PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6a 
ACTION ITEM 
Date of Meeting    November 10, 2015 
DATE:    November 2, 2015 
TO:      Ted Fick, Chief Executive Officer 
FROM:   Lindsay Pulsifer, Maritime Division Managing Director 
Rebecca Schwan, Real Estate Manager, Maritime Division 
Tracy McKendry, Sr. Manager, Recreational Boating, Maritime Division 
SUBJECT:  Fifth Amendment to the Seaview Boatyard West, Inc. Lease 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to execute a Fifth
Amendment to the lease with Seaview Boatyard West Inc. (Seaview), a small business located at
Shilshole Bay Marina, to expand the lease premises and add two five-year renewal options. 
SYNOPSIS 
The current lease expires on December 31, 2027. This lease amendment will add two five-year
renewal options to the term, expand the Seaview lease premises by approximately 10,000
contiguous square feet and increase annual revenue by  approximately  $24,400.00.  This
expansion will enable Seaview to upgrade their facility to serve the demand for large vessel
repairs, increase their ability to adapt to seasonal variations and generate an additional 10-12
family wage jobs. This expansion will displace approximately 20 (of 1158) parking spaces at
Shilshole Bay Marina (SBM). 
BACKGROUND 
Seaview has operated at Shilshole Bay Marina since 1973. Seaview operates three facilities in
the Puget Sound area that offer boat repair and maintenance services to recreational boaters,
commercial fishermen, and the yachting community. They have invested $1.6 million into the
SBM facility over the term of their ground lease. The boatyard currently employs 27 employees.
If approved, the company will invest another $750,000 to expand and upgrade their facilities to
serve the demand for large vessel repair and create an additional 10-12 full-time, family wage
jobs. Seaview qualifies as a small business in the State of Washington and utilizes numerous
small businesses including sub-contractors and vendors. At the completion of the project,
Seaview will own and operate the largest travel lift (rubber tired crane for lifting and transporting
vessels) in the greater Seattle area, which will allow them to meet the growing demand for large
vessel repairs. The Port of Seattle has received a petition of 146 signatures and letters of support
from State of Washington Department of Commerce, SSA Marine, Northwest Marine Trade
Association, Fisheries Supply, Sea Hawk Premium Yacht Finishes, Privateer II, Auxiliary
Engine Service, Inc. and Sands  Marine.Com. 

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
TBD Page 2 of 6 
Community outreach on this topic has included, since April, five meetings with Liveaboard and
Dock Captains and one meeting to which all moorage customers were invited. In addition, there
have been thirteen contacts with individuals and one with the City of Seattle Department of
Neighborhoods. These contacts included information regarding the nature of the expansion of
the Seaview operation, the equipment involved and compliance with current noise and
environmental regulations. 
Environmental Commitment 
Seaview  has demonstrated  environmental leadership by developing  a long-term strategic 
commitment to environmental protection and innovation. They are recognized as a model for
environmentally sound boatyard operations throughout the region.  The company's three
locations are among only 11 boatyards state-wide that have earned the Clean Boating
Foundation's Leadership Clean Boatyard Certification. In 2011, Seaview  received the
Environmental Excellence Award from the Association of Washington Businesses. In addition,
Seaview is working with the Northwest Marine Trade Association task force to assist the
Washington State Department of Ecology to prepare the 2016 revision of the National Pollution
Discharge Elimination System (NPDES) Boatyard General Permit. Questions raised regarding
impacts of the expansion have been addressed  the new equipment will be quieter and cleaner,
due to current environmental standards. 
Previous Expansions & Operations 
In 1996, the Port and Seaview agreed to an expansion and improvement plan, which allowed the
growth of their boatyard operations at SBM. In 2011 the Port approved a smaller expansion of
1,541 square feet bringing the operation to the current size of 64,385 square feet. This
amendment would bring the premises to approximately 74,385 square feet. 
Seaview's facilities and operations include yard space, a dedicated pier, a small administrative
building, a boat repair building, a mast repair and storage area, a 55 ton travel lift, and a boat
wash area. Seaview also leases 300 linear feet of moorage near the "A" dock to support their
operations which contributes approximately $27,000 per year in revenue to SBM. 
Seaview allows boat owners with the required expertise to perform their own repairs and
maintenance within the yard for a fee. When a higher level of expertise is required, Seaview 
offers skilled staff to perform maintenance and repair work.
SEAVIEW PROJECT DETAILS & JUSTIFICATION 
If approved, Seaview Boatyard will invest approximately $750,000 in tenant improvements to
reconfigure their facility to better accommodate large vessels ranging from 60 feet to 75 feet.
This will include an addition to their paint shop building and the construction of additional
workshop space. The expansion also includes the purchase of a 75-ton travel lift to replace the
current 55-ton travel lift in operation. In addition to the tenant improvement, Seaview projects an
increase of 10-12 full-time, family-wage jobs including: (1) purchasing agent/assistant, (1)
skilled travel lift operator, (2) skilled fiberglass workers, (1) skilled painter, (4) entry-level
general workers, (1) skilled wood worker, and (2) skilled mechanical workers. The extension of

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
TBD Page 3 of 6 
the lease term will enable Seaview to obtain acceptable terms for the financing required to
complete this project. 

The boatyard expansion will require the relocation of two tenants  Sands Marine (320 square
feet) and Auxiliary Engine (480 square feet) - currently located within the expansion footprint.
Staff have reached out to these tenants and both have agreed to a relocation plan to a nearby area
at SBM. Seaview has agreed to cover all relocation costs. Staff have also reached out to the dock
captains at the September 29, 2015 Dock Captains Meeting at SBM. As previously noted, the
proposed expansion will eliminate approximately 20 adjacent parking spaces which the Port will
not be able to recover due to the terms of the proposed lease. Loss of these spaces will impact the
moorage tenants in nearby docks, including live-a-board customers. To help mitigate this impact,
marina staff has launched an aggressive effort to remove derelict vehicles that are parked
throughout the marina, including those located near the project area. There is also parking
available on the street adjacent to the entire property. 
The new services offered at Seaview as a result of the expansion will benefit the Port by
attracting large vessels to SBM and increasing the opportunity for additional moorage revenue. 
This expansion of Seaview's premises and subsequent increase in full-time, family-wage jobs
supports the Century Agenda Strategies and Objectives to promote small business growth and
workforce development by increasing job opportunities for local communities in maritime, trade,
travel, and logistics. 
MARKET CONDITIONS 
In the Seattle Industrial Market, most of the tenant activity is occurring in the south end of the
city.  In the Ship Canal and Ballard market, local brokers confirm that warehouse space and
vacant land are scarce, which has allowed the Port to maintain its occupancy and rental rates in a
very challenging real estate market. In addition, increased commercial development in the
submarket in recent years has contributed to the reduction in industrial inventory. 
According to brokers in the area, the rate for improved land is ranging from $0.15
$0.20/sf/month ($1.80$2.40/sf/year). In a recent appraisal done by McKee & Schalka on the
FVO Marine Ways Shipyard at Fishermen's Terminal, land was valued at $0.20/sf/month
($2.40/sf/year). The subject premises is a combination mixed-use area, and the Port will be
receiving $0.1775/sf/month ($2.13/sf/year), which upon approval of the 5th Amendment will be
Seaview's  base rent rate. The basic lease provides for both Consumer Price Index and Market
Rent increases throughout the term of the lease, which will not change with the proposed
amendment. It is important to note that there are no broker commissions associated with this
amendment and Seaview Boatyard will assume all of the costs and risks for the expansion. 
Rental rate renegotiation is structured into the lease using two methods, and will continue
throughout the term of all renewal options. 
A CPI increase occurs every five years. The next increase will take place March 2019.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
TBD Page 4 of 6 
Market Rate is renegotiated every five years. T he next renegotiation will take place
September 2016. 
TERMS OF PROPOSED SEAVIEW BOATYARD 5TH AMENDMENT 
Remaining Term:   12 years, 3 months; expiring December 31, 2027. 
Option to Extend:    Two additional 5-year options to extend. 
Use:            Boatyard operations. 
Premises:         Premises consisting of 74,385 square feet comprised of office, storage,
yard, and submerged land space. 
Total Rent:        $13,511.85/monthly "estimate, to be calculated upon final measurement of
expansion area." 
Incremental Rent 
Increase:          $2,033.33/monthly "estimate, to be calculated upon final measurement of
expansion area." 
Port Improvements:  None. 
Security Deposit:    $40,000.00. 
FINANCIAL IMPLICATIONS 
If approved the Fifth Amendment will increase annual revenue by $24,400.00.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
TBD Page 5 of 6 
Financial Analysis and Summary 
CIP Category             N/A 
Project Type              Revenue/Capacity Growth 
Risk adjusted discount rate     7.0% 
Key risk factors             Risk of tenant default, which is partially mitigated by: 
Security deposit totaling $40,000 
Good standing status as a current Port tenant 
Project cost for analysis        None 
Business Unit (BU)          Portfolio Management, Real Estate Division 
Effect on business performance  The incremental impact of the 5th Amendment on Net
Operating Income (NOI) for the years 2015 through 2019
is shown below: 
Incremental Incr/(Decr) 
NOI (in $000's)      2015   2016   2017   2018   2019 
Revenue          $0   $19   $25   $25   $26 
Expenses          $0    $0    $0    $0    $0 
NOI            $0   $18   $25   $25   $26 
Incremental revenue is generated by expanding the leased
premises 10,000 sf. 
Note the 2016 incremental impact assumes an expansion
effective date of April 1st, and so only nine months of this
year are affected by the 5th Amendment. 
IRR/NPV 
NPV (in $000's)      IRR    Payback 
without    with
(%)     Years 
extension  extension* 
$200      $292      NA      NA 
The NPV is based on incremental net cash flows
generated by the 5th Amendment and does not factor in the
underlying value of the land and improvements. The
basis for establishing the market rates for the lease is
described in the memo under "Market Conditions." 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1) Reject the Seaview Fifth Amendment. Seaview is currently operating at full
capacity. Seaview's current lease expires in 2027, so the Port is not at risk of losing them as a
tenant should this amendment be rejected, however, without the opportunity to expand their
operations and meet the growing demand of larger vessels, they would likely explore options to
make investments at one of their alternate locations in Bellingham. By rejecting this amendment
the Port would preserve approximately 20 parking spaces. T hese spaces currently do not provide

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
TBD Page 6 of 6 
any revenue to the Port and staff is confident that the loss of these spaces can be mitigated by a
focused effort on parking enforcement throughout the marina. In addition, rejecting this 
amendment would result in the loss of $24,400 in annual revenue.  This is not the recommended
alternative. 
Alternative 2) Approve the Seaview Fifth Amendment. This would improve utilization of Port
property with no Port investment, support the growth of a small business and the creation of 
maritime jobs, expand the services provided by Seaview Boatyard and result in increased
revenue to the Port. - This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
Fifth Amendment to Lease as negotiated. 
Seaview Boatyard proposed expansion layout. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
September 15, 2011  Fourth Amendment to renegotiate the rent; Commission review
and approval was not required. 
June 28, 2011  Third Amendment to increase premises was reviewed and approved by
the Commission. 
December 12, 2006 - Second Amendment for the expansion of the premises and a term
extension was reviewed and approved by the Commission. 
October 6, 2006  First Amendment to renegotiate the rent; Commission review and
approval was not required. 
July 23, 1996  Lease with a 20-year term was reviewed and approved by the
Commission.