7a Supp Final
ITEM NO: 7a_Supp DATE OF MEETING : April 6, 2010 Real Estate Division Inventory Port of Seattle Commission April 6, 2010 Assessment Protocol Honor principles of the Century Agenda Determine Income from Operations (IFO)/Net Operating Income (NOI) for each property Establish range of investment/investor criteria Apply criteria to individual properties Establish a range of estimated property values Identify specific attributes that affect individual properties Describe obstacles that hinder individual properties Guiding PrinciplesCentury Agenda Encourage manufacturing and industrial growth Use of levy funds for community benefit and provide infrastructure that advances trade and commerce Advance land use that supports light industry, utilities, freight hauling and public transportation Assign priorities based upon a tiered system: Tier 1Direct uses (cargo and cruise terminals) Tier 2Indirect uses (World Trade Center, ERC) Tier 3Unrestricted uses (Tsubota, CEM) Valuation Principles Rent assumptions: Projections based on current rates increased by inflation Building occupancies based on 2010 Budget average occupancy Expense assumptions: Actual expenses where appropriate/2008 BOMA Experience Exchange Report (most current available) Future years increased by inflation Cap rates: 7.5%-9.5% @ 25 basis point increments Discount rates: 8.0%-10.0% @ 25 basis point increments Valuation Principles Land sites Based on land values from other port owned sites for which there was a recent appraisal Inflation assumption: 2.5%/year over 10 years Applied capital improvement expenditures consistent with plan of finance Assumes all sites environmentally clean Yields a range of estimated values and are indicative rather than conclusive Portfolio Management $'s in Thousands PROPERTY LOW VALUE HIGH VALUE Harbor Marina Corporate Center 12,749 17,172 Terminal 34 2,401 3,078 Pier 2 2,990 5,554 Terminal 5 SE (Chelan Caf/Mission to Seafarers) (62) (31) World Trade Center West 11,582 15,181 Bell Street Garage 16,658 21,454 Central Waterfront 25,593 34,101 CEM 9,110 9,110 Sub Total: $81,021 $105,619 Harbor Services $'s in Thousands PROPERTY LOW VALUE HIGH VALUE Bell Harbor Marina value Bell Harbor Marina value imbedded Bell Harbor Marina imbedded in totals in Central Waterfront totals Shilshole Bay Marina 53,452 71,261 Harbor Island Marina 1,700 1,700 Sub Total: $55,152 $72,961 Facilities Management and Real Estate Development $'s in Thousands PROPERTY LOW VALUE HIGH VALUE Real Estate Development Terminal 91 Uplands 67,039 80,659 Tsubota Steel 2,619 4,863 Sub Total: $69,658 $85,522 Facilities Management Pier 69 15,500 22,621 Sub Total: $15,500 $22,621 Tier 1 Properties $'s in Thousands PROPERTY LOW VALUE HIGH VALUE Bell St. Pier (Central Waterfront Project) 25,593 34,101 Sub Total: $25,593 $34,101 Tier 2 Properties $'s in Thousands PROPERTY LOW VALUE HIGH VALUE Harbor Marina Corporate Center 12,749 17,172 Pier 2 2,990 5,554 World Trade Ctr West 11,582 15,181 Bell Street Garage 16,658 21,454 Bell Harbor Marina value imbedded Bell Harbor Marina value Bell Harbor Marina in totals imbedded in Central Waterfront totals Shilshole Bay Marina 53,452 71,261 Pier 69 15,500 22,621 Sub Total: $109,931 $153,243 Tier 3 Properties $'s in Thousands PROPERTY LOW VALUE HIGH VALUE Terminal 34 2,401 3,078 Terminal 5 SE (Chelan Caf/Mission to Seafarers) 0 (62) 925 (31) Harbor Island Marina 1,700 1,700 Terminal 91 Uplands 67,039 80,659 Tsubota Steel 2,619 4,863 CEM 9,110 9,110 Sub Total: $82,807 $99,379 Total Values by Operating Group $'s in Thousands PROPERTY GROUP LOW VALUE HIGH VALUE Portfolio Management $81,021 $105,619 Harbor Services (Rec Boating) $55,152 $72,961 Real Estate Development $69,658 $85,522 Pier 69 Facilities Management $15,500 $22,621 Total: $221,331 $286,723 Other Considerations Shilshole legal limitations/State legislative authority Bell Harbor Marina limitations/MUP/funding Bell St. Pier (Central Waterfront Project) includes P-66 Cruise Terminal Excludes sales/brokerage costs Assumes environmentally clean Results in loss of 7 public access points Does not recognize allocations of $10.6MM ($8.6MM net) includes Corporate ~ $5.9MM Real Estate ~ $3.9MM CDD/Seaport ~ $0.8MM Preliminary Property Recommendations Pier 34 Market for Sale T-5 SE Market for Sale (Chelan Caf/Mission to Seafarers) Harbor Island Marina Market for Sale Tsubota Market for Lease T-91 Uplands Market for Lease CEM Continue current lease negotiations Bell St. Pier (Central Waterfront Project) Maintain WTC West Maintain WTC Garage Maintain Harbor Marina Corp Center Maintain Pier 2 Maintain Shilshole Bay Marina Maintain Pier 69 Maintain T-5 SE and Easement (Mission to Seafarers) T-5 SE (Chelan Caf)
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