COMMISSION

AGENDA MEMORANDUM

Item No.

ACTION ITEM

Date of Meeting

August 13, 2019

DATE: August 1, 2019

TO: Stephen P. Metruck, Executive Director

FROM: Dave McFadden, Managing Director, Economic Development Division

SUBJECT: Economic Development CAT II Partnership Agreement with Maritime Blue

Total contract request:

$200,000

ACTION REQUESTED

Request Commission authorization for the Executive Director to execute a joint partnership

agreement with Maritime Blue, a non-profit agency, to develop and pilot a maritime

accelerator initiative, host maritime blue forums, and advance the work of the maritime cluster

organization for one year at the rate of $200,000 and that the commission determine a

competitive process is not appropriate or cost effective and exempt this contract from a

competitive process consistent with RCW 53.19.020.

EXECUTIVE SUMMARY

Earlier this year Governor Inslee rolled out Washington State’s Strategy for a Blue Economy, a

comprehensive plan setting the course for taking the maritime industry to the highest level of

global sustainability leadership. The bold plan aligns closely with Port of Seattle goals to

advance maritime innovation, reduce greenhouse gas emissions, and support workforce

training opportunities within the sector for women and people of color.

The proposed agreement with Maritime Blue, a nonprofit cluster organization, is to develop

and pilot a maritime accelerator initiative, host blue forums and advance key strategies within

the state’s strategy to sustain Washington state’s maritime industries. These initiatives

constitute the focus for the Port of Seattle’s first year partnership with Maritime Blue based on

the Memorandum of Understanding executed between the two organizations.

Most recently, staff conducted market research and confirmed Maritime Blue to be the only

Maritime cluster organization with the capability and focused support network to implement

this partnership with the Port. At this time, no other maritime nonprofit organization or public

agency has the staff expertise, breadth of advisory members or focus that will allow us to work

in partnership to pilot a virtual maritime business accelerator program and advance key

elements of Washington State’s Strategy for a Blue Economy. Maritime Blue provides unique

skills and knowledge required by this agreement such as knowledge of maritime investment

and finance markets, which complements and augments that which the Port possesses.

COMMISSION AGENDA – Action Item No. 8a Page 2 of 5

Meeting Date: August 13, 2019

Both organizations have initiated projects that have engaged maritime businesses, education

and research institutions, and government agencies who have contributed substantially to

advance the Blue Economy strategy. In 2017-2018, $1.33 million in funding was secured to

support development of the strategy, support community engagement, and help create the

cluster organization. In 2019, Maritime Blue has raised $100,000 in memberships and

sponsorships. The organization is also waiting to see if they will receive another Economic

Development Administration grant to continue advancing Maritime BIue initiatives. This level

of involvement from colleagues across the state demonstrates considerable support for both

the Port of Seattle’s and Maritime Blue’s innovation and sustainability initiatives.

JUSTIFICATION

State Representative Gael Tarleton provided a compelling vision for Washington’s maritime

industry earlier this year when the state strategy was shared:

“Washington’s maritime, fishing, and recreational boating industries are the backbone of the

most trade-centric economy in the country. Tens of thousands of family-wage jobs in the

maritime trades have transformed communities throughout our region and state. Now, we must

find paths to give future generations of Washingtonians access to these jobs and opportunities.

New technologies require new skills. Innovative strategies that integrate educational programs

and skill-based workforce development will ensure that we retain and expand our region’s

unique maritime expertise. By working together, we can have smart, green ports that attract

business from all over the world…and thousands of jobs in a clean-trade maritime economy that

works for all of us.”

The proposed agreement with Maritime Blue takes notable first steps to implement this vision

and the recent memorandum of understanding the Port of Seattle executed with this non-profit

maritime cluster organization:

(1) Advances maritime innovation through development of a pilot accelerator program that

will nurture promising maritime companies and entrepreneurs;

(2) Advances development of financing networks and programs for small and emerging

maritime companies;

(3) Supports forums, projects and strategies to reduce maritime greenhouse gas emissions;

and

(4) Advances maritime workforce development.

Investing in this partnership supports the Port’s Century Agenda objectives to be the greenest

and most energy efficient Port in North America and to use the Port’s influence to promote

workforce development.

COMMISSION AGENDA – Action Item No. 8a Page 3 of 5

Meeting Date: August 13, 2019

Scope of Work

The agreement will support the following scope of work:

 Develop and implement a pilot maritime accelerator program in 2019/2020

o Provide evaluative report on program highlighting successes, outcomes,

challenges and lessons learned

 Advance development of the Port’s maritime innovation center

o Provide administrative support for the maritime innovation center advisory

committee

 Developing financing networks and programs for small and emerging maritime

companies

 Supporting maritime workforce development initiatives including the Maritime Youth

Collaborative

 Supporting forums, projects and strategies to reduce maritime greenhouse gas

emissions

Developing and piloting a maritime accelerator program can help develop an entrepreneurial

ecosystem that catalyzes innovation and fosters active partnerships between local industry,

academia and startups in the maritime community. Maritime Blue will select a contractor to

create a tailored startup program, source targeted startups and pilot the program. The goal for

the pilot accelerator is to attract 8-10+ early stage maritime companies that can tangibly

advance their ventures through the accelerator program.

Port staff and Joshua Berger, the Governor’s Maritime Sector lead, have done extensive

research on maritime accelerator programs. They have also evaluated several local options to

stage the virtual maritime accelerator initiative. If the Commission authorizes the partnership

agreement Maritime Blue would pilot the maritime accelerator on the following schedule:

 October: Announce program

 December: Launch program

 March: Program conclusion/celebration

Maritime Blue is also completing a maritime industry capital assessment that can also help

leverage the accelerator program. Next Street Financial is doing this study and it is helping

inventory capital providers and align them with promising maritime ventures. This database of

capital providers will be helpful to both emerging and established maritime businesses.

As part of the partnership agreement Maritime Blue will provide administrative support to the

Port’s maritime innovation center advisory committee. The group meets quarterly and is

comprised of maritime businesses, education and research institutions, and partner

government agencies. The group’s collective expertise is invaluable towards longer term

development of facility operations.

COMMISSION AGENDA – Action Item No. 8a Page 4 of 5

Meeting Date: August 13, 2019

Maritime Blue will also continue to advance maritime workforce development initiatives. The

cluster organization is an active part of the Maritime Youth Collaborative and a strong advocacy

organization for maritime workforce development. Maritime Blue will also support the Port of

Seattle’s efforts to develop a comprehensive energy strategy for the Seattle Harbor by

supporting stakeholder engagement and technology solutions.

ALTERNATIVES AND IMPLICATIONS CONSIDERED

Alternative 1) Do not authorize agreement with Maritime Blue

Pros:

1. Reduces specific budget request by up to $200,000 a year, which could be used for

other initiatives

2. Provides additional time to weigh options for implementing Maritime Blue partnership

Cons:

1. Momentum around WA Strategy for Maritime Blue implementation reduced

2. Pilot accelerator’s impacts and lessons learned could be lost

3. Opportunity to build maritime capital networks diminished

This is not the recommended alternative

Alternative 2) – Authorize $200,000 agreement with Maritime Blue to implement initiativves

that advance Port priorities and Washington State’s strategy for a Blue Economy at a cost not to

exceed $200,000.

Pros:

1. This new agreement will reinforce the Port of Seattle’s commitment to maritime

innovation and the maritime innovation center

2. Advancing a virtual maritime accelerator ramps up maritime entrepreneurial initiatives

that are instrumental to the success of the maritime innovation center

3. Port financial investments in Maritime Blue will be leveraged by other public and private

members and sponsors

Cons:

4. More time evaluating accelerator options could be helpful. Maritime venture financing

programs are nascent and need improvementThere are other maritime accelerator

programs available (outside Seattle)

This is the recommended alternative.

COMMISSION AGENDA – Action Item No. 8a Page 5 of 5

Meeting Date: August 13, 2019

FINANCIAL IMPLICATIONS

Cost Estimate/Authorization Summary

Capital

Expense

Total

COST ESTIMATE

Original estimate

$200,000

AUTHORIZATION

Previous authorizations

Current request for authorization

Total authorizations, including this request

Remaining amount to be authorized

Annual Budget Status and Source of Funds

Annual budget request is for $200,000. The source of funds is the King County tax levy.

ATTACHMENTS TO THIS BRIEFING

(1) Presentation slides

PREVIOUS COMMISSION ACTIONS OR BRIEFINGS

July 23, 2019 – The Commission authorized the Executive Director so sign Memorandum of

Understanding with non-profit Maritime Blue maritime cluster organization

May 14, 2019 – The Commission authorized design funding for the Maritime Innovation

Center (Historic Ship Supply Building)

January 8, 2019 – Commission received a briefing regarding Maritime Blue Plan and the

Maritime Innovation Center.