PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6d 
ACTION ITEM 
Date of Meeting      June 23, 2015 
DATE:    June 16, 2015 
TO:      Ted Fick, Chief Executive Officer 
FROM:   Mike Burke, Director, Seaport Lease & Asset Management 
Curtis Stahlecker, Seaport Project Management 
SUBJECT:  Surplus Crane Removal and Disposal at Terminals 5 and 46 
Amount of This Request:        $4,665,000   Source of Funds:       General Fund 
Est. Total Project Cost:          $4,665,000 

ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to advertise, award, and
execute a major public works contract for the removal and disposal of six Port-owned container 
cranes located on Terminal 5 and one located at Terminal 46. The total amount of this request is
$4,665,000. 
SYNOPSIS 
Subsequent to the final passage of Resolutions 3610 and 3695, declaring one crane at Terminal
46 and the six container cranes on Terminal 5 surplus, Port staff has been actively seeking buyers 
for the cranes. To date no offers have been received and the cranes must be removed from the
terminals in order to facilitate the construction schedule for the Terminal 5 Berth Modernization 
project and the Container Dock Apron Upgrade project at Terminal 46. 
BACKGROUND 
Cranes No. 61, 62, 63, 64, 66, and 68 are located at Terminal 5. They were purchased from
PACECO Corporation and are classified as post-panamax cranes having a gauge of 100 feet and
a lifting capacity of 50 long tons. Crane 54 is located on Terminal 46 and is an IHI crane
classified as a panamax having a capacity of 40 long tons and a gauge of 50 feet.
Port staff advertised the cranes in trade journals, contacted used equipment dealers, and reached
out to other ports, but received limited interest and no offers. Unfortunately, there are a number
of used cranes similar to the PACECOs on the market with very few buyers. There is no market
for the IHI crane and it has been inactive since 2008. The result is the Port will have to issue a
major public works contract to have the cranes removed from the terminals. 

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
June 16, 2015 
Page 2 of 6 
PROJECT JUSTIFICATION AND DETAILS 
The surplus container cranes located at Terminal 5 and Terminal 46 will need to be removed
before the upgrades to the facilities can occur.
Terminal 5 (T-5) Berth Modernization project is scheduled to begin demolition activities on the
southern half of the dock in early 2016. To facilitate the T-5 Berth Modernization project, the
cranes need to be removed in advance of the demolition activities. Construction of the Terminal
46 Container Dock Apron Upgrade project is scheduled to begin in the spring of 2016. The
intent is to remove Crane 54 prior to construction activities.
Project Objectives 
Remove the six PACECO Port owned container cranes from Terminal 5 and the one IHI Port
owned crane before spring 2016. 
Scope of Work 
Advertise, award, and execute a major public works contract for the removal and disposal of
seven Port-owned container cranes from Terminals 5 and 46. 
Schedule 
Commission Authorization for Construction    June 2015 
Advertise for Bids                     July 2015 
Award Contact                     August 2015 
Issue Notice to Proceed                  September 2015 
Removal Complete at Terminal 5           February 2016 
Removal Complete at Terminal 46          April 2016 
FINANCIAL IMPLICATIONS 
There is no remaining book value for any of these cranes or their related parts. The cranes at
Terminal 5 were written off as impaired assets at the end of 2014. The crane at Terminal 46 was 
surplused and removed from the books in 2009. 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original Budget                            $0          $0          $0 
Previous Authorizations                       $0          $0          $0 
Current request for authorization                  $0    $4,665,000    $4,665,000 
Total Authorizations, including this request           $0          $0          $0 
Remaining budget to be authorized               $0          $0          $0 
Total Estimated Project Cost                    $0    $4,665,000    $4,665,000

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
June 16, 2015 
Page 3 of 6 
Project Cost Breakdown                     This Request       Total Project 
Construction                               $3,814,000        $3,814,0000 
Construction Management                     $182,000         $182,000 
Design                                    $62,000           $62,000 
Project Management                          $88,000          $88,000
Permitting                                  $153,000          $153,000 
State & Local Taxes (estimated)                   $366,000          $366,000 
Total                                      $4,665,000         $4,665,000 
Budget Status and Source of Funds 
The crane removal projects are undertaken at this time to facilitate projects C800132- Terminal 5
Berth Modernization and C102554-Terminal 46 Development projects.  Both of these projects
and related funds were included in the 2015 Capital Budget and Plan of Finance. However, the
cost to remove the cranes will be recognized as an Operating Expense, which was not factored
into the 2015 Operating Budget. It is anticipated that $1,000,000 of the project will be expensed
in 2015 with the balance in 2016. Therefore, proceeding with the project is expected to result in
an unfavorable ($1,000,000) operating expense variance and an associated unfavorable net
operating income variance for 2015. The 2016 Operating Budget will reflect the balance of costs 
to complete the project. 
The crane removal projects will be funded by the General Fund. 
Financial Analysis and Summary 
CIP Category             Renewal and Replacement (Terminal 5 Modernization
and Terminal 46 Development) 
Project Type              Infrastructure Upgrade 
Risk adjusted discount rate     N/A 
Key risk factors             Construction risks 
Project cost for analysis        $4,665,000 
Business Unit (BU)          Container Operations 
Effect on business performance  Net Operating Income before depreciation (NOI) for 2015
will be reduced by the estimated 2015 project costs of
$1,000,000 and 2016 NOI will be reduced by $3,665,000.
The 2015 expenses are expected to create an unfavorable
operating expense variance in 2015. The 2016 amount
will be included in the 2016 Operating Expense Budget 
IRR/NPV             N/A 
Lifecycle Cost and Savings 
Removal of the cranes allows for the modernization of our existing assets and readies those
assets for current and future changes, extends their useful service life, and preserves the
economic vitality of our operations.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
June 16, 2015 
Page 4 of 6 
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 by removing older equipment that is not
suitable for the anticipated class of vessel that will be calling on the terminal. 
ENVIRONMENTAL AND COMMUNITY BENEFITS 
Removing the PACECO cranes from Terminal 5 and IHI Crane from Terminal 46 is the initial
step in enhancing the terminals. Terminal 5 will be modernized by the installation of larger
cranes to support larger vessels and Terminal 46 will have an additional 200 feet of dock apron
upgrade to accommodate larger container ships. These terminal improvements are a 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.
Employing environmental sustainability principles during the crane removal process will be
consistent with Port policy, including sustainable construction practices and recycling of the
crane materials. 
In addition, the project team will collaborate with the Office of Social Responsibility (OSR) to
maximize small business participation opportunities in support of the Century Agenda goals or
requirements will be established, accordingly. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1) Maintain status quo, leave cranes in-place 
Pros: 
This alternative would save the removal cost of $4,665,000. 
Cons: 
Significantly impedes both the Terminal 5 Berth Modernization and the Terminal 46
Container Dock Apron upgrade projects and does not accomplish project objectives. 
Alternative 2)  Include the removal of cranes in the respective construction packages. 
Pros: 
It is more efficient to administer one contract instead of two at each terminal. 
Reduces the risk of potential delay from the crane removal contractor to the
Modernization/Upgrade contractor. 
Cons: 
Increases the construction duration of the Terminal 5 Construction Phase 1 Package
conflicting with the fish window and potentially adding another construction season to
the Terminal 5 Modernization project. 
Terminal 5 Construction Phase 1 package bid documents cannot be completed sooner to
allow for the additional duration needed to remove the cranes.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
June 16, 2015 
Page 5 of 6 
The Terminal 5 Phase 1 construction contractor would likely subcontract the crane
removal work, adding costs. Therefore, any savings realized in administering one
contract would be offset by additional contract overhead. This is similar for Terminal 46. 
For Terminal 46, any delay in removal of the crane would impact in-water related work,
and potentially extend another year for completion of project. 
Estimated additional cost range $300,000 to $500,000. 
Alternative 3)  Bid to dismantle cranes and transport steel to a scrap dealer and the Port
receiving scrap value. 
Pros: 
Port would gain the value of the scrap steel. 
Cons: 
Bids for the removal of the cranes would be increased to account for the loss of revenue
that would be received by the contractor from the sale of the scrap. 
Eliminates the option for removing the cranes intact. 
Port assumes risk for any loss of revenue if the salvage value of the steel decreases. 
Estimated additional cost range for this alternative is $750,000 to $1,000,000. 
Alternative 4)  Incorporate the removal of Terminal 46 crane in the existing T-18 IHI
contract as a change order and Bid Terminal 5 cranes separately. 
Pros: 
The crane at Terminal 46 is a sister crane to the three IHI cranes currently under contract
to be removed from Terminal 18. 
Reduced cost uncertainty in the bid process by negotiating a change order. 
Cons: 
Lose possible economy of scale savings by having fewer cranes in bid package. 
Additional costs added to the  existing contract  for  added scope and  contract
administration. 
Alternative 5)  Incorporate the removal of Terminal 46 crane and the 6 Terminal 5 cranes
in existing T-18 IHI crane removal contract as a change order. 
Pros: 
It is the fastest way to remove cranes. 
Reduced cost uncertainty in the bid process by negotiating a change order. 
Cons: 
Likely considered a cardinal change to original public works contract and places the Port
at risk for an audit finding that the Port did not comply with competitive bid laws.
Potentially responsible contractors may be deprived of the opportunity to compete for the
work and the Port cannot ensure that we obtained the best possible price. 
Alternative 6)  Bid to remove and dispose of the cranes as one stand-alone contract. 
Pros:

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
June 16, 2015 
Page 6 of 6 
Contractors have maximum flexibility to remove the cranes in the manner they think is
most efficient. 
Project can be bid as soon as the documents are available. 
Contractor assumes risk for any loss of revenue if the salvage value of the steel decreases. 
Removing the cranes in advance of the construction contract would avoid delay of in-
water works for both Terminals 5 and 46. 
Cons: 
Cranes are structurally and geographically different 
Need to coordinate between crane removal contract and two construction packages. 
Alternative 6 is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
None. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
September 11, 2014  Commission authorized the Second Reading of Resolution No.
3695, declaring certain personal property surplus (Port of Seattle Cranes 61, 62, 63, 64,
66, and 68) for Port of Seattle purposes and authorizing its sale or disposal. 
August 19, 2014  Commission authorized the First Reading of Resolution No. 3695, 
declaring certain personal property surplus (Port of Seattle Cranes 61, 62, 63, 64, 66,
and 68) for Port of Seattle purposes and authorizing its sale or disposal. 
February 24, 2009  Commission authorized the Second Reading of Resolution No.
3610, declaring Port of Seattle Crane 54 surplus for Port of Seattle purposes and
authorizing its sale or disposal. 
February 10, 2009  Commission authorized the First Reading of Resolution No. 3610, 
declaring Port of Seattle Crane 54 surplus for Port of Seattle purposes and authorizing
its sale or disposal.