PORT OF SEATTLE 
MEMORANDUM 

COMMISSION AGENDA             Item No.:       5a 
ACTION ITEM 
Date of Meeting:      May 3, 2011 
DATE:    April 26, 2011 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:    Michael Burke, Director, Lease and Asset Management 
Scott Pattison, Asset Manager, Lease and Asset Management 
SUBJECT:  Second Amendment to Crowley Marine Services, Inc. Lease at Piers 16/17. 

ACTION REQUESTED: 
Request for Commission Authorization for the Chief Executive Officer to execute the Second
Amendment to Crowley Marine Services, Inc. (CMS) Lease No. 262 at Piers 16/17 to reduce the
submerged lands portion of CMS's lease by 13,100 square feet and to reduce the annual rent by
$5,361.84. 
SYNOPSIS: 
On July 13, 2010, the Commission authorized construction funding for the North Harbor Island
Mooring Dolphin Project. In early August 2010, Port staff determined that if the maximum barge
size (400' x 100') were to use the West Berth of the new North Harbor Island Mooring Dolphins,
a small portion of the berth area would infringe on submerged land the Port was already leasing
to CMS. Port staff began working immediately on a solution that would resolve this potential
usage infringement. Execution of the proposed Second Amendment to the CMS lease is required
to correct this encroachment on leased property. The proposed amendment reduces CMS's
submerged lands portion of its premises by 13,100 square feet, from 544,347 to 531,247 square
feet. 
The total annual rent from CMS would be reduced by $5,361.84 per year, from $495,049.68 to
$489,687.84 per year. Approving this amendment will enable full utilization of the West Berth
area at the adjacent North Harbor Island mooring dolphins by allowing the Port to market the
new facility to the largest barge size the facility is constructed to service, without encroaching on
CMS's submerged premises. CMS supports this Amendment. 
The Port has a tenant that is prepared to locate to the West Berth under a lease agreement. With
this agreement, staff projects additional revenue of $62,000 per year upon the approval of this
amendment to the CMS lease.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
April 26, 2011 
Page 2 of 4 
BACKGROUND: 
The Industrial Moorage Initiative was presented at the June 3, 2008, Commission meeting and
outlined a three-phased approach to preserving, restoring, and expanding harbor moorage for
industrial vessels in our harbor. 
On August 11, 2009, the Commission authorized design funding of the North Harbor Island
Mooring Dolphin Project. On July 13, 2010, the Commission authorized construction funding of
the North Harbor Island Mooring Dolphin Project. The replacement berths are designed to
handle the larger class of modern barges than was previously possible at this location. In order to
make space for these larger barges at the West Berth, it is necessary to reduce the submerged
lands in the CMS lease by 13,100 square feet. 
CMS and its predecessors have been Port of Seattle tenants for more than thirty-five years. CMS
provides worldwide, specialized marine transportation and logistics services, operating one of
the world's largest fleets of marine and related equipment. In the Seattle harbor, the company 
administers ship-assists and tanker escorts; petroleum sales; contract barge transportation; ocean
towing; maritime logistics and support services; marine salvage, and marine emergency response
services. CMS is supportive of this Amendment, as it would expand barge moorage in the Seattle
harbor for larger barges, such as those owned and operated by CMS. 
Approval of this request will result in a reduction in the amount of rent from CMS by $5,361.84,
and will preserve the capacity to maximize revenue at the North Harbor Island West Berth as
described in the July 13, 2010, Commission Memo when the Harbor Island Mooring Dolphin
Project was approved. 
FINANCIAL IMPLICATIONS: 
Source of Funds: 
No funds needed. 
Financial Analysis and Summary: 
CIP Category      NA 
Project Type       NA 
Risk adjusted     NA 
Discount rate 
Key risk factors      The CMS lease requires annual rental rate adjustments for submerged land
based on the Consumer Price Index (CPI). Effect on business performance
shown below assumed a 2.5% average annual CPI increase through lease
expiration of December 31, 2021. 
Marketing efforts are currently underway to maximize utilization of the
West Berth of the North Harbor Island mooring dolphins, as well as for
other Port barge moorage locations throughout the harbor.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
April 26, 2011 
Page 3 of 4 
Project cost for     NA 
analysis 
Business Unit (BU)  Seaport Leasing and Asset Management 
Effect on business   Impact on Net Operating Income (NOI) and NOI after Depreciation for years
performance      2011 through 2015 from the Crowley Marine Services (CMS) lease
amendment is shown below. 
NOI (in $000's)        2011     2012     2013     2014     2015
NOI            ($4)    ($5)    ($6)    ($6)    ($6)
Depreciation          $0       $0       $0       $0       $0
NOI After Depreciation    ($4)      ($5)      ($6)      ($6)      ($6)
The above reduction in revenue from the CMS lease amendment preserves the
ability to fully utilize the West Berth of the newly constructed North Harbor
Island mooring do lphins. Annual revenue for the mooring dolphins West
Berth is currently estimated at $85,000/yr. Revenue from the North Harbor
Island mooring dolphins is not included in the NOI impacts above.
IRR/NPV       FOR INFORMATION ONLY:
The financial analysis prepared for the Commission approval of the North
Harbor Island mooring dolphin project has been updated to consider the
impact of the revenue reduction from the Crowley Marine Services (CMS)
L ease Amendment. The resulting change in NPV and IRR for the North
Harbor Island Mooring Dolphin project is shown below. 
North Harbor Island Mooring Dolphins   NPV    IRR
Financial Impacts              (in $000's)  (%)
July 13, 2010 Commission Memo  ($28)   7.0%
May 3, 2011 Commission Memo  ($68)   6.9%
STRATEGIC OBJECTIVES: 
Develop New Business and Economic Opportunities for the Region and the Port by
rebuilding the North Harbor Island layberth facilities to moor the new class of larger
barges frequenting our harbor, increasing the Port's financial performance in the process. 
Ensure Seaport Vitality by increasing potential revenue to the Port of Seattle by returning
the North Harbor Island layberth facilities to productive service. 
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS: 
Execute the Second Amendment to CMS Piers 16/17 Lease, reducing its lease area by
13,100 square feet and reducing annual rent by $5,361.84. The proposed amendment will
correct infringement on leased property, and allow the Port to expand the berth area at the
West Berth of the North Harbor Island dolphins. This is the recommended alternative. 
Do not amend the CMS Lease. This alternative will limit the capacity of the West Berth
to one barge up to 280 feet, rather than two barges each up to 400 feet long. The Port
would not be maximizing the use of the West Berth and would be required to restrict the

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
April 26, 2011 
Page 4 of 4 
size of the barges using this berth to a smaller vessel size than the facility was constructed
to handle. Revenue would decline accordingly. 
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: 
Second Amendment to CMS lease at Piers 16/17 signed by CMS. 
PREVIOUS COMMISSION ACTION OR BRIEFING: 
July 13, 2010  Commission authorization for construction funding CIP# C800182. 
August 11, 2009  Commission authorization to design, permit, and procure long lead
materials to reconstruct four (4) mooring dolphins at the north end of Harbor Island. 
June 3, 2008  Industrial Moorage Initiative - policy and staff briefing. 
November 27, 2001  Authorization for the Managing Director to execute the First
Amendment to CMS lease at Piers 16/17, and project-wide authorization to execute
agreements related to Pier 17 Partial Replacement project. 
November 13, 2001  Authorization for the Managing Director to execute a reforming
amendment to Pier 16/17 lease with CMS and indemnity agreement. 
December 14, 1999  Commission approved the adoption by the Board of Industrial
Development Corporation of the Port of Seattle of an Official Declaration of Intent to
Issue Nonrecourse Revenue Bonds for the purpose of paying and reimbursing Capital
Expenditures associated with the CMS building; Resolution No. 3380 Surplusing certain
Pier 16 personal property; and Resolution 3181 authorizing major and small works
construction contracts for Pier 17 maintenance and repair. 
December 9, 1999  Authorization for the Managing Director to execute a Term Lease
with CMS at Piers 16/17.