Item No. Date of Meeting 8a May 14, 2019 Maritime Innovation Center Design Funding May 14, 2019 1 Maritime Innovation Initiative Progress  Update Business Plan  Form advisory group  Develop MOU with WA State  Develop virtual incubator and accelerator  Complete design work on Ship Supply building Substantial progress since January "The challenging times in all port related markets, like logistics, oil and gas, and maritime, require that we have a window on new technologies. [The] PortXL [Maritime Accelerator] helped us identify these trends, bringing new business models to our markets and challenging conventional businesses." Paul Smits CFO, Port of Rotterdam 2 Advancing Maritime Innovation • Seeking authorization for design services in support of developing Ship Supply building at Fishermen's Terminal. • Requesting $1,750,000 • Part of 2019-2023 Capital Improvement Plan Vision: Washington State becomes a world leading hub for sustainable maritime and ocean industries... 33 Maritime Innovation Center Mission: The Port of Seattle's Maritime Innovation Center will provide support required by marine and ocean-oriented companies in their effort to modernize and/or innovate the maritime industry and create good-paying Blue Jobs. The Center will provide this support by making use of its own facility as an incubator and accelerator environment as well as by leveraging on local assets, resources and network... Seattle becomes global leader in BlueTech When people think about sustainable BlueTech industries, we want them to think about Puget Sound in the same way the world equates finance with New York or technology with Silicon Valley. 4 Innovation Center Strategic Objectives 1. 2. 3. 4. 5. Be a focal point for maritime innovation Become a centralized information source to the BlueTech sector Offer incubator and accelerator environment Support investment in BlueTech start-ups and new technologies Support workforce development and maritime career exploration 5 Innovation Center Services • Business development assistance • Professional network and relationship support • Educational programs • Out-reach services • Facility-based services • Virtual Services 6 Benefits to Incubator/Accelerator Companies • Reduced barriers to entry • Networking and mentoring • Increased visibility and stature • Increased company valuation Supporting Maritime Start-ups and Scale-ups SURF Incubator in Seattle helps early stage high-tech companies 7 Governance Recommend that nonprofit partner operate innovation center Several types of nonprofit organizations could operate the Maritime Innovtion Center 8 Facility Location Criteria • Accessibility • Access to water • Access to laydown area • Proximity to Maritime Suppliers and Manufacturers • Visibility • Historic Preservation, Aesthetics & Ability to Leverage Capital 9 Site Evaluation • Fishermen's Terminal (FT) site options ranked higher than Terminal 91 options: - More proximate to suppliers and partners - More visible and accessible - Better access to water • FT's Gateway and Historic Ship Supply sites ranked similarly - Ship Supply slightly better based on historic preservation opportunity • Capital development costs not considered 10 Financials • Center will generate positive operating income for the Port from Year one onwards • Center "operator" will be able to cover most of its operational costs from facility rental revenue - 79% in Year 1 to 97% in Year 7 • Center operator will need to secure contributions of approximately $ 72,000 annually for initial 5 years period 11 Proposed Building Improvements • Abatement of regulated materials in existing structure • Partial existing building demolition (timber structural framework to be preserved) • Enhancement of structural piles and framework • Construction of new MIC building core and shell • Utility services removal and replacement • New building perimeter and parking lot paving 12 Maritime Innovation Center Development Schedule Maritime/Economic Development Project T-91 Uplands Development Design Funding Project Sponsor ? Project Manager Tim Leonard Project Complexity 2018 2019 2020 2021 2022 2023 Q1│Q2│Q3│Q4 Q1│Q2│Q3│Q4 Q1│Q2│Q3│Q4 Q1│Q2│Q3│Q4 Q1│Q2│Q3│Q4 Q1│Q2│Q3│Q4 3 * Community engagement tasks will vary by project needs Community Engagement* Environmental Review Commission Approval Planning/Design Construction 13 13 Maritime Community Engagement Fishermen's Terminal Master Planning (2015-2016) • Madison Bay study: Interbay industrial market • Multiple planning sessions, open houses and stakeholder meetings • Need for meeting rooms/conference center Maritime Innovation Center Planning (2017-2018) • SWOT workshop • Online survey input from 150+ stakeholders • Interviewed 35 Maritime stakeholders • Facilitated design charrette The Port received significant input that helped focus the Port's innovation initiative and drive Maritime Blue 14 14 Enhancing Engagement: Washington Maritime BLUE Initiative A Strategy for accelerating the BLUE economy, technology innovation and sustainability in Washington's maritime industry. A Cluster Organization formed as the focal point for coordination, incubation, capital investment & commercialization. A Maritime Innovation Center to support R&D and commercialization of innovation technology through public/private partnerships. 15 Next Steps  Develop MOU with WA State (July)  Develop and pilot maritime incubator and accelerator initiatives (Q4)  Fact finding Trips (Q3 and Q4)  Advisory Committee Meetings  Complete 60% design work on Ship Supply building (Q1 2020)  Make decision on location of innovation center (Q1 2020) Advancing "Virtual Operations" as Port does homework on future location 16 Community Benefits • Job creation • Enhanced image • Business development • Industry innovation and sustainability • Increased tax revenue • Workforce development • Meeting space for FT tenants and customers A hub for maritime innovation and education 17 APPENDIX 18 19 An Ocean of Opportunity The global "Ocean Economy" is valued on a conservative basis by the Organization for Economic Cooperation and Development (OECD) at $1.5 trillion (2010) and growing to $3.0 trillion by 2030... Stakeholder Input: Room and Opportunity for Improvement 1. The Maritime industry does not enjoy the visibility or reputation that other industries enjoy in Seattle (ex. Aerospace and IT) 2. Washington's Maritime industry is not particularly innovative 3. The top three trends/opportunities for the Washington maritime sector include: • Electrification • Ship and vessel design innovation • Marine renewables 21 Site Evaluation No I Site Selection Criteria Weight Accessiility 20% Site 1: Ship Supply Building Score Weighted Score 3 0.6 Site 2: T91 Uplands Score Weighted Score 1 0.2 Site 3: FT Gateway Score Weighted Score 4 0.8 4 = Facility is within 200 yards of public transit and within 20 minute commute from partners (UW Applied Physics Lab, Maritime Blue, etc.) 3 = Facility is within 1/4 mile of public transit and within 20 commute from partners 2 = Facility is within 1/2 mile of public transit and within 30 minute commute from partners 1 = Facility is more than 30 minutes drive from partners II Access to water 20% 4 0.8 2 0.4 3 0.6 20% 4 0.8 4 0.8 3 0.6 20% 4 0.8 3 0.6 4 0.8 10% 4 0.4 3 0.3 3 0.3 10% 3 0.3 1 0.1 3 0.3 3.7 2.3 2.4 3.3 4 = Facility is on fresh or salt water with moorage capacity 3 = Facility is within 1/4 mile of fresh or salt water - limited moorage capacity 2 = Facility is within 1/2 mile of fresh or salt water - limited moorage available 1 = Access to fresh or salt water difficult or not optimal III Access to laydown area for staging 4 = Facility provides a laydown area 3 = Facility is within 200 yards of a laydown area 2 = Facility is within 1/4 mile of a laydown area 1 = Access to laydown area is difficult or not optimal IV Proximity to Maritime Suppliers and Manufacturers 4 = Faciltiy is within 1/2 mile of machine shops and maritime suppliers (inc. chandlery) 3 = Facility is within 1 mile of machine shops and maritime suppliers (inc. chandlery) 2 = Facility is within 3 miles of machine shops and maritime suppliers (inc. chandlery) 1 = Facility not located in proximity to maritime supply chain V Historic Preservation, Aesthetics & Ability to Leverage Partner Capital 4 = Faciltiy is historic and can leverage other capital $ 3 = Facility is new and can leverage other capital $ 2 = Facility is new but it may not leverage other capital $ 1 = Facility not located in proximity to maritime supply chain VI Visibility 4 = Visible from Seattle arterials and surrounding streets 3 = Visible from property entrance 2 = Visibility possible from property entrance with signage or other building improvements 1 = Not immediately visible Total Scores 100% Site Ranking 3.7 1 3 Fishermen's Terminal offers best location options for Maritime Innovation Center 3.4 2 22 Center Will Be Built on Partnership 23 Maritime Innovation Initiatives - RDM Rotterdam • Converted from a defunct shipyard into a new interdisciplinary space that supports events, technical training academy, an incubator, storage space with a wave tank, and other testing facilities • Co-located with a senior secondary vocational school and a higher professional educational program • Supported with funding from the European Commission, the Port of Rotterdam, and other sponsors • Focused on maritime technologies and other ocean related verticals including innovative housing concepts over water and design 24 Maritime Innovation Initiatives - COVE • Converted an old Coast Guard facility into a hub for scientific research, events, incubator space, ocean technology tenants, and workforce programming • Significant government funding and support • Focused on ocean technologies • Governed by a nonprofit organization that is similar to a cluster, and its incubator is contracted out to another company that specializes in running incubators. 25 Maritime Innovation Initiatives - Port XL • "World's first Port Accelerator," spun out of the Port of Rotterdam, runs as an independent accelerator • General co-working office space with fastpaced programming for startups that are selected through a competitive process in cohorts • Two Seattle based companies have participated in the accelerator • Value proposition is the connection to the port and a growing number of end-users at one of the largest ports in the world • XL wants to open US office 26