Item No.:       6b_attach
Meeting Date:  May 12, 2015


Interpretation of the Director
Under Seattle Municipal Code Title 23


Regarding the Use of the
DPD Interpretation No. 15-001
Property at                          (DPD Project No. 3020324)

2701 - 26'II Avenue SW (Terminal 5)


Background

This interpretation was generated by the Department of Flaming and Development (DPD) in
response to general questions it has received regarding a proposal to moor an exploratory drilling
rig and two accompanying tugboats at the Port of Seattle's (Port's) Terminal 5 facility for
periods of approximately six months per year when the drilling rig is not in use in the Arctic. The
central issue is whether this proposed moorage is consistent with the legally established use of
the property as a cargo terminal or whether a permit must be obtained to establish a different or
additional use. The Port and its lessee, Foss Maritime (Foss), have been cooperative in providing
information about proposed activities at Terminal 5.

Media reports indicate that two drilling rigs are destined for Seattle: the Polar Pioneer and the
Noble Discoverer. The information provided by the Port indicates that only one of these, Polar
Pioneer, would moor at Terminal 5. This interpretation is based on the Port's representations.

Findings of Fact

1.  The Port's Terminal 5 facility is at the north end of the Duwamish River, near Harbor
Island, and located in an 1G1 U/85 (General Industrial-l) zone and a U1 (Urban
Industrial) shoreline environment.

2.  Seattle Municipal Code (SMC) Section 23.40.002 requires a permit in order to establish
or change the use of a property. The recognized existing use of the Terminal 5 facility, as
reected in decisions including Projects 9404118 and 9404124, is as a cargo terminal.

3.  Foss entered into a two-year lease of Terminal 5 with the Port on February 9, 2015. By
the terms of the lease, Foss is to use the facility as a marine cargo terminal. In an April 8
letter to DPD, Foss expressed its intent to load and unload its own vessels as well as those

Interpretation No. 15-001
Page 2

of other customers at Terminal 5 during the lease. The Foss representative said Foss
intended to receive and move goods, cargo, equipment, supplies, stores, provisions and
other materials into the vessels associated with the drilling rig, for transportation to other
locations. The letter indicates that the services they intend to provide for Shell Offshore
would be a fraction of the activity they hope to conduct at Terminal 5.

As reported in the Seattle P-I, the Polar Pioneer is a 400-foot tall, 292-foot drilling rig.
The Peninsula Daily News describes it as a 400-foot-long, 355-foot-tall rig. Based on the
media reports, the Polar Pioneer was delivered to Port Angeles aboard a heavy-lift ship,
to be unloaded and towed to Seattle. Based on information provided by the Port and Foss,
the drilling rig and two tugboats would be moored at Terminal 5 for several months out
of the year.

The Port has indicated that a variety of types of vessels use its facilities. The Port
documented that its fee schedules include specic fees for "lay berthing" of vessels that
are not actively being loaded or unloaded. The Port has asserted that this is common and
necessary, as much cargo activity is seasonal, and some vessels used to transport cargo sit
'
idle during the off-season.

Seattle's current Shoreline Master Program is codified at SMC Chapter 23.60, which is a
part of Subtitle III, Division 3 of Title 23. An updated shoreline master program has been
approved by the City and is awaiting nal approval by the Washington State Department
of Ecology. DPD anticipates that the new provisions will take effect later in May.

"Cargo terminal" is dened at SMC 23.60.906 as:

[A] transportation facility in which quantities of goods or container cargo
are stored without undergoing any manufacturing processes, transferred to
other carriers or stored outdoors in order to transfer them to other
locations. Cargo terminals may include accessory warehouses, railroad
yards, storage yards, and ofces.

The denition of "cargo terminal" under the new provisions, to be codied at SMC
23.60A.906, remains the same as the current denition, apart from minor punctuation
changes, such as addition of a comma after "carriers."

SMC 23.42.010 provides in part:

Principal uses not listed in the respective zones of Subtitle III, Division 2
of SMC Title 23, Land Use Code shall be prohibited in those zones. If a
use is not listed, the Director may determine that a proposed use is
substantially similar to other uses permitted or prohibited in the respective
zones, therefore, and should also be permitted or prohibited.

Interpretation No. 15-001
Page 3

10. SMC 23.42.020.A provides in part:

Any accessory use not permitted by Title 23, either expressly or by the
Director, shall be prohibited. The Director shall determine whether any
accessory use on the lot is incidental to the principal use on the same lot,
and shall also determine whether uses not listed as accessory uses are
customarily incidental to a principal use.

1 1. For purposes of the Land Use Code generally, "accessory use" is dened at SMC
23.84A.040 as "a use that is incidental to a principal use." A more specic and limiting
denition of "accessory use" is provided for purposes of the current shoreline code at
SMC 23.60.9402 "a use which is incidental and intrinsic to the function of a principal use
and is not a separate business establishment unless a home occupation." This denition
remains the same under the new shoreline provisions, at SMC 23.60A.940.

12. "Good" is dened, in relevant part, by Webster's New Collegiate Dictionary (based on
Webster's third new international dictionary) as:

3 . .
.
b pl : personal property having intrinsic value but usu. excluding money,
securities and negotiable instruments . . . (1 pl : WARES, COMMODITIES,
MERCHANDISE 

Conclusions

1.  The activity that is the subject of this interpretation is the proposed moorage of an oil-
drilling rig and two accompanying tugboats that would be located at the Port's Terminal
5 facility during winter months when this equipment is not being used for exploratory
drilling in the Arctic. In recent years permits for this property have characterized the use
as a "cargo terminal."

2.  The question raised is whether the proposed activity requires a permit to legally establish
a use that allows this moorage. The analysis may be broken down into two sub-questions:

o  Is the proposed activity properly characterized as a "cargo terminal" use based on the
denitions in the current code, and in the updated shoreline master program the City
is in the process of adopting; and

o  If the proposed activity does not specically match the activities described in the
cargo terminal denition, may the proposed activity nevertheless be allowed as an
accessory use, without obtaining a separate use permit?

Consistency with current and future use definitions

3.  Under the current and the proposed new shoreline standards, a cargo terminal is a
transportation facility in which quantities of goods or container cargo are stored
without undergoing any manufacturing processes, transferred to other carriers or

Interpretation No. 15-001
Page 4

stored outdoors in order to transfer them to other locations. (The proposed new
denition adds a comma after "carriers."

Is Terminal 5, if used for the proposed activity, a "transportation facility"? This
term is not dened within the shoreline code, but is generally dened in the Land Use
Code, at Section 23.84A.038 as "a use that supports or provides the means of transporting
people and/or goods from one location to another." One of the subcategories in the
general denition is parking and moorage. The proposed activity would support the
transportation of the equipment to and from the Arctic, and falls within the range of uses
listed under the broad category of "transportation facility."

Does the proposed activity involve "quantities of goods or container cargo"? Neither
the drilling rig nor the tugboats would carry container cargo. The denition of cargo
terminal is broad enough to include transportation of many different types of goods, in
greatly differing quantities. The exploratory drilling equipment afxed to the drilling rig,
however, would not fall under the denition of "goods" as it is used under the code, nor
could the drilling rig itself be considered "quantities of goods or container cargo."

If the equipment on the drilling rig could be considered goods, would they be
"stored without undergoing any manufacturing processes, transferred to other
carriers, or stored outdoors in order to transfer them to other locations"? This
provides three options for activities that might occur at a cargo terminal: storage without
manufacturing, transfer to other carriers, or outdoor storage. The unifying theme is that
the goods are at the cargo terminal in order to be transferred to other locations. The
drilling rig would be at Terminal 5 only for purposes of seasonal storage. Terminal 5
would not serve as stop where the rig or the equipment on it would be stored or
transferred in the course of transit from a starting location to an ultimate destination.

The two tugboats that would accompany the drilling rig with the equipment likewise
would not bear quantities of goods in the process of being transferred to other locations,
apart from provisioning that might be anticipated for vessels at moorages generally.

It has been argued that even if the proposed use does not meet the denition of cargo
terminal, it should be regulated as a cargo terminal use, as this is the most similar use
category regulated under the code. In general, under SMC 23.42.010, if a principal use
does not t in any of the regulated use categories, as dened, there is authority to regulate
that use according to the standards for the most similar dened use. That provision,
however, specically extends to the standards in Subtitle 111, Division 2 of the Land Use
Code. Seattle's Shoreline Master Program, which includes the use regulations specic to
the Shoreline Overlay District, is in Subtitle III, Division 3 of the code, and is outside of
the scope of Section 23.42.010. The authority to regulate an undened use according to
the standards for the most similar dened use does not extend to the use provisions in the
shoreline code.

Interpretation No. 15-001
Page 5

Moorage as an accessory use

9.  Even if we were to determine that the proposed seasonal moorage of the drilling rig and
tugboats did not meet the denition of cargo terminal, it might be permissible if that sort
of moorage activity is accessory to a cargo terminal. The denition of cargo terminal says
that cargo terminals may include accessory warehouses, railroad yards, storage yards, and
ofces. It does not state that other accessory uses are not allowed. We do not conclude
that other accessory uses are precluded merely because they are not specically listed.

10. Based on information received from the Port, "lay berthing," or moorage of vessels that
are not actively loading or unloading materials, is a normal, customary and essential
practice at marine cargo terminals. The Port has specic dockage fees for lay berthing in
the fee schedule for its facilities. According to the Port, lay berthing occurs at marine
cargo terminals throughout the coastal and inland waterways of the country and the
world, specically at marine cargo terminals in Seattle, Bellingham, Everett, Port
Angeles, Tacoma, Olympia, San Diego, Los Angeles, Long Beach, Sacramento, San
Francisco, Oakland and Portland. According to the Port, temporary, seasonal and
sometimes indenite berthing of vessels must be provided by ports until duty calls those
vessels back to the sea. The Port indicates that cargo, emergency response, military, and
research vessels, as well as barges and tugboats, commonly lay berth at the Port of
Seattle's cargo terminals.

11. For purposes of the shoreline code, "accessory use" is dened as "a use which is
incidental and intrinsic to the function of a principal use, and is not a separate business
establishment unless a home occupation." SMC 23.60.940. This differs, and is more
stringent than, the denition that generally applies under the Land Use Code: "a use that
is incidental to a principal use." SMC 23.84A.040. We accept that lay berthing of vessels
otherwise used for transporting goods in the stream of commerce may be regarded as
incidental and intrinsic to the function of a cargo terminal. This recognizes that shipment
of some sorts of goods is seasonal, and that vessels involved in that sort of trade are
necessarily idle for periods during the year. We do not, however, nd that provision of
moorage to other vessels and equipment, not used for transfer of goods to other locations,
is intrinsic to the function of a cargo terminal. Such moorage would be regarded as a
separate principal use, dened as "any use, whether a separate business establishment or
not, which has a separate and distinct purpose and function from other uses on the lot."
SMC 23.60.940.

12. Even if we were to agree that moorage of the drilling rig and tugboats could be allowed
as an accessory use at a cargo terminal, some question also is raised as to whether
sufcient levels of activity relating to the principal cargo terminal use, transfer of
quantities of goods or container cargo, would continue while the drilling rig and tugboats
are moored there. The factual component of that question is unresolved. On the one hand,
the drilling rig and tugboats would occupy much of the site's frontage available for
moorage along the Duwamish, and upgrades and repairs to that frontage are also
contemplated which would possibly limit its use for loading and unloading of cargo

Interpretation No. 15-001
Page 6

during the same period. On the other hand, both the Port and Foss have advised us that it
is their intent that other cargo terminal use of the property will continue.

13. The legal component of that question obviates the factual question because, even if cargo
terminal activity is the predominant use, moorage of vessels not used for transport of
cargo in the process of being transferred to other locations is not intrinsic to the function
as a cargo terminal, and thus would not qualify as a legitimate accessory use.

Conclusion

An additional use permit is required for the proposed seasonal moorage at the Port of Seattle's
Terminal 5 facility of a drilling rig and accompanying tugboats.

Entered May 7, 2015


Andrew S. McKim
Land Use Planner  Supervisor

'
City of Seattle
|  h       Edward B. Murray, Mayor

May 8, 2015

The Honorable Stephanie Bowman and Courtney Gregoire
Port of Seattle Co-Presidents
Port of Seattle
PO. Box 1209
Seattle, WA 981 1 1

Dear Co-Presidents Stephanie Bowman and Courtney Gregoire;

As I have indicated to you in the past, 1 stand behind our maritime industry and support continued success for the Port of
Seattle and maritime businesses in our community. The Port and its tenants provide thousands of family-wage jobs,
adding needed diversity to our region's economy.

1 also understand that you have been very concerned about the potential reach of the Department of Planning and
Development's (DPD's) interpretation regarding Terminal 5 and the proposed presence of a drilling rig and related
vessels. In a separate letter, DPD indicated to Port staff that the interpretation is very narrowly focused to the specic site
and specic proposed use. The interpretation would not extend to other Port facilities.

In addition to that declaration, in a meeting with Port staff on May 7, 2015, DPD suggested working with Port staff to
review and update the Shoreline ordinance's denition of "cargo terminal." If there is concern that the denition does not
accurately describe the activities typically taking place at a cargo terminal, we should make a revision. 1 have asked DPD
to conduct this work in the coming months, so that the denition accurately reects the historic, current and future uses at
marine cargo terminals in Seattle.

Thank you very much. 1 look forward to working with you to make sure we address this issue.
Sinzmly,
Mayor Edward B.Mun;

cc:    Commissioner Tom Albro
Commissioner Bill Bryant
Commissioner John Creighton


Ofce of the Mayor
Seattle City Hall, 7m Floor                                                                       Tel (206) 684-4000
600 Fourth Avenue                                                                 Fax: (206)684-5360
PO Box 94749                                         Hearing Impaired use the Washington Relay Service (7-1-1)
Seattle, Washington 98124-
4749                                                                  www.seattle.gov/mayor

City of Seattle
I
Edward B. Murray, Mayor

Seattle Department of Planning and Development
Diane M. Sugimura, Director


May 8, 2015



Mike Merritt
Local Government Relations Manager
Port of Seattle
PO. Box 1209
Seattle, Washington 98111-1209
Dear/Mpmerritt:   h"m
Thank you very much for meeting with us yesterday. It was a helpful discussion for moving forward. Per
our conversation, we would like to clarify the interpretation.

Based on the code provisions governing Land Use Code interpretations (SMC 23.88.020), interpretations
are site specific. DPD's interpretation is based on the specific facts relating to the permit history for
Terminal 5, and facts relating to the presence of a drilling rig and related vessels proposed at that site.
The conclusions in the interpretation cannot be directly applied to activities that may be occurring at
other Port facilities.

Thank you very much. I hope this is helpful.

Sinc ely,


Diane M. Sugimura
Director




a.
My
City of Seattle, Department of Planning and Development
700 Fifth Avenue, Suite 2000
PO. Box 34019, Seattle, WA 98124-4019
An equal employment opportunity, afrmative action employer. Accommodations for people with disabilities provided upon request.

Foss Maritime to appeal city determination on Terminal 5 permit 

May 8, 2015 
CONTACT: Paul Queary, (206) 334-1483, paulq@strategies360.com 

Foss Maritime plans to appeal the city of Seattle's determination that Foss's
use of the Port of Seattle's Terminal 5 is not allowed under the Port's
existing use permit. 
The appeal process will take months to complete. In the meantime, Foss
intends to provide its customer, Royal Dutch Shell, the services for which it
contracted over the next few weeks as it prepares for the summer oil
exploration season in Alaska. 
The city's position is not supported by the plain language of the permit at
issue, and will cause long-term harm to the maritime industry as a whole.
The permit for Terminal 5 allows Port customers to tie up vessels so that
goods and cargo can be stored, loaded and unloaded, which is precisely
what Foss is doing at Terminal 5. 
By taking this action so late in the day, Mayor Ed Murray is trying to stop a
lawful project that has already put 417 people to work full-time and will soon
employ hundreds more, many of them citizens of Seattle. Worse, he has
openly solicited the Port of Seattle to use the city's action as a pretext to
break a valid lease at Terminal 5, despite the separately elected Port
Commission's recent unanimous vote to uphold the lease. 
These actions are an attempt to prevent one of the city's oldest and most
prominent companies from performing marine services that it has provided
and the Port has welcomed for generations. This action is akin to the mayor
ordering Seattle City Light to cut off all electricity to Amazon on the Friday
after Thanksgiving.
If his actions simply impacted Foss, that would be bad enough. But it
jeopardizes many other business activities across the waterfront, and calls

into question the sincerity of the mayor's previous statements in support of
the maritime sector.
For example, under the city's initial determination, Alaska fishing trawlers
would not be allowed to winter over at the cruise ship docks at Terminals 90
and 91; the Seattle Fire Department's fire boats could not dock at Terminals
90 and 91 as they are currently doing; and the vessels of the U.S. Navy and
other navies that visit during Seafair would not be allowed to tie up at Port
facilities. Maritime businesses from Ballard to South Park are doubtless
nervously checking their permits and wondering whether the mayor will
deem them worthy. 
Foss believes that the permitting at Terminal 5 is appropriate for our use,
and that the city's determination is a statement of politics rather than policy.
Accordingly, we will challenge it through the appropriate channels. The
process looks like this: 
Foss will appeal the determination to the Seattle Hearing Examiner
within 14 days. Other interested parties, such as the Port, may join in
the appeal. 
The Hearing Examiner will then set a hearing date on the matter. 
The hearings officer would typically produce a ruling on the matter
within 15 days after the hearing. 
Under normal circumstances, the city would not issue a violation to
Foss or the Port of Seattle until and unless it prevailed in the hearing. 

### 

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Foss operates two shipyards and offers worldwide marine transportation, emphasizing
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