PORT OF SEATTLE
hIEhIORANDUb1

CObIhZISSION AGENDA             Item No.      6f
Date of Meeting   Aligtist 25,2009
DATE:   July 7, 2009
TO:     Tay Yoshitani, Chief Executive Officer
FROM:   Joan Knutson, Assistant Manager, Industrial P. pertiesl
Scott Pattison, Manager, Industrial Propertie$@
SUBJECT: Fourth Amendment to CityIce Cold Storage Company's Lease #13 1
at Terminal 91
REQUESTED ACTION:
Request for Port Commission authorization for the Chief Executive Officer to execute .the
Fourth Amendment to Lease #LO0013 lwith CityIce Cold Storage Company allowing
subleases and assignments subject to Port's prior written approval and conditions of such
approval.
BACKGROUND:
CityIce Cold Storage Cornpany ("CityIce") is a long-term tenant of the Port of Seattle
("Port") at Terminal 91. CityIce holds four leases with the Port - for land, cold storage
facilties and dry warehouse buildings.
CityIce entered into lease #LO00131 with the Port on November 10, 1987. This lease
was subsequently amended on May 14, 199 1, June 8, 1993 and May 30, 2003. The lease
has strict lirnitations on the ability to sublease or assign the lease which hamper the
interests of the Port and CityIce.
This proposed Fourth Amendment to the lease affords CityIce the ability to sublease or
assign the lease to other parties subject to prior written approval of the Port and subject to
any cotlditions OF such approvril.
1)ESCRIYTION AND JUSTIFICArTION:
CityIce curscntly has several subtenants under this lease. which is not in
conlpliance with suhlcase tcrnls of the lease as currently written.
Anlending the lease to allow sitbleases or an assig~lnlentof the lease, sub.jcct to
prior written approval of the Post and s~tb.jcctto any conditions of s11c.happroval,


COhIILlISSION LIGENDA
Tay Y mhitani, C11it.L'Esccut i\,cOt't'iccr
July 07, 2009
Page 2 of 3
would cnahle Cityice to bring the agrccnicnt inlo compliance wit11 terms of the
lease, while retaining key business partners.
Affording CityIce the ability to propose sublease and or assign~nentof the lease
woilld allow the Port to entertain alternative co~n~nercialarrangements that may
better serve Port interests over time.
Upon approval of the Fourth Amendment, Port staff would draft "Conditional
Consent to Sublease" documents for existing subleases under this lease.
The Port and CityIce would then work collectively to ensure the lease is brought
into, and maintained in full compliance with these lease terms and conditions.
The "Assignment and Sublease" sections of the lease would be co~lsistentwith
current Port practices.
STRATEGIC'OBJECTIVES:
Ensure lease terms and conditions are monitored and maintained in full
compliance over the lease term.
Establish lease terms and conditions that are commercially viable and serve the
interests of the Port.
BUSINESS PLAN OBJECTIVES:
Proceeding with this Amendment would allow this tenant to bring its lease into
compliance, while retaining strategic subtenants that serve the mutual interests of
CityIce and Port in the short and long term.

FINANCIAL IMPLICATIONS:
BudgetIAuthorization Summary
brevious Authorizations                                     None
- -- -
I
b r r e n trequest for a        u        t        h        l        l
I Total Authorizations, including this request                                                 None I
Remaining budget to be authorized                                None 1
Source of Funds
No funds needed.


COTIIhIISSION '1GENDA
Tay Yo\hitani. C'hic't'Excci~ti\.cOUficcr
July 07, ZOOC)
Pagc 3 oL' 3

Financial Analysis Summary
CIP Category      N/A
Proiect T v ~ e    N/A
Kisk adjusted
Discount rate
Key risk factors        Assigri~nent,subletting, or license by CityIce does not
relieve tenant of any obligation under the lease thereby
mitigating default risk of potential assignees.
Project cost for      None
analvsis
Business Unit (BU)   Industrial Properties
Effect on business      This a~nendmentwaives the obligation of CityIce to provide
performance        the Port with a percentage of excess rent in the event a
subtenant pays CityIce inore than the rent they pay to the
Port.

ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS:
Do not revise lease terms for subleases or assignments. CityIce would be required
to terminate and evict existing subtenants, and the Port would not have the ability
to assess .the nierits of such subtenancies. This may not serve the Port's short or
long-term objectives and is therefore not recommended.
Amend the current lease agreement's sublease and assignment terms to those
more consistent with Port lease agreements, .thereby: enabling the Port to bring
the current lease into full compliance while retaining those subtenants deenned in
the Port's interest; and lo~lgerterm, the Post would have the ability to consider
proposed sublease or assig~l~nentalternatives and accept. condition, or deny on a
case-by-case basis. This is the recommended a1 ternative.
I'KEVIOUS CONIlCIISSION ACTIONS OK BKIE=FIN<;S:
Noveniber 10, 1987- CityIce entered into leasc #LOO013 1 with the Port
May 14. 1991 - First Aniendmcnt
J~lne8. 1993- Second Aniendincnt
May 30, 2003
-
Thirtl Amendment