PORT OF SEATTLE 
MEMORANDUM 

COMMISSION AGENDA                Item No.               5d 
Date of Meeting      July 13, 2010 
DATE:   July 7, 2010 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:  Michael Burke, Senior Manager, Container Leasing and Operations 
Michael Campagnaro, Manager, Container Leasing and Operations 
SUBJECT:   Accounts Receivable Write-Off for Western Cartage, Inc. 
ACTION REQUESTED: Request for Commission authorization for the Chief
Executive Officer to write off $337,171.36 in outstanding accounts receivables owed
to the Port by Western Cartage in accordance with Resolution No. 3605, as amended,
Section 10.2. 
SYNOPSIS: 
On June 23, 2005, the Port of Seattle and Western Cartage, Inc. ("Western Cartage") 
entered into a five-year term lease agreement for the premises described as 387,930
square feet of yard and 41,280 square feet of warehouse, that included 4,800 square
feet of office located at Terminal 104.
Western Cartage, a casualty of the economic downturn, was in default in the payment
of rent from November 2008 to April 2009. Port staff recognized that with the
economic climate there was little potential to rent the property to another tenant in the
immediate near term. Prior to issuing the default notice, Port staff entered into
discussions with Western Cartage on the potential for rent restructuring to allow
Western Cartage more time to meet its lease obligation. These discussions did not
produce a potential settlement.
On March 4, 2009, the Port claimed against the Western Cartage lease bond for 
$78,018.00 and cash deposit for $42,965.46, and applied the total amount to
outstanding balances. 
The Port continued its efforts to collect outstanding rent. After several efforts to
collect monthly rent and work with Western Cartage to cure the default, the Port 
proceeded with legal action to evict tenant.
The Port was granted judgment in a suit filed by the Port's Legal department, and on
April 30, 2009, it was ordered, adjudged and decreed that Western Cartage was guilty
of unlawful detainer and its tenancy of Terminal 104 was terminated. The Port was
awarded judgment against Western Cartage to collect all rent arrearages, utilities,

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
July 7, 2010 
Page 2 of 4 
finance and maintenance charges, including all other costs and attorney's fees. The
Port found no attachable assets in the corporation's asset search. 
As of June 1, 2010, Western Cartage, Inc. has ignored all collection efforts. An asset
search revealed that Western Cartage has a long list of creditors. The Judgment will
remain in effect for 10 years. At this time, it would be futile for the Port to engage in
further collection attempts. 
In hindsight, Port staff could have moved more quickly to evict Western Cartage and
not try to negotiate a restructured lease to reduce book losses. Following lease
termination, the property was offered for lease through a Request for Proposal
process and is now under lease at a rate reflecting the current market conditions. 
Resolution No. 3605 requires the Commission to approve writing off any accounts
receivable over $300,000. 
BACKGROUND:
Western Cartage was delayed with rent payments staring in November 2008, and Port
staff made past due reminder letters and phone calls to collect past due amounts. The
escalating collection efforts by the Credit Analyst, such as assigning to a third party
collection agency, were on hold waiting for the Property Manager's corresponding
actions. 
The first default/unlawful detainer letter was sent to Western Cartage on December
11, 2008. The default/unlawful detainer letter was followed with e-mail
correspondence and meetings between Western Cartage and Port staff. The Port
utilized its Legal staff for all collection efforts. 
The Port's General Counsel brought action in courts of law and was awarded
judgment. The Port found no assets to attach to the corporation. Therefore, furthering
all collection efforts at this point would be ineffective. If the Port assigned this
account to a third party collection agency, the agency would close the account 
because it is a no asset case. 
As of today, the Port's records indicate accounts receivable due the Port from
Western Cartage total approximately $337,171.36, as outlined in the table below.
Base Rent & Other Charges                                $387,554 
Sales Tax                                                       $164 
Leasehold Tax                                             $32,580 
Lease Bond                                             ($78,018) 
Cash Deposit                                             ($42,965) 
Bad Debt Reserve to Write Off                          $299,315 
Non-Operating Finance Charges to Credit                $37,856

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
July 7, 2010 
Page 3 of 4 
Total Outstanding Receivables from Tenant              $337,171 
This account has been uncollectable for more than 180 days. According to Section 10
of Resolution No. 3605, as amended, if an account is still uncollectable after 180 days
or more, the CEO is authorized to provide for writing off such an account. Any
amount in excess of $300,000 shall be referred to the Commission for final approval
of writing off that account. 
The Seaport Division requests approval for the CEO to write off this uncollectible 
account, and contends that Port staff has made every reasonable effort to resolve or
accomplish the collection of the account. 
FINANCIAL ANALYSIS: 
Financial Analysis Summary:
CIP Category              N/A 
Project Type                N/A 
Risk adjusted Discount     N/A 
rate 
Key risk factors              N/A 
Project cost for analysis      $337,171.36 
Business Unit (BU)          Container Support Properties 
Effect on business             Of the total amount owed by Western Cartage,
performance                   $299,315 in rents, sales tax, and leasehold tax
were expensed as Bad Debt in 2009 creating a
Bad Debt Reserve account. The write-off of
that portion of the balance will be charged
against the reserve and, accordingly, will have
no impact on 2010 Net Operating Income. 
The $37,856 in finance charges were recorded
as Non-Operating revenue in 2008 and 2009. 
The reversal of these charges will have no
impact on 2010 Net Operating Income, but will
reduce Non-Operating Income by $37,856. 
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS: 
Continue efforts to collect bad debt. Western Cartage has ignored all collection
efforts and it had no attachable assets. Further pursuit would not justify the
collection and legal staff's efforts. If the Port assigned this account to a third party 
collection agency, the agency would close the account because it is a no asset
case. This is not the recommended alternative.

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
July 7, 2010 
Page 4 of 4 
Write off outstanding receivables owed to the Port for $337,171.36. Should
Western Cartage pay in the future, the amount would be applied toward
recovering this bad debt. This is the recommended alternative.
OTHER DOCUMENTS ATTACHED WITH THIS REQUEST: 
Letter from accounting requesting authorization to write off account dated April
28, 2010 (Attachment A). 
Finding of fact, conclusions of law, judgment, and order for writ of restitution
dated April 30, 0009 (Attachment B). 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
None