PORT OF SEATTLE 
MEMORANDUM 

COMMISSION AGENDA               Item No.      6b 
Date of Meeting     October 5, 2010 

DATE:    September 29, 2010 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:    Isabel Safora, Deputy General Counsel 
SUBJECT:  Resolution No. 3642, Second Reading and Final Passage, As Amended and
Restated. Amending Unit 20 of the Comprehensive Scheme of Harbor
Improvements Related to the Surplus and Transfer of Title of Certain Real
Property to the Washington State Department of Transportation 
Net Proceeds of Sale: Approximately $6,387,116, including interest and initial payment. 
ACTION REQUESTED 
First Reading of Resolution No. 3642, As Amended and Restated, amending Unit 20 of the
Comprehensive Scheme of Harbor Improvements of the Port of Seattle by declaring certain real
property surplus and no longer needed for Port district purposes; deleting said property from Unit
20 of the Comprehensive Scheme of Harbor Improvements; and authorizing the Chief Executive
Officer (CEO) to execute all documents necessary to transfer title of the property to the State of
Washington Department of Transportation (WSDOT). The Port will receive $6,320,021.00 plus
interest of approximately $67,095.00 in total compensation for the sale of this property. 
On _August 24, 2010, the Port Commission conducted amended Resolution No. 3642 to add the
proceeds of the sale of the transferred property to the Port's Transportation and Infrastructure
Reserve. Because the amendment is inconsistent with Port bond covenants providing that the
proceeds of a sale or condemnation of any Port real property that contributes to the Port's gross
revenues must be applied to capital expenditures upon or for the property which will contribute
in some measure to the Port's gross revenues or to the retirement of bonds then outstanding, Port
staff is requesting that the Port Commission amend and restate Resolution No. 3642 to eliminate
the August 24, 2010 amendment. 
SYNOPSIS: 
In 2009, the Port agreed to sell a portion of Port-owned real property, known as Terminal 46,
which had been leased to Total Terminals International LLC (TTI), to WSDOT. On February 10,
2009, the Commission authorized the CEO to execute a Possession and Use Agreement between
the Port, WSDOT and TTI for the partial taking of T-46. The Commission also authorized the
CEO to amend the Possession and Use Agreement with WSDOT on July 14, 2009, and on March
9, 2010, to execute the Eleventh Amendment to the Lease with TTI, which in part deleted the
area in the Possession and Use Agreement from TTI's lease.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
September 29, 2010 
Page 2 of 6 

The Possession and Use Agreement and this sale allowed WSDOT to proceed with the S.
Holgate to S. King Street Project, which is one of the "Moving Forward" projects associated
with the Alaskan Way Viaduct and Sewall Replacement program. The S. Holgate to S. King
Street project is already underway and will replace the south end of the viaduct, which accounts
for about 40 percent of the entire structure. 
The Port and WSDOT have been in negotiations to determine the final compensation the Port
will receive for the property. The Port's compensation is $6,320,021 for the value of the land,
which is the Port's full-appraised value. The Port will also receive estimated interest amounting
to $67,095 due to the difference in value between WSDOT's original offer of $5,670,000, which 
WSDOT paid to the Port under the Purpose and Use Agreement, and the final agreed upon
compensation of $6,320,021. The Port will not be paid for its improvements to the property
(asphalt, fence and crushed rock improvements valued at $261,852). The Port's total
compensation for transferring this land to WSDOT is estimated to be $6,387,116. This
resolution declaring the property surplus for Port requirements and authorizing the CEO to
transfer title is the last step in the process to sell the property to WSDOT. 
In addition, TTI will receive $1,674,824 from WSDOT for temporary construction easements
and $560,000 in parking lot reconfiguration costs. The parking lot reconfiguration, allowing TTI
to retain the existing number of parking spaces within a smaller footprint, will eliminate the only
possible negative impact on the operation of the terminal due to the sale of the property. 
BACKGROUND: 
The S. Holgate Street to S. King Street Viaduct Replacement Project is one of the "Moving
Forward" projects associated with replacing the Alaskan Way Viaduct with a bored tunnel along
the central waterfront and is critical to public safety because the viaduct is at risk of failure from
earthquakes. This project replaces the south end of the viaduct, which accounts for about 40
percent of the entire structure. It also improves freight and traffic mobility by providing new onand-off
ramps for SR-99 near S. King Street to improve access to downtown; by creating an
overpass for freight coming to and from the Port; and by relocating the existing BNSF Seattle
International Gateway (SIG) Yard tail track to the west. 
A portion of Port owned real property known as Terminal 46, and which had been leased to TTI, 
is required by WSDOT for the S. Holgate Street to S. King Street Project. On February 10,
2009, the Port of Seattle Commission granted approval to the Chief Executive Officer to execute
a Possession and Use (P&U) Agreement between WSDOT, the Port, and TTI, granting WSDOT
possession and use rights to the property. (A copy of the February 10, 2009, Commission memo
explaining the Possession and Use Agreement in detail is attached.). On July 14, 2009, the
Commission granted approval to the Chief Executive Officer to execute the First Amendment to
the Possession and Use Agreement to accommodate WSDOT project design changes resulting in
modifications to the area required by WSDOT.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
September 29, 2010 
Page 3 of 6 

The Possession and Use Agreement enabled WSDOT to have possession of the property, 
allowing WSDOT to advertise for bidders for the construction of Phase I of the project in
February 2009 before WSDOT acquired the real property from the Port under the threat of or by
condemnation. Otherwise, the project would have been delayed.
WSDOT took possession of the required property effective August 1, 2009, and compensated the
Port the amount of $5,760,900 for property to be acquired in fee and TTI the amount of
$1,237,800 for temporary construction easement areas within their leased premises. On March 
9, 2010, the Commission granted approval to the Chief Executive Officer to execute the Eleventh
Amendment to the TTI Lease, which deleted from the lease the area covered under the
Possession and Use Agreement to be transferred to WSDOT under this requested commission
action. 
PROPERTY VALUE EVALUATION: 
Following full execution of the Possession and Use Agreement, the Port and WSDOT have been
in negotiations with respect to final compensation to the Port pending this action to fully transfer
the deed to the property. 
The Port completed an independent appraisal of the subject property and determined the fair
market value to be $6,581,873 (fee land and site improvements) versus the amount WSDOT had
offered and paid to the Port of $5,670,900. The Port appraisal is broken down as follows:
Fee Land:                           $6,320,021 
Improvements (Asphalt, Fence & Crushed Rock)   $ 261,852 
Total                                 $6,581,873 
In addition to the above difference in the opinion of value, the Port and WSDOT had a difference
of opinion with respect to costs to cure the damages associated with the required modifications to
the Terminal 46 parking area within the TTI leasehold as a result of the WSDOT project.
WSDOT initially estimated that cost at $20,000. These parking lot modifications within TTI's 
leasehold are required to prevent any negative impact on their overall terminal operations. The
issue was resolved when WSDOT agreed to work directly with TTI and compensate them
directly for the costs to cure the damages to their facility. Accordingly, WSDOT and TTI agreed
to a cost of $560,000 for which TTI will be paid to complete the necessary parking lot
modifications.
WSDOT has agreed to pay the Port's full appraised value of $6,320,021 for the fee property with
the understanding that the value for the asphalt, fence and crushed rock improvements be

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
September 29, 2010 
Page 4 of 6 

included in the fee value. The Port will not be paid for any costs associated with the parking area
modifications. However, the Port will be paid interest at 12% per annum for the $559,121.00 
difference in value between the original WSDOT offered amount of $5,670,900 paid on August
1, 2009 and the final agreed upon compensation amount of $6,320,021. The estimated
accumulated interest amount to be paid to the Port is $67,095.00. The elimination of the
improvements value in the amount of $261,852 from the Port's total appraised value amount of
$6,581,873 equates to a difference in value of 3.98%.
Port staff believes this to be a reasonable compromise and results in total compensation to the
Port of $6,320,021.00 plus interest of approximately $67,095.00. 
A breakdown of the compensation difference between the original Possession and Use
Agreement, as amended, and the final compensation, as proposed, is as follows: 
Original Possession and    Final Compensation 
Use Agreement           and 
(per Commission Memo     Execution of Final
dated February 10, 2009,        Documents 
as amended per
Commission Memo dated
July 14, 2009) 
Fee Area                      87,159 Square Feet       Same 
Fee Area Purchase Offer payable to the   $5,920,350            $6,320,021.00 
Port                             (reduced by deduction for
Special Benefits below) 
Temporary Construction Easement Area  113,540 Square Feet      Same 
Removal & Installation of Security     $10,000               Same 
Cameras to TTI 
Temporary Construction Easement Offer  $1,227,800            $1,674,824 
payable to TTI 
Asphalt Paving and Chain-link fence    $13,550              $0 
improvements to Port 
Parking Lot Reconfiguration and      $20,000              $0 
restriping costs to Port 
Parking Lot Reconfiguration costs to                        $560,000 
TTI 
Deduction to fee purchase offer for     $193,020              $0 
Special Benefits to the Port (removal of
railroad spur and landscape easements
from property remaining in the Port's
ownership) 
FINANCIAL IMPLICATIONS

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
September 29, 2010 
Page 5 of 6 

Source of Funds 
The Port will receive $6,320,021 in compensation from WSDOT for this property. The Port
received an initial payment of $5,760,900 in August 2009 when WSDOT took possession of the
property. The remaining balance of $559,121, plus interest, is payable at transfer of title. 
Financial Analysis Summary 
CIP Category       N/A 
Project Type        N/A 
Risk adjusted       7.5% 
Discount rate 
Key risk factors      No remaining risk factors are identified. The title transfer documents
related to this land sale have been finalized. 
Project cost for      N/A 
analysis 
Business Unit (BU)    Seaport Container Operations 
Execution of the final title transfer documents will have no effect on
Effect on business
business performance.
performance 
All components of this land sale which impact rental income have
already been implemented, based on Commission approval on 2/10/09
and 7/14/09 to execute and amend the WSDOT Possession and Use
Agreement. 
The gain on the sale of the land will be recorded as Non-Operating
Revenue. 
NPV          The final sales proceeds of $6.3 M reflects current fair market value
for the 2.0 acre parcel, as determined by independent appraisal.
1.24 acres of that 2.0 acre parcel was within the TTI leasehold area at
Terminal 46, generating revenue at the current blended eagle rate. The
remaining 0.76 acres to be sold to WSDOT was not under lease or
generating revenue to the Port.
The NPV of expected cash flows is shown below and reflects lost
future lease payments within the TTI leasehold area, offset by sales
proceeds for the entire parcel. 
NPV
$2,691
(in $000's)
PREVIOUS COMMISSION ACTION 
On February 10, 2009, the Commission authorized the Chief Executive Officer to execute
a Possession and Use Agreement between WSDOT, the Port of Seattle and TTI for the

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
September 29, 2010 
Page 6 of 6 

partial taking of Terminal-46 for the S. Holgate Street to S. King Street Viaduct
Replacement Project. 
On July 14, 2009, the Commission authorized the Chief Executive Officer to execute the
First Amendment to the Possession and Use Agreement between the WSDOT, the Port of
Seattle and TTI for the partial taking of Port of Seattle Terminal 46 for the S. Holgate
Street to S. King Street Viaduct Replacement Project. 
On March 9, 2010, the Commission authorized the Chief Executive Officer to execute the
Eleventh Amendment to the Lease with TTI, which in part deleted from the lease the area
covered under the Possession and Use Agreement with WSDOT. 
August 10, 2010, First Reading of Resolution No. 3642 and public hearing. 
August 24, 2010, Second Reading and Final Passage of Resolution No. 3642, as
amended, to add the proceeds of the sale of said property to the Port's Transportation and
Infrastructure Reserve.

OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: 
Resolution No. 3642, As Amended and Restated. 
Aerial View of the area to be transferred.