8i. Memo

Fishermens Terminal Maritime Innovation Center

COMMISSION 
AGENDA MEMORANDUM                        Item No.          8i 
ACTION ITEM                            Date of Meeting     November 8, 2022 

DATE :     October 6, 2022 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Kelly Purnell, Capital Project Manager IV, Waterfront Project Management 
Kyra Lise, Director Real Estate Development 
Melinda Miller, Director Real Estate Asset Management 
SUBJECT:  Request  for  additional  design  funding  for  Fishermen’s  Terminal  Maritime
Innovation Center (CIP# 801084)
Amount of this request:           $500,000 
Total estimated project cost:    $26,400,000 

ACTION REQUESTED 
Request Commission authorization for the Executive Director to acquire additional funding for
design of the Maritime Innovation Center project in the amount of $500,000. 
EXECUTIVE SUMMARY
As part of the ongoing redevelopment efforts at Fishermen’s Terminal, the historic Seattle Ship
Supply Building will be transformed into a cutting-edge, Living Building Challenge (LBC) certified
Maritime Innovation Center (MInC). The building will be the home port of a business incubator
and accelerator for emerging technologies, businesses, and services in the maritime Blue
Economy.
At the 90% - 100% design level of the MInC, a significant structural design error was discovered
during first round of City of Seattle permit reviews. After researching the impacts of the error
with Port and consultant subject matter experts, it has been determined that a partial redesign
of the foundation and building structure will be required to meet required City of Seattle
structural code. Additionally, a 6-month delay in the project schedule is anticipated, pushing
Commission construction authorization from Q1 2023 to Q3 of 2023. 
A level of effort (LOE) estimate has been developed to perform the redesign work in the amount
of $500,000. The current design budget for the MInC is $3,150,000, 99% of which has been
committed/expended at this time. Therefore, authorization of additional design fees is requested

Template revised January 10, 2019.

             COMMISSION AGENDA – Action Item No. 8i                                  Page 2 of 8
Meeting Date: November 8, 2022 
in  the  amount  of  $500,000  to  complete  the  redesign  of  the  foundation  and  building
superstructure, complete a construction vibration impact analysis of the adjacent FT buildings,
provide risk mitigation through a third-party geotechnical engineering quality review, and
subsequently to progress the design to the final bid set. 
JUSTIFICATION
Additional funding is needed to address the project cost change due to the recent discovery of a 
design error  found during the City of Seattle’s permit structural review. The structural
calculations will need to be revised and a redesign of the structural foundation and building
structure completed to ensure that the project is up to current structural code. Additionally, a
vibration impact analysis on the adjacent Fishermen’s Terminal Buildings C-9 and C-10 will be
conducted to determine current building condition and potential risk of damage during the
foundation installation process recommended by the structural engineering consultant through
a constructability study of the MInC building.
The requested funds in the amount of $500,000 will cover consultant redesign fees, geotechnical
analysis, and internal Port of Seattle labor to administer the design corrections and provide
subject matter expert reviews to ensure that the project can progress to permit resubmittal and
final bid set. 
Diversity in Contracting 
The WMBE utilization goal for Design is set at 15%. 
The project team is working with the Port’s Diversity in Contracting Department to set
Women/Minority Business Enterprise (WMBE) aspirational goals for both the MInC and the Site
Improvements projects for Construction. 
In pursuing the Living Building Challenge credential, the Maritime Innovation Center project will
satisfy performance areas that include Equity and Inclusion, with diversity in contracting being
one of the metrics. The Equity-based Living Building Challenge compliance items are thus also
expected to help us achieve the Port’s commitment to increasing the utilization of WMBE
businesses in its contracting processes.
DETAILS 
With respect to the overall progress of the FT Redevelopment Program, since last coming before
the Commission in May 2021, the Port has made the following progress:   
• The Maritime Innovation Center has completed the 90% and 100% reviews; however the
design error that was discovered will require a partial redesign.
• Submitted for construction permit at 90% completion, at which point the design error
was discovered during the City’s structural review. 
• Contracted with two artists for 1% for Art. 
• Drafted the layouts for the interpretive signage for the FT Site Improvements. 

Template revised June 27, 2019 (Diversity in Contracting).

             COMMISSION AGENDA – Action Item No. 8i                                  Page 3 of 8
Meeting Date: November 8, 2022 
• Completed a constructability study for the foundation and temporary building structure
relocation. The study confirmed the constructability of the design and is informing how
to minimize impacts to operations during construction. 
• Completed a foundations alternatives analysis as risk mitigation and due diligence,
confirming that the selected alternative for driven pile foundation is the most costefficient
solution for the project. 
Updated Cost Information at 100% Design of Maritime Innovation Center 
Elements that have contributed to the Maritime Innovation Center’s project cost include, but are
not limited to:
(1) Escalation adjustment triggered by skilled labor shortages realized in 2022, construction
market volatility, and supply chain shortages for steel and long-lead materials. 
(2) Additional analysis required to confirm feasibility of current foundation design and
construction methodology. 
(3) Discovery of design error that will require a partial redesign of the project and correction
to the structural calculations to comply with City of Seattle structural code and ensure the
building is seismically resilient. 
The Site Improvements project does not need additional funding to complete design and
permitting at this time.
Staff will return to the Commission once the MInC project design has been corrected and fully
permitted to request authorization for advertisement for construction bids, as well as
construction funding for the proposed MInC (U00414) and the Site Improvements (U00320)
projects.
Schedule 
Commission design authorization (Initial FT Redevelopment)          2016 Quarter 4   
Design start                                                                2019 Quarter 2   
Design additional funds request                                       2021 Quarter 2 
Design correction funds request                                      2022 Quarter 4 
Commission construction authorization                               2023 Quarter 3   
Construction start                                                        2024 Quarter 2  
In-use date                                                                2025 Quarter 3 




Template revised June 27, 2019 (Diversity in Contracting).

             COMMISSION AGENDA – Action Item No. 8i                                  Page 4 of 8
Meeting Date: November 8, 2022 
Cost Breakdown 
Design                                                                                          
MInC Building                                          $500,000       $3,650,000  
Site Improvements                                          $0       $1,525,505  
Construction                                                                                    
MInC Building                                                   $0      $22,750,000  
Site Improvements                                          $0       $1,677,495  
Total                                                                                                         
MInC Building                                                 $0       $26,400,000 
[does not account for $5M State grant]                                          
Site Improvements                                          $0       $3,203,000  
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1 – Do nothing – Do not approve the requested action that allows to complete
proposed MInC and Site Improvements projects. 
Pros:
(1) Retains Port capital for other priority projects and financial initiatives. 
(2) Avoids temporary construction impacts to existing fishing and upland tenant business
operations. 
Cons:
(1) Missed opportunity to implement FT Long-Term Strategic Plan objectives of supporting
fishing and maritime clusters.
(2) Loss of $5 million grant funds from Washington State Department of Commerce towards
the construction of the MInC. 
(3) Missed opportunity for partnering with Washington Maritime Blue in creating FT based
hub for regional innovation initiative and achieve Port objectives of advancing maritime
industry through innovation and modernization. 
(4) Missed opportunity to enhance public awareness and enjoyment of Fishermen’s
Terminal. 
This is not the recommended alternative. 
Alternative 2 – Do not approve the requested action and postpone MInC and site improvement
projects. 
Pros:
(1) Retains Port capital for other priority projects and financial initiatives. 
(2) Enables factoring of more exact economic condition information into project approval
decision. 

Template revised June 27, 2019 (Diversity in Contracting).

             COMMISSION AGENDA – Action Item No. 8i                                  Page 5 of 8
Meeting Date: November 8, 2022 
(3) Delays temporary construction impacts to existing fishing and upland tenant business
operations. 
Cons:
(1) Likely higher cost of completing construction bid documents due to delay and restarting
remaining design and permitting process at future point. 
(2) Potential missed opportunity to capitalize on market and implement FT Long-Term
Strategic Plan objectives of supporting fishing and maritime clusters, particularly as the
sector begins to recover from the COVID-19 pandemic. 
(3) Loss of $5 million grant funds from Washington State Department of Commerce towards
the construction of the MInC. 
(4) Potential missed opportunity for partnering with Washington Maritime Blue in creating
FT based hub for regional innovation initiative and achieve Port objectives of advancing
maritime industry through innovation and modernization. 
(5) Potential missed opportunity to capitalize on market and to enhance public awareness
and enjoyment of Fishermen’s Terminal. 
This is not the recommended alternative. 
Alternative 3 – Approve design funding to correct the design error discovered during permit
review for the proposed MInC that will allow for the completion of the MInC and FT site
improvements projects.
Pros:
(1) Implementation of FT Long-Term Strategic Plan objectives of supporting fishing and
maritime clusters as well as improving long-term financial viability of FT. 
(2) Creation of FT based hub, in financial partnership with the State of Washington, for
regional innovation initiative and achieve Port objectives of advancing maritime industry
through innovation and modernization. 
(3) Addition of major maritime business tenant(s) and needed light industrial space within
the Ballard Interbay area. 
(4) Redevelopment of existing vacant and dilapidated facility areas and make an architectural
statement at site entrance. 
(5) Enhancement of public awareness and enjoyment of Fishermen’s Terminal. 
(6) Support the creation of many new jobs in the maritime/manufacturing sector. 
Cons:
(1) Requires major Port investment of funds. 
(2) Creates  temporary  construction  impacts  to  existing  fishing  and  tenant  business
operations. 
(3) Moving this project forward at this time during continued unprecedented market
uncertainty is an inherent risk we must manage by evaluating market information on an
ongoing basis. 

Template revised June 27, 2019 (Diversity in Contracting).

             COMMISSION AGENDA – Action Item No. 8i                                  Page 6 of 8
Meeting Date: November 8, 2022 
This is the recommended alternative. 
FINANCIAL IMPLICATIONS 
The current estimate completed at 100% design increased the anticipated project cost of the
MInC largely due to unprecedented levels of construction escalation caused by rapid inflation
across markets, labor uncertainty, and supply chain shortages. The MInC increased 24%, and the
Site Improvements decreased 8.5% between 90% estimate in July 2022 and 100% estimate in
October 2022. The Site Improvements decreased partly due to a date error in the previous
estimate that triggers construction escalation, a small drop in site electrical costs, and removal
of design allowance at 100% design. 
Cost Estimate/Authorization Summary                     Capital        Expense            Total  
COST ESTIMATE                                                                          
Previous Estimate                                                             
MInC Building                            $19,800,000            $0     $19,800,000 
Site Improvements                        $3,300,000             $0      $3,300,000 
Current Change                                                                            
MInC Building                             $6,600,000             $0      $6,600,000 
Site Improvements                          ($97,000)             $0        ($97,000)
Revised estimate                                                                                   
MInC Building                              $26,400,000             $0     $26,400,000 
FT Site Improvements                      $3,203,000             $0   $3,203,000  
AUTHORIZATION                                                                    
Previous authorizations                                                                            
MInC Building                               $3,150,000              $0   $3,150,000  
Site Improvements                       $1,525,505             $0   $1,525,505  
Current request for authorization                                                                 
MInC Building                                 $500,000             $0        $500,000 
Site Improvements                                $0             $0             $0  
Total authorizations, including this request                                  $0  
MInC Building                                $3,650,000                    $3,650,000
FT Site Improvements                      $1,525,505                    $1,525,505 
Remaining amount to be authorized                                                            
MInC Building                              $23,250,000             $0     $23,250,000 
FT Site Improvements                      $1,677,495             $0   $1,677,495  
Annual Budget Status and Source of Funds 
Both projects were included in the approved 2022 Capital Plan: 
• C801084 FT MInC – total project cost of $19.9 million 
• C801211 FT Site Improvements – total project cost of $3.3 million 


Template revised June 27, 2019 (Diversity in Contracting).

             COMMISSION AGENDA – Action Item No. 8i                                  Page 7 of 8
Meeting Date: November 8, 2022 
Additional funding for cost increases will be covered by C800002 Maritime Management Reserve.
Both projects have been included in the Draft 2023 Capital Plan with updated estimates based
on 90% design completion.
Both projects will be funded by the Tax Levy. The Maritime Innovation Center has received a $5
million contribution towards construction from the State of Washington’s Department of
Commerce. 
Analysis and Summary 
Project cost for analysis              $26,400,000 
Business Unit (BU)                  Maritime Portfolio Management 
Effect on business performance     An updated cash flow forecast will be completed for the
(NOI after depreciation)             request for construction authorization (Q3 2023). 
IRR/NPV (if relevant)                NA 
CPE Impact                       NA 
ADDITIONAL BACKGROUND 
This request for additional design funds is a result of a significant design error discovered during
the construction permitting process. 
• June 23, 2022 – The construction permit package for the FT MInC and Site Improvements
was submitted 90% design to Seattle Department of Construction & Inspections (SDCI).
• August 29, 2022 – The project team was contacted by the structural engineering reviewer
at SDCI to inform them of an error found in the structural calculations and design.
• September 8, 2022 – Project management team received level of effort estimate and
schedule impacts for design correction. 
• November 8, 2022 – Commission meeting to request additional design funds to complete
design correction. 
ATTACHMENTS TO THIS REQUEST
(1) Presentation 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
March 08, 2022 –Commission authorization for the Executive Director to invest at least
$5,718,840 into the Maritime Innovation Center (MInC) to provide required matching
funds for a United States Economic Development Administration grant in the amount of
$5,000,000. 
May 11, 2021 – Commission authorized an additional $1,000,000 in design funding for the
proposed Fishermen’s Terminal Maritime Innovation Center (C801084, U00414) to
complete design and permitting; and (2) to execute an amendment to the existing service

Template revised June 27, 2019 (Diversity in Contracting).

             COMMISSION AGENDA – Action Item No. 8i                                  Page 8 of 8
Meeting Date: November 8, 2022 
agreement with Miller Hull Partnership, LLP for Fishermen’s Terminal Phased Design
Services in the amount of $2,500,000; for a new Not-To-Exceed (NTE) value of $6,000,000.
March 23, 2021 – Commission authorized Design and Permitting completion of the FT Site
Improvements (U00320) Under the New CIP C801211, utilizing $1,525,505 in formerly
authorized funding for the Gateway Building. 
December 8, 2020 – Commission authorized Construction of the MInC as the condition for
executing the Interagency Agreement with Washington State Department of Commerce
to allow the acceptance of a $5M grant towards its construction.
May 14, 2019 – Commission authorized $1,850,000 design funding and an amendment to the
Fishermen’s Terminal Phased Design Services contract, with Miller Hull Partnership LLP,
for $1,000,000 for final planning, design, and permitting for the Maritime Innovation
Center.  
 
January 22, 2019 – The Commission authorized an additional $1,800,000 in design funding
for FT Gateway Building improvements, and the execution of an amendment to the
existing Architectural/Engineering Services contract for FT Redevelopment for $1,000,000
to complete the final planning, design and permitting of the Gateway Building and FT Site
Improvements.
January 8, 2019 – Commission received a briefing regarding Maritime Blue Plan and the
Maritime Innovation Center.   
 
September 26, 2017 – The Commission authorized $1,325,000 construction funding for the
demolition of the existing bank building and Net Sheds 7 and 8.  This work has
not yet been advertised for bids, per direction by the Commission, pending finalization of
a Gateway Building tenant lease agreement. 
December 13, 2016 –Commission authorized an initial $3,000,000 for the Fishermen’s
Terminal Redevelopment program planning and design; the total preliminarily estimated
design cost was $7,000,000.  
May 17, 2016 - Commission received a briefing on the planning strategies comprising the
Fishermen’s Terminal Long-Term Strategic Plan.   
 
October 27, 2015 - Commission received a briefing about the progress of the stakeholder
outreach program for the Fishermen’s Terminal Long-Term Strategic Plan.   
 
August 11, 2015 - Commission received a briefing on the proposed scope and goals in advance
of the launch of the planning process.    

Template revised June 27, 2019 (Diversity in Contracting).



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