ITEM NO.    6h 
DATE OF 
MEETING April 14, 2015 

THE INDUSTRIAL DEVELOPMENT CORPORATION 
OF THE PORT OF SEATTLE 
NOTICE OF A SPECIAL MEETING 

A Special Meeting of the Industrial Development Corporation of the Port of Seattle will be held on Tuesday,
April 14, 2015, in the Commission Chambers, Pier 69, 2711 Alaskan Way, Seattle Washington, during a
recess of the Port of Seattle Commission Regular Meeting, which convenes at l:00 p.m. The Agenda
includes: 
1.  Approval of the proposed minutes of the Industrial Development Corporation of the
Port of Seattle Special Meeting of April 1, 2014. 
2.  Approval of the Industrial Development Corporation of the Port of Seattle Board of
Directors and Officers for 2015. 
3.  Review, as needed, of the Annual Report for the Industrial Development Corporation
for year ending December 31, 2014. 
4.  Attachment for reference:  Overview of the Industrial Development Corporation and
Frequently Asked Questions (FAQs). 

Adjournment of the Annual Meeting of the Industrial Development Corporation of the Port of Seattle. 








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INDUSTRIAL DEVELOPMENT CORPORATION AGENDA 
Item No.        1 
Date of Meeting     April 14, 2015 
DATE:        March 27, 2015 
TO:          Ted Fick, Chief Executive Officer 
FROM:       Scott W. Bertram, Supervisor  Corporate Finance & Budget 
SUBJECT:      Approval of the Proposed Minutes of the Industrial Development Corporation of the
Port of Seattle Meeting of April 1, 2014 
ACTION REQUESTED: 
Request Board approval of the proposed minutes of the Industrial Development Corporation of the Port of
Seattle meeting of April 1, 2014. Draft minutes have been circulated to the Board of Directors and approved
minutes will be posted to the Port's website. 













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INDUSTRIAL DEVELOPMENT CORPORATION AGENDA 
Item No.        2 
Date of Meeting     April 14, 2015 
DATE:        March 27, 2015 
TO:          Ted Fick, Chief Executive Officer 
FROM:       Scott W. Bertram, Supervisor  Corporate Finance & Budget 
SUBJECT:      Election of Officers 
REQUESTED ACTION: 
Request Board approval of the Industrial Development Corporation of the Port of Seattle Board of Directors
and Officers for 2015. 
BACKGROUND: 
In accordance with the Bylaws for the Industrial Development Corporation of the Port of Seattle, the
following is a list of the Board of Directors and Officers for the Corporation: 
Stephanie Bowman, Co-President 
Courtney Gregoire, Co-President 
John Creighton, Vice President 
Tom Albro, Secretary 
Bill Bryant, Assistant Secretary 

"Section A. Number and Qualifications. The officers of the Corporation shall be the same as the officers of
the Port Commission and such other officers as may be determined by the Board of Directors from time to
time to perform such duties as may be designated by the Board of Directors." 







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INDUSTRIAL DEVELOPMENT CORPORATION AGENDA 
Item No.        3 
Date of Meeting    April 14, 2015 

DATE:        March 27, 2015 
TO:          Ted Fick, Chief Executive Officer 
FROM:       Scott W. Bertram, Supervisor  Corporate Finance & Budget 
SUBJECT:      Industrial Development Corporation Annual Report for 2014 

SYNOPSIS: 
The Industrial Development Corporation (the "IDC") of the Port of Seattle was established in 1982 pursuant
to Revised Code of Washington (Chap. 39.84). The IDC is a special purpose government with limited
powers and was established for the purpose of facilitating industrial expansion through tax-exempt financing 
by providing companies with access to the tax-exempt credit market through the facilities of the IDC.
Any company with a project that qualifies for tax-exempt financing and qualifies under both RCW 39.84 and
IDC policy may apply for IDC financing. The Port is not the lender and cannot lend credit or give money to
the IDC. Debt issued by a company through the IDC is the sole responsibility of the company and is always
non-recourse to the Port and to the IDC. Bond proceeds go directly to the company borrowing through the
IDC. The companies pay their debt service (principal and interest) to a trustee. 
Any city, county or port in Washington state may establish an IDC, and a number of other jurisdictions have
done so, including King and Pierce Counties; the cities of Seattle, Auburn, Redmond and Kent; and several
other ports.
The majority of projects financed through the Port's IDC occurred between 1982 and 1986. Activity has
since declined, primarily due to the Tax Reform Act of 1986 (the "Act"), which made a number of changes to 
the tax-exempt financing code that ultimately limited the benefits of an IDC financing for both issuers and
investors. For issuers, the Act reduced the number of qualifying projects by narrowing the definition of types
of projects, and eliminated certain depreciation tax advantages. The tax code change also reduced the pool of
investors, (e.g. banks, who were the majority investor) in this market segment by making their effective rate
for holding private activity bonds equivalent to a taxable rate. Item No. 4, FAQs provides more details. 
The IDC is governed by a board of directors comprised of the members of the Port Commission; accordingly,
both the IDC Board and the Port Commission must approve any IDC bond issue. The IDC Board meets at a
minimum once a year during a Commission meeting to elect new officers and review the IDC's annual
financial results. 




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ANNUAL REPORT SUMMARY: 
Attached are the financial statements of the IDC. The IDC had assets totaling $273,817 at year-end 2014,
which consists primarily of existing cash & cash equivalents, and total revenues of $2,454, generated almost
exclusively from interest earnings. 
STATUS OF IDC BONDS: 
At December 31, 2014, there were two companies with outstanding IDC debt totaling $74,725,000, as shown
in the table below:
Company           Outstanding Debt  Maturity Date 
Crowley Marine Services    $ 8,700,000         2021 
Delta Air Lines, Inc. (1)        66,025,000          2030 
TOTAL           $ 74,725,000 
(1) Previously Northwest Airlines Corp. (NWA). NWA merged with Delta Air Lines, Inc. (Delta) in 2008. NWA bonds refunded with Delta
bonds, October 2012. 
MANAGEMENT DISCUSSION: 
The IDC collects customer fees from the companies, based on a customer fee rate and their annual debt
service. The fee can be paid annually or via a one-time lump sum payment at the time the company issues
bonds, and is calculated using the present value of debt service over the life of the bonds. Annual customer
fees are collected from Crowley Marine Services ("Crowley"), whereas Delta made a one-time lump-sum
payment in 2012 during the refunding of the Northwest Airlines bonds. 
Customer fees collected from Crowley in 2014 amounted to only $28. Crowley's IDC debt has a variable
interest rate, and as such, the annual customer fee will fluctuate with interest rates. Due to the continued low
interest rate environment, the actual 2014 and projected 2015 customer fee is small. 
IDC assets are invested in the Port's investment pool and the allocated interest income from the pool in 2014 
was $2,426. The investment income for 2015 is projected to be approximately $2,000. 
2014 IDC expenses totaled $450 and consisted exclusively of Port's staff administrative time. The IDC is
subject to the Washington State Auditor process at least once in every three years, and was last audited in
2013 (covering 2010-2012). Expenses anticipated for 2015 are for Port's staff time only; the next State Audit
will occur in 2016.
The Economic & Trade (E&T) Fellowship Reserves is the undistributed balance of awards to the E&T
Fellowship. The program ended in 2011, and the recipients have five years to spend the award, therefore the
reserve balance is expected to be drawn down by the end of 2016. 
The IDC's charter permits its funds to be transferred only to the Port. Under an amendment to RCW
39.84.130, IDC funds that are not otherwise encumbered for the payment of revenue bonds and are not
anticipated to be necessary for administrative expenses of the IDC may be transferred to the Port to be used
for growth management, planning or other economic development purposes. In order to transfer funds, the
Board of Directors of the IDC needs to adopt a resolution authorizing the transfer. Any transfer of funds
would reduce the assets of the IDC and the interest earnings on these assets. 


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MINIMUM FUND BALANCE RECOMMENDATION: 
Staff recommends that the IDC maintain the current balance of ~$270,000 (less any obligated payments) to
ensure adequate investment earnings to fund annual operating and triennial audit expenses over the next three
years. The low interest rate environment requires a higher fund balance to earn sufficient interest earnings to
cover these anticipated expenses and there are no anticipated additional sources of funds. 

INDUSTRIAL DEVELOPMENT CORPORATION
OF THE PORT OF SEATTLE
BALANCE SHEET
AS OF DECEMBER 31, 2014, 2013, and 2012

December 31,     December 31,     December 31,
2014          2013          2012
ASSETS
Cash and Cash Equivalents       $ 273,789        $ 273,375        $ 261,184 
Accounts Receivable                    28            36            120
TOTAL ASSETS            $ 273,817      $ 273,411      $ 261,304 

LIABILITIES AND EQUITY
E&T Fellowship Reserves (1)     $ 25,438      $ 27,091      $ 28,578 
Accounts Payable                       55   - - 
Equity                           248,324         246,321         232,725
TOTAL LIABILITIES & EQUITY    $ 273,817      $ 273,412      $ 261,304 
(1) The Economic & Trade Fellowship Reserves, is the undistributed balance of approved Scholarship awards to the E&T Fellowship.








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INDUSTRIAL DEVELOPMENT CORPORATION
OF THE PORT OF SEATTLE
INCOME STATEMENT
AND CHANGES IN EQUITY
For The Years Ended December 31, 2014, 2013, AND 2012

December 31,   December 31,     December 31,
2014        2013         2012
INCOME
Customer Fee                 $ 28    $ 16,042      $ 166,232 
Investment Income                     2,426          1,873          1,513
Miscellaneous Income - -        15 
TOTAL INCOME          2,454          17,915          167,759 
EXPENSE
Administrative Expense            $ 462     $ 1,058      $ 8,817 
B&O Tax Expense (1)                   (11)             252          2,991
Other Expense - State Audit -        3,010 - 
Other Overhead - - - 
TOTAL EXPENSE           450          4,320          11,808 
NET INCOME              $ 2,003     $ 13,595     $ 155,952 

BEGINNING EQUITY           $ 246,321      $ 232,725      $ 76,774 
ENDING EQUITY             $ 248,324      $ 246,321      $ 232,725 
(1) Negative B&O Tax Expense in 2014 represents a correction of a duplicate Q4-2013 tax payment.








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INDUSTRIAL DEVELOPMENT CORPORATION
OF THE PORT OF SEATTLE
STATEMENT OF CASH FLOWS
For The Years Ended December 31, 2014, 2013, AND 2012

December 31,     December 31,     December 31,
2014          2013         2012
CASH FLOWS FROM OPERATING
ACTIVITIES:
Cash received from bond issuers           $ 36    $ 16,126       $ 166,228 
Miscellaneous cash receipts - -       15 
Cash paid for expenses                          (2,048)          (5,807)        (20,858)
Net cash provided by
operating activities                     $ (2,012)       $ 10,319       $ 145,385 
CASH FLOWS FROM INVESTING
ACTIVITIES:
Interest on investments                             2,426            1,873           1,514 
Net cash provided by
investing activities                     $ 2,426       $ 1,873       $ 1,514 
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS         $ 414    $ 12,191     $ 146,899 
CASH AND CASH EQUIVALENTS
Beginning of year                     $ 273,375        $ 261,184        $ 114,285 
End of year                         $ 273,789        $ 273,375        $ 261,184 








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INDUSTRIAL DEVELOPMENT CORPORATION AGENDA 
Item No.        4 
Date of Meeting    April 14, 2015 

DATE:        March 27, 2015 
TO:          Ted Fick, Chief Executive Officer 
FROM:       Scott W. Bertram, Supervisor  Corporate Finance & Budget 
SUBJECT:      Overview of the Industrial Development Corporation Frequently Asked Questions (FAQs). 

What is the purpose of an IDC? 
To facilitate industrial expansion through use of tax-exempt financing made available to companies
for qualified projects. 
What does the term "tax-exempt financing" mean? 
It means bondholders (investors) who purchase the bonds do not pay federal income tax on the
interest received on such bonds, as they normally would do on interest-bearing bonds.
How does tax-exempt financing help the institution that is funding capital projects?
Because investors pay no income taxes on interest income, they are generally willing to accept a lower
interest rate than if the bonds were issued on a taxable basis. Thus, tax-exempt bonds provide the
ability to finance many public infrastructure capital projects at a reduced cost. 
What changed in the tax law to make tax exempt financing through the IDC less attractive now than it was
when these projects were financed? 
There are several factors that have adversely affected the use of tax exempt financing over the years.
When our state initially authorized the use of nonrecourse tax-exempt financing, federal tax rules
permitted the financing of a very broad spectrum of projects, including wholesale and retail facilities
as well as warehouse facilities. There was almost no limit on the types of facilities that could be
financed. There are a lot of warehouse facilities in the State (due in large measure to our agricultural
base). As a result, tax-exempt financing was an option for most capital expansion projects. Further,
interest rates were very high (substantially higher than the current interest rate environment). As a
result, tax-exempt financing was especially attractive, when compared to conventional interest rates. 
The Tax Reform Act of 1986 made a number of changes in the tax-exempt financing code sections that
adversely affected the use of tax exempt bonds for business expansion. The tax rules imposed substantial
limitations on the types of facilities that may be financed with tax-exempt bonds.  These limitations
eliminated at least 50-60% of the facilities that had been financed pre-1986.
In addition, before 1986, banks were the largest investors in tax-exempt bonds. The 1986 Tax Reform
Act eliminated banks from the market, by making their effective rate for holding private activity
bonds equivalent to a taxable rate.

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Users of tax-exempt bond financing were also restricted in their depreciation methodology for tax-
exempt bond financed property.  Interest on private activity bonds also is subject to alternative
minimum taxes. The US Treasury proposed the enactment of these rules in order to minimize the
availability of this financing tool.
Who can establish an IDC? 
Any city, county or port in the State of Washington can establish an IDC. 
When and how was the Port's IDC formed? 
The Port's IDC was established on February 9, 1982, pursuant to RCW 39.84. 
What is the boundary of the Port's IDC? 
King County  as defined, it is the "Corporate boundaries of the Port". The IDC may finance projects
within King County. 
What is the Port's IDC's structure? 
It is a special purpose government with limited powers. 
It is governed by a board of directors who are the same as the members of the Port Commission. 
The Port cannot lend credit or give money to IDC. 
Debt is always non-recourse to the Port and to the IDC. 
What law(s) govern the IDC? 
Washington State law RCW 39.84, which is the statute that covers all IDC-related issues. 
Federal law (tax code), which significantly narrows the type of projects that can be financed with tax-
exempt bonds and the type of borrowers who can avail themselves of tax-exempt bonds. Projects that
qualify include those involving manufacturing, processing, airports, docks and wharves, mass
commuting facilities, facilities for the furnishing of water, sewage facilities, solid waste disposal
facilities, qualified residential rental projects, facilities for the furnishing of local electric energy or
gas, local district heating or cooling facilities, qualified hazardous waste facilities, high-speed intercity
rail facilities, environmental enhancements of hydro-electric generating facilities, and qualified public
educational facilities. 
Resolutions on policy adopted by the IDC board. 
What does that resolution stipulate for eligibility of projects? 
The Commission has adopted a policy for judging eligibility of projects:
The IDC will consider only projects or proposals which will further the purposes and objectives of the
Port of Seattle within the confines of state and federal law. 
Tax exempt private activity bonds will be issued only for the financing of projects which broaden and
strengthen the economic base of the Port District by enhancing trade and the movement of passengers
and cargo by air or sea, including: 
o  the development or improvement of marine terminals and airport facilities or components
thereof; 


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o  the development and improvement of commercial and industrial land, manufacturing facilities,
warehouses, terminal and transfer facilities, and related improvements which enhance trade via
Port-owned or operated airport and marine facilities; 
o  the development and improvement of facilities which will enhance or promote the Port's
Comprehensive Scheme; and 
o  the development and improvement of facilities which directly support and assist the movement
of passengers and cargo by air or waterborne transportation, including, but not limited to,
aircraft and ship construction and repair facilities, facilities necessary for the inspection,
weighing, storage, and packaging of cargo; and connecting surface transportation facilities. 
Who assists the Port in deciding which projects to fund? 
When bonds are issued, outside bond counsel is engaged to review and confirm legal compliance and
eligibility of the project for tax-exempt financing. The bond counsel certifies that the issuer has the
legal authority to issue the bonds and that the securities qualify for federal income exemption. 
Who may apply for financing through the IDC? 
Any company with a project that qualifies for tax exempt financing and qualifies under RCW 39.84
(the RCW that covers all IDC issuances) and the IDC policy listed above may apply for IDC
financing.
How much can be spent on financing the project?
The amount of the bond issuance depends of the borrower's ability to repay as determined by
investors; as non-recourse bonds, this is determined solely by the borrower's credit. Generally, all
proceeds from the bond issuance are used for project spending with some exceptions. Under section
147(g) of the Federal Tax Code, any amount of bond proceeds that may be applied to finance the costs
associated with the issuance of qualified private activity bonds (both before and after the issue date) is
limited to 2% of the proceeds of the bond issue. As a general rule, qualified private activity bonds
must satisfy a use test whereby 95% or more of the net proceeds of the bond issue must be used to
finance the qualified purpose for which the bonds were issued.
How does the IDC get compensated? 
The IDC is compensated for administrative expenses related to the bonds by the borrower. The
compensation is based on a percentage of the debt service. Payment is generally a lump-sum paid
when bonds are issued; older bonds had the option of payments made annually through the life of the
bond. 
How does the bond counsel get compensated? 
Bond counsel is paid a fee that is negotiated with the borrower. The fee may be fixed or hourly. A
flat fee is generally based on the type and size of the bond issue. Fees are paid at the time of issuance,
generally out of bond proceeds.
Who are the current outstanding borrowers of IDC funds? 
There are currently two projects that used IDC bonds to finance the project: 
o  Crowley Marine Services: Acquisition and construction of improvements to certain dock facilities
(Pier 16/17) owned by the Port of Seattle. 
o  Delta Air: In 2001, the IDC issued bonds on behalf of Northwest Airlines for the construction of a
two-bay maintenance hangar and a cargo handling facility at SeaTac Airport. In September of

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2012, the Commission gave approval for the bonds to be refinanced by Delta Airlines, which has
acquired Northwest Airlines, so Delta Airlines is now the borrower.  The facility is still in
operation. 
These projects are all completed, but the bond debt is still being paid down. 


















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IDC Frequently Asked Questions 
Appendix A 
Chapter 39.84 RCW 
INDUSTRIAL DEVELOPMENT REVENUE BONDS 
Chapter 39.84 RCW Industrial Development Revenue Bonds can be found in the Washington State
Legislature web site, via the following hyperlink:    http://apps.leg.wa.gov/rcw/default.aspx?cite=39.84.
















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Appendix B 
RESOLUTION NO. 2 
A RESOLUTION of the Industrial Development Corporation of the Port of Seattle adopting a
master policy for the purpose of determining the eligibility of projects or proposals for financing. 
WHEREAS, the Industrial Development Corporation of the Port of Seattle (the "Corporation") is a public
corporation created pursuant to Chapter 300, Laws of Washington 1981 (Reg. Sess.) codified as Chapter
39.84 of the Revised Code of Washington and Resolution No. 2845 adopted by the Port of Seattle
Commission on February 9, 1982; and 
WHEREAS, the Corporation is now desirous of adopting a master policy to determine the eligibility of
projects or proposals coming before the Corporation; and 
WHEREAS, the Corporation wishes to establish and empower a Chief Staff Officer for the Corporation with
the authority to amend, update and revise, when necessary, the initial procedures to carry out the adopted
policies herein; and 
WHEREAS, the initial procedures have been submitted to the Board of Directors of the Corporation and by
adoption of this Resolution represents Board concurrence in the general context and form. 
NOW, THEREFORE, BE IT RESOLVED BY THE INDUSTRIAL DEVELOPMENT CORPORATION OF
THE PORT OF SEATTLE, WASHINGTON, as follows: 
Section 1. It is the basic policy of the Corporation to comply with the applicable Federal and State of
Washington laws and amendments thereto in determining the eligibility of any project or proposal coming
before the Corporation for consideration and/or approval for financing. 
Section 2. The Corporation hereby adopts the following additional policy to determine the eligibility of
projects or proposals for financing by the Corporation: 
A.  The Corporation will consider only projects or proposals which will further the purposes and objectives
of the Port of Seattle as adopted by the Port Commission December 9, 1980 or as further amended from
time to time. 
B.  Tax exempt industrial revenue bonds will be issued only for the financing of projects which broaden and
strengthen the economic base of the Port District by enhancing trade and the movement of passengers
and cargo by air or sea, including: 
(1)  the development or improvement of marine terminals and airport facilities or components thereof; 
(2)  the development and improvement of commercial and industrial land, manufacturing facilities,
warehouses, terminal and transfer facilities, and related improvements which enhance trade via Portowned
or operated airport and marine facilities; 
(3)  the development and improvement of facilities which will enhance or promote the Port's
Comprehensive Scheme; and 
(4)  the development and improvement of facilities which directly support and assist the movement of
passengers and cargo by air or waterborne transportation, including, but not limited to, aircraft and
ship construction and repair facilities, facilities necessary for the inspection, weighing, storage, and
packaging of cargo; and connecting surface transportation facilities. 
A.  The Corporation will not consider projects or proposals that: 
(1)  unnecessarily or unjustifiably subsidize users, i.e., proponents must demonstrate reasonable need
for this form of financing; 

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(2)  create unfair competition or dislocate the balance of competition within the Port District; 
(3)  duplicate existing facilities which already adequately meet current needs; 
(4)  are proposed by others than the directly interested party, or by any proponent unable to
demonstrate a sound operating and financial history; and 
(5)  are not otherwise authorized by the 1981 Local Economic Development Act or other applicable
laws. 
Section 3. The Chief Staff Officer of the Corporation shall be the Executive Director of the Port of Seattle.
The chief staff officer is hereby authorized to carry out the purposes of the policies hereby and henceforth
adopted by the Corporation and may amend, update and revise the procedures of this Resolution as it is from
time to time necessary due to changes in law and/or operations of the Port without prior Commission
approval, except as to fees and assessments to be charged. 
The initial procedures have been submitted to the Board of Directors of the Corporation and by this
Resolution they concur in the general context and form. 
ADOPTED by the Board of Directors of the Industrial Development Corporation of the Port of Seattle,
Washington this 27th day of April 1982. 
JACK BLOCK 
PRESIDENT 
ATTEST: 
HENRY L KOTKINS 
SECRETARY 
(SEAL) 










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IDC Frequently Asked Questions 
Appendix C 

Examples of some local area IDCs** 
City of Kent Economic Development Corporation 
King County Economic Enterprise Corporation 
Industrial Development Corporation of the City of Everett 
Economic Development Corporation of Pierce County 
City of Seattle Industrial Development Corporation 
City of Redmond Economic Development Corporation 
City of Auburn Economic Development Corporation 
Industrial Development Corporation of Kitsap County 
** Entities listed established IDCs. This is a partial representative list, and does not include all
IDCs and Entities with the IDCs in the State of Washington. 












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