INTERLOCAL AGREEMENT 
BETWEEN THE PORTS OF SEATTLE AND TACOMA 
CREATING A JOINT SEAPORT ALLIANCE
[Exhibit 1 to FMC DISCUSSION AGREEMENT ___] 
This Interlocal Agreement (the "ILA") is made this   ____ day of
________________, 2015, by and between the Port of Seattle and the Port of
Tacoma (each, a "Port" and together, the "Ports"), each a port district organized
under the laws of the State of Washington (the "State"), under the authority of the
Washington State Interlocal Cooperation Act, RCW 39.34 and the Port Joint Powers
authority (RCW 53.08.240), and the authority of the Federal Maritime Commission
("FMC") in accordance with the provisions of the Federal Shipping Act of 1984 for the
purpose of creating a Port of Seattle and Port of Tacoma joint marine cargo seaport
alliance ("Alliance"). 
RECITALS 
WHEREAS, the Port of Seattle (the "POS") and the Port of Tacoma (the "POT") are
municipal corporations of the State, organized under provisions of the laws of the
State, now codified at Title 53 RCW. POS owns and operates the marine facilities
at the Seattle harbor, Seattle-Tacoma International Airport, and other properties.
POT owns and operates the marine facilities at the Tacoma harbor and other
properties; and 
WHEREAS, the Ports are the two largest ports in the State and together represent
the third largest container trade gateway in the United States, serve as the
primary gateway for our state's export-based economy and support thousands of
maritime-related jobs; and 
WHEREAS, discretionary container cargo, principally bound for or from the Midwest,
represents a significant segment of each Port's cargo volume, supports the
financial success of each Port's seaport operations, and provides critical empty
container capacity for Washington exporters; and 
WHEREAS, the Ports understand significant changes in the shipping industry present
challenges and opportunities for the future of the United States' Pacific Northwest
trade, including: 
1.  Increased competition from expanding international gateways across North
America, including other West Coast ports, 
2.  Shipping line consolidations and alliances leading to fewer port calls, 

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3.  The introduction of larger container ships and increased use of all water
routes, leading to fewer port calls, and 
4.  Attracting and accommodating larger container ships will require substantial
capital investment by the Ports; and 
WHEREAS, these market developments present opportunities for expanded
collaboration between the Ports to improve our region's capabilities to grow cargo
volume and protect market share by: 
1.  Coordinating investment strategies to achieve terminal infrastructure needed
to handle ultra-large container ships; 
2.  Improving terminal capacity utilization; 
3.  Adopting a sustainable financial business model that improves financial
outcomes for the two public port authorities; 
4.  Jointly pursuing and executing a shared road and rail infrastructure strategy; 
5.  Enhancing the Ports' mission of responsible economic development through
coordinated environmental stewardship; 
6.  Sharing advocacy on state and federal issues affecting marine cargo and
related logistics issues; and 
7.  Improving infrastructure utilization and long-term financial stability by
implementing a marine cargo gateway approach to mitigate the risks of
changing markets and market uncertainty; and 

WHEREAS, the continued competitiveness of the Puget Sound gateway and the
resulting job growth would be enhanced by leveraging the strengths of each Port
to reach shared goals for the region and the State in ways that either Port acting
alone could not achieve; and 
WHEREAS, State law allows the Ports to exercise any of their powers jointly by
mutual agreement; and the Ports desire to come together to form, establish, and
support a joint seaport alliance to carry out the unified management and operation 
of the marine cargo operations and functions of each Port; and 

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WHEREAS, this ILA reflects the actions of and approvals by the two Ports to create
and implement a joint seaport alliance; and 
WHEREAS, the Ports will remain separate port districts governed by locally elected
port commissioners; these joint actions discussed herein will not consolidate or
merge the Ports; and 
WHEREAS, the Ports are committed to shared core objectives of financially viable
business models that support customer success, value the Port-labor partnership,
protect and increase regional jobs, benefit the citizens of Pierce and King
counties, promote the Pacific Northwest corridor's role in US trade strategies and
the greater North American economy, and ensure the ability of the Ports to
reinvest in terminal assets and infrastructure; and 
WHEREAS, pursuant to Federal law 46 USC Title 46, Congress has granted
authority for ports and marine terminal operators in certain circumstances and if
approved by the Federal Maritime Commission, to "discuss, fix or regulate rate or
other conditions of service; or engage in exclusive, preferential, or cooperative
working arrangements, to the extent that such agreements involve ocean
transportation in the foreign commerce of the United States." 46 USC 
40301(b)(1-2); and
WHEREAS, the Ports are committed to working together based on trust and
transparency, mutual respect for the goals and public input of the people of both
Pierce and King counties, and a recognition the region is stronger when its
leaders collaborate and leverage limited public resources; and 
WHEREAS, the Ports are committed to serving the citizens of Pierce and King 
counties and the manufacturing  and agricultural exporters throughout the State
by supporting thousands of existing jobs, growing new jobs, securing new
investments, and generating significant tax  revenues to state and local 
governments; and 
WHEREAS, the Ports believe the ability to achieve these guiding objectives is
through the creation of a joint seaport alliance that prioritizes regional interests in
decision-making, with a unified vision for regional success, to better fulfill their
shared economic development mission as defined in State law; and 
WHEREAS, the Alliance will promote regional economic development, which is a
legislatively authorized port and municipal purpose; and 
WHEREAS, the Ports find mutual benefit in the creation and implementation of the

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Alliance and in defining the operational scope, powers and roles of the Alliance
and the two creating Ports; and 
WHEREAS, pursuant to the laws of Washington and expressly subject to the
approval of and oversight by the FMC, the Ports elect to enter into this ILA for the
purpose of approving of the creation, operation, funding and delegated powers of
the Alliance. 
NOW THEREFORE, in consideration of the premises contained in this ILA, the Ports
agree as follows:
AGREEMENT 
I.    GENERAL 
A. The Ports are port districts, organized under provisions of the laws of the State
of Washington, and codified under Title 53 RCW. 
B. The Ports pursuant to Federal law 46 USC Section 40301(b)(1-2), have filed a
Discussion Agreement with the FMC for permission to jointly operate certain
marine cargo facilities through an Alliance. 
C. The Ports by this ILA form the alliance pursuant to the following federal and
state authorities: (1) the FMC Discussion Agreement (2) an interlocal
agreement with delegated powers exercised pursuant to the port joint powers
statute (RCW 53.08.240), which expressly permits joint operation and
investment outside of a port's district boundaries, (3) RCW 39.34.030, the
state Interlocal Cooperation Act, and (4) Title 53.XX RCW, which authorizes
the Ports to create a port development authority to use, operate and manage
certain marine facilities jointly, to be known as The Northwest Seaport Alliance
("Alliance PDA"). 
II.    ALLIANCE PDA 
A. Effective Date. Commencing August 1, 2015 ("PDA Effective Date"), and
subject to (1) FMC approval, and (2) each Port's approval of the Charter, the
Alliance PDA will begin operations under the terms of the Alliance PDA's
Charter attached hereto as Exhibit A ("Charter") for a term commencing on
the PDA Effective Date and continuing indefinitely until dissolution thereof in
accordance with the provisions of the Charter or as otherwise provided by law. 
B. Charter to be Adopted. Immediately upon effectiveness of this ILA, each Port
shall adopt by resolution the Charter. 
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C. Managing Members. The Port of Tacoma and the Port of Seattle, as
members of the Alliance PDA (each, a "Managing Member" and collectively,
"Managing Members") are the only governing members of the Alliance PDA.
Each Managing Member shall act in such capacity through its own elected
commission. 
D. Licensed Properties. Effective as of August 1, 2015, the Ports as Managing
Members shall license to the Alliance the operation, management, and use of
certain properties of each Port as set forth in the Charter at Schedule 2 
("Licensed Properties"), and as depicted on the attached Exhibit B, maps of
each Port's Licensed Properties. 

III.    ALLIANCE PDA STARTUP PERIOD; ASSIGNED PORT EMPLOYEES 
A. Startup Period. The Alliance PDA "Startup Period" is defined as the term
from August 1, 2015 through December 31 2015. 
B. Assigned Port Employees. During the Startup Period, staff of the Ports
identified as appropriate to be working full time (or near full time) on the
Alliance PDA will be assigned by the port where they are employed or
contracted as of July 31, 2015 to perform duties full time (or near full time) on
behalf of the Alliance PDA ("Assigned Port Employees"). Service
agreements between the Ports will be put in place for other staff support.
Each Port will collect their respective costs associated with Alliance PDA
activities in preparation for the Alliance PDA budget and accounting activities
which will commence on January 1, 2016.
a.  Initially, approximately 30 to 40 people who are currently Port of Seattle
and Port of Tacoma employees will be Assigned Port Employees,
including all "customer facing" employees in the commercial and
operations segments of the Alliance PDA business, plus management
positions for all primary Alliance PDA functions.
b.  Beginning January 1, 2016, the Assigned Port Employees will begin to
transition to Alliance PDA employment or formal assignment. Most
transition processes are anticipated to be complete by the end of 2016,
although some will be provided after a longer timeframe if needed to
support a sound transition. It is expected that by the end of 2016, all
Assigned Port Employees will be Alliance PDA employees. The Alliance
PDA will implement a compensation package (salary and benefits) that

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is designed to attract, retain, reward and motivate the productivity and
commitment of a highly qualified and diverse workforce. 
C.  Support Services. Focused support will be provided to the Alliance PDA
from the staff of each Port through specific service agreements. These
include non-represented employees who will provide services to the Alliance
PDA for engineering, construction management, permitting and
environmental services, public affairs, accounting, financial analysis, human
resources, information technology, public records management, legal, and
similar. These also include represented employees (under collective
bargaining agreements), who will provide services to the Alliance PDA for
equipment and facilities maintenance, Port security/police, railroad
operations, construction inspection, and similar. During the initial years of
Alliance PDA operations, Alliance PDA employee functions and those
functions provided through service agreements will be evaluated and
adjusted as appropriate to best support the Alliance PDA business model.
Following Alliance PDA organizational development, Alliance PDA staff could
also provide support to the Ports if needed, using service agreements. 

IV.   ALLIANCE PDA STRATEGIC BUSINESS PLAN. 
A. Creation. The commercial teams from the two Ports and the Managing
Members shall together develop a Strategic Business Plan for the Alliance
PDA, with a 10-year planning horizon. This Strategic Business Plan shall set
forth a strategic vision for the Alliance for the period 2015-2025. 
B. Defining Principles. The Strategic Business Plan shall define the principles
for increased cargo volumes, job creation and financial performance. It shall
define opportunities for development of strategic terminals with the ability to
handle ultra-large container ships and increased throughput. It shall propose
approaches for phased build-out of strategic terminals based on market
drivers, opportunities to optimize existing facilities, and opportunities to use
excess container terminal acreage for alternative cargos and to boost the
Alliance PDA diversified cargo and maritime portfolio. The Strategic Business
Plan additionally shall address the Alliance PDA's commitment to deliver best
value to customers and stakeholders, through focus on operational excellence
- ease of doing business, reliability, operational efficiency and cost of doing
business. 
C. Framework for Decisions. The Strategic Business Plan shall be used as a
framework for individual future build-out decisions, which will be based on

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market demand, capital capacity, speed to market, and improved Alliance PDA
financial results.
D. Periodic Reporting. Periodic reporting and evaluation of key Alliance PDA
metrics is essential to success. Beginning in the fourth quarter of 2014, the
two Ports commenced reporting joint, combined cargo statistics. The Strategic
Business Plan will be periodically evaluated relative to market and
performance data, and updated accordingly. 
V.   ALLIANCE PDA FINANCIAL DECISION CRITERIA. 
A. Based on recommendations from the CEO and financial teams from the two
Ports, the Alliance PDA Managing Members shall together develop Alliance 
PDA Financial Decision Criteria, to include a standard approach to developing
a net present value calculation for projects. 
B. Based on recommendations from the CEO and financial teams from the two
Ports, the Alliance PDA Managing Members shall establish standard financial
modeling assumptions for use in evaluating Alliance projects. 

VI.   SHARED GOVERNANCE FLEXIBILITY AND TRANSPARENCY. 
A. Attendance at Executive Sessions. To facilitate overall Alliance PDA
coordination, all POT commission executive sessions and all POS commission
executive sessions addressing Alliance PDA matters, will be open for
attendance by any of the ten commissioners of either Port. 
B. Limitation. No Alliance business will be discussed in executive session at
either Port commission meeting unless jointly agreed to in advance by both
Port commission presidents. 
C. Communication Protocols. The Alliance PDA and the Ports' management
teams will establish communication and work flow protocols to ensure
information is shared with each Port and its commissioners in a consistent and
timely manner. This activity is crucial to build trust and effectiveness that will
support success. 
VII.   MISCELLANEOUS 
A. Third Party Beneficiaries. This ILA does not create any rights, claims, or
benefits inuring to any person that is not a party hereto, and it does not create

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or establish any third party beneficiary hereto. 
B. Binding Effect. This ILA shall be binding upon and inure to the benefit of the
Ports, and their legal representatives, successors, and permitted assigns. 
C. Severability. If any provision of this ILA shall be held to be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining 
provisions shall not in any way be affected or impaired thereby. The Ports
agree to use good faith efforts to replace such invalid or unenforceable
provision of this ILA with a valid and enforceable provision that will achieve, to
the extent possible, the purposes of such invalid or unenforceable provision. If
the Ports cannot reach a mutually agreeable and enforceable replacement for
such invalid, illegal, or unenforceable provision, the balance of the ILA shall be
interpreted as if such provision were so  excluded so as reasonably to
effectuate the intent of the Ports. 
D. Notices. Unless otherwise specified herein, all notices, consents, approvals,
reports, designations, requests, waivers, elections, and other communications
authorized or required to be given pursuant to this ILA shall be in writing and
shall be given or made (and shall be deemed to have been duly given or made
upon receipt) by personal hand-delivery, by facsimile transmission, by
electronic mail, by mailing the same in a sealed envelope, registered first-class
mail, postage prepaid, return receipt requested, or by air courier guaranteeing
overnight delivery, sent to the addresses on Schedule 3 of the Charter (as
such may be updated by notice from time to time). 
E. Usage Generally; Interpretation. 
1.  The captions and headings of this ILA are for convenience of reference
only and shall not affect the interpretation of this ILA. 
2.  Any statute or law defined or referred to herein means such statute or law
as from time to time amended, modified, or supplemented, including by
succession of comparable successor statutes. 
F. Entire Agreement. This ILA, together with the Charter, embodies the entire
agreement of the parties and supersedes all prior agreements and
understandings between the Ports with respect to the subject matter hereof. 
G. Counterparts. This ILA may be executed in any number of counterparts,
including by electronic transmission or facsimile, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument. 

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H. Amendments. The terms and provisions of this ILA may only be modified or
amended at any time and from time to time by mutual agreement of the Ports. 
I.   Further Assurances. Each Port shall execute and deliver any additional
documents and instruments and perform any additional acts that the Ports
determine to be necessary or appropriate to effectuate and perform the
provisions of this ILA. 
J.  Governing Law. This ILA shall be governed and construed in accordance with
the laws of the State of Washington, without regard to the conflicts of law
principles thereof. Generally, in the event of a conflict, the following sources of
authority shall prevail in descending order of supremacy: (i) Federal law and
regulation, including those of the Federal Maritime Commission; (ii) state law
and regulation, including the Joint Powers, the Port PDA Act, and the ILA;
(iii) the Charter; (iv) any policies of the Alliance. 
K. Waiver of Jury Trial. Each of the parties to this ILA acknowledges and agrees
that any controversy arising under this ILA is likely to involve complicated and
difficult  issues.  As  a  result  each  party  to  this  ILA  irrevocably  and
unconditionally waives any right that such party may have to resort to the
courts for a judicial remedy and to a trial by jury in respect to litigation arising
out of this ILA or any of the transactions related hereto. Each party to this ILA
understands and has considered the implications of this waiver and makes this
waiver voluntarily. 
L.  Costs, Fees and Expenses. The Ports shall share on  a prorata basis,
consistent with the Membership Interest as defined in the Charter, any legal
and other costs, fees and expenses incurred by such party in connection with
the negotiation and preparation of this ILA and the transactions contemplated
hereby. 
M. Waivers. No waiver of any breach of any of the terms of this ILA shall be
effective unless such waiver is made expressly in writing and executed and
delivered by the party against whom such waiver is claimed. No waiver of any
breach shall be deemed to be a further or continuing waiver of such breach or
a waiver of any other or subsequent breach. Except as otherwise expressly
provided herein, no failure on the part of any party to exercise, and no delay in
exercising, any right, power, or remedy hereunder, or otherwise available in
respect hereof at law or in equity, shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power, or remedy by such party
preclude any other or further exercise thereof, or the exercise of any other
right, power, or remedy. 

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N. Ratification. Acts taken in conformity with this ILA prior to its execution are
hereby ratified and affirmed. 
O. Document Execution and Filing. The Ports agree that there shall be
________ (___) signed originals of this ILA procured and distributed for
signature by the necessary officials of each Port. Upon execution by both
Ports, each such signed original shall constitute an ILA binding upon both
Ports. The executed originals of this ILA shall either recorded with the
respective County Auditors or shall be posted on both Ports' web site as
authorized by RCW.39.34.040. 

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SIGNED BY: 
PORT OF SEATTLE COMMISIONERS 
PORT OF TACOMA COMMISSIONERS 













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