PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA             Item No.      5d 
Date of Meeting    August 2, 2011 
DATE:    July 25, 2011 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:    Michael Burke, Director, Leasing and Asset Management 
Mike Kriston, Seaport Real Estate Specialist 
SUBJECT:  Transfer Agreement between the Port of Seattle and General Recycling of
Washington relating to vacation of West Marginal Way S.W. and S.W. Idaho
Street. 

ACTION REQUESTED: 
Request Commission authorization for the Chief Executive Officer (CEO) to execute an 
agreement (Transfer Agreement) with General Recycling of Washington, LLC (GRW) wherein
the Port will agree to transfer to GRW the right the Port of Seattle (Port) has to a reduced-cost
street vacation of West Marginal Way S.W. (West Marginal) and S.W. Idaho Street (Idaho),
diligently pursue and satisfy any remaining conditions relating to obtaining the street vacation, 
pay administrative costs in the amount of $300, and pay escrow fees estimated to be $3,000 in
exchange for GRW's payment of $500,000. 
SYNOPSIS: 
Port staff is in the process of finalizing a number of pending street vacations with the City of
Seattle (City) dating from terminal developments in the 1990s. Petitions are pending with the
City to vacate various streets at Terminal 5 (T-5), Terminal 18 (T-18), Terminal 25 (T-25), and
the Port's former Terminal 105 (T-105). Additionally, public shoreline access issues need to be
resolved at Terminal 108. 
This memo requests Commission authorization for the CEO to execute a Transfer Agreement
wherein the Port will transfer its right to a reduced-cost street vacation to GRW in exchange for
GRW's payment of $500,000 less fees and costs estimated to be $3,300. 
In the coming months, Port staff expects to return to the Commission to seek approval of 10 to 
12 additional street vacation related agreements.

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
July 25, 2011 
Page 2 of 5 

HISTORY AND BACKGROUND: 
In July of 1980, the Port entered into the West Seattle Freeway Bridge Agreement (1980
Agreement) with the City wherein the Port agreed to convey to the City $10 million in cash as
well as land and easements valued at $1.3 million for the construction of the new West Seattle
Bridge. At the time, the Port envisioned development of marine cargo operations in the lower
Duwamish River area. 
In order to provide consideration for the Port's contribution, the City agreed that the Port would
not have to pay fair market value for the vacation of streets as long as the City Council decided 
to grant the street vacation. The street areas identified in the 1980 Agreement included a portion
of West Marginal and Idaho near T-105. 
The Port and the City entered into another agreement dated December 27, 1989, (1989
Agreement) wherein the Port paid the City $2.9 million for land the Port needed to complete its
Central Waterfront Project. 
The 1989 Agreement also contained a provision that allowed the Port to vacate certain identified
streets that included West Marginal and Idaho at "no cost to the Port except for the City's 
Administrative costs only," and would "not include any payment based on the fair market value
of the area vacated " 
In 1996, the Port and the City terminated the 1980 Agreement with the understanding that both
parties had received fair value. The Port would be allowed, however, to petition the City and
complete the vacation of streets at T-105 as well as streets at T-5 and T-18. Once the City issues
a final ordinance based on the original or an amended petition for the vacation of streets at these
properties, then its obligations to the Port, under the 1980 Agreement and the 1989 Agreement
regarding street vacations, ends. 
On June 22, 1995, the Port and Birmingham Steel (Birmingham) entered into an agreement
(1995 Exchange Agreement) wherein the Port conveyed to Birmingham the south portion of 
T-105 and agreed to finalize its petition with the City to have West Marginal and Idaho vacated
for the benefit of Birmingham. The value of the T-105 property plus the value of the vacated
street area contained in West Marginal and Idaho was exchanged for a parcel of land owned by
Birmingham that the Port needed for the expansion of T-5. 
The Port petition to vacate West Marginal and Idaho for the benefit of Birmingham also included 
S.W. Dakota Street (Dakota), which is needed to complete sales transactions with two other
parties. 
West Marginal, Idaho and Dakota have not yet been vacated by the City.

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
July 25, 2011 
Page 3 of 5 

In June 2002, Birmingham filed for Chapter 11 bankruptcy protection. In connection with the
bankruptcy, GRW obtained title to all of Birmingham's assets including title to T-105 and the
rights to streets adjoining T-105 when vacated, and the 1995 Exchange Agreement became
unenforceable against the Port thereby freeing the Port of its obligation to seek the vacation of
West Marginal and Idaho for the benefit of Birmingham. 
However, in reliance on the City's cooperation under the 1980 Agreement and the 1989
Agreement, the Port has acted to derive a benefit from the City to initiate vacation of specified
streets without paying fair market value for the vacated area in the following ways: a) by
exchanging the value of a vacated street for other land needed by the Port (as was done in the
1995 Exchange Agreement); and b) by negotiating the amount of monetary compensation for the
value of the Port's right to petition the City to vacate a street without the requirement that the
abutting owner pay fair market value for the vacated area (as is comtemplated in the proposed
Transfer Agreement). 
LEGAL REVIEW AND APPROVAL: 
Based upon a legal review of the Agreements, the Port has an enforceable contract right with the
City to have West Marginal and Idaho vacated for an abutting owner without the owner having
to pay fair market value for the vacated street area. 
Also based on legal review, and as a matter of clarification, the proposed Transfer Agreement
does not involve a real estate transaction and is not subject to the Port's real estate policies or
requirement for surplusing or appraisal. 
The proposed Transfer Agreement, with final terms reviewed and approved by legal, has been
signed by GRW and is attached to this memorandum. 
FINANCIAL ANALYSIS SUMMARY: 
CIP Category       NA 
Project Type        Transfer Agreement 
Risk adjusted       N/A 
Discount rate 
Key risk factors        City does not approve Port's petition for West Marginal and
Idaho street vacations. Under the terms of the agreement, the
Port would be required to refund the $500,000 to GRW. 
City charges GRW a fee, and/or seeks to recover the fair market
value for the vacation of the streets. Under the terms of the
agreement, the Port would be required to refund the $500,000 to
GRW. 
The potential for GRW to default on payment is mitigated by the

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
July 25, 2011 
Page 4 of 5 

requirement that GRW transfer the funds into an escrow fund
within ten business days of the execution of the "Transfer
Agreement." 
Project cost for      See "Effect on business performance." 
analysis 
Business Unit (BU)    Container Operations 
Effect on business    Revenue 
performance        Upon the passage of the ordinance by the City of Seattle granting
the street vacations, expected to occur in first quarter 2012, the Port
will receive payment of $500,000 from the escrow agent less
applicable escrow fees. As the payment reflects consideration for
transfer of a right, the amount will be recorded as non-operating
revenue. 
Expenses 
The primary cost of finalizing the street vacations has been and is
staff time and related overhead. Since 2007, when the Port began
tracking costs related to securing these street vacations separately,
operating staff costs and related overhead charged to these street
vacations plus the related Dakota Street vacation, have amounted to
approximately $90,000 (through June 2011). The incremental staff
costs and overhead associated with successfully completing these
street vacations is expected to amount to an additional $12,000. 
IRR/NPV        N/A 
ANALYSIS AND RECOMMENDATION 
The Port still possesses the right it received from the City, under the terms of the 1980 and 1989
Agreements, to petition the City to vacate West Marginal and Idaho without the obligation
requiring an abutting property owner to pay fair market value for the vacated area. The Port's
petition to the City to vacate West Marginal, Idaho and Dakota has not been amended or
withdrawn. 
By virtue of its ownership of T-105, GRW is the only party that can benefit from the Port's right
to vacate West Marginal and Idaho at a reduced cost.
GRW has offered to pay the Port $500,000 for this right, provided the Port completes the
requirements of the vacation petition and causes the City to issue a final ordinance granting
vacation of West Marginal and Idaho. 
Because GRW is the abutting property owner, upon vacation GRW will acquire ownership of the
vacated streets subject to utility easements.

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
July 25, 2011 
Page 5 of 5 

Since the Port has already completed all of the requirements needed for the vacation of West
Marginal and Idaho, except for one easement with Seattle Public Utilities and one with King
County Metro, the Port would benefit from completing the street vacation process in exchange
for a fee from GRW. 
Accepting GRW's offer will enable the Port to recover $500,000 of the funds it provided the
City under the 1980 Agreement. 
If the Port rejects GRW's offer, it must amend its petition with the City to vacate streets at T-105
by excluding West Marginal and Idaho and proceed to vacate only Dakota to meet the
contractual obligations it has with two parties that own property adjacent to this street. 
Once the petition is amended and the City passes a final ordinance for the vacation of Dakota,
the Port's right to petition the City to vacate West Marginal and Idaho at no cost for the abutting
property owner will terminate. 
Port staff recommends accepting the GRW's offer of $500,000 on the terms as proposed in the
attached Transfer Agreement. 
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: 
Transfer Agreement between Port and GRW, including Exhibit A. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
February 9, 2010  Staff briefed the Commission on background and status of street
vacations at various facilities. 
June 1, 2010  Commission authorized Chief Executive to execute consultant services
contracts or service directives, to advertise and award small works contracts, and to
employ Port staff for a total of up to $1,500,000 for street vacations at Terminals 5, 18
and 105. 
October 5, 2010  Commission authorized Chief Executive to execute three perpetual
nonexclusive easements with the City of Seattle to meet certain conditions imposed by
the City of Seattle for the vacation of submerged South Forest Street at Terminal 25. 
May 3, 2011  Commission authorized Chief Executive to execute a Public Access
Easement Agreement with the City of Seattle to partially meet conditions imposed by the
City for the vacation of streets on Harbor Island related to the expansion of Terminal 18.