PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA                   Item No.         5c 
Date of Meeting       May 11, 2010 

DATE:      May 6, 2010 
TO:       Tay Yoshitani, Chief Executive Officer 
FROM:     Phil Lutes, Deputy Director, Seaport 
Scott Pattison, Manager, Industrial Properties 
SUBJECT:   Terminal 86 Improvement Agreement between the Port of Seattle and
Louis Dreyfus Corporation 
ACTION REQUESTED: 
Request authorization for the Chief Executive Officer to execute an Improvement
Agreement between the Port of Seattle and Louis Dreyfus Corporation apportioning the
responsibilities of the Terminal 86 improvements authorized by the Commission on
March 23, 2010. No additional funds are requested. 
SYNOPSIS: 
On March 23, 2010, the Commission authorized the Chief Executive Officer to advertise
and execute contracts for upgrades at the Seaport's Terminal 86, which will be
undertaken in partnership with Louis Dreyfus Corporation. 
On November 10, 2009, the Commission authorized the Chief Executive Officer to
execute the 11th Amendment to the Lease between the Port of Seattle and Louis Dreyfus
Corporation at the Terminal 86 Grain Terminal. 
At this time, staff requests authorization for the Chief Executive Officer to enter into an
Improvement Agreement between the Port of Seattle and Louis Dreyfus to perform the
work authorized by the Commission. This Improvement Agreement will not expand the
scope of Port work or funding previously authorized; it will describe roles and
responsibilities between the parties for this joint project. 
Commission authorization is being requested because the Improvement Agreement was
not specifically referenced in the March 23, 2010 authorization.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
March 30, 2010 
Page 2 of 2 
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: 
A copy of the proposed Improvement Agreement 
Commission Memo dated March 23, 2010 
Commission Memo dated November 10, 2009 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
March 23, 2010  Commission authorization for the Chief Executive Officer to advertise
for bids and execute a contract for upgrades at Terminal 86 for a total Port capital
investment estimated at $2,500,000. 
November 10, 2009  Commission authorization for the Chief Executive Officer to
execute the 11th Amendment to the Lease between the Port of Seattle and Louis Dreyfus
Corporation at the Terminal 86 Grain Terminal which extended the decision period by
6 months for the next lease option to extend term 5 years. 
July 28, 2009  Staff provided an overview to the Commission in public session
regarding history of the Grain Terminal, the current situation and lease agreement,
business outlook and the need for future capital investment in this aging facility.

PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA                   Item No.         6e 
Date of Meeting      March 23, 2010 

DATE:      March 1, 2010 
TO:       Tay Yoshitani, Chief Executive Officer 
FROM:     Michael McLaughlin, Director, Cruise and Industrial Properties 
Rod Jackson, Capital Construction Project Manager, Seaport 
SUBJECT:   Terminal 86 Facility Modernization Project Tower Upgrades 
CIP #C800133 
Amount of this request: $2,440,000          Source of Funds: General Operating Funds. 
Total Project Cost: (Estimate) $2,500,000 
State and Local Taxes to be paid: (Estimate)  $148,000 
Estimated Workers Employed:      17 
ACTION REQUESTED: 
Request authorization for the Chief Executive Officer to advertise for bids and execute a
contract for upgrades at the Seaport's Terminal 86 (T-86) Grain Facility for a total Port
capital investment estimated at $2,500,000. The scope of work would focus on the grain
terminal's ship loading systems on towers 2, 3 and 5 in the amount of $2,440,000, for a
total authorization of $2,500,000. 
This authorization is combining two steps of the Resolution No. 3605 process
(authorization to design and authorization to advertise and execute a contract) into one to
expedite a project which has been identified as a safety concern related to potential
failure of ship loading systems on towers 2, 3 and 5 like those that have occurred on
equipment failures of loadings systems on towers 1 and 4. 
SYNOPSIS:
This is a request to reduce risks by proactively repairing aging structural and mechanical
components on Towers 2, 3 and 5 at T-86. Doing so stands to reduce life safety risks and
to preserve revenue flows. Similar components were replaced on Towers 1 and 4 after
they failed and collapsed in recent years.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
March 1, 2010 
Page 2 of 8 
T-86 has been in operation as a grain facility since 1969. T-86 is leased to Louis Dreyfus
Corporation ("Tenant"). Under this lease agreement, the Tenant operates, manages and
maintains the grain facility. The Port is generally responsible for repairs stemming from
"damage and destruction". The facility has five ship loading systems, comprised of
towers and spouts, located on the pier structure serving the vessel berth. 
In 2006 and 2007, there were two major equipment and structural failures on towers 1
and 4. The Port undertook repairs on towers 1 and 4, and they have resumed full service.
Prior to 2006, there was a failure at tower 5, with portions of the tower repaired, but to a
lesser level of repair than on towers 1 and 4.
These three recent failures raised concerns of potential for additional failures on towers 2,
3, and 5. As a result, ship loading systems on towers 2, 3 and 5 were inspected and
evaluated. The engineering risk analysis is complete with recommendations to perform
the same type of upgrade work on towers 2, 3 and 5 that was recently completed on
towers 1 and 4. 
The total cost of investment to upgrade towers and ship loading systems on towers 2, 3
and 5 is estimated at $2.9 million. The Port would expend approximately $2.5 million;
the Tenant would expend an estimated $419,000. The Tenant would be responsible for
design, fabrication and delivery of three new pendants, booms and related equipment
which the Port would install. The Tenant will also exercise its five (5) year option for
lease extension. The Port would be responsible for the cost of design and construction to
replace equipment and components as needed on towers 2, 3, and 5 plus the cost for
design, permitting and construction related to the recommended tower strengthening on
towers 2, 3 and 5. 
Construction work at the Terminal, which will be done in (2) phases will be scheduled
during the seasonal slow periods over the next (18) eighteen months to minimize impact
on grain throughput at the Terminal. All work described in this request is expected to be
substantially complete by October 1, 2011.
Completing this work will reduce risk of ship loading system failures at T-86. Such
failures pose significant life-safety risks. Moreover, such failures shut down vessel
loading, with financial implications for the Port and Tenant, alike. 
Under the current lease agreement, the Tenant has two 5-year options to extend the term
of the agreement through November 15, 2020. Pending approval of this request, Port
staff has received notification that the Tenant would exercise its option to extend the
lease term for five (5) years, commencing November 14, 2010. This extension is subject
to a 10% increase in base rent and also allows for discussion of the tonnage rate schedule. 
Port staff and Louis Dreyfus management have agreed to continue negotiations regarding
a new long term lease agreement which will include major reinvestment in the facility to

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
March 1, 2010 
Page 3 of 8 
extend the life of the aging terminal. Staff will return to the Port Commission in the
future with a new lease proposal if and when a letter of agreement is complete defining
the terms of a new lease.
BACKGROUND: 
T-86 is an export grain terminal that receives stores and loads grain to bulk ships for
export to Asia, notably China, and other foreign markets. Constructed in the late 1960s,
T-86 was originally designed to export wheat; today it handles primarily corn, soybean 
and sorghum from the Midwest. 
T-86 is unique in its ability to load bulk ships directly from rail or via its network of silos.
Direct loading of ships from railcars reduces handling costs and breakage of product
(preserving its quality); silos enable products to be received from rail prior to arrival of
the ship, reducing costs associated with demurrage of railcars. Silos also allow a variety
of types and grades of grain to be received. Ship holds can be filled with different
commodities and, by blending various grades from the silos, a shipment can be prepared
to meet exacting standards.
Product is loaded to ship holds via a network of conveyors, which feed five spouts. Each
spout is mounted to a tower and can be articulated, much like the boom of a crane, to
distribute product evenly throughout each hold. Typically, two spouts operate at any
given time during loading. However, to fill all of a ship's holds, all five spouts are used
intermittently to eliminate the time and expense of repositioning the ship to fill its array
of holds.
Based on an analysis of the three failures of grain spouts on towers 1, 4 and 5, it has been
determined each occurred for unrelated reasons. Nevertheless, as a risk assessment
measure, a thorough review of all five towers, spouts and assemblies was performed.
Repairs of the failed spouts #1 and #4 were completed based upon results of that review.
Towers 2, 3, and 5 and their ship loading systems have been inspected during the past
year and are approved for operation, subject to monthly inspections and testing.
Completion of the requested improvements would reduce risks for the short and longer
terms. 
Impacts to operations from unexpected spout/tower failures have been and could be
substantial. They result in facility shut downs to secure the Terminal prior to resuming
operations on an interim basis with a reduced number of loading spouts. The facility
subsequently must be shut down to undertake repairs. Such shutdowns reduce
throughput volumes (and revenues to the Port and Tenant) and increase demurrage
charges for railcars and vessels, alike.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
March 1, 2010 
Page 4 of 8 
PROJECT DESCRIPTION AND JUSTIFICATION: 
Project Statement: 
This is a request to advertise for bids to undertake upgrades to ship loading tower systems
2, 3 and 5. T he estimate for this work is approximately $2,900,000, with the Port being
responsible for $2,500,000 and the Tenant approximately $400,000. The Tenant will also
exercise its five (5) year option to extend the lease term. 
Project Objectives: 
Reduce risk of future spout failures 
Minimize disruptions to terminal operations during construction. 
Minimize future maintenance & repair work. 
Project will be managed and completed on budget. 
Project will be delivered on time to meet schedule milestones. 
Return facility to acceptable operational standards. 
Upgrade spouts #2, #3 and #5 for longer life and less maintenance. 
Meet customer schedule needs. 
Meet strategic asset management criteria. 
Scope of Work and Schedule: 
Upgrades will be performed in a two-phase approach: 
Phase I - Replace equipment components on towers 2, 3, and 5 
This project would involve the Port contracting to: 
Remove three (3) existing pendants and replace them with three (3) new
pendants/assemblies (supplied by the Tenant) on towers 2, 3 and 5, and to 
Remove three (3) existing booms and replace them with three (3) new
booms/assemblies (supplied by the Tenant) on towers 2, 3 and 5. 
March 2010 through May 2010 
The tenant will provide design, fabrication and delivery to the site of (3) three new
Pendants and (3) three new booms, along with assemblies, fittings and equipment. The
Port will create construction documents for advertisement, bidding and award to install
the new tenant provided equipment. If the contractor installation cost for Phase I is
within the project budget, the contract will be awarded via Port Major Works contracts.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
March 1, 2010 
Page 5 of 8 
May 2010 through September 30, 2010 
Phase I construction will proceed to remove and install new equipment components on
Towers 2, 3 and 5. Work to be substantially complete by September 30, 2010. 
Phase II  Tower and Bullwheel strengthening on towers 2, 3 and 5 
March 2010 through April 2011 
Structural analysis will be performed on towers 2, 3 and 5 followed by
engineering/design for tower strengthening of each tower. Design documents will be
finalized for bullwheel replacements on towers 2, 3 and 5. Port will apply for building
permits. The Port will create construction documents for advertisement, bidding and
award to perform all work described for Phase II. If the contractor installation cost for
Phase II is within the project budget, the contract will be awarded via Port Major Works
contracts.
May 2011 through September 30, 2011 
With building permit issued, Phase II construction will proceed to strengthen towers and
replace bullwheel assemblies on towers 2, 3 and 5. Work to be substantially complete by
September 30, 2011 
STRATEGIC OBJECTIVES: 
This project supports the Port strategy to "Ensure Airport and Seaport Vitality" through
renewing and replacing vital Seaport Infrastructure to the Port of Seattle Waterfront
operations. 
Best management practices will be deployed by the Port staff and tenant in the selection
of materials, work practices and ongoing total cost of ownership. 
BUSINESS PLAN OBJECTIVES: 
This project is aligned with the 2010 Seaport business plan objectives to protect our
current business. It also will serve to: maintain safe reliable facilities and assets which 
provide customers with compelling value; protect jobs in our region and future revenue
sources for the division; and maintain business partnerships with our core customers.
This is a renewal and replacement project to upgrade the equipment and strengthen
structures on towers 2, 3, and 5.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
March 1, 2010 
Page 6 of 8 
FINANCIAL ANALYSIS: 
Budget/Authorization Summary 
Original Budget                                                                              $0 
Previous Authorizations (Seaport Deputy Managing Director)                                       $60,000 
Current request for authorization                                                         $2,440,000 
Total Authorizations, including this request (estimated construction costs)                    $2,500,000 
Remaining budget to be authorized (pending final design)                                         $0 
Project Cost Breakdown 
Construction                                                                           $1,652,000 
Construction Management                                                         $330,000 
Design                                                                                $235,000 
Project Management                                                               $120,000
Permitting                                                                                $15,000 
State & Local Taxes (estimated)                                                         $148,000 
Total                                                                                     $2,500,000 
Source of Funds 
The project was included in the 2010 Plan of Finance under Business Plan Prospective 
CIP# C800133, T86 Grain Facility Modernization, in the amount of $9,900,000. The
cost of this project will be funded from the General Fund. 
The remaining $7,400,000 in the capital plan for CIP# C800133 may be needed for future
facility upgrades to be considered in conjunction with a new lease proposal, currently
being negotiated. 
Financial Analysis Summary 
CIP Category                Renewal/Enhancement 
Project Type                  Renewal & Replacement 
Risk adjusted Discount rate     N/A 
Key risk factors                 Negative financial impact to grain terminal operations if the
upgrade project is not completed within the optimal
timeframe, during the tenant's slow season. 
Potential cost overruns due to project complexity and time
constraints.
Project cost for analysis        $2,500,000 (current cost estimate) 
Business Unit (BU)            Bulk Terminals

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
March 1, 2010 
Page 7 of 8 

Effect on business             This asset replacement project will not generate any incremental
performance                 revenue. However it will eliminate disruptions to the tenant's
terminal operations and the tenant's customers from further
grain spout failures.
Incremental depreciation expense from this project is estimated
at $83,000/year, based on a 30 year asset life. NOI after
Depreciation will decrease by the associated depreciation from
this project. 
NOI (in $000's)           Year 1   Year 2   Year 3   Year 4   Year 5
NOI                   $0      $0      $0      $0      $0
Depreciation              ($83)    ($83)    ($83)    ($83)    ($83)
NOI After Depreciation     ($83)     ($83)     ($83)     ($83)     ($83)
IRR/NPV                 N/A 
ENVIRONMENTAL SUSTAINABILITY/COMMUNITY BENEFITS; 
No impact to the environment is anticipated as a result of this project. Upgrades will be
constructed with materials that have demonstrated long life and durability. 
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS: 
Alternative 1: Do nothing more. Discontinue preliminary engineering and design work.
Address future failures of equipment if and when they occur. The Port is obligated to
undertake repairs stemming from damage and destruction. As a result of previous
failures on towers 1, 4 and 5, and risks identified by engineers at towers 2, 3 and 5.
Alternative 1 is not recommended.
Alternative 2: Undertake Phase I work, replacing pendants and booms on towers 2, 3 and
5, but do not undertake Phase II work. Phase II work addresses structural issues on
Towers 2, 3 and 5 and end-of-life issues with the bullwheels on towers 2, 3 and 5.
Foregoing structural repairs to these towers and replacement of these bullwheels poses
safety and reliability issues over the longer term, with life-safety and financial
implications, as well. Accordingly, Alternative 2 is not recommended. 
Alternative 3: Continue the work underway for Phase I and II scopes of work
(complete final design, prepare construction documents, procure necessary permits,
advertise and award contracts to complete the designs, perform the site work). 
Phase I work - removal and replacement of 3 pendants, 3 booms and associated
equipment provided by Tenant on towers 2, 3 and 5. Phase II work - tower
strengthening and bullwheel replacement on towers 2, 3 and 5. This is the
recommended alternative

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
March 1, 2010 
Page 8 of 8 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
Below is a chronology of events and staff actions, including funding authorizations via
re-delegated authority: 
October 2, 2006  Spout #4 collapses. 
January 2007  Seaport management authorizes $93,000 to design an in-kind replacement
of spout #4. This authorization was subsequently increased by $29,047 to a total of
$122,047. As of August 3, 2007, $117,000 had been spent and this authorization is
scheduled for close-out.
April 19, 2007  Spout #1 collapses. Engineering authorizes by emergency declaration
$90,000 to remove spout #1 from the ship, secure the area and to determine the cause of
the collapse. 
April 24, 2007  Staff was scheduled to request funding in Public Session to repair spout
#4  this Action Item was withdrawn due to the April 19th incident. 
May 8, 2007  Commission briefed in Public Session on collapse of spouts #1 and #4. 
May 2007  Staff determines need to undertake a new approach that will address repairs
to both the spouts and towers at T86, with emphasis on spouts and towers #1 and #4. 
May 22, 2007  Seaport management authorized $200,000 to begin preliminary design
and alternative repairs. 
August 28, 2007  Commission authorized $1,300,000 to design and install temporary
and permanent repairs/upgrades on tower 1 and 4 for a total amount of $1,500,000 in
authorizations. 
July 28, 2009  Staff provided an overview to the Commission in public session
regarding history of the Grain Terminal, the current situation and lease agreement,
business outlook and the need for future capital investment in this aging facility. 
November 10, 2009  Commission authorization for the Chief Executive Officer to
execute the 11th Amendment to the Lease between the Port of Seattle (Port) and Louis
Dreyfus Corporation (Lessee) at the Terminal 86 Grain Terminal which extended the
decision period by 6 months for next lease option to extend term 5 years.

PORT OF SEATTLE 
MEMORANDUM 

COMMISSION AGENDA     Item No.     6a
Date of Meeting    November 10, 2009
DATE:     October 22, 2009 
TO:       Tay Yoshitani, Chief Executive Officer
FROM:    Scott Pattison, Manager, Industrial Properties
Mike McLaughlin, Director, Cruise and Industrial Properties
SUBJECT:  11th Amendment to Louis Dreyfus Lease at Terminal 86 Grain Terminal
REQUESTED ACTION: 
Request Commission authorization for the Chief Executive Officer to execute the 11th 
Amendment to the Lease between the Port of Seattle (Port) and Louis Dreyfus
Corporation (Lessee) at the Terminal 86 Grain Terminal. This amendment would revise
the date when Lessee may elect to exercise its next (5) five year option to extend the
Lease term, providing an additional (6) six month decision period from November 14,
2009 to May 14, 2010. This amendment would also revise the date when the Port must
respond to Lessee's notice from February 14, 2010 to August 14, 2010. This will give
both parties the opportunity to negotiate a longer-term alternative which would be
beneficial to each side.
SYNOPSIS: 
The Terminal 86 Grain Terminal has been in operation for nearly 40 years under the
current lease agreement, presently in its 10th amendment. The Lease was assigned from
Cargill to Louis Dreyfus in 2000. Louis Dreyfus has actively marketed and operated the
terminal since that time. In 2004, the Lease was amended to reduce base (fixed) rent and
eliminate dockage revenue  in exchange the Port receives payment based upon tonnage
volume with a market share component. Financial performance has improved for the
Port as a result of these changes.
The current agreement provides the Lessee an option to extend the lease term for two
additional five (5) year terms. The first 5 year option period would become effective
November 14, 2010, provided Lessee notifies the Port on or before November 14, 2009.
Options to extend are subject to Port approval, which shall not be unreasonably withheld.
The current agreement requires the Port to respond to Lessee's notice to extend the Lease
term on or before February 14, 2010.  We believe there are no significant downsides, and

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer
October 22, 2009
Page 2 of 4
significant potential benefits, to the Port in extending the Lease term by providing the
Lessee an additional six-month decision period from November 14, 2009, to May 14,
2010, to exercise the option, and by revising the date of the Port's response to August 14,
2010.
When the terminal was new, provisions adequately addressed needs for keeping the
terminal operational. However the Lease was silent about responsibility for replacement
of systems that have simply worn out due to age (despite proper maintenance and repair
over their serviceable lives), nor does the Lease speak to upgrades and enhancements to
increase productivity, improve efficiency, or keep up with technology and systems
related to safety and the environment. These are the types of issues to be negotiated.
BACKGROUND AND JUSTIFICATION: 
The parties began discussions in January 2009 to address the current and future needs of
the grain terminal. These discussions have been ongoing, with a target of negotiating a
"Terminal Upgrade Amendment" to the Lease prior to November 14, 2009, the date
when Lessee must either exercise its option to extend the term, or allow the option to
lapse.
The base component to negotiating a Terminal Upgrade Amendment is to reach a clear
understanding of what scopes of work need to be performed and to determine the value of
the future improvements. Accordingly, the Port retained an engineering firm with
expertise in grain terminals to perform a condition survey of Terminal 86, and to
recommend scopes of work with order-of-magnitude costs. This report was just
completed in October  which does not provide adequate time to properly negotiate a
Terminal Upgrade Amendment prior to the lapsing of Lessee's date of decision to
exercise its option.
There is mutual understanding by both parties that a six-month extension on the decision
to exercise the option would provide needed time and the proper negotiation environment
to allow both parties to bring a mutually beneficial alternative to our respective boards for
final approval. We believe there are no significant downsides and significant potential
benefits to the Port in extending the Lease term.
BUSINESS PLAN OBJECTIVES: 
Through collaborative efforts with our customer, identify the upgrades and needed
improvements for the aging facility which were not contemplated or provided for under
the current Lease agreement.
Future upgrades and improvements would be aimed at preserving the competitiveness of
the grain terminal by enhancing structural, mechanical, electrical and/or control systems
and protection of the environment.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer
October 22, 2009
Page 3 of 4

Apportion such investments between the Port and Lessee to better ensure an efficient,
reliable, safe and environmentally-sound facility as a going-concern.
This Amendment, if approved, would provide additional time to identify, consider and
negotiate scopes of work under a shared investment scenario which would be presented
to the Commission in a future proposed Terminal Upgrade Amendment or a new lease
proposal.
FINANCIAL IMPLICATIONS: 
Not applicable. There are no direct financial impacts. This amendment would afford
additional time prior to the Lessee exercising or waiving its option to extend the Lease
term for the upcoming five (5) year option. It would not affect the dates of the option, if
exercised.
STRATEGIC OBJECTIVES: 
Make needed capital improvements in Terminal 86 to extend its useful life, and to
optimize its financial performance now and over time by incorporating some of these
investments into a longer term commitment with the current tenant.
ALTERNATIVES CONSIDERED / RECOMMENDED ACTION: 
1.  Amend the Lease to include upgrades and improvements prior to November 14,
2009. Amending the Lease by this date would not allow time to thoroughly
evaluate the terminal and is therefore not recommended.
2.  Do not provide an extension for Lessee to exercise its option beyond the current
decision date of November 14, 2009. This alternative could reduce incentives for
Lessee to participate in meaningful negotiations with the Port to upgrade and
improve the facility.
3.  Defer by six months the decision dates for the Lessee to notify the Port of its
election to extend the Lease term, and for the Port to respond to this notice. This
would allow time to more thoughtfully consider prospective upgrades and
improvements to the grain terminal not contemplated under the current lease
agreement. This is the recommended alternative.
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
No prior Commission Action has been taken relating to the extension of the decision
dates relating to exercising the next five-year Lease option.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer
October 22, 2009
Page 4 of 4
July 28, 2009 Terminal 86 Grain Facility Briefing  Staff presented an overview of the
Grain Terminal and proposed process going forward with the tenant, Louis Dreyfus, to
the Commission in public session.
October 12, 2004  Commission approved the 10th Amendment to this Lease.