7d Supp
Item No. _7d_Supp__ Date of Meeting __Aug. 17, 2010_ Port of Seattle Real Estate Division 2011 Business Plan August 17, 2010 Division Objectives Implement SAO audit recommendations, as appropriate Provide for NOI consistent with 2010 levels, notwithstanding recognition of deferred maintenance costs Commence execution of deferred maintenance obligations Provide for amended real estate policies as necessary with regard to: Purchase and sale of properties Competitive process requirements Establishment of asset ranking system Real Estate 2011 Budget Preview Operating Revenues expected to be favorable by approximately 3% relative to 2010 Budget Positive trailing indicators: Third party revenue 15% favorable as the hospitality market continues to strengthen. Market conditions continue to tighten, albeit with aggressive owner contributions Exposures/ risks: Potential higher vacancies in commercial properties and recreational marinas Eastside Rail Corridor Deferred maintenance costs SAO audit compliance implications Tenant improvement allowances 3 Real Estate Division Financial Overview In $ Thousands 2008 2009 2010 2010 2010 Bud Var Actual Actual Forecast Budget $ % Operating Revenue 34,797 30,132 29,947 29,798 149 1% Total Revenue 34,797 30,132 29,947 29,798 149 1% Direct Expenses 36,355 27,525 31,046 30,949 (97) -0.3% Divisional Allocations (3,413) (3,200) (3,750) (3,802) (52) -1% Corporate Allocations 5,253 5,244 5,808 5,808 0 0% Total Expense 38,195 29,569 33,105 32,956 (149) -0.5% Net Operating Income (NOI) (3,398) 563 (3,158) (3,158) 0 0% 4 Financial Overview Harbor Services Harbor Services 2008 2009 2010 $'s in 000's Actual Actual Budget Revenue 10,491 11,402 11,260 Direct Expenses 5,694 6,077 7,149 Income from Operations 4,797 5,324 4,111 Divisional Allocations 1,589 1,937 2,622 Corp Allocations 2,904 3,089 3,367 Net Operating Income 304 298 (1,878) Depreciation 5,187 5,423 5,320 Net Income (4,883) (5,124) (7,198) 5 Financial Overview Portfolio Management Portfolio Mgmt Group 2008 2009 2010 $'s in 000's Actual Actual Budget Revenue 22,720 17,646 17,347 Direct Expenses 14,849 12,826 13,614 Income from Operations 7,871 4,820 3,732 Divisional Allocations 2,478 2,193 1,966 Corp Allocations 2,157 1,966 2,202 Net Operating Income 3,235 661 (436) Depreciation 4,323 4,299 4,118 Net Income (1,088) (3,638) (4,554) 6 Financial Overview RE Development & Planning RE Dev & Planning 2008 2009 2010 $'s in 000's Actual Actual Budget Revenue 1,270 807 749 Direct Expenses 7,902 727 713 Income from Operations (6,632) 80 37 Divisional Allocations 161 207 283 Corp Allocations 191 190 240 Net Operating Income (6,985) (318) (486) Depreciation 523 227 221 Net Income (7,508) (545) (707) 7 Financial Overview Eastside Rail Corridor Eastside Rail Corridor 2008 2009 2010 $'s in 000's Actual Actual Budget Revenue 0 0 155 Direct Expenses 0 79 513 Income from Operations 0 (79) (358) Divisional Allocations 0 0 0 Corp Allocations 0 0 0 Net Operating Income 0 (79) (358) Depreciation 0 0 0 Net Income 0 (79) (358) 8 Capital Projects REAL ESTATE DIVISION DRAFT 2011 CAPITAL PLAN 08/03/2010 Committed 2011 2011-2015 Bus Plan Prospective 2011 2011-2015 HARBOR SERVICES MIC Seawall Replacement 1,573 1,573 HARBOR SERVICES FT NW Dock East Fender Sys Repl 4,671 4,671 Shilshole Bay Marina Fuel Dock 100 1,000 Central Seawall Replacement 0 915 PORTFOLIO MANAGEMENT FT Net Shed Solution 500 16,600 FT S. Wall Reconstruction 3,000 3,000 PORTFOLIO MANAGEMENT FT C15 HVAC Improvements 400 3,868 FT Paving/Storm Upgrades 750 1,500 Bell St Garage Safety Improve. 0 55 FT C14 (Downey) Bldg Imp 0 450 Tenant Improvements-Capital 775 2,742 T102 Bldg Roof Replacement 100 2,430 Bell Harb Lighting Ctrl Upgrade 550 550 OTHER FT C-2 Bldg Roof & HVAC Rplmnt 50 1,175 RE Green Port Initiative 150 900 P66 Chiller Upgrades 350 350 Fleet Replacement 600 3,000 FT C-15 Bldg Subsidence Imp 150 2,500 Maintenance Shop Solution 300 300 OTHER Small Projects 990 2,990 Contingency Renew & Replace 3,000 17,000 P69 N Apron Piling Cathodic 1,400 2,903 Other 500 2,500 TOTAL COMMITTED $14,359 $28,502 TOTAL BUS PLAN PROS $5,550 $44,470 Real Estate Development and Planning Master planning and land development: North Bay Complete development options study Initiate the environmental review process Engage the City and other stakeholders in the planning process Des Moines Creek Complete new development agreement with City Finalize possible retail option agreement with City Real Estate Development and Planning Other Projects: Complete SCORE negotiation and transfer title Respond as appropriate to the GSA/FAA office requirement for SeaTac and Des Moines sites Continue collaboration City of Burien on the Northeast Redevelopment Area Continue collaboration City of SeaTac on the 28th Avenue S. area Complete second land swap with WSDOT Portfolio Management and Leasing Property management Achieve net operating income and occupancy targets Fishermen's Terminal Complete asset condition examination and adopt 20 year asset plan Complete FVO lease renewal and seawall replacement Conduct due diligence and prepare to receive title to Downey building Examine alternatives for energy conservation measures utilizing utility company incentive plans Pursue development of CEM site Lease & utilities administration SAO audit compliance Examine alternatives and select lease administration accounting/software packages Complete department organizational review Real estate policy review and recommendations Harbor Services Financial performance: Achieve net operating income target Fishermen's Terminal: Complete asset condition examination and adopt 20 year asset plan Implement net locker solution Commence NW Dock East Fender Pile Replacement Maritime Industrial Center: Complete seawall replacement project Shilshole Bay Marina: Revise long term master plan Complete enterprise risk assessment/plan. P69 Facilities Management Achieve flat utility consumption over 2010 Perform space planning forecast for 2012 Continue improvement of emergency operations & business continuity program Conduct three communication drills and one tabletop exercise Marine Maintenance Manage expense budgets within 2% Continue Green & Sustainability Initiatives Zero increase in landfill waste Stormwater compliance Energy Conservation Parks and public access22 sites, 63 acres Deferred maintenance Multiple projects underway
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