness to proceed: 4 = imminent 3 = needs permit/plan 2= 1+ year out 1= significant work needed Chart does not include Contingency/Small Projects/Projects Underway or non MD/EDD Projects 7 Asset Stewardship 2019-2023 Financial Return Life/Safety Readiness to Capital Project ($ in millions) Cost Operational or Revenue Related ($Ms) Proceed Preservation Terminal 91 Berth 6 & 8 $35.0 Redevelopment No Q4 2021 New Revenue* 2 Fishermen's Terminal Docks 3, 4, & 5 $6.1 No Q1 2021 Preserve 4 Fixed Pier Improvement Salmon Bay Marina Docks D & E $5.9 Yes Q3 2020 Preserve 4 Replacement Pier 66 HVAC Systems Upgrade $2.9 Yes Q4 2021 Preserve 4 *Preliminary financial results not yet available Readiness to proceed: 4 = imminent 3 = needs permit/plan 2= 1+ year out 1= significant work needed 8 Financial Sustainability Est. NOI 2019-2023 IRR Payback Operational Readiness Capital Project NPV ($Ms) Cost ($Ms) per year ($Ms) (years) to Proceed [year] $5.03 New Cruise Facility $100.0 10-11% $267.3 9 Q2 2022 2 [2022] $1.50 Terminal 91 Uplands Development $39.0 5.5-6% ($8.7) 17 Q3 2021 2 [2023] Fishermen's Terminal Gateway $0.86 $23.0 5-5.5% ($6.9) 20 Q3 2021 4 Building [2023] Bell Harbor Conference Center $0.23 $9.9 7-8% $2.2 10 Q3 2020 4 Interior Modernization [2021] $0.20 Harbor Mooring Dolphins $3.6 6.5-7% $1.8 11 Q3 2020 1 [2021] Initial Net Operating Income after Depreciation (does not include Allocations) Assumes 50% cost share with private investment. Financial return based on one sailing per week; approximately $2M of NOI is in the form of revenue from NWSA for POS share of ground lease payment. Based on third-party conference center management company proforma, assumes modernization will double NOI of BHICC Readiness to proceed:4 = imminent 3 = needs permit/plan 2= 1+ year out 1= significant work needed 9 Environment and Community Benefits 2019-2023 Financial Return Readiness to Capital Project Cost Operational or Revenue Proceed ($Ms) Preservation Waterfront Electrification $30.0 2022 N/A 2 Terminal 117 Restoration* $17.9 Q2 2020 TBD 3 Fishermen's Terminal Maritime Innovation Center $10.5 Q3 2021 TBD 3 *Does not represent the full project cost Readiness to proceed: 4 = imminent 3 = needs permit/plan 2= 1+ year out 1= significant work needed 10 Projects Underway, Small Projects, & Contingency Capital Project(s) Cost ($Ms) Description/Examples Projects Underway* $8.2 Shilshole Bay Marina (SBM): Restrooms, Paving, and Restaurant Site; Pier 69 Solar; Cruise Capital Allowance Terminal 91 (T91) Pier Stormwater Phase I, Pier 91 Bollards, Cruise Rideshare Canopy, T91 Liftstations, T91 Paint/Oil Containment Units, Maritime Industrial Center (MIC) Yard Maritime Small Projects* $5.8 Lighting, T91 Lighting Upgrades, MIC A1 Building Renovation, Harbor Island Marina (HIM) Hazmat enclosure, SBM Wireless Meter Reading System, SBM Dinghy Racks, HIM E Dock Power Improvements, SBM Paving, SBM dry storage expansion, HIM Cameras Economic Dev Small Projects* $2.6 Pier 66 Elevators, Conference Center Lighting Controls, Pier 66 Garage EV Charging Fleet & Technology Projects $5.9 Vehicle and equipment replacements (Maintenance, Maritime, Economic Development) Tenant Improvements $2.2 Capitalized tenant improvements for new leasing Total $24.7 Contingency** $40.0 Funds set aside for cost increases and unanticipated projects. *Only projects with total cost of $150K+ shown 11 **Note, the 2018 Capital Plan included a $40M contingency for the 2018-2022 CIP. 2019-2023 CIP Spending 2018 2019 -23 Recommended 2019 to 2023 CIP ($ millions) 2019 2020 2021 2022 2023 Forecast Total Authorized (partial/design)* Fishermen's Terminal Gateway Building 1.4 1.8 11.5 9.8 0.0 0.0 $23.0 Terminal 117 Restoration 0.1 8.0 9.9 0.0 0.0 0.0 $17.9 Bell Harbor Conference Center Modernization 0.5 1.6 8.3 0.0 0.0 0.0 $9.9 Fishermen's Terminal Docks 3, 4 & 5 Pier Improvements 0.2 5.5 0.5 0.0 0.0 0.0 $6.1 Total Authorized* $2.1 $16.9 $30.2 $9.8 $0.0 $0.0 $56.9 Pending Authorization New Cruise Facility (Assumes 50% Tenant Cost Share) 0.0 1.3 15.0 80.0 3.4 0.3 $100.0 Terminal 91 Uplands Development 0.0 3.5 19.5 16.0 0.0 0.0 $39.0 Terminal 91 Berth 6 & 8 Redevelopment 0.0 0.5 3.0 30.0 1.5 0.0 $35.0 Waterfront Electrification 0.0 1.0 15.0 14.0 0.0 0.0 $30.0 Fishermen's Terminal Maritime Innovation Center 0.0 0.0 5.3 5.3 0.0 0.0 $10.5 Salmon Bay Marina Docks D & E Replacement 0.0 0.4 2.5 3.0 0.0 0.0 $5.9 Harbor Mooring Dolphins 0.0 0.2 3.5 0.0 0.0 0.0 $3.6 Pier 66 HVAC Systems Upgrade 0.0 1.2 0.1 1.5 0.1 0.0 $2.9 Total Pending Authorization $0.0 $8.0 $63.8 $149.8 $5.0 $0.3 $226.9 Projects Underway 0.8 8.2 0.0 0.0 0.0 0.0 $8.2 Small Projects/Fleet/Technology/Tenant Improvements 5.3 5.5 3.2 2.6 2.7 2.5 $16.5 Other Projects Completed or Deferred** 22.6 0.0 0.0 0.0 0.0 0.0 $0.0 Contingency 1.5 3.0 3.0 9.0 9.0 16.0 $40.0 Total ($ millions) $32.4 $41.7 $100.2 $171.2 $16.7 $18.8 $348.5 *Partial/design funding authorized by Commission. Future Commission action required for construction funding. **Includes projects with expected completion in 2018. Acquisition of Salmon Bay Marina completed in Q2 2018. 12 Appendix 13 Deferred Projects 2019-2023 Deferred Projects ($ millions) Total Terminal 46 Replace North Pier Structure* $50.0 Only projects with budget status of Salmon Bay Marina Uplands 20.5 New Cruise Gangway at Terminal 91 4.5 "Business Plan Prospective" or Harbor Island Marina Dock E Rehabilitation 3.9 Maritime Video Camera Project 3.2 higher shown Terminal 10 Dolphins 3.1 Dredge Pier 90 East 3.0 Garage Elevator Modernizations 1.9 Pier 66 Fender Upgrade 1.7 Shilshole Bay Marina X Dock Pier Replacement 1.6 "Prospective" projects not included World Trade Center HVAC Replacement 1.5 Shilshole Bay Marina Fuel Float Rehabilitation 1.3 Less defined and have not been fully Central Waterfront Elevator Modernizations 1.2 reviewed Maritime Industrial Center West & Central Piers Resurface 0.9 Shilshole Bay Marina Lower A Dock Improvements 0.8 Pier 66 Anthony's Mechanical Roof 0.8 Fishermen's Terminal West Wall Building Roof Replacement 0.7 Terminal 91 West Slope Stabilization 0.6 Fishermen's Terminal C15 Building Window Replacement 0.5 Salmon Bay Marina Fire Suppression Upgrades 0.5 Salmon Bay Marina Security Upgrades, Terminal 102 Outdoor Lighting, T106 Mooring Dolphins, FT South Wall Improvements, 0.9 FT West Wall Sheet Pile Corrosion Protection, FT West Wall Fender Replacement, FT Net Shed 10, 11 Roof Overlay *Prospective, preliminary placeholder estimate Total Deferred $103.0 14
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