Item No.               8h supp
Date of Meeting         February 9, 2021
SR509 Surplus Land Purchase
Supporting Development of the Des Moines Creek West property

Action Requested
Request Commission authorization for the Executive
Director to execute the purchase and sale
agreement between WSDOT and the Port of Seattle,
and approve $3.15 million, which includes $2.9
million and associated costs, in order to purchase a
14.3 acre section of the former SR509 right of way
in the City of Des Moines, WA.

2

The Site Location



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Adding Value to Port Des Moines Creek West Development
Property Details
WSDOT acreage: 14.3 acres
Port acreage: 15.6 acres
Purchase price: $2.9 million
Street Improvements: $1.5
million

Road
improvements

Light Industrial Development Supports SEA
Property acquisition enhances potential to
support aviation supply chain (logistics
companies, manufacturers, service
providers, etc.) and SEA efficiencies
Property acquisition and subsequent larger
development generates jobs and new tax
revenues for City of Des Moines and
surrounding communities
Property development will generate income
to support airport operations and capital
projects
Property development will support Port
Diversity in Contracting and Workforce
Development initiatives
The purchase protects and reserves land for
industrial development

5

Des Moines Creek West Development Schedule
Q2      Distribute RFP
2O21
Q1
2022      Commission approval on ground Lease with Developer

Q2       Break ground and commence Port
2023        revenue
Q3
2024
Facility delivery and certificate of occupancy

Strong Market for Industrial Development
MARKET RENT PER SQUARE FEET







7

Property Development Options


Manufacturing             Office Center                   Distribution            Small Business Incubator


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Financial Summary
Site area
Total Developable Site Area                                    19 acres
Building Area                                              300,000 SF
Des Moines Creek West Stabilized Annual Income          $1,100,000
Cost Basis
Street improvement payment to Des Moines              $1,500,000
14 acre WSDOT Property Acquisition                      $2,900,000
Predevelopment costs                                    $250,000
Total Cost Basis                                               $4,650,000
IRR                                                         *7.8%
Payback period (From stabilization)                              7 years
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Des Moines Creek West Development Recap
Need Commission support to
purchase WSDOT property that
enhances development of adjacent
Port property.
Property development can support
aviation supply chain and generate
positive economic impacts to local
cities
Industrial market is hot and this is an
excellent time to go to market with
this property
We expect lease can be executed to
support development by Q1 2022.
Subsequent development would be
completed sometime in 2024.

Appendix

11

With or Without WSDOT Option
Without the additional
land of WSDOT parcel,
site has limited access &
46% lower projected rent
income.


In addition to
much more
rental
income, more
jobs will be
created when
combining the
two sites.
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