PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA             Item No.      7b 
Date of Meeting    July 26, 2011 

DATE:    July 15, 2011 
TO:     Tay Yoshitani, Chief Executive Officer 
FROM:    Michael Burke, Director, Leasing and Asset Management 
SUBJECT:  Briefing on the Fifth Amendment to the Terminal 18 Lease and the
Second Amendment to the Terminal 18 Crane Agreement with SSA
Containers, Inc. and SSA Terminals, LLC, and on the First Amendment to
the Supplemental Crane Agreement between the Port and the Trustee. 

SYNOPSIS: 
The Port is proposing two amendments to the leases in effect between the Port and SSA
Containers, Inc. (SSA) and SSA Terminals, LLC (SSAT) at Terminal 18 (T-18). These 
amendments reflect the changing nature of the container business, especially the upsizing
of vessels calling at T-18. These amendments will also create an incentive to retain and
increase container volume at T-18 by waiving the intermodal lift fee for five years. The
Port also benefits from these amendments by not being required to purchase new, or
replace existing, Port-owned cranes with our limited capital. The Port will lose
intermodal lift revenue with these amendments, which is projected to be $350,000 for this
year alone. In addition the Supplemental Crane Agreement between the Port and the
Bond Trustee will need to be amended. 
The Port of Seattle, SSA Containers, Inc. (SSA), and SSA Terminals, LLC (SSAT)
("SSA" together with "SSAT," hereinafter called "SSAT") have agreed to two proposed
amendments to the Terminal 18 Lease and the Terminal 18 Crane Agreement. The Bond
Insurer for the T18 bonds, National Public Finance Guarantee Corporation (NPFG), has
reviewed and approved all three amendments. 
The proposed amendments serve three purposes: 
Provide additional tools to retain current and recruit new container business.
By waiving the on-dock lift fee and some volume guarantees, the Port is
supporting efforts to recruit new business to Terminal 18 and retain or create jobs.
In addition, these amendments facilitate getting larger, more efficient container
cranes to Terminal 18 to enable that facility to efficiently handle the larger ships
that the current customers of that terminal plan to bring to the Pacific Northwest

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 15, 2011 
Page 2 of 5 
in the near future. The industry trend is clearly to upsize the vessels in the
transpacific trade, and the Port needs to be able to handle ships in the 10,000 to
12,000 TEU size. These larger cranes will help retain the current customers of the
Port and make the Port more competitive for additional business. 
Relieve the Port of current obligations for crane purchase, including costs for
latent design flaws. Under the current lease terms, the Port is obligated to
replace existing container cranes or provide additional ones at the customer's
request due to high volumes. This is a significant financial obligation for the Port.
In exchange for the consideration listed above, SSAT waives this requirement and
agrees to purchase cranes necessary for their operations. As owners of the cranes,
SSAT will be able to respond to market forces more quickly and be responsible
for repair of any design flaws that may become apparent. 
Resolve questions regarding interest accrued from a proposed cash deposit
for lease security. SSAT provided a cash deposit in lieu of bonds for most of its
lease security requirement at Terminal 18, and interest accrued from this deposit
will be for the benefit of SSAT and used to meet future increases needed in lease
deposit as the rent increases. 
BACKGROUND: 
In the late 1990s, the Port expanded Terminal 18 by over 90 acres and made other
improvements. The expansion was funded in part by project-specific bonds guaranteed 
by terminal revenues, and SSAT agreed with the alternative financing model. The bonds
are insured by National Public Finance Guarantee Corporation (NPFG), formerly known
as MBIA Insurance Corporation (MBIA). Because of this arrangement, any amendments
to certain documents, including the lease and the crane agreement, cannot take effect
without NPFG consent. 
Under the structure required by the bond financing on the Terminal 18 project, the Port
leased Terminal 18 to the Bond Trustee, currently the Bank of New York Mellon,
formerly Chase Manhattan Bank, ("Bond Trustee") under a Base Lease agreement. The
Bond Trustee subleased the terminal back to the Port under a Leaseback agreement and
the Port sub-subleased the terminal to SSAT under the Terminal 18 Lease.
As noted above, although purchasing cranes has previously been a positive financial
investment for the Port, cranes are becoming obsolete faster because of upsizing of
container ships. Cranes require a significant upfront cash investment and the shorter life
spans make recovering that investment more difficult. SSAT already has the right,
through the Crane Agreement, to bring their own cranes onto the Terminal, as long as the
cranes do not overload the capacity of the dock. SSAT has ordered six new cranes for
Terminal 18. This makes it unlikely SSAT will use any Port cranes beyond any
minimum guarantee and that makes it unlikely the Port will adequately recover its
investment in any newly purchased cranes.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 15, 2011 
Page 3 of 5 

The newer generation of container vessels, with 12,000 twenty-foot equivalent unit
(TEU) capacity and greater, need cranes that can reach further and higher than the Port's
largest cranes can handle. With larger capacity cranes, Terminal 18 will have a market
advantage for bringing in additional volume from the carriers such as Maersk, CMACGM
and MSC, which have made significant commitments to these larger vessels. 
As allowed in the existing agreements, SSAT may bring on six new container cranes to
Terminal 18 with this expanded capacity. The first of these cranes are expected to arrive
in Seattle by the end of the year. SSAT believes the addition of these new cranes is
necessary to keep the current customer mix at Terminal 18 satisfied. SSA may also bring
on three additional cranes to the terminal next year. 
SSAT believes it can purchase cranes more cost effectively than using cranes purchased
by the Port. SSAT should be able to purchase the cranes at a lower cost and with faster 
delivery than the Port because of both market leverage and not needing to factor in
overhead required to manage a public bid contract. Port staff estimates these savings are
at least 10% of the initial cost of the crane. SSAT has responsibility for maintenance and
operational costs for cranes whether it or the Port owns the crane. SSAT also bears the
risk of latent design defect costs, such as those the Port has incurred with our cranes at
Terminal 46. 
By purchasing its own cranes, SSAT relieves the Port of a major financial obligation and
allows the Port to use its funds for other high-priority projects without diverting scarce
capital resources. With SSAT bringing on their own cranes to the terminal, future use of
Port-owned cranes is expected to be at the minimum guarantee levels of the lease, not
generating enough return to justify the cost to purchase new cranes. 
The waiving of the Port's share of the on-dock intermodal lift fee, currently at $11.60 per
lift, will help draw additional business to the Port. This proposed amendment will waive 
the fee for five years and will be applicable to any volume beyond a tenant's minimum
guarantee. SSAT does not have a minimum guarantee at Terminal 18. 
Waiving SSAT crane rent minimum guarantee if annual volumes fall below 250,000 lifts
at Terminal 18 helps protect SSAT if business leaves the terminal, helping SSAT justify
the risk of purchasing cranes. If volumes fell to this level, SSAT would still pay crane
rent for the volume handled by Port-owned cranes on the terminal, but they would not be
billed for any shortfall between actual usage and the minimum annual guarantee. It is
also likely that when volume levels are below 250,000 lifts per year, there would be no
intermodal usage. 
Because of the alternative financing used to fund the Terminal 18 expansion, SSAT has
had difficulty obtaining a lease bond or letter of credit that complies with the enhanced
requirements in the lease. The current lease does not specify which party would get any
interest accumulated from a cash deposit. The proposed lease amendment clarifies that

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 15, 2011 
Page 4 of 5 
the interest or earnings from SSAT's cash deposits would accrue to SSAT's benefit and
be held by the Bond Trustee to be applied toward future increases in the lease security
requirement. 
Due to the Most Favored Nations clause in the Terminal 5 lease, the Port must offer
Eagle Marine Services Ltd. ("Eagle Marine") a similar incentive on intermodal lift fees,
after Eagle Marine meets their minimum guarantee, currently at 51,266 lifts per year.
This incentive would only be for the same five-year period and only to the extent that
SSAT uses the Terminal 18 on-dock facility and therefore benefits from the waiver of the
intermodal fee in a given year. The Terminal 5 lease would need to be modified based
on the outcome of negotiations with Eagle Marine. However, Commission approval of
the proposed amendments with SSAT will set some part of this incentive in place with
Terminal 5 as well. 
The proposed Fifth Amendment to Terminal 18 lease and Crane Agreement will not take
effect until it has been reviewed and approved by the Credit Facility Issuer, NPFG, as
required by the Terminal 18 Lease. 
MAJOR ELEMENTS OF THE PROPOSED AMENDMENTS: 
The major elements of the proposed amendment to the Terminal 18 Lease and Terminal
18 Crane Agreement are as follows: 
1)  Fifth Amendment to the Terminal 18 Lease 
a.  Modify Section 4.2, Basic Land Improvements Rent; Intermodal Yard (IY)
Facilities Rent and IY Facility Charges, subsection (g), of the Terminal 18 lease
where the Port will forgo its portion of the Intermodal Yard Facility Charges for a
period of five (5) years, effective January 1, 2011. 
b.  Modify Section 4.7, Security of Rent Payments, of the Terminal 18 Lease to allow
the Port to provide accumulated interest income, if any, in the event SSAT
provides a cash security deposit in place of a letter of credit or a surety bond. 
2)  Second Amendment to the Terminal 18 Crane Agreement 
a.  Modify Section 5 of the Crane Agreement to relieve the Port of the future capital
commitments of replacing Port-owned cranes on Terminal 18. Currently, the Port
is potentially obligated to provide additional cranes at Terminal 18 if crane use
equals or exceeds 2,000 hours per crane per year and to provide three functional
cranes of similar capacity to the MHI cranes on site. 
b.  Modify Section 6 of the Crane Agreement to provide for adjustments relating to
crane minimum hours, where SSAT is relieved of the crane minimum annual

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 15, 2011 
Page 5 of 5 
guarantee rental charge if the Terminal 18 container volumes fall below 250,000
lifts per calendar year. 
c.  This Second Amendment also maintains the requirement of the first amendment
for SSAT to bring three new cranes to Terminal 18, replacing the Port's 50-foot
gauge IHI cranes. 
d.  SSAT also has the option to bring three additional cranes (Phase II cranes) to the
terminal. If SSAT brings Phase II cranes onto the terminal, then the Port's three
100-gauge MHI cranes will have no minimum annual guarantee beyond 2015. In
addition, SSAT can request the Port to remove the MHI cranes from the terminal
within 24 months of installation of the additional three Phase II cranes, but not
before December 31, 2018. 
3)      First Amendment to the Supplemental Crane Agreement 
The Supplemental Crane Agreement has always committed the Port to provide up
to seven cranes at Terminal 18 in case of an SSA default and the loss of tenantowned
cranes. This requirement would only be enforced? if a new tenant required
Port-owned cranes before leasing the terminal and is considered extremely
unlikely. This amendment clarifies that there might be tenant-owned cranes on
the terminal. 
OTHER DOCUMENTS ASSOCIATED WITH THIS BRIEFING: 
None. 
PREVIOUS COMMISSION ACTION OR BRIEFING: 
None.