PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.       4i 
ACTION ITEM 
Date of Meeting      July 14, 2015 
DATE:    July 7, 2015 
TO:      Ted Fick, Chief Executive Officer 
FROM:   Joe McWilliams, Managing Director, Economic Development 
Tim Leonard, Capital Project Manager, Capital Development 
SUBJECT:  Harbor Marina Corporate Center Roof and HVAC Units Replacement
(CIP #C800196) 

Amount of This Request:    $402,000        Source of Funds:  Tax Levy 
Est. Total Project Cost:      $6,300,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to proceed with design and
preparation of construction documents for the Terminal 102 Harbor Marina Corporate Center
(HMCC) Roof and Heating, Ventilation, and Air Conditioning (HVAC) Units Replacement
Project for an estimated cost of $402,000, bringing the current authorization for this project to
$472,000 for a total estimated project cost of $6,300,000. 
SYNOPSIS 
This memo requests authorization to proceed with the design of a new replacement roofing
system as well as the replacement of the final 14 of 69 existing HVAC rooftop units and all
existing rooftop gas piping on the four buildings (A, B, C, and D) that comprise the HMCC. The
buildings, collectively, are approximately 80% occupied; primarily as general office and
warehouse space for a variety of businesses. 
The existing roofing system on the four HMCC buildings covers approximately 88,000 square
feet and is nearing the end of its service life. The fourteen existing rooftop HVAC units, slated
for replacement, utilize natural gas and have reached their typical service life of 15 years.
Replacing the HVAC units at the same time as the roof will result in an installation cost savings 
and minimize impact to building tenants and operations. With the pre-design of the HVAC and
roofing system investigations completed, staff is seeking Commission authorization to proceed
with the design phase of the project. 
BACKGROUND 
Terminal 102 is a waterfront facility located at the south end of Harbor Island and was purchased
by the Port in 1998. The four buildings comprising the HMCC contain a total of approximately

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
July 7, 2015 
Page 2 of 6 
138,000 square feet of flex office, warehouse, storage and retail space. The tenant base is mixed
with a few large tenants, Virtuoso, Mountaineers Books and Puget Sound Institute of Pathology
collectively occupying a third of the total leasable square footage. Other tenants include
Department of Homeland Security and several businesses that support the maritime industry. 
The four HMCC building roofs currently contain 69 gas-fired HVAC units. Two prior HVAC
improvement projects replaced 48 and 7 of the rooftop units in 2006 and 2010 respectively. The
remaining 14 HVAC units, as well as the gas piping system on the roofs that serves all of the
HVAC units, are now at the end of their service life. The Port intends to install the new gas-fired
HVAC units and associated piping per current City of Seattle building codes that will have a 15-
year typical service life. 
In 2014, the Port had a condition study performed for the HMCC building roofs by Cornerstone
Architectural Group. The assessment determined that the roof systems were at the end of their
service life and in poor condition due to observed cracking and open seams in the surface roof
membrane, metal coping deficiencies, flashing failures, inadequate fall protection, and poor
surface drainage resulting in large areas of ponding water. A follow-up investigation performed
by Cornerstone in April 2015, involving thermal imaging, open roof cuts for sample removal,
and moisture testing, revealed localized areas of moisture penetration into the roof substrate
layers and degraded timber roof decking. Cornerstone rated the roof to be in "failing" condition
with a maximum of two years of remaining viable life with average maintenance. While tenant
space maintenance issues due to roof leakage have been routine to date, this will become a
serious concern if the current moisture infiltration into the roof substrate and resultant increased
rotting of timber materials is not addressed soon. A delay in replacement of the existing building
roofs will also likely result in higher long-term costs, due to replacement of an increased amount
of rotted timber substrate material and potential mold remediation. The proposed replacement
roof will reuse the existing roof's insulation material, and be installed per the City of Seattle
building codes, with a 25-year minimum warranty life.
The current asset strategy for Harbor Marina Corporate Center is to maximize occupancy,
aggressively manage costs, and to hold the property until the various major projects (e.g. the
boring of the viaduct replacement tunnel and subsequent removal of the viaduct) that are
negatively affecting access to the property are completed. Today, due to the very difficult access
issues to the property caused by these projects, rental rates are depressed and occupancy is lower
than desired and both would generate a significant discount in property value were we to decide
to sell now. The payback period for this project is less than 8 years and seems to be a reasonable
investment as the project is currently generating a positive operating cashflow and will likely
become an attractive location in the post-viaduct environment. With the expected increases in
property values, it might be prudent to consider disposition at that time. 
Long-term planning assumes that the HMCC will continue to be a viable commercial office
space property for the Port; therefore, this request does not affect any long-term development
plans. This project is included in the 2016 Plan of Finance.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
July 7, 2015 
Page 3 of 6 
PROJECT JUSTIFICATION AND DETAILS 
The proposed project would preserve revenues associated with the leased space at HMCC,
extend the life of the building structures, and minimize Port liability. Deferring or foregoing this
work will result in continued deterioration of the HVAC and roof system components.
Eventually this could lead to additional leakage, energy loss, detrimental impacts to operations,
and the need for more costly replacements. In addition, it could lead to loss of rent and revenues.
Proactive asset stewardship is the key to reducing the total cost of ownership to the Port over
time. 
Project Objectives 
Preserve the structural integrity of the building structure. 
Preserve future revenues from the building. 
Complete project on time and within budget. 
Investigate environmentally sustainable practices during the design and incorporate into
the project design and construction where practical. 
Minimize disruptions to facility operations, tenants and customers. 
Scope of Work 
The scope of work for the HMCC Roof and HVAC Units Replacement Project includes
evaluation and design for the: 
Additional insulation and new energy-efficient roofing system; 
New energy-efficient HVAC units; 
Fall protection and attachments to the roof; and 
Environmentally sustainable components and construction methods. 
Schedule 
The project's design and construction schedule: 
Commission Approval for Design         July 2015 
Permit/Design Complete               December 2015 
Commission Approval for Construction      December 2015 
Advertise for Bids                     January 2016 
Construction                       May 2016 through October 2016 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original Budget                            $0          $0          $0 
Previous Authorizations                   $70,000          $0      $70,000 
Current request for authorization              $402,000          $0      $402,000 
Total Authorizations, including this request      $472,000          $0      $472,000

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
July 7, 2015 
Page 4 of 6 
Remaining budget to be authorized         $5,828,000          $0    $5,828,000 
Total Estimated Project Cost              $6,300,000          $0    $6,300,000 
Project Cost Breakdown                     This Request       Total Project 
Construction                                     $0         $5,071,000 
Construction Management                         $0         $274,000 
Design                                   $227,000          $265,000 
Project Management                         $150,000         $182,000
Permitting                                   $25,000           $25,000 
State & Local Taxes (estimated)                        $0          $483,000 
Total                                       $402,000         $6,300,000 
Budget Status and Source of Funds 
This project was included in the 2015 capital plan and related Plan of Finance under CIP
#C800196 T102 Roof Replacement in the amount $3,368,000. Upon recent completion of the
preliminary design phase, the scope has been further defined and the construction estimates
increased to $6,300,000.  Amounts included in the Renewal and Replacement Contingency
capital project will partially offset the funding variance. 
The project will be funded by the tax levy.
Financial Analysis and Summary 
CIP Category             Renewal/Enhancement 
Project Type              Renewal & Replacement 
Risk adjusted discount rate     N/A 
Key risk factors             Costs could exceed the estimated amounts. 
Future revenues generated by these buildings could
decrease. 
Project cost for analysis        $6,300,000 
Business Unit (BU)          Economic Development  Commercial Properties 
Effect on business performance   This project is a renewal and replacement project and,
accordingly, preserves Net Operating Income (NOI),
rather than creating new NOI. 
Preserves HMCC NOI of approximately $625K per
year. 
Depreciation expense will increase an average of
approximately $210K per year based on a 30-year
service life for the roof and a 15-year service life for
the HVAC system. 
IRR/NPV             The NPV is the present value of the project cost ($6.3M)

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
July 7, 2015 
Page 5 of 6 
Lifecycle Cost and Savings 
During final design, continue to develop a lifecycle cost analysis to identify the lowest total cost
of ownership for the HVAC replacement and the roofing system. Annual Operating and
Maintenance costs for the HVAC and roof system expected to decrease for the HMCC buildings
because of the replacement and installation of these new systems. The lifecycle cost analysis for
the building preliminarily determined which of the HVAC and roof design options were
appropriate for the facility. The design for the HMCC Roof and HVAC Replacement will use
the desired analysis design option as the project replacement design is developed. 
STRATEGIES AND OBJECTIVES 
This project supports the Port's Century Agenda strategy to "position the Puget Sound region as
a premier international logistics hub" by doubling the economic value of the maritime cluster and
be the greenest and most energy efficient port in North America by: 
Investing in and preserving a valuable Port asset. Providing maritime businesses and
moorage customers close proximity to businesses located in the HMCC buildings. 
Maintaining long-term revenue-generating capability of the T102 HMCC. 
Reducing overall energy consumption by replacing old, outdated equipment with energy-
efficient equipment and controls. 
Fulfilling lease commitments and obligations to the Port's tenants. 
TRIPLE BOTTOM LINE 
Economic Development 
Preserving existing assets defers high-impact and high-cost asset replacement, and, therefore,
reduces environmental impacts while supporting economic vitality by reducing Port costs and
generating construction-related jobs. The project team will work with the Office of Social
Responsibility to maximize opportunities for participation by small business on this project. 
Environmental Responsibility 
A "green" vegetative roof option as well as the addition of rooftop photovoltaic systems were
included in a predesign roofing options analysis, but both were determined to be infeasible due to
inadequate existing structural capacity to support the resultant additional roof load. The roofing
system and HVAC replacement designs will incorporate  sustainable and environmentally
friendly elements where possible. One example of potential environmental improvement under
consideration is the introduction of water quality filtration appurtenances to treat the roof
drainage prior to its release into the on-site stormwater collection system. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative #1: Increase the maintenance inspections and repair of the existing roofing system,
subject HVAC units, and rooftop gas piping, and delay replacement of the same indefinitely.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
July 7, 2015 
Page 6 of 6 
Pros: 
Lower initial investment cost 
Cons: 
Continued moisture infiltration into roof substrate layers 
Accelerated degradation of timber roof decking 
Increased risk of mold occurrence within roofing system and tenant space ceilings 
Increased risk of HVAC system failures 
Higher long-term replacement costs due to less existing roof materials being salvageable 
and escalating construction costs 
Increased likelihood and severity of tenant disruptions due to roof leaks, HVAC system
failures, and potential mold issues 
Ongoing safety risk due to inadequate existing fall protection system 
Existing rooftop gas piping system will remain not up to current code standards 
Alternative #2: Proceed with the design and replacement of the roofing system, remaining
HVAC units, and rooftop gas piping system. 
Pros: 
Preservation of existing asset and generated revenues 
Minimizing roof replacement cost by maximizing salvage percentage of existing roof
insulation and decking materials 
Reduced maintenance costs 
Elimination of moisture infiltration into roofing system thereby greatly reducing risk of
future tenant disruptions due to leak or mold issues 
HVAC system performance will remain reliable 
Decreased safety hazard due to improved fall protection system 
The rooftop gas piping will be up to current code 
Cons: 
Higher initial investment cost 
This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
None 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None