COMMISSION 
AGENDA MEMORANDUM                        Item No.          8e 
ACTION ITEM                            Date of Meeting       June 28, 2022 

DATE :     June 8, 2022 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Susie Archuleta, Real Estate Manager, Central Harbor 
SUBJECT:  Contract to provide property management services at the World Trade Center
West building 
Amount of this request:                 $530,000 
Total estimated project cost:            $530,000 
ACTION REQUESTED 
Request Commission authorization for the Executive Director to execute a contract for property
management services at the World Trade Center West with an initial term of 2 years plus 5 oneyear
options to extend, and a total contract value of up to $530,000. 
EXECUTIVE SUMMARY 
Since opening in 1998, the World Trade Center West (WTCW) building has utilized contracted
property management services to provide a high level of service to its occupants. The existing
WTCW property management contract provides a five-year term that will expire December 31,
2022. A new property management contract is needed to continue the high level of service at
this property. 
Current nationwide labor shortages are impacting all service providers, including property
managers. Because of this, the quality of  service that any provider can offer is especially
uncertain right now.  The term of the new property management contract is structured to
provide a 2-year initial term and five 1-year options to extend for a maximum contract value of
$530,000 (if all options are exercised).
JUSTIFICATION 
The WTCW is a four-story building with retail and office tenants on floors one through three,
and office tenants and hospitality visitors to the World Trade Center Seattle (WTCS) on the
fourth floor.  The WTCS attracts business leaders, politicians and other high-profile individuals
attending the various conferences and social events held at this venue.  The high-profile foot

Template revised January 10, 2019.

             COMMISSION AGENDA – Action Item No. _8e___                              Page 2 of 5 
Meeting Date: June 28, 2022 
traffic in the WTCW building and Class A status drives the need for a high level of property
management service, which are the primary reasons for contracting for this service. 
Diversity in Contracting 
The Port of Seattle is committed to providing the maximum practicable opportunities for
Woman and Minority Business Enterprises (WMBE) to compete for and participate in Port
contracting.   Staff has contacted the Diversity in Contracting Department  to discuss this
contract and has set a 10% WMBE goal.  The wide variety of service contracts needed to 
support daily operations (janitorial, window cleaning, horticulture, HVAC, elevator, pest control,
etc.) are expected to provide ample opportunity for the property management provider to
achieve this goal.
DETAILS 
The normal business hours for the WTCW building and office tenants are Monday through
Friday from 7am to 6pm.  The retail tenant and the WTCS both regularly operate outside of
these hours.  The most efficient way to support their off hours needs (for plumbing leaks,
temperature adjustments, elevator failures, etc.) is to contract for a property management
provider that offers 24/7/365 emergency coverage.
The property manager will be responsible for contracting for the services needed to operate 
the WTCW building. In addition to supporting most of the daily building operations, the scope
of this contract will include collaborating with Port staff to prepare annual budgets, monthly
financial reporting, collection of rents from tenants, and payment to all service providers.
We are proposing a 7-year term because the most recent solicitation for a 5-year term and
$299,000 contract value did not produce enough interest from the market. To increase interest 
in the current labor market, this contract offers a maximum 7-year term. There is a nationwide
labor shortage and staff is concerned the level of service might not meet expectations in
subsequent years. To address this potential concern, the contract term is structured to provide
an initial 2-year term followed by five 1-year options. This gives Port staff the flexibility to shift
contract strategies as necessary depending on contract performance. 
Property management fees are typically based on a percentage of the building’s gross
revenues. For buildings with long terms leases, that structure works well because total revenue
is certain. In the expiring property management contract, fees were provided in fixed amounts 
because the WTCW tenants all have short term leases (5-year terms). Today , the WTCW
building is 75% occupied.  To overcome the building’s uncertain revenue forecast and entice
more market interest in this contract, staff will negotiate a fixed fee structure in the new
property management contract.
Property management fees are considered an operating expense. Because the WTCW leases
are structured as triple-net leases, WTCW tenants each pay their pro rata share of the building’s

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

             COMMISSION AGENDA – Action Item No. _8e___                              Page 3 of 5 
Meeting Date: June 28, 2022 
total operating expenses. The current occupancy is 75%, meaning that WTCW tenants will pay
for 75% of these contracted property management fees. 
Scope of Work 
The property manager will be responsible for contracting the services needed to operate the
WTCW building. These services include but are not limited to: janitorial, window washing, floor
cleaning,  restocking  supplies,  HVAC,  fire/life/safety,  elevator,  interior  horticulture,  roof
maintenance, and pest control.  The services that will not be included in this contract are 
locksmithing, roving security, and exterior landscaping.  These excluded services are provided
separately to the WTCW by the Port.  In addition, the parking management in the basement
level garage is managed by the WTCS so is also excluded from the scope of this contract. Other
responsibilities included in the property management contract  are preparation of  annual
budgets, monthly financial reporting, monthly owners’ reports, monthly collection of rents
from tenants, and payment to all service providers.  The cost breakdown below is estimated
annual amounts. 
Cost Breakdown                                     This Request 
Year 1                                                         $65,000 
Year 2                                                         $68,000 
Year 3                                                         $72,000 
Year 4                                                         $76,000 
Year 5                                                         $79,000 
Year 6                                                         $83,000 
Year 7                                                         $87,000 
Total                                                           $530,000 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1 – Contract for a fixed 5-year term, as has been done historically. 
Cost Implications: $360,000 
Pros: 
(1)   The total cost to the Port and WTCW tenants is less than a 7-year term. 
(2)   A fixed 5-year term provides certainty to the contract applicants, which could increase
applicant interest.  Applicants know what fees they will receive regardless of the
quality of their performance. 
Cons: 
(1)   The contract value is less than a 7-year term, which could reduce applicant interest. 
(2)   Addressing poor service quality is difficult with a longer fixed term. Service quality is a
major concern because of the current nationwide labor shortage. 
This is not the recommended alternative. 

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

             COMMISSION AGENDA – Action Item No. _8e___                              Page 4 of 5 
Meeting Date: June 28, 2022 

Alternative 2 – Contract for a fixed 7-year term. 
Cost Implications: $530,000 
Pros: 
(1)   A fixed 7-year term provides certainty to the applicants, which could increase contract
applicant interest. Applicants know what fees they will earn regardless of the quality
of their performance. 
(2)   Port staff’s time spent on contracting efforts would be less frequent than with a 5-year
term. 
Cons: 
(1)   Total cost is higher than a 5-year term (but annual cost is the same). 
(2)   Less flexibility to address performance concerns with a longer fixed term.  Service
quality is a major concern because of the current nationwide labor shortage. 
This is not the recommended alternative. 
Alternative 3 – Contract for a 7-year term that is structured as a 2-year initial term plus 5 one-
year extensions 
Cost Implications: $530,000 
Pros: 
(1)   Provides the Port with the highest flexibility for reacting to the quality of service.
Service quality is a major concern because of the current nationwide labor shortage.
(2)   If quality of service is good, a 7-year term will be achieved.  Port staff’s time spent on
contracting efforts would be less frequent than with a 5-year term. 
Cons: 
(1)   Cost is higher than a 5-year term. 
This is the recommended alternative. 
FINANCIAL IMPLICATIONS 
Cost Estimate/Authorization Summary              Capital        Expense           Total 
COST ESTIMATE 
Original estimate                                          $0        $530,000        $530,000 
AUTHORIZATION 
Previous authorizations                                    0                0                0 
Current request for authorization                          0        $530,000        $530,000 
Total authorizations, including this request                  0        $530,000        $530,000 
Remaining amount to be authorized                    $0       $530,000       $530,000 

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

             COMMISSION AGENDA – Action Item No. _8e___                              Page 5 of 5 
Meeting Date: June 28, 2022 
Annual Budget Status and Source of Funds 
Property management services are budgeted annually as a line item in the World Trade Center
West operating budget. WTCW tenants pay their pro rata share of the  WTCW operating
expenses and costs are charged to the operating divisions.
Financial Analysis and Summary 
Project cost for analysis              $530,000 
Business Unit (BU)                  Portfolio Management 
Effect on business performance     Reduce the Net Operating Income by $132,500 for a 7-
(NOI after depreciation)             year lease term, based on 75% occupancy rate. 
IRR/NPV (if relevant)                N/A 
CPE Impact                       N/A 
Future Revenues and Expenses (Total cost of ownership) 
None 
ADDITIONAL BACKGROUND 
None 
ATTACHMENTS TO THIS REQUEST 
(1) Presentation 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None 







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