PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      4d 
ACTION ITEM 
Date of Meeting     June 9, 2015 
DATE:    June 2, 2015 
TO:      Ted J. Fick, Chief Executive Officer 
FROM:   Jasmin Contreras, Property Manager, Leasing and Asset Management 
Curtis Stahlecker, Capital Project Manager 
SUBJECT:  Westway Feed Products Inc. lease extension, easement, and South Gate Rail Spur 
design funding (CIP #C800721) at Terminal 18 
Amount of This Request:        $151,000   Source of Funds:  General Fund 
Est. Total Project Cost:         $1,000,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to execute a third amendment
to the lease and easement between Westway Feed Products Inc. and the Port of Seattle,
exercising a ten-year extension option; and execute contracts, perform design, prepare necessary
permit submittals, and prepare construction bid documents to rehabilitate the Terminal 18 South
Gate Rail Spur for an amount of $151,000, bringing the total authorized amount to $190,000.
The estimated total project cost is $1,000,000. 
SYNOPSIS 
For the past 16 years, Westway Feed Products Inc. has leased approximately 62,515 square feet
of land located at the southeast corner of Terminal 18 (T-18) for handling bulk molasses and
related products by vessel and rail and for the manufacture of animal feed products. As a global
supplier of agricultural-based liquid solutions, the tenant uses the south gate rail spur on a regular 
basis to ship its product to a mix of customers in the U.S. and Canada.
The T-18 rail spur was installed approximately 50 years ago and currently provides rail service
to the tenant. The rail spur crosses directly in front of the T-18 South Gate used by the majority
of drayage trucks entering the SSA Terminals LLC (SSAT) container yard. Current records
show that approximately 1,000 trucks per day are entering the container facility. 
In April 2014, rail service was stopped for approximately ten days by the Railroad until
temporaryrepairs were performed on the spur line to prevent derailment, significantly affecting 
the tenant's operation. The temporary repairs were made and rail service was restored; however,
the line is in poor condition and rail service could be stopped again if the Railroad deems the line

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
June 2, 2015 
Page 2 of 6 
unsafe. Should rail service be stopped for any length of time, the tenant would be required to use
trucks to transport their product, significantly increasing operation costs. 
Even with the temporary repairs, the underlying deficiencies consisting of: age, rail use, and
truck traffic, the rail spur has reached the end of its service life and needs to be replaced to 
provide  predictable  and  uninterrupted rail service to  the tenant as identified  in the lease
agreement. 
In combination with the repairs to the rail spur, Port staff entered into negotiations with the
tenant to extend the lease. As part of the lease negotiations, the tenant will perform all future
track maintenance on the rail spur once the initial repairs have been completed. This lease
amendment extends the revenue for an additional ten years and reduces the long-term operational
costs of the Port. 
BACKGROUND 
The rail spur was designed and installed in 1964 to provide on-dock rail service at Pier 21, which 
would later become part of T-18. The rail spur now provides rail service only to Westway Feed 
Products Inc. (previously PM AG Products Incorporated). 
In the early 1980s, the T-18 South Gate entrance was installed in the current location, which is
just to the north of the rail spur. The south gate was expanded to the east in 1996 to its current
configuration of 14 lanes. The vehicle crossing for the gate traffic used the existing asphalt. 
PROJECT JUSTIFICATION AND DETAILS 
On April 23, 2014, the railroad stopped service to Westway Feed Products due to the condition
of the track.  Port Maintenance conducted temporary repairs in early May and restored rail
service to the tenant. The temporary repairs satisfied the immediate need to re-establish rail
service; however, the underlying deficiencies in the rail spur remain and are in need of repair. 
The current lease with the tenant states the tenant will be provided rail access to and from the
property. The lease expires on September 30, 2018, and the tenant has one 10-year option to
extend the lease.  Westway Feed Products has expressed its long-term commitment to the
facility; consequently, Seaport Lease Management staff entered into negotiations with the tenant
to: extend the lease term, clarify future rail maintenance responsibilities, and document the
tenant's easement to the molasses pipeline.
Project Objectives 
The project objective is to remove and replace the section of the rail spur that services Westway
Feed Products on T-18 and replace the vehicle crossing in front of the T-18 South Gate for the
Port to fulfill its obligation to provide rail access to the tenant.  Failure to maintain this access
poses potential risks to the Port.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
June 2, 2015 
Page 3 of 6 

Scope of Work 
Design and replace the section of rail from the spur switch to the fence line where the spur enters
the fenced area of the tenant's leasehold, for a total length of approximately 500 lineal feet. The
500 linear feet of repair includes approximately 180 linear feet of track from the spur switch to
the start of the truck gate and 320 linear feet across the truck gate to the tenant's fence line. As
the 320 linear feet are in front of the T-18 South Gate, the vehicle crossing will also be replaced.
The size of land-disturbing activity triggers stormwater review. The project anticipates design
and construction costs for stormwater infrastructure as required by the City of Seattle stormwater
code. 
Schedule 
The current schedule for this project is: 
Design                            4 months     July 2015  Oct 2015 
Bidding, award, submittals, and NTP          6 months     Nov 2015 Apr 2016 
Construction                          3 months     May 2016  July 2016 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original Budget                            $0          $0          $0 
Previous Authorizations                   $39,000          $0      $39,000 
Current request for authorization              $151,000          $0      $151,000 
Total Authorizations, including this request      $190,000          $0      $190,000 
Remaining budget to be authorized           $810,000          $0     $810,000 
Total Estimated Project Cost              $1,000,000          $0    $1,000,000 
Project Cost Breakdown                Total Authorizations       Total Project 
Construction                                     $0          $655,000 
Construction Management                      $10,000          $73,000 
Design                                   $108,000          $108,000 
Project Management                          $60,000          $79,000
Permitting                                   $12,000           $20,000 
State & Local Taxes (estimated)                        $0           $65,000 
Total                                       $190,000         $1,000,000 
Budget Status and Source of Funds 
This project was included in the 2015 capital budget and plan of finance as a Committed-
Division Approved project: CIP #C800721 Terminal 18 South Gate Rail Spur in the amount of

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
June 2, 2015 
Page 4 of 6 
$1,000,000. However, $500,000 was indicated to be spent in 2014, with the remainder in 2015.
Amounts not spent in 2014 are available to fund amounts in 2015 and 2016. 
The project will be funded from the Seaport General Fund. 
Financial Analysis and Summary 
CIP Category        Renewal/Enhancement 
Project Type         Renewal & replacement 
Risk adjusted discount  7.0% 
rate 
Key risk factors        Project costs could exceed current estimates 
Project cost for analysis  $1,000,000 
Business Unit (BU)     Seaport Industrial Properties 
Effect on business      The incremental revenue associated with this project is generated
performance         by the lease extension which extends the existing lease termination
date from September 2018 to September 2028 with annual average 
revenue over the 10 year period of approximately $570,000 per
year. 
Based on an asset life of 50 years, this project will increase
depreciation by $20,000 per year. 
IRR/NPV 
NPV     IRR    Payback 
(in $000's)      (%)       Years* 
$ 2,338    17%       5 
Note* - The payback period is 5 years because the incremental
revenue generated from the lease extension commences in 2018. 
Lifecycle Cost and Savings 
The existing rail spur has been in use for the past 50 years and is at the end of its service life.
During the design phase, total lifecycle cost analysis will evaluate options. Options that have the
lowest total cost of ownership will be included in the construction documents. 
STRATEGIES AND OBJECTIVES 
Providing a reliable rail connection to the tenant and investing in a critical asset for the
movement of bulk cargo supports the Century Agenda strategy of positioning the Puget Sound
region as a premier international logistic hub.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
June 2, 2015 
Page 5 of 6 
MAJOR ELEMENTS OF THE THIRD AMENDMENT AND EASEMENT 
Lease Term: The current lease expires September 30, 2018, and the tenant has one option to
extend the lease for 10 additional years. The proposed amendment extends the original term of
the lease to 30 years to terminate on September 30, 2028. 
Maintenance and Repair: In an effort to control the Seaport's operating expenses and shift all
maintenance responsibility to the lessee, the proposed amendment will clarify that all future
maintenance and repair responsibilities of the new track located outside the tenant's leased
premises will be the tenant's responsibility. The tenant will be responsible for making all repairs
and replacements to the leased premises, including repairs to certain railroad track(s) outside the
tenant's leased premises. 
Easement: An easement will also be required to document the tenant's nonexclusive easement to
the underground molasses pipeline for the purpose of operating, maintaining, removing,
repairing, replacing, and using the molasses pipeline. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1)  Continued Temporary Repairs - Continue to make temporary repairs to the
track alignment as needed to provide reliable rail access to the tenant's facility in accordance
with the lease. 
Pros: 
Lower initial investment cost. 
Cons: 
Risk of potential service disruption to the tenant and south gate operations should a
derailment occur along the rail spur. 
Due to the condition of the track, ongoing maintenance costs are difficult to forecast as is
the length of time the temporary repairs would be effective. 
Additional cost due to unplanned or emergency type work including replacement of
additional ties and subgrade. 
Risk of potential service disruption to the tenant if Railroad determines the track is not
safe for travel and stops service until the line is replaced or repaired. 
Alternative 2)  Repair the rail spur line 
Pros: 
Provides reliable rail access to the tenant's facility in accordance with the lease. 
Repair work is planned within a specified time frame and budget. 
Cons: 
Highest initial investment. 
Alternative 2 is the recommended alternative.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
June 2, 2015 
Page 6 of 6 
ATTACHMENTS TO THIS REQUEST 
PowerPoint 
Draft Lease Amendment 
Draft Easement 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
On February 4, 2010, Commission authorization received to execute a conditional
consent to assignment of the lease.
On January 22, 2009, Commission authorization received to execute a second
amendment to the lease and for design and permitting of fender system improvements
at T-18 south. 
On October 12, 1999, Commission authorization received to execute a first amendment
to the lease to clarify language pertaining to preferential and secondary preferential
rights to berth barges and tankers at T-18. 
On June 24, 1996, Commission authorization received to execute a new term lease to
accommodate the tenant's molasses tank farm that was relocated to the southeast corner
of T-18, as required by the T-18 container terminal expansion.