ITEM NO: 9b_Supp 
DATE : March 13, 2012 



Real Estate Division Policy Briefing 
Port of Seattle Commission 
March 13, 2012

Competitive Offering vs. Direct Negotiation 

Purpose: To identify when circumstances are
present that warrant competitive offering and when
they warrant direct negotiation

Competitive Offering vs. Direct Negotiation 
Rationale: Competitive processes generally result
in most effective result for the public, however, it 
Does not recognize pre-existing business
relationships 
Does not permit effective tenant mix to minimize risk 
Does not yield best result if there is a limited field of
interested parties 
Does not advance broader Port initiatives 
Job creation 
Green development 
Infill development

Competitive Process Applicability 
Exclusions: 
Leases for terms of 10 years or less 
Airline signatory lease and operating agreement-- 
SLOA 
Leases with Federal, State, Local government 
Leases or easements with public utility

Competitive Process Alternatives 
Published public offering for RFI, RFQ, RFP, etc 
Listing with qualified commercial brokerages 
Targeted direct marketing to industry specific
enterprises 
Offering published in trade and business
journals

Direct Negotiation Exceptions 
Renewal of existing tenant relationship,
presuming tenant is in good standing 
Expansion of existing tenant premises,
presuming tenant is in good standing 
Lease would permit expansion of tenant mix to
suit the Port's purposes by broadening the
business base either horizontally or vertically 
Lease would promote an otherwise appropriate
public use as determined by current initiatives

Direct Negotiation Exceptions 
An unsolicited opportunity that advances a
public use as determined by current initiatives 
Permits effective use of property otherwise
encumbered by physical, legal, or environmental
hurdles that makes it otherwise of limited utility 
Subsequent to an unsuccessful competitive
process, a targeted opportunity presents itself

Direct Negotiation Protocol 

To commence a direct negotiation, the following
conditions/constraints attach 
Staff will advise the CEO that a specific negotiation
falls under one of the exceptions 
Staff will commence negotiations on an exploratory
basis to confirm the merits of the exception 
Upon commencement of formal negotiations, staff will
advise the CEO, who will, in turn, advise the
commission 
Other appropriate due diligence/financial
analysis/approval protocol applies

Discussion

Acquisition and Disposition Protocol 
When, and under what conditions, would the
Port acquire or dispose of certain assets? 
What are the conditions precedent to
disposition? 
What disposition models are appropriate? 
What alternative disposition models may
emerge? 
Exceptions to disposition to governmental
subdivisions 
What is appropriate acquisition protocol

Acquisition and Disposition Protocol 
The default position is for the Port to retain
ownership in all holdings directly necessary for Port
operations 
When parcels are deemed to be marketable, these
guidelines will apply 
These guidelines apply to all property types

Acquisition and Disposition Protocol 
Conditions precedent to disposition: 
Port has legal authority to convey 
Existing covenants, bond restrictions and permit
conditions are complied with 
Port business units confirm the property is not needed
for current or anticipated future operations 
Properties fall into Tier 2 or Tier 3 of the 2012 Century
Agenda protocol 
Anticipated zoning for the property remains
unchanged

Acquisition and Disposition Protocol 
Commercial properties are 95% leased 
Environmental considerations are factored into the
value analysis 
Capital repairs are factored into the value analysis 
Market conditions are generally favorable to effective
marketing effort

Acquisition and Disposition Protocol 
Disposition models: 
Sale to third party owners 
Long term ground lease to third party developers 
Land or building swap with third party 
Contribution of land to PPP development efforts so
long as doing so does not violate appropriate legal
constraints

Acquisition and Disposition Protocol 
Alternative disposition models: 
Up zone and sell or lease 
Subdivide parcels for different uses, condominiumize 
Sale-leaseback 
Sale to governmental subdivisions 
Comply with statutes regarding intergovernmental
transfers

Acquisition and Disposition Protocol 
Disposition of proceeds: 
Retire bonded indebtedness 
Book sale proceeds to the business unit responsible
for the operations 
Re-invest in alternative properties 
Fund other Port initiatives

Acquisition and Disposition Protocol 
As a matter of confirming Port Commission policy: 
The Port will acquire necessary property at fair
market value, recognizing buying opportunities may
exist where the property is otherwise distressed 
The port will use its power of eminent domain when
necessary 
Staff will examine alternative sources of funding for
real estate acquisitions

Discussion