ITEM NO: __7a Supp___ DATE OF MEETING: September 12, 2011 Airport Cargo Logistics Development Strategy Commission Briefing Previous Air Cargo Commission Briefing • February 22, 2011 - Overview of air cargo business, operations, and facilities at Seattle-Tacoma International Airport - Regional economic benefit of air cargo - Changing role of airports for cargo - Air Cargo Logistics Study findings - Strategic development of airport-based Gateway Logistics Center 2 Preliminary Century Agenda Goals: Moving Cargo • Position the Puget Sound region as a premier international logistics hub. • Triple air cargo volume to 750 thousand metric tons. • Grow seaport annual container volume in a sustainable manner to more than 3.5 million TEUs. • Triple the value of the Port's export cargo to over $50 billion. 3 Three Legs of Air Cargo Development • Air Service marketing and business development • On-Airport capital facilities renovation and development • Off-Airport logistics support facilities development 4 Marketing and Business Development • Market and develop new air cargo service - International routes - Focus on Asia, Europe and Middle East - Freighter main-deck service - Facilitate development of belly-cargo service • Market and develop growth of existing service - New destinations - Increase frequencies 5 Air Cargo Facilities at Sea-Tac North Cargo Area South Cargo Area 6 North Cargo Area Map 7 On-Airport Facilities • Implement hardstand expansion and modernization projects for freighter parking - Focus on Cargo II and Cargo VI ramps - Increase hardstand size, and install fuel hydrant and ground power • Plan for growth in airside cargo transfer buildings - Ramp expansion impacts some existing buildings - New buildings will be needed to handle cargo volume growth 8 Off-Airport Logistics Development • Industry-specific air cargo supportive development • Sea-Tac Gateway Logistics Center concept • Focus on properties north of the airfield in Burien and SeaTac • Focus of remainder of briefing 9 Sea-Tac Gateway Logistics Center Linkage to the Airport • Efficient roadway linkage to Airport and industry clusters • Technology linkage • Connectivity with CPB/TSA/AMS Universal branding • "Sea-Tac Gateway Logistics Center" Common standards • Design & development • Property management • Performance & security 10 Why is a Logistics Center important? • Ties together airport's available separated properties in lieu of a larger contiguous development area • Creates a bigger package for marketing future development than individual building opportunities • Integrated logistics services become part of Sea-Tac air cargo brand, in addition to airfield and regional components, to market region's air cargo service • Businesses like to co-locate with similar activities - creates a "logistics zone" that adds efficiencies for users 11 Development Creates a Virtuous Cycle Cargo tonnage growth Off-airport logistics development Proximity-related cost savings & revenue growth New airline services Region more attractive for logistics New or relocated businesses Jobs created 12 Specific Industries Employment Growth 13 Distribution of Economic Benefits United States United States Washington State Washington State King County King County Local Community Local Community Cargo Logistics Development Alternate Commercial Use Development 14 North Airport Properties • North end graphic 15 L-Shaped Property • Closest to airfield cargo area • Ready to develop now • Parcel size: 26.1 acres • Developable square feet: 200,000 - 300,000 • Type of use: Freight forwarder, consolidator, cargo screening center 16 Northeast Redevelopment Area (NERA) 3 • Largest developable area • Ready to develop now • Parcel size: 23.4 acres • Developable square feet: 400,000 • Type of use: Freight forwarder, distribution center, 3rd-party logistics 17 Lora Lake/NERA 1 • Excellent highway and airport access • Development could not happen until after environmental cleanup - 2014 or 2015 • IRS limitation on use of tax-exempt bond funds • Parcel size: 13.3 acres • Developable square feet: 230,000 • Type of use: Freight forwarder, consolidator, cargo screening facility 18 Work Plans • Define Port's role in development - Active role as developer/owner, or - Facilitative role as "orchestrator" of development • Choose Development Strategy - Concept Development: Gateway Logistics Center - Parcel Specific Developer: Can still be Gateway Center - Seize opportunities as they arise • Define Development Marketing Plan • Develop Sea-Tac Air Cargo brand 19 Work Plans • Define linkage of development to airport cargo operations • End-user market research • Jurisdictional development agreements • Study Green Gateway Initiative sustainable development options • Infrastructure and development needs • Development timeline and phasing • Developer selection • Market airport as total logistics platform 20 Environmental Review and Master Planning • L-Shape: - Covered by Comprehensive Development Plan (CDP) and project level environmental review • NERA: - City of Burien and Port partnered to create Redevelopment Plan and Implementation Strategy - Environmental Impact Statement completed - Also covered by CDP at programmatic level 21 Next Steps • Ambitious development schedule proposed: - 2011-2012 • Articulate Port's development role and formulate overall development strategy • Develop branding and conduct market research • Begin conversation on jurisdictional development agreements - 2012-2013 • Complete any needed planning or environmental review • Sign development agreements with local cities • Issue RFP for developer(s) • Developer selection 22 Next Steps • Other initiative work continues: - 2011 • Airline notice of airfield capital projects • Project planning for related capital projects • Cargo airline marketing with focus on China - 2012 & 2013 • Seek Commission authorization for cargo-related capital projects • Airfield cargo facilities planning • Continue airline marketing and business development 23 Logistics Development Strategy Supports Regional Goals • Creates well-paying local industrial jobs • Enhances local tax base • Supports regional manufacturers and exporters • Growing air cargo tonnage facilitates growth of international passenger service • Supports logistics industry including airlines 24