PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA             Item No.      6b 
Date of Meeting     March 1, 2011 

DATE:    February 28, 2011 
TO:     Tay Yoshitani, Chief Executive Officer 
FROM:    Michael Burke, Senior Manager, Lease and Asset Management 
Fred Chou, Capital Project Manager 
SUBJECT:  Terminal 10 Utility Infrastructure Upgrade Project 
CIP #C800264 
Amount of This Request:  $6,225,000       Source of Funds: General Fund 
Est. State and Local Taxes: $512,000         Est. Construction Jobs Generated: 63 
Total Project Cost: $7,205,000 
ACTION REQUESTED:
Request authorization for the Chief Executive Officer to (1) enter into an agreement with
Lockheed Martin Corporation; and (2) in accordance with Resolution No. 3628, advertise, 
award, and execute construction contracts for the Terminal 10 Utility Infrastructure Upgrade
Project, for an additional estimated cost of $6,225,000, bringing the total authorized amount of
this project to $7,205,000. If the pending agreement is not finalized by the time of selection of a 
contractor, the project will not be awarded, and construction will likely be delayed until 2012. 
SYNOPSIS:
The proposed project at Terminal 10 will add to the Seaport's long-term capability by providing
improved, secure container cargo marshalling area and drayage truck parking. The Port is proposing
to construct the following utility infrastructure improvements at Terminal 10: 
Installation of a replacement storm water conveyance system and outfall to the West
Waterway; 
Site leveling and placement of a uniform upland pavement vehicle use surface and
improved environmental cap; 
Installation of lighting; 
Layout of parking and vehicle use areas; and, 
Installation of fencing and access control.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 11, 2011 
Page 2 of 8 
This project is located on a former Superfund cleanup site (Lockheed Shipyard Upland Operable
Unit). EPA has required Lockheed to complete stormwater improvements; however the Port has
a pre-existing duty to maintain the cap. The Port and Lockheed propose to enter into an
agreement that clarifies their legal relationships for the construction of the Utility Infrastructure
Upgrade Project.
At the time of the June 22, 2010, Commission meeting, staff estimated the total project costs
would be approximately $6,700,000. Since then, EPA has mandated that construction storm
water be disposed off site. Total project costs is now increased by $505,000 to $7,205,000 to
address this requirement. If favorable weather condition is encountered, costs to address storm
water runoff could be drastically reduced. 
In order to implement construction during periods of low rainfall and to meet aquatic area
construction requirements, the project is on a tight timeline. Staff is requesting Commission
approval for construction funding now, allowing initiation of the public bid process.
Construction is expected to be substantially completed by October 31, 2011, a one-month delay
from the schedule shared with the Commission on June 22, 2010. If the pending agreement is 
not finalized by the time of selection of a contractor, the project will not be awarded, and
construction will likely be delayed until 2012.
ADDITIONAL BACKGROUND: 
Terminal 10 is located on the west shoreline of Harbor Island, within the boundaries of the
Harbor Island Superfund area. The Port purchased the former shipyard site, now referred to as
Terminal 10 (T-10), from Lockheed Martin Corporation (Lockheed) in 1997 to provide land
necessary for implementation of the Terminal 18 (T-18) Redevelopment Project. Between 1998-
1999, Lockheed conducted a cleanup project at T-10 in compliance with Consent Decree No.
C94-1823 (the "Upland Remedial Action"), which consisted of excavating soils and installing 
areas of asphalt cap to isolate remaining upland contaminated soils. Under the terms of the
purchase and sale contract, the Port agreed to (1) maintain the asphalt cap in compliance with the
Upland Remedial Action Consent Decree; (2) pay environmental costs arising from any
subsequent redevelopment of the property; (3) ensure that any improvements constructed on the
uplands would not diminish the effectiveness of the Uplands Remedial Action; and (4) conduct
no activities on the uplands that would contribute to increased costs of the Sediment Remedial
Action (see below). Lockheed retained responsibility for groundwater monitoring of the Upland
Remedial Action, and for the entirety of the Sediment Remedial Action. 
In 2004, Lockheed conducted a cleanup of the aquatic lands adjacent to the property, in
compliance with a separate Consent Decree (the "Sediment Remedial Action"). This consisted
of removing approximately 3.4 acres of overwater creosote piling dock and platform structures,
approximately 2650 linear feet of vertical steel, concrete, and timber bulkheads, and excavation
of contaminated sediments, as required by EPA. In addition, a five feet thick aquatic area cap
was installed to isolate remaining contaminants from the West Waterway. Because the Sediment
Remedial Action was conducted on State-owned aquatic land, Lockheed obtained a Use

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 11, 2011 
Page 3 of 8 
Authorization Agreement from the DNR for the construction and long-term maintenance of the
remedy. A small portion of the proposed Utility Infrastructure Upgrade project will be located
on this State-owned land. 
In January 2011, EPA formally notified Lockheed of its determination that there were serious
problems with the integrity of the upland cap affecting the long-term protectiveness of both the
Upland Remedial Action and the Sediment Remedial Action. EPA therefore determined that it is
necessary to permanently repair the cap problems and implement stormwater controls on the
uplands as quickly as possible. EPA agreed that Lockheed could meet this requirement by
having the Port implement its planned Utility Infrastructure Upgrade project. 
Accordingly, the Port and Lockheed have negotiated an agreement in principle in which the Port
agrees to act as Lockheed's agent and construct the Utility Infrastructure Upgrade project in
accordance with the Upland Remedial Action Consent Decree, and indemnifies Lockheed from
claims that could arise if the Port fails to do so. Lockheed agrees to submit these plans to EPA. 
At the time of purchase of the property in 1997, it was anticipated that the approximately 11
acres that would remain at T-10 following the T-18 project would be used in support of adjacent
container cargo uses or serve as a separate marine cargo site. Since then T-10 has been used to
accommodate temporary surges in container and chassis equipment and for staging marine
terminal construction materials. However, it has been generally under-utilized. The present
infrastructure improvement project will prepare T-10 for more effective use as container drayage
truck parking, container cargo marshalling area, and overflow parking for Todd Pacific Shipyard
employees (a use required by terms of a previous agreement). Following completion of utility
improvements at the site, the capability for either temporary or long term container cargo use
increases substantially. 
Construction in the summer months is necessary for control of storm water during trenching and
grading required for installation of the replacement storm water system. In order to have
sufficient time to advertise for qualified contractors, scrutinize bids and competitively award the
project and meet the 2011 construction schedule, staff is requesting Commission approval for
construction funding at this time without final approvals and the agreement in place. If the final
agreement is unavailable at the time of final selection of a contractor, the contract will not be
awarded, and construction will likely be delayed until 2012.
PROJECT STATEMENT AND OBJECTIVES: 
Project Statement: 
This is a request for $6,225,000 additional project funds to advertise, bid and construct the
Terminal 10 Utility Infrastructure Upgrade Project.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 11, 2011 
Page 4 of 8 
Project Objectives: 
Fulfill the Port's contractual duty to maintain the Uplands Remedial Action. 
Improve infrastructure at T-10 for effective marine cargo operations. 
Minimize future maintenance and repair work. 
Project will be managed and completed on budget. 
Project will be delivered on time to meet schedule milestones. 
Ensure acceptable operational standards. 
Meet strategic asset management criteria. 
PROJECT SCOPE OF WORK AND SCHEDULE: 
Scope of Work: 
This project would involve the Port contracting to install utility infrastructure improvements
ensuring long-term stable, useable site conditions. 
Schedule: 
Commission Authorization                           March 1, 2011 
Advertise bid                                       March, 2011 
Receive final authorizations, agreements, permit                April, 2011 
Award                                      April/May, 2011 
NTP                                  June, 2011 
Start onsite construction                                 July, 2011 
Construction Substantially Complete                       October, 2011
FINANCIAL IMPLICATIONS: 
Budget/Authorization Summary 
Previous Authorizations                                        $ 980,000 
Current request for authorization                                   $6,225,000 
Total Authorizations, including this request                           $7,205,000 
Remaining budget to be authorized                                $ 0 
Project Cost Breakdown 
Capital 
Construction                                              $4,510,000 
Project Management & Other Soft Costs                           $1,090,000 
Sales Tax                                                 $430,000 
Sub-total Capital Project Costs                                 $6,030,000

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 11, 2011 
Page 5 of 8 
Environmental Remediation Liability 
Construction                                               $868,000 
Environmental & Other Soft Costs                                $225,000 
Sales Tax                                                  $82,000 
Sub-total Environmental Remediation Liability Project Costs            $1,175,000 
Total Project Costs                                            $7,205,000 
Source of Funds 
This project was included in the 2011 Plan of Finance as a committed project under CIP#
C800264, Terminal 10 Interim Development, in the amount of $6,118,000.
The portion of the project, amounting to $6,030,000, not included in the Environmental
Remediation Liability work described below will be funded from the General Fund. 
It is expected that approximately $1,175,000 of the project construction costs will involve
disposal of contaminated soil, storm water and groundwater to be paid as operating
Environmental Remediation Liability. The source of funds for the Environmental Remediation
Liability portion of the project will be the General Fund.
Financial Analysis Summary:
CIP Category            Renewal/Enhancement 
Project Type             Renewal & Replacement 
Risk adjusted Discount rate    NA 
Key risk factors             Future operating income from this project is uncertain.
While the proposed project would enable the site to be
used for either interim drayage truck parking or
container cargo marshalling in support of container
terminal operations, there are currently no lease
negotiations underway for this site. 
It is unlikely that revenue generated from potential
future leasing opportunities will support the level of
investment required for this project. 
Adverse weather conditions could negatively impact the
cost and timing of this project. 
Project cost for analysis       $7,205,000
Business Unit (BU)         Container Support Properties

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 11, 2011 
Page 6 of 8 
Effect on business           Effect on business performance is pending until a 
performance              determination of market demand for future use is known. 
Incremental depreciation for this project is estimated at
$349,000/yr. 
IRR/NPV            To be determined by future leasing efforts. 
ECONOMIC IMPACTS AND BUSINESS PLAN OBJECTIVES: 
Provides needed container cargo marshalling area for use by drayage trucks directly related
to movement of cargo to and from the terminals, consistent with regulatory requirements. 
Improve Terminal 10 marketability and utilization by installing utilities necessary for
commercial use as a cargo support area. 
STRATEGIC OBJECTIVES: 
This project supports the Port's strategies to "Ensure Airport and Seaport Vitality" and "Exhibit
Environmental Stewardship through our Actions". 
Improves air quality and decreases greenhouse gas emissions in the Duwamish industrial area
by reducing container cargo truck drayage travel times and miles traveled serving south
harbor industrial facilities, including adjacent public roadways. 
Improve community relations by providing operators of drayage vehicle/equipment a near
terminal staging and use area, as an alternative to parking in public right-of-way areas
throughout the Duwamish Industrial area and nearby neighborhoods. 
Fulfills Port and City storm water quality requirements for intended uses. 
Provides storm water upland source controls for storm water runoff protecting the sediment
cap from contamination. 
Maintain remedy of the existing isolation cap over the upland contaminated soils and
sediments within the project boundaries. 
Best management practices will be implemented by the Port in the selection of materials, work
practice and ongoing total cost of ownership. 
ENVIRONMENTAL SUSTAINABILITY AND COMMUNITY BENEFITS: 
Specifications will encourage recycling asphalt, concrete, creosote timber foundation and
metal debris removed from the project area as either construction material or as a source of
energy. 
Off-site disposal of excavated soils has been minimized. However, in order to upgrade the
site infrastructure, excavation is required to install utilities. The project represents a net
disposal of in-ground materials.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 11, 2011 
Page 7 of 8 
The site contains contaminated soil from the previous owner's operations. Any contaminated
soil not replaced into required excavated trenches will require offsite disposal at an approved
facility. 
Residential communities near the Duwamish industrial area support improvement of the T-10
site to reduce truck traffic congestion, truck parking in residential areas and air pollution
from idling trucks. 
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS: 
Alternative 1 - No Action. This alternative would result in the Port breaching its obligation to
maintain the upland cap under the Purchase and Sale Agreement, and may endanger project
permits. It would also not allow for proposed interim or long term uses of T-10. Alternative
1 is not recommended. 
Alternative 2  Installation of minimal improvements necessary to meet maintenance cap
requirements but insufficient to allow any significant cargo-related uses or truck parking at
the site. Cost of this alternative is estimated at between $1,000,000 to $3,700,000.
Alternative 2 may endanger project permits and would not allow for proposed interim or long
term uses of T-10. Alternative 2 is not recommended. 
Alternative 3  Fully develop the site for a cargo support area with the improvements to
container yard standards. Cost for complete development to container yard standards, which
includes complete lighting system, fire protection and additional asphalt paving is estimated 
at $8,000,000 - $10,000,000. Revenue from this site would not justify this level of
investment at this time and the site can always be retrofitted to such standards cost
effectively at a later date. Alternative 3 is not recommended. 
Alternative 4  Installation of utilities and paving improvements necessary for the use of the
site for container cargo marshalling and associated drayage vehicles. These improvements
will also allow for safe and clean operation of T-10 as a cargo support area, a use consistent
with previously established uses at the site. As a component of marine cargo activities,
portions of the site would be used for staging of trucks and vehicles directly engaged in
transshipment of cargo between Port marine terminals and other transportation facilities. 
This alternative would maintain the Upland and Sediment Remedial Action as required by
the EPA. Cost of development is estimated at $7,205,000. This is the recommended
alternative. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
On August 27, 1996, Commission authorized execution of a purchase and sale agreement and
all other necessary documents providing for the acquisition of certain real properties
(Lockheed Yard 1), for $6,020,000

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 11, 2011 
Page 8 of 8 
On March 25, 2008, Commission approved $530,000 to complete 100% design and
permitting for the redevelopment of T-10 uplands into truck parking. 
On September 2, 2008, Commission was advised by staff that: 
o  Costs for 100% design and permitting may exceed the authorized amount of $530,000 by
several hundred thousand dollars. 
o  Staff will proceed only with 30% design to better quantify risks specifically involving use
of the site with only the existing asphalt cap and permitting a new 30-inch outfall. 
o  Staff will plan to return to Commission in public session to describe the findings and
request additional funding for design and permitting if necessary. 
On April 14, 2009, Commission approved an additional $270,000 to include a new storm
water outfall in the permitting and design; and to accommodate increased costs associated
with the Environmental Protection Agency and City coordination on construction issues. 
On June 22, 2010, Commission approved an additional $180,000 to support easement and
permit negotiations with Lockheed Martin and State agencies.