COMMISSION 
AGENDA MEMORANDUM                        Item No.         11a 
BRIEFING ITEM                            Date of Meeting       March 23, 2021 
DATE:     March 23, 2021 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Dave McFadden, Managing Director, Economic Development Division 
Kyra Lise, Director, Real Estate & Economic Development 
SUBJECT:  Real Estate Strategic Plan Update 
EXECUTIVE SUMMARY 
Staff has worked with Heartland LLC (HTLand) to provide the final update the Port of Seattle's
2020 Real Estate Strategic Plan. The p lan delivers a comprehensive roadmap to advance Port
Real Estate  development  efforts  over the  next five  years  and provides a framework for
contemplating new property acquisitions and partnerships on property development.
Heartland and Port staff will brief the Commission on the work to-date: reviewing the highlights
of an analysis of Port-owned property development opportunities.  Heartland's report will go
over their approach to and focus on how we use the principles of the Century Agenda to
contemplate potential future land acquisition strategies, as well as the financing tools to help
the Port support real estate development projects. 
PROPERTY PLANNING EFFORT 
The final recommendations presented at Commission will address certain key questions and
issues related to the Port's real estate portfolio: 
1.  Identify the key properties in the Port's development portfolio and evaluate them against
current market trends for industrial property within the Puget Sound region and key
Seattle submarkets (Ballard/Interbay and SODO).
2.  Provide recommendations to the Commission on principles and strategies that make the
best use of Port real estate under a "highest and best use" standard for key Port
properties. 
Identify  development  objectives  and  outcomes  for  each  property based  on
observation and analysis supported by market data and discussion with internal
and external stakeholders associated with the planning effort. 
Update plans, strategies and timelines for each property. 
Provide  specific  implementation  recommendations  that  support  the  Port's
ongoing Real Estate acquisition goals  in-line with the Century Agenda and
portwide initiatives that reflect the new realities for the real estate market due to
COVID19. 

Template revised April 12, 2018.

COMMISSION AGENDA  Briefing Item No. 11a                                 Page 2 of 6 
Meeting Date: March 23, 2021 

Properties Being Evaluated 
The Economic Development Division has taken a comprehensive look at the Port's real estate
portfolio to determine which sites merit investment. For the RESP report, staff is focusing the
real estate strategic plan on every Port property that can support industrial or commercial
development.  This excludes Seaport Alliance terminals, sites impacted by the SAMP, sites
nearing development like T106 and Des Moines Creek West, and several sites which are part of
separate processes already underway to support other projects (Pier 2, CEM). 
The following properties were evaluated during the strategic planning process: 
Salmon Bay Marina 
Fishermen's Terminal 
Terminal 91 Uplands 
Pier 69 
Harbor Marina Corporate Center 
World Trade Center West 
For a variety of reasons, the following properties will not be evaluated: 
SAMP impacted: 55 acre, L-Shape, 13 acre and SASA 
NWSA properties: Terminals 5, 10, 18, 25, 30, 46, 103, 104, 105, 107, 108, 115 and 117 
Current/pending RFPs: Des Moines Creek West, CEM, Pier 2 and Terminal 106 
Process/Timelines/Milestones 
The 2020 strategic planning process included input from an internal advisory committee made
up of range of staff from various departments around the Port of Seattle whose work involves
working with operating properties at the Port, and detailed conversations with individual staff
members where pertinent. In addition, a panel of external advisors including Commissioners Cho
and Calkins; Jennifer Maietta, NWSA; Bobby Lee, City of Seattle, OED; Anthony Wright, King
County; Thatcher Imboden, Sound Transit; Wilma Warshak and Erwin Park, both private brokers
and portfolio managers in the Puget Sound region; Mike Stanley, Expedia's development
manager and Chuck Depew, National Development Council. The external advisors met 3 times,
the internal advisors met 3 times as a group and in several independent sessions on specific
topics. 

Kick off          Mid-point           Final
March 10        Oct 27        March 23

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. 11a                                 Page 3 of 6 
Meeting Date: March 23, 2021 
This is the third and final of the three Commission briefings that have been scheduled during the
planning effort. 
The strategic planning effort also included: 
Weekly consultant check-in meetings 
3 Internal advisory committee meetings 
Individual  1:1 interviews and 100% participation of Internal Advisory Committee
members 
3 External Advisory Committee Meetings 
Data requests and follow up interviews with asset management and other Port staff 
Compilation and analysis of asset specific data 
o   Portfolio level Lease expiration Analysis from rent roll data 
o   Asset Specific and Portfolio Financial analysis and Modeling 
Initial existing conditions assessment, market analysis and site mapping update for 2020
assets, and any new additions to the RESP 
Development of property evaluation principles in line with the Century Agenda 
Development of an evaluation matrix using these principles to allow staff and
stakeholders to quickly evaluate prospective properties for potential acquisition and
development by the Port of Seattle 
A framework for discussions about financing real estate development at the Port of
Seattle 
BACKGROUND 
Successful real estate development initiatives can help support the Century Agenda and top Port
goals: 
Grow as an international logistics hub. 
Sustain fishing, cruise and other maritime industries. 
Advance equitable economic development. 
Enhance and protect industrial lands. 
Advance sustainability and energy efficiency. 
Heartland has proposed a set of guiding principles to direct the Port staff's effort to realize the
benefits of proactive real estate investment decisions on existing Port properties. These
principles are derived both from existing strategic documents and frameworks, as well as
foundational Port practices when it comes to the use and development of real estate. These
principles are: 
Manage for the Mission: Setting clear objectives and goals for each property and development
project established in close connection to the Century Agenda and the Port's operational

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. 11a                                 Page 4 of 6 
Meeting Date: March 23, 2021 
missions, as well as larger strategic frameworks more recently established such as sustainability
and equity principles. 
Leverage Expertise: Whenever possible, identify opportunities to realize multiple Port policy
objectives within our real estate development and investment efforts to enhance the impact of
our leadership in areas where we have the greatest expertise. 
Partner to Amplify Impact: In this time of declining revenues and economic adjustment look
outside the Port to find financial and policy partners to support our real estate objectives so we
can maintain the positive momentum we've gained delivering on Real estate development
projects in recent years. 

Part of our mission criteria is the growth of the Port of Seattle Real Estate portfolio.  With a
refined Century Agenda, the following objectives will enable the critical analysis of prospective
properties to take place. 
1. Advance NWSA competitiveness 
2. Advance SEA competitiveness and/or efficiency 
3. Advance maritime industries and/or protect industrial lands 
4. Enhance and/or protects Port properties/operations 
5. Advance Port energy and sustainability goals 
6. Advance equitable economic development 
7. Meet Port's financial objectives 

In addition to these guiding principles, Heartland has developed a simple classification framework
that allows us to consider properties according to the strategic role that may play towards
realizing Port goals and support a method of priority setting for real estate projects. Those
categories are: 
Operational properties: Properties whose primary role is to support Port operations or
to optimize operational capacity for the Port and its industry partners and tenants. 
Cashflow properties: Properties whose purpose is to generate net cash flow in order to
reinvest in other key priorities of the Port. 
Opportunity properties: Properties with underrealized market or mission value generally
on underdeveloped Port land. 
This classification framework recognizes that properties usually represent a hybrid of two or
more of the types and that property classifications can and do change over time.  Having a


Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. 11a                                 Page 5 of 6 
Meeting Date: March 23, 2021 
classification framework will allow us to develop appropriate evaluation metrics to determine if
we've met our objectives. 
Using this succinct framework, Heartland provides profiles for each of the seven properties
analyzed for this plan along with a set of strategic recommendations for each based on the
principles noted earlier for each of the properties. 
Fishermen's Terminal: Following on the Commission's 2016 Strategic Plan for Fishermen's
Terminal (FT), Heartland notes the important operational role the property has played historically
and continues to play as the homeport of the North Pacific Fishing fleet and those enterprises
that support the fleet. The profile is based on a thorough review of FT's existing building's overall
operational  and  financial  performance,  while  looking  at  the  real  estate  development
opportunities considering current market conditions, including the COVID19 crisis which has
disrupted the conventional wisdom about real estate generally and industrial development. 
Salmon Bay Marina: Adjacent to FT and the Port's most recent acquisition (2017), the profile
considers the opportunities to connect uplands development to in-water uses and expanding the
footprint of operations at FT. 
T91 Uplands: Development of light industrial buildings is underway, and the property can support
more development to support maritime industries with additional infrastructure investments.
These facility investments recognize the key role the T91 Uplands has played for maritime 
operations and points to strategic opportunities the property plays for the future of maritime
industrial development. 
Harbor Marine Corporate Center (HMCC): While a successful Marina operation continues on the
waterside, HMCC's value with its location directly under the West Seattle Bridge has been greatly
impacted by the bridge's recent structural failure, as well as a high level of vacancy. The building's
operational and financial future is intimately tied to the health of the bridge. Recommendations
are made to consider selling or repositioning this property to serve public users working on the
bridge itself. 
World Trade Center West (WTCW): WTCW was a significant property for the Port's vision for
establishing an international business hub along the Seattle waterfront and symbolic of the
significant role the Port has played in international trade.  Today the office building has been
impacted by both slow growth during a period of heavy construction at the central waterfront
and the COVID economy.  Recommendations include reviewing the continued relevance to
current Port missions and operations and consideration of whether the property should be
marketed. 
Pier 69: The much beloved Pier 69 has served as the Port headquarters since 1993 and represents
a major investment by the Port in the City's waterfront revitalization, as well as serving as an
important depot for the West Coast Clipper fleet on the waterside. Recommendations are to

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. 11a                                 Page 6 of 6 
Meeting Date: March 23, 2021 
consider how continued teleworking post-COVID may impact the need for Port-used office real
estate  and  open  the  conversation  about  adding  additional  tenants,  along  with  the
reconsideration of the now vacant Clipper Caf space. 
ATTACHMENTS TO THIS BRIEFING 
(1)   Presentation slides (Real Estate Strategic Plan - Deliverable) 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
March 10, 2020  The Commission was briefed on the Real Estate Strategic Plan. 
October 27, 2020  AM Study Session  Real Estate Strategic Plan Update Mid-Year. 














Template revised September 22, 2016.