8h Presentation SR509 Surplus Land Purchase
Item No. 8h supp Date of Meeting February 9, 2021 SR509 Surplus Land Purchase Supporting Development of the Des Moines Creek West property Action Requested Request Commission authorization for the Executive Director to execute the purchase and sale agreement between WSDOT and the Port of Seattle, and approve $3.15 million, which includes $2.9 million and associated costs, in order to purchase a 14.3 acre section of the former SR509 right of way in the City of Des Moines, WA. 2 The Site Location 3 Adding Value to Port Des Moines Creek West Development Property Details WSDOT acreage: 14.3 acres Port acreage: 15.6 acres Purchase price: $2.9 million Street Improvements: $1.5 million Road improvements Light Industrial Development Supports SEA Property acquisition enhances potential to support aviation supply chain (logistics companies, manufacturers, service providers, etc.) and SEA efficiencies Property acquisition and subsequent larger development generates jobs and new tax revenues for City of Des Moines and surrounding communities Property development will generate income to support airport operations and capital projects Property development will support Port Diversity in Contracting and Workforce Development initiatives The purchase protects and reserves land for industrial development 5 Des Moines Creek West Development Schedule Q2 Distribute RFP 2O21 Q1 2022 Commission approval on ground Lease with Developer Q2 Break ground and commence Port 2023 revenue Q3 2024 Facility delivery and certificate of occupancy Strong Market for Industrial Development MARKET RENT PER SQUARE FEET 7 Property Development Options Manufacturing Office Center Distribution Small Business Incubator 8 Financial Summary Site area Total Developable Site Area 19 acres Building Area 300,000 SF Des Moines Creek West Stabilized Annual Income $1,100,000 Cost Basis Street improvement payment to Des Moines $1,500,000 14 acre WSDOT Property Acquisition $2,900,000 Predevelopment costs $250,000 Total Cost Basis $4,650,000 IRR *7.8% Payback period (From stabilization) 7 years 9 Des Moines Creek West Development Recap Need Commission support to purchase WSDOT property that enhances development of adjacent Port property. Property development can support aviation supply chain and generate positive economic impacts to local cities Industrial market is hot and this is an excellent time to go to market with this property We expect lease can be executed to support development by Q1 2022. Subsequent development would be completed sometime in 2024. Appendix 11 With or Without WSDOT Option Without the additional land of WSDOT parcel, site has limited access & 46% lower projected rent income. In addition to much more rental income, more jobs will be created when combining the two sites. 12
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