PORT OF SEATTLE 
MEMORANDUM 

COMMISSION AGENDA             Item No.          10a 
Date of Meeting       March 5, 2009 
DATE:    February 18, 2009 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:    Joe McWilliams, Managing Director, Real Estate Division 
Pat Spangler, Real Estate Manager 

SUBJECT:  Request Port Commission authorization for the Chief Executive Officer to
execute a Fourth Amendment to the Management Agreement for the operation of
Bell Harbor International Conference Center between the Port of Seattle (Port)
and Columbia Hospitality, Inc. (CHI) to include the "Maritime Event Center at
Bell Harbor" premises (former Odyssey space), as exclusive premises, and use 
those premises for events, meetings, and catering. 

BACKGROUND
From January 14, 1997 through June 3, 2008, Odyssey Maritime Discovery Center (OMDC), a
non-profit corporation, leased approximately 28,000 square feet of exhibit space at Pier 66 in the
Port's Bell Street Pier project operating as a contemporary maritime museum focused on
building public awareness of maritime trade, transportation, and marine affairs. 
On June 4, 2008, the Port terminated the lease with OMDC and the Port entered into an
agreement with Columbia Hospitality Inc., (the third party managers of Bell Harbor
International Conference Center), to manage the day-to-day operations of the Odyssey Maritime
Discovery Center on behalf of the Port through December 31, 2008. On August 11, 2008 a
settlement agreement was fully executed between the OMDC and the Port transferring ownership
of the assets (exhibits, furniture, fixtures and other equipment) to the Port. 
After discussing the alternatives with the Commission, staff composed a Request for Proposals 
(RFP) to Lease the former Odyssey Maritime Discovery Center space. The RFP was published
widely in local and regional periodicals and received significant interest during the solicitation
period. After eight weeks of repeated publication of solicitation notices and outreach, the Port
received one proposal from Columbia Hospitality, Inc.

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
February 18, 2009 
Page 2 of 6 

Terms of Columbia Hospitality Agreements 
Lease of former Odyssey Space 
To meet the Port objectives, set forth in the RFP, Columbia Hospitality Inc. proposes to enter
into a new lease with the Port for the former Odyssey space, renamed the "Maritime Event
Center at Bell Harbor," for use as a venue to host conferences, special events and as a potential
maritime educational facility. The Port will not participate in any costs associated with the
educational program. CHI intends to work with the maritime industry to raise funds to support
such programs. Staff believes that retention of the facility as an event center achieves the best
use for the space utilizing the existing investments made within the premises. Terms of the lease
are: 
Premises:    28,563 square feet 
Term:     March 5, 2009  May 31, 2012 
Rent: 
March 5, 2009 through October 31, 2009        $0/yr ($0.00/mo.)* 
November 1, 2009 through December 31, 2009   $24,000/year* ($2,000/mo) 
January 1, 2010 through December 31, 2010     $30,000/year* ($2,500/mo) 
January 1, 2011 through December 31, 2011     $36,000/year* ($3,000/mo) 
January 1, 2012 through May 31, 2012         $3,500/month 
*plus applicable taxes 
Improvements to Premises Provided by Landlord:    New signage, carpet and
paint up to $50,000. 
All conferences and special events will be conducted by CHI, not on its own behalf but as
manager of the Port's BHICC. The Port will grant CHI the authority to conduct these events 
through an amendment to the management agreement for the BHICC. In order for the Port to be
able to amend this agreement to add the Maritime Event Center at Bell Harbor, the Port must
have sufficient control of the space. To acquire that control, we propose the Port enter into a
sublease with CHI for the space rent-free. 
Amendment to Management Agreement 
Staff has prepared a Fourth Amendment to the Management Agreement with CHI that allows for
Bell Harbor International Conference Center to be the exclusive caterer for events and meetings
in the "Maritime Event Center at Bell Harbor" space. Revenues and expenses will flow through
Bell Harbor. Details of the amendment are attached.

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
February 18, 2009 
Page 3 of 6 

PREVIOUS COMMISSION ACTION 

On September 8 1995, the Port Commission authorized the Executive Director to execute
a six-year management agreement with Columbia Hospitality, Inc. for the management of the
Port's Bell Harbor International Conference Center. This agreement terminated on May 31,
2001. 

On June 26, 2001, the Port Commission authorized the Executive Director to execute a
new five-year management agreement with an option for five additional years with Columbia
Hospitality, Inc. for the management for the Port's Bell Harbor International Conference Center. 

On February 11, 2003, the Port Commission authorized the Chief Executive Officer to
execute a First Amendment to Management Agreement with Columbia Hospitality, Inc. for the
management for event space located at the Port's Shilshole Bay Marina. The management of this
space expired on October 12, 2004. 

On November 14, 2006 the Port Commission adopted Resolution No. 3570, establishing
additional revolving funds, designating where such funds shall be deposited, and directing how
disbursements shall be made, and; authorized the Chief Executive Officer to execute a Second
Amendment to Management Agreement with Columbia Hospitality, Inc. amending certain
aspects of the agreement pertaining to the adoption of Resolution 3570. 

On February 26, 2008 the Port Commission authorized the Chief Executive Officer to
negotiate and execute a Third Amendment to Management Agreement amending the
management contract between the Port of Seattle and Columbia Hospitality, Inc at Bell Harbor to 
provide for CHI to manage the day-to-day operations of the OMDC and for CHI to be exclusive
beverage and caterer for events within the OMDC space expiring December 31, 2008. 

STRATEGIC OBJECTIVES 

This action supports the Port's strategy of "Seaport Vitality" by increasing the net operating
income through greater asset utilization providing for a larger number of attendees for events.

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
February 18, 2009 
Page 4 of 6 

ALTERNATIVES CONSIDERED/RECOMMENDED ACTION 

1.     Do nothing and leave premises vacant. The Port would continue to incur expenses for
maintaining and servicing the space with no opportunity to recover those costs. 

2.     The preferred alternative is to approve the following:
A. Amend the management agreement between the Port and CHI for the Bell Harbor
International Conference Center to include the "Maritime Event Center at Bell
Harbor" facility as exclusive premises and BHICC as exclusive caterer and provider
for events and meetings. The above actions secure future revenues from the leased
space and provide for greater revenue from events with Bell Harbor International
Conference Center's ability to accommodate larger events. 

B. After Commission authorization of the amendment to allow use of the event center
space, staff will execute a new lease with CHI (within CEO authorization) with a
subsequent sublease back to the Port. 

FINANCIAL IMPLICATIONS 
Budget/Authorization Summary 
Previous Authorizations                                          $0 
Current request for authorization                                   $50,000 
Total Authorizations, including this request                            $50,000 
Remaining budget to be authorized                                   $0 
Project Cost Breakdown 
Tenant Improvements- New signage, carpet, paint                      $50,000 
Total                                                      $50,000 

Source of Funds 
The 2009 Real Estate Division Operating Expense Budget included amounts for tenant
improvements. The tenant improvements will be funded from the General Fund.

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
February 18, 2009 
Page 5 of 6 

Financial Analysis Summary 
CIP Category           Revenue / Capacity Growth 
Project Type            Business Expansion 
Risk adjusted Discount rate   7.5% 
Key risk factors           The financial return generated by the lease and amendment is
highly dependent on event activity at the Maritime Event Center
space and by incremental revenue generated by larger events 
booking at BHICC due to the availability of the Maritime Event
Center space. To the extent that actual activity falls below that
assumed in the financial analysis, the return will be lower than
presented below. A mitigating factor is the experience and
proven results of CHI as an event manager. 
Project cost for analysis      $50,000 
Business Unit (BU)        Real Estate Portfolio & Asset Management 
Effect on business
performance           Following is an estimate of the impact of the lease and
amendment on Real Estate Division Net Operating Income
(NOI): 

NOI (in $000's)       2009    2010    2011    2012    Total 
NOI              $26   $219   $349   $185   $780 
Depreciation           $0     $0     $0     $0     $0 
NOI After
Depreciation          $26    $219    $349    $185    $780 

IRR/NPV 
NPV    IRR   Payback
(in $000's)            (in years)
$681     NM   Under 1 Yr

ENVIRONMENTAL SUSTAINABILITY/COMMUNITY BENEFITS 
N/A

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
February 18, 2009 
Page 6 of 6 

REQUESTED ACTION 
Request Port Commission authorization for the Chief Executive Officer to execute a Fourth
Amendment to the Management Agreement for the operation of Bell Harbor International
Conference Center between the Port of Seattle (Port) and Columbia Hospitality, Inc. (CHI) to
include the "Maritime Event Center at Bell Harbor" premises (former Odyssey space), as
exclusive premises, and use those premises for events, meetings, and catering.