Item 5a Memo

PORT OF SEATTLE 
MEMORANDUM 

COMMISSION AGENDA             Item No.      5a 
Date of Meeting    January 27, 2009 
DATE:    January 21, 2009 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:    Mike Burke, Senior Manager, Container Leasing and Operations 
SUBJECT:  Request for Port Commission authorization for the Chief Executive Officer to:
Execute a Relocation Agreement and All Other Documents Providing for the
Final Reimbursement of Moving and Re-Establishment Expenses Incurred in the
Relocation of Inspiration Media Inc dba Salem Communications, Located within
the Port of Seattle's Terminal 18 Expansion Area on Harbor Island in the amount
of $1,741,687.95. 

BACKGROUND

Inspiration Media dba Salem Communications (Radio Station KKOL AM) ("Salem") was one of
64 businesses located on Harbor Island that were relocated as part of the Terminal 18 Expansion
Project. Reimbursement for relocation expenses is authorized under the Port's Resolution 3263,
Port of Seattle Marine Division Guidelines for Business Relocation Reimbursements for
Container Terminal Expansion Projects, as revised July 10, 1966 ("Guidelines"). On June 1, 
2001 a Settlement Agreement was reached between the Port and Salem, wherein the Port
acquired, under eminent domain, Salem's real property and certain equipment located on Harbor
Island. On December 31, 2001, Salem vacated their premises on Harbor Island. Shortly
thereafter Salem began broadcasting from a barge in Elliott Bay while they attempted to find a
new permanent location from which to broadcast. This search was complicated by numerous
factors, such as the FCC required that for Salem to retain their license the new location must
provide essentially the same signal coverage over the Seattle area as their location on Harbor
Island; Local zoning requirements limited or prohibited radio tower locations. There were
limited land parcels available of a size, topography and conductivity that would allow for the
number of transmission tower arrays (typically 4) necessary to replicate the original radio station
coverage. 

On January 12, 2005, Salem leased property from the Port of Tacoma to re-establish their
transmission building, equipment and towers. Construction of the building, towers (4) and
transmitting equipment installation commenced in 2006. In late 2006, Salem began broadcasting
from the new location.

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
January 21, 2009 
Page 2 of 3 
Since April 24, 2003, Salem submitted various claims for reimbursement of their moving and reestablishment
expenses totaling $5,350,762.72. Port staff, legal counsel and their
communication-consulting experts reviewed every claim and underlying invoice and reached
agreement for a total eligible payment of $2,140,791.64. A partial payment of $399,103.69 was
made to Salem on December 22, 2005, primarily reimbursing expenses of their interim move 
leaving an agreed balance due of $1,741,687.95. 

PREVIOUS COMMISSION ACTION 

On September 28, 1999, the Commission approved Resolution 3346, acquisition by
purchase and/or eminent domain, of Salem's real property on Harbor Island. 

On December 13, 2005, the Commission approved payment of $399,103.69 for
reimbursement of expenses associated with Salem's interim move. 

FINANCIAL ANALYSIS 
Budget/Authorization Summary 
Previous Authorizations (Transfer 12/09/2004 from C001549           3,065,000 
Property Acq./Relocation T18) 
Current request for authorization                                      0 
Total Authorizations, including this request                         3,065,000 
Project Cost Breakdown 
Construction Costs                                           NA 
Sales tax                                                      NA 
Outside Professional Services                                     NA 
Reimbursement of moving and re-establishment expenses            1,741,687.95 
Total                                                1,741,687.95 
Source of Funds 
Committed CIP C102875 "T-18 Complete Real Estate Issues" includes the funds for the
negotiation of the Salem relocation costs. However, the CIP did not include funds for
final payment to Salem in the 2009 Draft Plan of Finance. The $1,741,688 required for
payment to Salem is available due to anticipated timing delays in other 2009 Draft Plan
of Finance committed projects such as the South T25 Container Yard.
This project will be funded from 2007 Revenue Bonds proceeds.

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
January 21, 2009 
Page 3 of 3 
Financial Analysis Summary 
CIP Category            Economic Opportunities 
Project Type             Property Acquisition 
Risk adjusted Discount rate    N/A 
Key risk factors            N/A 
Project cost for analysis       1,741,688 
Business Unit (BU)         Container Operations 
Effect on business          No effect. Relocation expenses are considered part of land
performance            acquisition costs. No depreciation expense will be incurred. 
IRR/NPV             N/A 
REQUESTED ACTION 

Request for Port Commission authorization for the Chief Executive Officer to: Execute a
Relocation Agreement and All Other Documents Providing for the Final Reimbursement of
Moving and Re-Establishment Expenses Incurred in the Relocation of Inspiration Media Inc dba
Salem Communications, Located within the Port of Seattle's Terminal 18 Expansion Area on
Harbor Island in the Amount of $1,741,687.95.

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