PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6a 
ACTION ITEM 
Date of Meeting      July 14, 2015 
DATE:    July 7, 2015 
TO:      Ted Fick, Chief Executive Officer 
FROM:    Michael Burke, Director Seaport Lease and Asset Management 
Anne Porter, Capital Project Manager 
SUBJECT:  Terminal 5 Berth Modernization Design Funding 
Amount of This Request:    $5,000,000       Source of Funds:  General Fund 
Est. Total Project Cost:      $230,000,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to continue design and
permitting, prepare final construction documents, purchase test piles, advertise for construction
bids for test pile installation, and conduct a test pile program as part of the Terminal 5 Berth 
Modernization for an estimated cost of $5,000,000. The funding is in addition to the previously
Commission-authorized amount of $5,000,000 for a new total authorization of $10,000,000 and
was anticipated and accounted for in the 2015 budget.
SYNOPSIS 
Modernization of the Terminal 5 infrastructure is critical to prepare the Port to handle larger
container vessels and maintain competitive viability in the container business.  This memo
requests Commission authorization for $5,000,000 to continue design, permitting, fund a test pile
program, and keep the project on schedule for a 2018 completion. The funding is in addition to
the previously Commission-authorized amount of $5,000,000 for a new total authorization of
$10,000,000 and was anticipated and accounted for in the 2015 budget. This amount is expected
to be the final design phase funding authorization for the project. Request for authorization to
advertise the berth modernization project major construction bids is expected in early 2016. The
requested design action has been endorsed by Northwest Seaport Alliance leadership. 
BACKGROUND 
Vessels calling at the Port of Seattle have grown in size to 10,000 TEUs today with 19,000+
TEUs currently operating globally. To maintain the Port's competitive position and preserve
jobs, dock and infrastructure upgrades are needed to modernize the terminal to handle current
and future classes of container vessels and larger cranes. 
Terminal 5 began operating as a container terminal in 1964. The Port invested in improvements
to create a 182-acre container terminal, which was completed in 1997. It was leased and

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
July 7, 2015 
Page 2 of 6 
operated by Eagle Marine Services, a subsidiary of American President Lines for 17 years. A
portion of the site is currently under short-term lease to Foss Maritime Company. The Port is
actively pursuing a new tenant to lease and operate the facility as a container terminal.
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 for this authorization of funds includes continued development of
construction and permitting documents. It will also fund a test pile program that has a potential
estimated net savings of $5,000,000 to $7,000,000 in construction costs. The test pile program
will provide additional geotechnical information that may result in shorter and fewer structural
piles, improving habitat and fisheries and reducing noise from construction.  Additionally,
information gathered from the program reduces design and construction uncertainties and
associated cost and schedule risks.  Key elements of the overall T5 Modernization project
include crane rail strengthening, berth deepening, slope stabilization, and electrical
supply/distribution. Other terminal improvements, currently not included in either the scope or
estimated cost of this project, will be evaluated for consideration based on prospective tenant
needs. Examples include upland storm water treatment, paving, intermodal yard improvements,
and lighting. 
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 team will evaluate
the scope of work to determine a cost-effective approach to efficiently implement the work. 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital       Public  Total Project 
Expense 
Original Budget                            $0          $0          $0 
Previous Authorizations                 $4,960,000      $40,000    $5,000,000 
Current request for authorization            $4,950,000       $50,000    $5,000,000 
Total Authorizations, including this request     $9,910,000       $90,000    $10,000,000 
Remaining budget to be authorized        $218,990,000    $1,010,000   $220,000,000 
Total Estimated Project Cost            $228,900,000    $1,100,000   $230,000,000

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
July 7, 2015 
Page 3 of 6 
Project Cost Breakdown                     This Request       Total Project 
Construction                               $2,300,000        $182,000,000 
Construction Management                     $270,000        $9,000,000 
Design                                  $1,000,000        $11,000,000 
Project Management                         $500,000        $5,000,000 
Permitting                                  $700,000         $5,000,000 
State & Local Taxes (estimated)                   $230,000        $18,000,000 
Total                                      $5,000,000        $230,000,000 
Budget Status and Source of Funds 
This project, Terminal 5 Berth Modernization, was included in the capital budget and 2015 Plan
of Finance. The funds requested in this memo encompass the second half of the design funds
which were anticipated and accounted for in the 2015 budget. $5,000,000 funding for the
continued design and permitting portion of this project is available under CIP's C800132  T5
Berth Modernization, 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. 
Unforeseen site conditions and permit requirements 
Project cost for analysis        Current Request - $5,000,000 for Design & Permitting 
Prospective Project Cost $230,000,000 
Business Unit (BU)          Containers

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
July 7, 2015 
Page 4 of 6 
Effect on business performance  Current Request: 
The $5,000,000 for the continued 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.
Prospective Project Cost 
Based on estimated overall cost of the prospective project,
annual depreciation would increase by $7,666,667 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. The current T5 facility is
unable to generate revenue as a container terminal due to obsolete dock infrastructure. 
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 the evolution of vessel size in
the container shipping market. The improvements are critical to remain relevant as the shipping
industry changes. The project represents an investment in   effectively stewarding 
competitiveness of the region for market share.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
July 7, 2015 
Page 5 of 6 
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.  Among anticipated benefits is the removal of the existing
creosote-treated timber piling. 
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) Suspend all design work and test pile program and resume at a later date. 
Pros: 
Tenant solicitation and discussions can progress independent of the design providing
scope clarity and schedule of when the terminal actually needs to become operational. 
Allows time for initial formation of the Northwest Seaport Alliance and consideration by
Managing Members before making further commitments to invest. 
Cons: 
Delay of scheduled design work will delay the completion date and reduce flexibility to
provide speed to market if desired by prospective tenants.
Small change in schedule can have disproportionate effect on facility opening date due to
annual restrictions on in-water construction for fisheries. 
Adds design costs to restart the project at a later date creating inefficiencies.
Alternative 2) Provide up to 90% level design and do not conduct test pile program. 
Pros: 
Would require funding authorization of approximately $2,000,000.
Cons: 
Eliminates benefits of test pile program, which are in the $5 to $7 million range. 
Eliminates the potential benefits to fisheries due to fewer piles. 
Delay of scheduled design work will delay the completion date and reduce our flexibility
to provide speed to market if desired by prospective tenant.
Small change in schedule can have disproportionate effect on facility opening date due to
annual restrictions on in-water construction for fisheries. 
Alternative 3) Proceed with action request to continue design and permitting, prepare final 
construction documents, purchase test piles, advertise for construction bids for test pile
installation, and conduct a test pile program.
Pros: 
Realizes benefits of test pile program (fewer and shorter piles, reduced noise, improved
habitat and fisheries) and potential net savings in the $5 to $7 million range.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
July 7, 2015 
Page 6 of 6 
Allows for completion in mid-2018 or 2019 if desired by prospective tenant and most
effectively supports Port strategy of speed to market. 
Cons: 
Moving forward with design without a committed tenant may result in project delays or
significant scope changes requested by future tenant that will result in additional design
work and expense. 
This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
PowerPoint Presentation. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
On May 13, 2014, briefed Commission on the T5 Facility Modernization project. 
On June 3, 2014, Commission authorized request for $5,000,000 to begin T-5 Facility
Modernization design and permitting.