IITEM NO:   ____6a Supp 1_____ 
DATE OF 
MEETING:   June 10, 2014 

Des Moines Creek Business Park 
Panattoni Option/Ground Lease Agreements 
City of Des Moines Development Agreement

Site Map

Option Agreement  Key Terms 
Optionee 
Panattoni Development Company, Inc. 
Assignment to related entity 
Term 
7 years (3 phases likely) 
Lease-up milestones

Ground Lease  Key Terms 
Term 
55-year initial term 
2, 10-year options to extend 
Premises 
87 acres 
66 fully usable 
12 acres streets and storm water facilities 
9 acres steep slopes and wetlands

Ground Lease  Key Terms 
Use 
Business park with 1.4 million SF 
Total investment:$117 million 
1st Phase
$40 million 
535,000 SF 
605 permanent jobs,139 construction jobs

Ground Lease  Key Terms 
Option Payments 
$0.04/sf/year 
NPV @ 8% of  $267K (nominal  $344K) 
Base Rent 
$0.53/sf/year NNN 
NPV @ 8% of  $18 million (nominal  $115 million) 
Rent Adjustments 
10% every 5 years 
Periodic reappraisals of land

Ground Lease  Key Terms 
Operating Expenses 
Absolute net to Port 
Panattoni pays all utilities, taxes, insurance,
maintenance 
Rent Credit 
South 208th Street 
$450,000 maximum

Ground Lease  Key Terms 
Economic Benefits (at full build-out) 
Jobs:  1600 permanent;  350 construction 
Tax Revenue: 
Ongoing:  $6.1 million annually ( $1.2 million to City) 
One-Time:  $8.5 million ( $750,000 to City) 
Gross Receipts:  $338 million annually 
Employee Earnings:  $114 million annually

Development Agreement  Key Terms 
Frontage Improvements In-Lieu Fees 
Port prepaid $6 million in early feesa discounted
amount 
Port recoups the undiscounted $9.1 million value of
the improvements 
Each phase financed over 7 years at 8% interest 
NPV @ 8%  $7 million

Development Agreement  Key Terms 
Internal streets 
Three streets 
Dedicated to City upon completion 
Storm water management 
Two facilities deeded to City upon completion

Development Agreement  Key Terms 
Duration 
15 years, unless extended 
Terminates upon full build-out 
May be terminated sooner by agreement 
Vesting 
Development regulations vest for 15 years 
Building code changes and others regulations
excepted