COMMISSION 
AGENDA MEMORANDUM                        Item No.          6g 
ACTION ITEM                            Date of Meeting       June 23, 2020 
DATE:     June 5, 2020 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Melinda Miller. Director, Portfolio & Asset Management 
Dave McFadden, Managing Director, Economic Development Division 
SUBJECT: First Amendment to Lease with Mad Anthony's, Inc. at Pier 66 
Amount of this request:                       $0 
Total estimated project cost:                   $0 
ACTION REQUESTED 
Request Commission authorization for the Executive Director to execute the first amendment to
the lease with Mad Anthony's, Inc., substantially similar to the attached draft amendment and
on the following terms, effective June 1, 2020: 1) remove Minimum Rent requirement for two
years; 2) increase percentage rent from 6% to 6-1/2% for two years; 3) effective June 1, 2022,
increase percentage rent permanently from 6% to 6-1/4% for the remainder of the lease term. 
EXECUTIVE SUMMARY 
Due to the significant economic impact of COVID-19 on the restaurant industry in general and
Anthony's at Pier 66 specifically, staff is proposing to amend this lease. The lease adjustments
being proposed for Anthony's are consistent with relief offered across the Port during this public
health crisis. 
The intent is to provide this tenant with the flexibility to respond to ongoing economic
uncertainty due to COVID-19 and help them weather the crisis. We propose to temporarily
remove the Minimum Rent (similar to the Minimum Annual Guarantee (MAG) at the airport) and
have them pay percentage rent only for two years. During this period, the percentage rent
amount will increase from 6% to 6-1/2%, effective June 1, 2020. After two years, effective June
1, 2022, the terms will revert to current lease terms and Anthony's will again pay Minimum Rent
against 6-1/4% percentage rent, whichever is greater. This is an increase of 1/4% in percentage
rent through the remainder of the lease term. The lease expires in December 2041. 
JUSTIFICATION 
Economic Development and Maritime Division landside tenants have been affected in some
manner by the ongoing Covid-19 pandemic, the broader economic crisis, and the mandates from
various regulatory agencies including the Governor, Mayor, and most recently, the Seattle City

Template revised January 10, 2019.

COMMISSION AGENDA  Action Item No. 6g                                   Page 2 of 5 
Meeting Date: June 23, 2020 
Council. Some sectors, particularly the restaurant and hospitality sector, have been severely
affected through direct closure, starting on March 23, 2020. 
Following on the Commission's policy direction and the Executive Director's guidance, the Port
offered a deferred payment plan to all tenants who were directly affected by the various
mandates made by the Governor, Mayor, and Seattle City Council. Rent and other charges are
being deferred for four months (April through July) without finance charges and re-payment
plans begin on October 1, 2020, in most cases. Most agreements give the tenant twelve months
to repay the deferred rent. This payment plan does not change the terms and conditions of the
lease. 
Out of 190+ tenants, 74 tenants were deemed to be directly affected and invited to apply. 59
tenants applied for the program and 45 agreements have been executed to date. During this
period, the Commission also authorized lease adjustments to Aviation Dining and Retail tenants
that included waiving the Minimum Annual Guarantee and providing lease extensions. 
Anthony's is a family-owned, local company that was established in 1969 and currently operates
restaurants in nineteen  locations  in Washington, Oregon and Idaho, including Chinook's
Restaurant at Fishermen's Terminal. Alloperations were shut-down by the Governor's first
mandate in March. This week, King County now allows partial re -opening for restaurants with
many operating constraints including occupancy limits between 25-50% of permitted occupancy. 
Recent polls, as reported in the LA Times article of May 23, have stated that "much of the country
remains unlikely to venture out to bars, restaurants, theaters, or gyms anytime soon, despite
state and local officialsallowing businesses to reopen" It is widely held that the recovery for
the restaurant industry will be long and shallow. 
The Port of Seattle and Anthony's have both made significant investments in the building and
operations of the restaurant at Pier 66. As an anchor tenant, Anthony's banked on the
development of the cruise business at Pier 66 and depends on the seasonal influx of cruise
passengers and visitors to support the financial success of this large, multi-floor restaurant. The
closing of the 2020 cruise season and uncertainty of the 2021 season are additional blows to their
survival. 
Should Anthony's at Pier 66 fail, the Port would be saddled with a very large and virtually
unleasable facility in the current restaurant market. 
Diversity in Contracting 
Staff have contacted the Diversity in Contracting Department to discuss this request and found
no opportunity for WMBE participation as it is an amendment to an existing lease. 


Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. 6g                                   Page 3 of 5 
Meeting Date: June 23, 2020 
DETAILS 
Staff proposes to amend the following terms: 
CURRENT                               PROPOSED 
22,000+ SF, three restaurants  Built by Port  Same as current lease 
1995, Lease expires 2041 
Minimum Rent: Greater of                    No Minimum Rent, Two years 
$31K+/month rent or                         6-1/2% of gross sales only 
6% of gross sales 
After two years through expiration: Greater of 
Minimum Rent or 6-1/4% gross sales 
Note: They have regularly paid percentage rent annually over the last ten years. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Anthony's management approached the Port with a proposal to help them survive the effects of
the first Governor's mandate that closed all their restaurants and the uncertain dining market.
Staff discussed the proposal at length and proposed a revised structure which Anthony's has
accepted, contingent on Commission authorization. 
Alternative 1  Reject Anthony's proposal for lease amendment 
Cost Implications: None, unless tenant abandons the lease 
Pros: 
(1)   If tenant remains, continues monthly revenue. 
(2)   Maintains continuity of lease terms 
Cons: 
(1)   Exposes tenant to significant financial risk from COVID-19 economic impact 
(2)   Tenant may abandon lease thus provoking legal action 
(3)   Exposes Port to costly legal action, lost revenue, and renovation expenses 
This is not the recommended alternative. 
Alternative 2  Agree to terms as initially proposed by Anthony's 
Cost Implications: Three years waiver of Minimum Rent, increase percentage Rent from 6% to 6-
1/2%, after three years return to lease terms 
Pros: 
(1) Accepts tenant's proposal thus strengthening relationship 
(2)   Provides revenue to Port in an uncertain economy 
(3)   Gives tenant flexibility to weather impact of Public health crisis 

Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. 6g                                   Page 4 of 5 
Meeting Date: June 23, 2020 
Cons: 
(1)   Reduced revenue during two years of Minimum Rent waiver 
(2)   Excessive term of Minimum Rent waiver 
(3)   Less likely to recover waived rent over three years 
This is not the recommended alternative. 
Alternative 3  Accept negotiated terms proposed by staff 
Cost Implications: Two years waiver of Minimum Rent, increase percentage Rent from 6% to 6-
1/2%, after two years return to lease terms but increase percentage from 6% to 6-1/4% for
remaining term. Lease expires in December 2041. 
Pros: 
(1)     Provides reasonable term to tenant and revenue to Port in an uncertain economy 
(2)     Gives tenant significant flexibility to weather impacts of Public health crisis 
(3)     More likely to recover Minimum rent deferred during waiver period, with possible
upside if economy recovers faster than projected 
Cons: 
(1)   Reduced revenue during two years of Minimum Rent waiver 
(2)   If economy does not improve, may not recover all waived Minimum Rent 
This is the recommended alternative. 
Financial Analysis and Summary 
Project cost for analysis              No incremental costs to the Port for this request 
Business Unit (BU)                  Portfolio Management 
Effect on business performance    This amended lease agreement will generate the Total
(NOI after depreciation)             Cash Flow of $11,110,597 for the remainder of the lease
term until December 31, 2041. 
IRR/NPV (if relevant)                Total Effective Rent: $11,110,597, an increase of $75K as
compared to the current lease agreement 
Discounted Effective Rent at 4.5%: $6,775,770, a
marginal NPV of ($81K) as compared to the current lease
agreement 
CPE Impact                       N/A 
Future Revenues and Expenses (Total cost of ownership) 
Future revenues will be generated based on lease rates and terms stated above in the
amendment. 

ATTACHMENTS TO THIS MEMO 
(1)   Presentation slides 

Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. 6g                                   Page 5 of 5 
Meeting Date: June 23, 2020 
(2)   Draft Lease Amendment 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
February 14, 1995  Commission approved the lease. 
January 12, 2016  The Commission authorized reimbursement of costs related to the
installation of heating and hot water systems necessitated by the termination of Seattle
Steam service to the facility. 















Template revised June 27, 2019 (Diversity in Contracting).