Item No.                    10b
Date of Meeting             July 12, 2022
Des Moines Creek West
Development Partnership
July 12, 2022

                  Action Requested
Request Commission authorization for the Executive
Director to execute a ground lease with PDC Seattle
LPIV BB/TH, LLC (Panattoni) in order to develop
approx.  399,337  sf  of  Class  A, environmentally
sustainable state of the art logistics & distribution
facilities  to  support  SEA  airport’s  Aviation  and
Logistics operations.

2

                  The Site Location

Property Details
•   Size: 19.8 acres
•   Zoning: B-P
(Business Park)




3

           New Development Supports Port Goals
•   Project supports regional aviation, logistics &
manufacturing industries
•   550 net new jobs expected with combined annual
earnings of $16M
•   Contractor Abbot Construction commits to project labor
agreement (PLA),
–  Priority Hire and Apprenticeship Utilization
•   Company committed to WMBE utilization goal
•   Generates nearly $4M in Port revenue to contribute to
aviation division needs and capital projects
•   Building Design targets LEED (or similar)
sustainability standards
Panattoni will develop a 399,337 square foot light industrial
•   Preserves adjacent wetlands and significant green buffer    building at Des Moines Creek West
•   Relocates & improves popular walking trail

4

   Development Partner
Panattoni Seattle will develop Des Moines
Creek West:                                             NERA 3 completed 2019 ( Burien, WA)
•  NAIOP Washington’s Developer of Year 2017 and the
most active industrial developer in the Pacific
Northwest, covering Washington, Oregon, and Idaho.
Port of Seattle Development projects include:
•  Des Moines Creek Business Park Phase 1 – 3 =                                     Des Moin es Cre ek Business Park Phase 2
FAA Regi onal H eadquarters
1,332,000 SF
•  Burien Northeast Redevelopment Area 2 & 3 (NERA) =
460,000 SF

D MC BP all phases complete: 2018

        Property History/Ecological Inventory
History
•   The parcel was historically agricultural land, including
orchards.
•   The Port bought the western portion as a potential
borrow area for Third Runway fill in 1993, but the site was
never used for such and has remained undeveloped.
•   The Port purchased the eastern 14.3 acres of the site in
2021 from WSDOT (former HWY 509 ROW) to enhance
the value of our property.
Ecology
•   Majority red alder and other hardwoods, indicating a
disturbed site history.
•   Ground cover is predominately invasive blackberry and
English ivy
•   Wetlands and buffers impact 45% of the site, most of which
is non developable, however suitable for mitigation
•   Slopes - moderate to steep slopes are found onsite                                 Des Moine Creek West -- 1936 Orthophoto
6

               Community/Sustainability Benefits
Improved trail access for residents
(Crime Prevention through
Environmental Design)
Sustainable Building Design, LEED or
better is intention.
Development preserves key wetlands
and buffer strips with adjacent
residential neighborhood
Substantial buffer zones to remain

           City of Des Moines Partnership
City has planned for and benefited
from planned development along
216th:
•  Supporting new FAA facility and
other new employers
•  Supports city diversification
and downtown revitalization​
•  Invested over $20 million in road
and infrastructure development
to accommodate new facilities​

8

        City Development Review and Permitting
Permit Requirements:
•   Master Plan
•   SEPA Environmental Review
•   Environmentally Critical Areas Review
•   Design Review
•   Building Permit, Grading Permit, ROW Permit
Tree Replacement/Sustainability:
•   3:1 replacement ratio for trees
•   City will use its new urban forest plan
(completed by Forterra and paid for by the
Port) to identify where trees will be planted

9

                 Financial Summary
Site area
Total Developable Site Area                                                19.8 acres
Building Area                                                            399,337 SF
Des Moines Creek West Stabilized Annual Income                        $3,415,452
NPV                                                 $60,431,836
Cost Basis
Street improvement payment to Des Moines (2018)                     $1,500,000
14-acre WSDOT Property Acquisition (July 2021)                         $2,900,000
Predevelopment costs                                                 $250,000
Total Cost Basis                                                              $4,650,000
Yield year 1 & 2                                                                  7.35%
Yield year 3 and onward                                                      75%+
MIRR                                                        *12%
Payback period (From stabilization)                                         14 months
10

      Des Moines Creek West Development Schedule


Q4 2021           Q3 2022       Q1 2023        Q1 2024        Q2 2024

RFP Issued        Commission Approval    Permits issued and       Substantial          Lease up and
of Ground Lease         groundbreaking          Completion         full occupancy

         Des Moines Creek West Development Recap

•  Requesting Commission authorization to develop
Des Moines Creek West in partnership with Des
Moines and Panattoni
•  Excellent community benefits (jobs, workforce
development, WMBE utilization, trail
enhancements, etc.)
•  $3.4M annually in revenues generated to support
Aviation Division and capital projects
•  Substantial completion by Q1 2024