PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.       6c 
ACTION ITEM             Date of Meeting    June 5, 2012 

DATE:    May 29, 2012 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:   Mark C. Griffin, Director, Real Estate Development 
SUBJECT:  Des Moines Creek Business Park - Puget Sound Energy Ground Lease and City of
Des Moines Second Development Agreement 

Amount of This Request:  $6,545,000  Source of Funds: Airport Development Fund 
Est. State and Local Taxes: $7,000,000   Est. Jobs Created: 200 construction jobs 
Est. Total Project Cost:    $6,545,000 
ACTION REQUESTED: 
Request Commission authorization for the Chief Executive Officer to execute substantially
consistent with the terms described in this memorandum:  (i) a ground lease and related
agreements with Puget Sound Energy, Inc. (PSE) and Benaroya Capital Co. LLC or an affiliated
entity (Benaroya); and (ii) a Second Development Agreement with the City of Des Moines 
(City), including authorization to pay the City $6 million to fully satisfy all frontage
improvements in-lieu fees that will become due as the Des Moines Creek Business Park
(DMCBP) site is developed. The Port's actual out-of-pocket expenses from the proposed ground
lease are anticipated to total approximately $545,000. The Port will also provide rent credits to
PSE in an amount not to exceed $1.836 million for stormwater and street improvements 
benefitting both PSE's leased premises and the larger DMCBP site that Benaroya will construct
as part of the project. 
SYNOPSIS: 
Staff proposes to enter into a ground lease agreement for an approximately 42.3-acre site within
the DMCBP with PSE. The rent is approximately $920,000 per year. PSE will assign its interest
in the ground lease to Benaroya. Benaroya will then develop a new operations center on the
DMCBP site and lease the improvements back to PSE.
Staff also proposes to enter into a related Second Development Agreement with the City. The
development agreement specifies the terms and conditions associated with development of the
DMCBP site as a whole, including that portion to be leased by PSE for its proposed facility.
This agreement provides for the Port making a $6 million payment to the City to cover all
frontage improvements in-lieu fees that will be owed as development of the DMCBP site

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 29, 2012 
Page 2 of 12 
advances. Funding for the Port's out-of-pocket expenses are spread over two years (2012 and
2013). These funds are included in the Airport's 2012 operating budget and will be included in
the 2013 operating budget.
Approximately 250 permanent jobs will be located onsite, and more than 200 construction jobs
will be generated from building PSE'simprovements. The average annual earnings will total
approximately $71,000 per PSE employee. 
BACKGROUND: 
From 1989 to 1993, the Port acquired approximately 77 acres of residential lots in the City of
Des Moines (City) as part of the Airport's noise mitigation program. The Port purchased
approximately 12 acres of abandoned streets in 2011 from the City, King County and the
Washington State Department of Transportation. Together, this roughly 89-acre assemblage is
now referred to as the DMCBP. The DMCBP site has been vacant since the Port completed the
residential acquisitions.  Market conditions stemming from the economic recession halted earlier
plans to ground lease the entire DMCBP site to a developer in 2008. 
Representatives for PSE approached staff in late 2010 about leasing a portion of the DMCBP to
accommodate PSE's need for a new operations facility. After considering other available sites in
south King County, PSE chose the DMCBP site. Staff negotiated and signed a letter of intent
with PSE in August 2011. PSE's new facility will replace and consolidate other facilities located
in the cities of Kent, Renton and SeaTac and would represent the first tenant in the DMCBP.
The DMCBP site's more central location within its service area will allow PSE to better service
its infrastructure and clients. PSE is the state's oldest local energy utility. It serves 1.1 million
electric customers and more than 750,000 gas customers in 11 counties.
The City supports the ground lease with PSE. To facilitate development of PSE's facility, the
proposed Second Development Agreement addresses the roles, responsibilities, and obligations
between the Port, as the owner of the DMCBP site and the City as the permitting authority.
Benaroya, as the developer of PSE's facility (and other future developers within the DMCBP),
will be subject to the Second Development Agreement. The proposed agreement builds on Port
staff's ongoing collaboration with City staff to ready the DMCBP site for redevelopment. Since
2005, Port and City staff have cooperated in completing a conceptual master plan, an
environmental impact statement, and a first development agreement.
KEY GROUND LEASE PROVISIONS: 
A draft of the proposed ground lease is included as Attachment 2. The proposed terms of the
ground lease include: 
Lessee; Assignee. PSE is the lessee under the ground lease. PSE will assign its interest
in the lease to Benaroya or an affiliated entity. Benaroya will design, permit, finance, construct
and own the improvements. Benaroya will lease the completed improvements back to PSE.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 29, 2012 
Page 3 of 12 
Leased Premises. The leased premises cover approximately 42.3 acres at the north end
of the DMCBP site. This area includes approximately 36.4 acres that will be the basis for the 
rent calculation and approximately 5.9 acres of environmentally critical areas (e.g., steep slopes
and wetlands) along the western boundary of the site that are unbuildable. These 5.9 acres are
excluded from the rent calculation and would otherwise be unleaseable but are included within
PSE's premises to make its premises co-extensive with the DMCBP's western boundary line.
Initially, PSE's leased premises will also encompass an additional approximately 7.8 acres (for a
total of approximately 50.1  acres) to allow Benaroya to construct stormwater and street
improvements that will serve both PSE's premises and the larger DMCBP site as described in the
"Rent Credits" paragraph below. This additionalarea will be removed from PSE's premises
upon completion of the improvements and recordation of the final short plat. 
Attachment 1  Site/Lot Map identifies the various components of PSE's leased premises. 
Term. The term is 20 years and includes three, 10-year options to extend the initial term
to as long as 50 years. 
Use. Benaroya will build and PSE will occupy an operations center comprised of two
primary components: 
o  Warehouse. The warehouse totals approximately 281,000 square feet and will
provide receiving, storage and materials distribution for PSE's gas and electric
operations throughout the region.  The warehouse will include supporting shop
functions for testing and maintenance of systems and materials and for fleet vehicle
outfitting. Electric and gas operations work crews responsible for construction and
maintenance of PSE's utilities will also operate from the warehouse. In addition, the
warehouse will serve as an emergency, storm, and maintenance operations base for
gas and electric first response.
o  Storage Yard. Approximately 21 acres of the leased premises will be devoted to an
outdoor storage yard for materials storage and management. A substation/operations
shop and waste management facilities totaling approximately 37,000 square feet will
be located within the storage yard area. PSE also plans to build some covered
materials storage. 
PSE may pursue at some future date a three to five-story office building that is currently
expected to be 75,000 to 125,000 square feet and that would be located adjacent to the
warehouse. 
Option Payments. PSE will pay monthly option payments to the Port as consideration
for exclusive control of its site during the entitlement period. The option payments equal $6,000
per month for the first five months of the entitlement period and $8,000 per month for months 6
through 18.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 29, 2012 
Page 4 of 12 

Rent Commencement Date. Base rent will be due when PSE has obtained a building
permit to begin building construction but not later than 18 months after the lease is executed.
Alternatively, PSE will begin paying rent if it chooses to begin site work on the project upon the
issuance of a grading and clearing permit and prior to the issuance of a building permit. 
Rental Rate; Annual Rent.  The initial five-year rental rate is $0.58 per land square foot
per year triple net. This rate results in annual rent of approximately $920,000 or approximately
$76,600 per month. 
Rent Credits.  Benaroya will construct stormwater and street improvements that will
benefit both PSE's leased premises and the larger DMCBP site. PSE will receive a credit from
the Port against the base rent otherwise due for the Port's proportionate share of these costs as
follows: 
o  Industrial Stormwater Detention Pond. A single stormwater detention pond will
be designed and constructed for the "industrial" portion of the DMCBP site. A single
pond represents the most efficient use of the DMCBP site and the most cost-effective
approach to managing surface water runoff from the industrial pad. PSE's leased
premises will consume approximately 69% of the pond's capacity and the remaining,
yet-to-be-leased portion of the industrial pad will consume approximately 31%. The
Port will provide PSE with a rent credit for 31% of the design and construction costs
of the pond in an amount not to exceed $736,000. The Port will bear no construction
risk for costs exceeding this rent credit. 
o  South 208th Street. This street will serve as the northern boundary and access point
for PSE's leased premises and will also provide access to the Port's property
immediately north of this street in the City of SeaTac. The Port will provide PSE
with a rent credit for 49% of the design and construction costs of this street in an
amount not to exceed $550,000. The Port will bear no construction risk for costs
exceeding this rent credit. 
o  South 212th Street. This street will serve as the southern boundary and access point
for PSE's leased premises and will also provide access to the remaining, unleased
portion of the industrial pad of the DMCBP site. The Port will provide PSE with a
rent credit for 49% of the design and construction costs of this street in an amount not
to exceed $550,000. The Port will bear no construction risk for costs exceeding this
rent credit. 
Rental Rate Adjustments. Adjustments to the base rent will occur every five years.
The base rent will increase by the cumulative Consumer Price Index over the prior five years
with a "floor" on any five-year increase of 2.5% per year compounded annually and a "ceiling"
of 4.5% per year compounded annually. For each of the three, 10-year options to extend the

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 29, 2012 
Page 5 of 12 
initial term that PSE may exercise, the leased premises will be re-appraised and the base rent will
be adjusted to the then-current fair market value rental rate.
Operating Expenses. The lease will be an absolute "net lease" to the Port. The base
rent due the Port will be free of all charges and deductions. PSE will pay all the costs and
expenses incurred with respect to the operation and maintenance of its leased premises. 
In-Lieu Fee Payment - 24th Avenue South Frontage Improvements. Pursuant to the
proposed Second Development Agreement described below, the Port will make an early in-lieu
payment to the City for the frontage improvements associated with the City's widening of both
24th Avenue South and South 216th Street, the eastern and southern boundaries of the DMCBP
site. The City refers to the widening of these two streets as its "Transportation Gateway Project"
(Gateway Project). PSE will pay its proportionate share of the 24th Avenue South frontage
improvements based on the percentage (approximately 54%) of its leased premises that front on
24th Avenue South. PSE's payment equals approximately $2.6 million. The City requires the in
lieu fee payment as a condition for its issuance of a building permit for PSE's proposed facilities. 
Property Condition; Hazardous Substances. The Port will deliver the site to PSE in its
"as is" condition. The Port will be responsible for any contamination existing on PSE's leased
premises prior to the lease.  The lease provides for establishing a pre-lease environmental
conditions baseline and a work plan to appropriately manage any contamination discovered
during construction. The lease also provides for periodic environmental audits during PSE's
tenancy and outlines a site investigation process at the end of the PSE's tenancy to address any
environmental liability issues after PSE vacates the premises. 
Entitlement.  PSE will be responsible for completing environmental review and for
preparing and submitting all applications, plans, and other documentation required to obtain the
permits and approvals necessary to construct and operate its facilities. PSE will have up to 18
months to complete this work. 
Short Plat. The Port will be responsible for preparing and filing a short plat application
to create new legal lots for the DMCBP site and to vacate the existing residential lots. The final
short plat cannot be recorded until Benaroya has completed PSE's improvements. Staff will
return to the Commission after construction is completed with a property surplus resolution to
authorize conveyance to the City of the site improvements (South 208th Street, South 212th Street
and the Industrial Stormwater Detention Pond) that are to be dedicated or deeded to the City as
part of the final short plat recordation as described in the proposed Second Development
Agreement. The City will then responsible for long-term maintenance of these improvements.
An amendment to the ground lease will also be necessary to update the legal description of
PSE's leased premises. 
Security Deposit. PSE will pay a security deposit equal to one year of base rent.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 29, 2012 
Page 6 of 12 
Termination. After executing the lease, PSE will have the right to terminate the lease at
any time before the rent commencement date. In addition, PSE may terminate the lease after the
rent commencement date with respect to any unexpected, pre-existing contamination that
substantially delays construction of PSE's improvements. Upon any such termination, the option
payments and base rent received prior to the termination date will be non-refundable. 
Right of First Offer. PSE will have a one-time right of first offer to purchase its leased
premises should the Port choose to sell the property to a third party during the initial 20-year
term of the lease or any extension. This right is personal to PSE and is non-assignable. 
Assignment/Subletting. Assignment and subletting are generally prohibited without the
Port's prior written consent. However, PSE may assign all or a portion of its interest in the lease
or sublease all or a portion of its leased premises to Benaroya to allow for development of its
improvements. In addition, PSE may assign or sublease to (i) to an affiliate of PSE, (ii) as
collateral for PSE's corporate mortgages; or (iii) in connection with any merger, reorganization
or sale of all or a portion of PSE's assets. 
Mortgage Financing. Any mortgage will be subject and subordinate to the Port's rights
in the lease and the leased premises. 
Brokerage Commission.  The Port will pay MetPartners, PSE's broker, a brokerage
commission of approximately $382,000. T his commission equals 5% of the rent payments for
years 1 through 5 of the lease plus 2.5% of the rent payments for years 6 through 10. The
commission will be paid one-half at the rent commencement date and one-half after all
termination rights have lapsed at the issuance of a certificate of occupancy for PSE's facility.
FAA Approval. The Port's execution of the ground lease is subject to the Federal
Aviation Administration's review and approval. 
GROUND LEASE - FINANCIAL IMPLICATIONS: 
The initial base rent rate of $0.58 per land square foot per year triple net represents a 9.6% return
on land valued at $6 per square foot based on a September 2010 appraisal of the DMCBP site. A
local brokerage firm with pertinent leasing experience and market familiarity provided an
opinion letter validating the assumed land value and rental rate as fair market rates prior to staff's
execution of the letter of intent in August, 2011.
Budget Status and Source of Funds: Funding for the Port's actual out-of-pocket expenses
associated with the ground lease spread over two years2012 and 2013and are included in the
Airport's 2012 operating budget and will be included in the 2013 operating budget.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 29, 2012 
Page 7 of 12 
Financial Analysis and Summary: 
CIP Category             Revenue/Capacity Growth 
Project Type              Business Expansion 
Risk adjusted discount rate     8.5% 
Key risk factors             PSE fails to make its rent payments or otherwise
defaults under the ground lease terms. 
Project cost for analysis        The Port's actual out-of-pocket expenses from the
proposed ground lease (e.g., the brokerage commission, 
owner's representative services, short plat preparation
and application fee, etc.) will accrue over two years
2012 and 2013. These expenses are anticipated to total
approximately $330,000 in 2012 and $215,000 in 2013.
Business Unit (BU)          Business Development 
Effect on business performance  Funding for the Port's actual out-of-pocket expenses
associated with the ground lease is included in the
Airport's 2012 operating budget and will be included in
the 2013 operating budget. The ground lease provides
for PSE's reimbursement of up to $80,000 of the Port's
owner's representative expenses. 
IRR/NPV             The 20-year NPV of the PSE lease revenue stream is
approximately $11.4 million. 
CPE Impact             Not applicable. 
For comparative purposes, a potential sale of PSE's  leased premises could result in
approximately $10 million in sale proceeds assuming a $6 per square foot land value and
transaction costs totaling 10% of the total land value. However, because the Port used FAA
noise grants to acquire most of the PSE parcel and the larger DMCBP site, any sale (unlike a
lease) would require the Port to either reimburse the FAA with approximately 80% of the sale
proceeds, or place the proceeds in escrow pending utilization by the Port for a FAA granteligible
project. A reimbursement to the FAA, if it were to occur, would reduce the Port's net
sale proceeds to approximately $2 million, which is considerably less than the $11.4 million that
is the 20-year NPV of the PSE lease revenue stream. 
KEY DEVELOPMENT AGREEMENT PROVISIONS: 
A draft of the proposed Second Development Agreement is included as Attachment 3. The
proposed terms of the development agreement include: 
Frontage Improvements.   As the DMCBP site is built  out, the Port (or its
developers/tenants) will be responsible for paying for 50% of the frontage improvements along
South 216th Street and 24th Avenue South as part of the Gateway Project as required by the
City's Comprehensive Transportation Plan and the Des Moines City Code. Instead of each
individual property owner constructing the improvements, the City accepts in-lieu cash payments
and in turn assumes responsibility for actual construction of the frontage improvements.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 29, 2012 
Page 8 of 12 
Typically, these in-lieu payments are due when building permits are issued for construction
fronting on these two streets. As such, only the portion of the DMCBP site being leased by PSE
will be imminently due. However, given the DMCBP site's substantial frontage along both
streets and the magnitude and complexity of the Gateway Project, completing construction in
incremental stages would be significantly more costly than widening the streets as one integrated
project. I ncremental construction would have to account for interim roadway transitions, utility
terminations, and other temporary systems. The City estimates that this would increase the
Gateway Project costs by at least 20% to 30%. Consequently, the City has proposed the Port
make an advance payment of all in-lieu fees that will become due as the DMCBP site is built-out
in order to minimize the overall cost of the Gateway Project (and by extension the fees paid by
each property owner with street frontage). The Port's early paymentwill assist the City in
securing state and/or federal grants that are being sought to complete the Gateway Project. To
induce the Port's advance payment of all in-lieu fees that will eventually become due, the City is
reducing the Port's total payment from approximately $9.1 million to $6 million assuming the
Port's payment by the following dates: 
o  South 216th Street. The City has secured a Transportation Improvement Board
grant of $4 million for construction of segment 2 of the Gateway Project. This grant
requires construction of this segment be underway in the first quarter of 2013. To
facilitate the City's adherence to this schedule and to provide the necessary local
match for the grant, the Port will make an in-lieu payment to the City of $2.5 million
(instead of approximately $4.3 million) on or before January 31, 2013. $4.3 million
represents 50% of the City's construction cost estimateand is the amount that would
be due without early payment. In return, the City agrees that the requirement for the
Port to construct frontage improvements along South 216th Street will be fully
satisfied. Staff reviewed and confirmed the City's construction cost estimate as
reasonable. 
o  24th Avenue South. The City is seeking federal, state, and/or regional grants for
construction of this segment.  To assist in the City's timely construction of this
segment and to provide the local match needed for pending grant applications, the
Port will  make an in-lieu payment to the City  of $3.5 million (instead of
approximately $4.8 million) on or before May 31, 2013. $4.8 million represents 50%
of the City's construction cost estimateand is the amount that would be due without
early payment. In return, the City agrees that the requirement for the Port to construct
frontage improvements along 24th  Avenue South will be fully satisfied.  Staff
reviewed and confirmed the City's construction cost estimate as reasonable.
o  20th Avenue South Traffic Signal. Based on the DMCBP environmental impact
statement (EIS), one of several off-site improvements that will be required as
DMCBP site is built-out is the installation of a traffic signal at the intersection of
South 216th Street and 20th Avenue South. This improvement is part of the Gateway
Project and is included in the in-lieu cash payment for South 216th Street.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 29, 2012 
Page 9 of 12 
o  Transportation Impact Fees. In consideration for the Port fully paying all in-lieu 
fees early, the Port will not be required to pay transportation impact fees that may
otherwise be due for the duration of the second agreement. Other project and system
improvements (i.e., mitigation) identified in the EIS will be required as the DMCBP
site is built-out.
Retail Development  Purchase Option. The Port will allow the City until September
28, 2012, to decide whether to negotiate an option for retail development on the southern portion
of the DMCBP site. If the City elects to negotiate an option agreement, the Port and City will
develop the agreement within three months of the City's notice. The option agreement will
outline the terms for a fixed-term, assignable option not exceeding two years for the City (or its
assignee) to acquire the southern portion of the DMCBP site for retail development. If the City
chooses not to negotiate an option, the Port will pursue development of this area for other
business park uses. 
Access and Internal Roadways.  The Port (or its developers/tenants through ground
lease agreements) will construct two new streets, South 208th Street and South 212th Street, that
upon completion will dedicated to and maintained by the City as public streets. South 212th 
Street, or the internal loop roadway, will be constructed in two phases. The first phase will be
constructed concurrent with development of PSE's leased premises. Construction of the second
phase will occur with development of the remainder of the DMCBP site.
Stormwater Management.  The Port (or its developers/tenants through ground lease
agreements) will construct stormwater facilities to address surface water runoff. One detention
pond will be constructed with PSE's facilities and will serve the "industrial" portion ofthe
DMCBP site, and a second pond will be constructed for the "retail" portion as shown on
Attachment 2  Site/Lot Map. Per City code, both stormwater facilities will be deeded to the
City upon completion and maintained by the City. 
Duration and Termination. The Second Development Agreement will remain in effect
for 15 years unless the term is extended, the DMCBP is fully developed, or the agreement is
terminated.
Vesting of Development Regulations. All development regulations that govern
development of the DMCBP site and that are in effect when the City approves the development 
agreement will vest for a 15-year period, subject to the City's authority to impose new or
different regulations to the extent necessary or required to address a threat to public health or
safety. In addition, c ompliance with the International Building Code, the City's street design and
construction standards, and other regulatory codes adopted by the state and county may preempt
the development regulations in effect as of the date the Port submits a particular development
application to the City for review.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 29, 2012 
Page 10 of 12 
DEVELOPMENT AGREEMENT -FINANCIAL IMPLICATIONS: 
The City proposes and the Second Development Agreement provides for the Port's payment of
$6 million in 2013 for frontage improvements in-lieu fees. 
Budget Status and Source of Funds: The City only recently (by letter dated March 19, 2012)
requested the Port's early payment of all in-lieu fees for the required frontage improvements. As
such, the $6 million is not in the 2012 operating budget. The City does not require payment until
2013. This amount will therefore be included in next year's operating budget if approved. 
Financial Implications: The $6 milllion payment will be accounted for as a prepaid permit fee
and recorded as an asset. As the reimbursements become due, the prepaid permit fee will be
reduced, and the Port will recognize both operating revenues and operating expenses. Upon
successfully leasing out the DMCBP site, the Port will have recognized $9.1 million in operating
revenues and $6 million in operating expenses. From an accounting standpoint, if the Port is not
successful in leasing out the remaining land, a loss will be incurred to write off any remaining
prepaid asset. From a cash flow perspective, the PSE lease revenue would pay back by 2016 the
approximate $3.4 million that is not being paid by PSE and that is to be recouped from future
tenants. None of these tran sactions will impact airline costs per enplanened passenger (CPE). 
ENVIRONMENTAL SUSTAINABILITY: 
The proposed ground lease includes language that encourages PSE to integrate sustainable
development elements in the planning, design, construction and operation of its improvements to
the extent such elements are  technically and financially practical.  The proposed second
development agreement calls for the use of "low impact development" features in the design and
operation of the stormwater management facilities. 
TRIPLE BOTTOM LINE SUMMARY: 
The proposed ground lease is expected to produce the following economic benefits:
Jobs: Approximately 250 permanent jobs will be located onsite. Over 200 construction jobs
will be generated from building PSE's improvements. 
Earnings: Average annual earnings will total approximately $71,000 per PSE employee. 
Gross Receipts: No taxable gross receipts will flow from the facility. However, the parts,
supplies and materials delivered to the facility are subject to retail sales tax. The annual
value of these items is estimated to be between $50 million and $84 million. 
Construction Cost and Development Value:  The preliminary estimated construction cost
of PSE's facilities is $75 million to $80 million. The value of the buildings and other site
improvements upon completion is expected to be approximately $100 million.  Gross 
receipts during construction are expected to total $77.5 million, and employees will earn
approximately $13 million during construction.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 29, 2012 
Page 11 of 12 
Ongoing, Direct Tax Revenues:  Direct state and local tax revenues from the
facility are estimated at $7 million annually, with approximately $676,200 going to the City. 
One-time, Direct Tax Revenues: Direct, one-time tax revenues generated onsite from
construction are estimated to be $7.4 million, the bulk of which will be paid to the state. The
City's share is estimated to be approximately $648,000. 
In addition, the proposed lease would also assist in the protection and enhancement of
environmentally critical areas along the western edge of PSE's leased premises. 
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS: 
Ground Lease: With respect to the proposed ground lease with PSE, the following alternatives
were considered: 
Alternative 1: Do Nothing 
The Port does not enter into the lease with PSE, and the property would be available for future
lease or sale. This alternative results in no near-term revenue and other economic benefits for
both the Port and the City. This is not the recommended alternative. 
Alternative 2: Sell the Site 
The Port sells the PSE parcel. This alternative would trigger the FAA reimbursement obligation
described in the "Financial Implications"  section above.  This is not the recommended
alternative. 
Alternative 3: Lease the Site 
The Port leases the site to PSE. This alternative yields the revenue and other economic benefits
for the both the Port and the City as described above. This is the recommended alternative. 
Second Development Agreement:  With respect to the proposed Second Development
Agreement and the Port's early payment of all in-lieu fees for the required frontage
improvements along 24th Avenue South and South 216th Street, the following alternatives were
considered: 
Alternative 1: No payment by the Port 
The Port could decline to make full early payment of the in-lieu fees. Doing so, however, would
prevent the City from accessing grant funds awarded for the South 216th Street segment. This
would delay construction and likely result in higher in-lieu fees as the DMCBP site is built-out.
This is not the recommended alternative. 
Alternative 2: Full payment by the Port 
The Port's early payment of all in-lieufees will save the Port approximately $3.1 million (the
Port's obligation willtotal $6 million instead of approximately $9.1 million). Approximately
$2.6 million will be paid by PSE as described in the "In-Lieu Fee Payment" paragraph above.
The remaining amount will be recovered from the DMCBP's future developers/tenants. In

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 29, 2012 
Page 12 of 12 
addition, the City will not exact the cost associated with the required traffic signal at 20th Avenue
South and has agreed to waive all transportation impact fees that might otherwise be due as the
DMCBP site is built-out. This is the recommended alternative. 
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: 
Attachment 1  Site/Lot Map 
Attachment 2  Draft Ground Lease 
Attachment 3  Draft Second Development Agreement 
Powerpoint presentation 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
There are no previous commission briefings or actions specifically related to theproposed PSE 
ground lease or the Second Development Agreement with the City.  However, previous
commission actions or briefings related to the DMCBP project include: 
November 9, 2010  Second Reading/Final Passage of Resolution No. 3646, surplusing
property need by the City of Des Moines for right of way. 
November 2, 2010  First Reading of Resolution  No. 3646, surplusing property needed by
the City of Des Moines for right of way.  Commission authorized acquisition of the
abandoned streets within the DMCBP site. 
July 22, 2008  Commission authorized execution of the first addendum to the first
development agreement with the City. 
February 27, 2007  Staff briefing on progress on the DMCBP project. 
June 8, 2006  Staff briefing on the completed conceptual master plan. 
August 23, 2005  Commission authorized preparation of the conceptual master plan. 
June 28, 2005  Commission authorized the execution of the first development agreement
with the City.