Item 5d Memo

PORT OF SEATTLE
MEMORANDUM 

COMMISSION AGENDA              Item No.     5d 
Date of Meeting   May 12, 2009 
DATE:    April 13, 2009 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:    James R. Schone, Director, Aviation Business Development 
Luis Navarro, Manager, Aviation Properties 
SUBJECT:  Amendment to Transportation Security Administration/General Services
Administration Main Lease #000307 

REQUESTED ACTION 
Request for authorization for the Chief Executive Officer to extend the existing Main Lease of
the Transportation Security Administration (TSA), represented and negotiated by the United
States General Services Administration (GSA). 
SYNOPSIS 
Port of Seattle ("Port") staff requests approval for a lease amendment to extend the TSA's Main
Lease #000307 ("Main Lease"), which includes break rooms and operational offices located
throughout the Seattle-Tacoma International Airport ("Airport") terminal complex. Exhibit A
provides an overview of premises contained in this Lease. The Main Lease had a term of five (5)
years, was executed on December 16, 2002, and is currently in holdover status. This amendment
will increase the rental rate retroactive to the Main Lease expiration date and will reflect changes
to the premises that have occurred during the holdover period. 
BACKGROUND 
The TSA earlier added 14,524 sq.ft. of office space in two separate locations at the Airport, both
of which required significant tenant improvement projects and two separate leases as described
below. Note: These facilities are separate from the leased areas referenced in this memo totaling
9,852 sq.ft. These previous locations are referred as "Mezzanine Offices" and "C1 Building".
TSA moved into the Mezzanine Offices in September, 2008, and is moving into the C1 Building
premises in May 2009. These facilities specifically required separate agreements because of the
differing site conditions; the C1 Building was new construction whereas the Mezzanine Offices
were a major remodel. It took these two federal agencies over six (6) years to justify, fund,
design, construct and move into these spaces. Due to the complexities of issues associated with
these two new spaces, the parties involved agreed to put the existing Main Lease into holdover
status until both construction projects and leases were completed. As part of this holdover

Tay Yoshitani, Chief Executive Officer 
April 13, 2009 
Page 2 

agreement, it was made clear that the lessee would have to pay all retroactive rent due to rate and
premises changes implemented during the time that the lease was in holdover. Now that these 
facilities are essentially completed and occupied, the parties wish to resolve the holdover status 
of the Main Lease by extending the term of the current lease. 
In the original Main Lease, the TSA/GSA accepted the offices and break-rooms in "as-is"
condition. The responsibility of making any improvements to remedy deficiencies was the
responsibility of the tenant. Although the TSA/GSA would like a long term lease, the standard
GSA forms have stringent requirements that would put the responsibility of remedying
deficiencies on the Port. It would not be in the Port's best interest to execute a new lease without
including provisions for the needed improvements to the premises. Therefore an extension of the
existing lease has been agreed upon by both parties. This lease ext ension will provide TSA/GSA
adequate time to scope, quantify, and fund proposed tenant improvements to the existing break
rooms and operations offices. Once these tenant improvements are clearly defined, the Port will
negotiate a longer term lease incorporating the improvements into the terms. 
The proposed term extension for this Lease is three (3) years retroactive to November 1, 2007 
with an expiration date of October 31, 2010.  This amendment will simply extend the term of the
existing lease, increase the rental rate, and reflect changes to the premises that were not
addressed under the holdover status. 
SCOPE OF AGREEMENT: 
Basic Lease                18th Amendment 
Term/Effective 
Date:           Five (5) years, Nov. 1, 2002      Three (3) years, Nov. 1, 2007 
through Oct. 31, 2007.          through Oct. 31, 2010. 
Options:         None                    None 
Use:            Provide break rooms and        No change 
operational offices for TSA. 
Rent:           5,912 sq.ft. @ $83.38/sq.ft./yr.     9,852 sq.ft. @ $97.66/sq.ft./yr. 
Totaling $472,681/yr.           Totaling $962,146 
3,171 sq.ft. @ $76.38/sq.ft./yr.     Total Annual Rent of $962,146 
Totaling $242,201/yr. 
243 sq.ft. @ 74.25/sq.ft./yr. 
Totaling $18,043 
Total Annual Rent of $732,925

Tay Yoshitani, Chief Executive Officer 
April 13, 2009 
Page 3 

HOLDOVER RENT RECONCILIATION: 
Rental Rate Increase Retroactive to beginning of Holdover Period           $ 167,397.30 
Added Lease Premises Retroactive to beginning of Holdover Period          $ 298,399.86 
Overpayment from Vacated Premises' since beginning of Holdover Period     $( 69,009.40) 
Total Back Rent to be paid to Port of Seattle                          $ 396,787.76 
STRATEGIC OBJECTIVES: 
Ensuring Airport and Seaport Vitality and Develop New Economic Opportunities for the Region
and the Port. 
ALTERNATIVES CONSIDERED: 
Alternative 1: Remain in holdover status. This would perpetuate an underpayment and not
address the required changes in the premises. 
Alternative 2: Negotiate a new lease instead of an extension of the existing Lease  Port staff
does not consider a new lease in the best interest of the Port for various reasons. First, the
TSA/GSA would like a long term lease, but has been unable to clearly define and quantify their
required level of tenant improvements and associated Port contribution. Second, the Port is not
willing to use the standard GSA forms for "as-is" premises because of its stringent requirements 
and current facility deficiencies. 
Alternative 3: This is the preferred alternative. Extend the existing Lease for approximately 18
months going forward thus providing TSA/GSA with adequate time to scope, quantify, and fund
their proposed tenant improvements. Once these tenant improvements are clearly defined, the
Port will negotiate a longer term lease incorporating the improvements into the terms. 
FINANCIAL IMPLICATIONS: 
The Port will recover $396,788 of uncollected back rent related to an increased annual rate and
added premises as part of this lease extension, as well as an increase in total annual rent for this
lease $229,221 ($732,925 to $962,146). 
ECONOMIC IMPACTS: 
Not deemed to have significant negative or positive economic impact. 
PREVIOUS COMMISSION ACTIONS/REVIEW: 
On January 15, 2008, the Port Commission executed a 10 (ten) year Lease Agreement (Lease)
with the United States General Services Administration (GSA), on behalf of the Transportation
Security Administration (TSA) for the construction of tenant improvements in the C1 Building.

Tay Yoshitani, Chief Executive Officer 
April 13, 2009 
Page 4 

On September 11, 2007, the Port Commission authorized the construction of tenant
improvements with the General Services Administration (GSA) and the Transportation Security
Administration (TSA) for office space on the Mezzanine Level of the Main Terminal.

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