Template revised April 12, 2018.
COMMISSION
AGENDA MEMORANDUM
Item No.
7b
BRIEFING ITEM
Date of Meeting
March 10, 2020
DATE: February 26, 2020
TO: Stephen P. Metruck, Executive Director
FROM: Dave McFadden, Managing Director, Economic Development Division
Kyra Lise, Director, Real Estate & Economic Development
SUBJECT: Real Estate Strategic Plan Update
EXECUTIVE SUMMARY
Port staff is starting to develop a new real estate strategic plan. Our team will be working with
the Heartland LLC (HTLand) to evaluate current Port properties and analyze sites throughout King
County that could be acquired or controlled by the Port to support the Century agenda, our key
lines of business and other top Port priorities.
Staff will brief the Commission on previous plan results as well as 2020 plan goals and timelines.
Port staff then will work HTLand and internal and external advisory groups to develop the new
plan between March and September.
CURRENT PLANNING EFFORT
The plan will address the certain key questions and issues related to the Port’s real estate
portfolio and help guide the priorities of the Real Estate development team for the next 3-5 years:
1. Identify current market trends for industrial property within the Puget Sound region and
key Seattle submarkets (Ballard/Interbay and SODO).
2. Evaluate 2016 plan strategies and results to determine lessons learned that should guide
current planning efforts
3. Determine highest and best uses for key Port properties
• Identify development objectives and outcomes for each property
• Update plans, strategies, timelines and finance proformas for each property
• Recommend whether any Port properties should be sold/traded
4. Identify strategic land acquisition opportunities and develop evaluation methodology and
standards for prioritizing purchase opportunities
5. Evaluate funding options and opportunities to support priority Real Estate Development
projects/initiatives
6. Provide implementation recommendations that support the Port’s ongoing Real Estate
development initiatives
Industrial Market Trends *Placeholder for Irwin Park’s industrial market snapshot*
COMMISSION AGENDA – Briefing Item No. 7b Page 2 of 4
Meeting Date: March 10, 2020
Template revised September 22, 2016.
Properties Being Evaluated
The Economic Development Division has taken a comprehensive look at the Port’s real estate
portfolio. Staff is focusing the real estate strategic plan on every Port property that can support
industrial or commercial development. This does exclude Seaport Alliance terminals, sites
impacted by the SAMP, sites nearing development like NERA in Burien, and a few small sites (ex.
Terminal 16/17).
The following properties will be evaluated during the strategic planning process:
• Salmon Bay Marina
• Terminal 91
• Fishermen’s Terminal
• Terminal 91 Uplands
• Pier 69
• Harbor Marina Corporate Center
• World Trade Center West
For a variety of reasons, the following properties will not be evaluated:
SAMP impacted: 55 acre, L-Shape, 13 acre and SASA
Fully developed: Des Moines Creek Business Park, Des Moines Creek North, NERA 2 and 3, Maritime
Industrial Center
NWSA properties: Terminals 5,10, 18, 25, 30, 46, 103, 104, 105, 107, 108, 115 and 117
Current/pending RFPs: Des Moines Creek West, CEM, Pier 2 and Terminal 106
Timelines/Milestones
The current strategic planning schedule includes 13 meetings/briefings:
Staff is organizing an internal real estate team that will meet monthly to help guide the project.
We will also establish an external advisory committee to review progress, findings and
recommendations. Three Commission briefings are also scheduled during the planning effort.
Successful real estate development initiatives can help support the Century Agenda and top
Port goals:
• Grow as an international logistics hub
• Sustain fishing, cruise and other maritime industries
COMMISSION AGENDA – Briefing Item No. 7b Page 3 of 4
Meeting Date: March 10, 2020
Template revised September 22, 2016.
• Advance equitable economic development
• Enhance and protect industrial lands
• Advance sustainability and energy efficiency
• Generate income to help sustain Port operations and investments
ADDITIONAL BACKGROUND
The Port of Seattle’s real estate development department is working on a new real estate
strategic plan that will update the plan we completed in 2016. Matt Anderson with the
Heartland LLC (HTLand) will help lead this planning effort again. We are pleased with the
actionable plan he developed four years ago that has driven tangible real estate development
projects:
• Development of NERA 2 & 3 properties in Burien
• Development of Des Moines Creek North property in SeaTac
• Terminal 91 Uplands light industrial facility development (in design)
• Pier 2 lease for long term water taxi terminal (negotiating lease with King County)
• Terminal 106 redevelopment (negotiating lease with prime respondent)
NERA 2 & 3
Port staff leased the site to Panattoni through a competitive RFP. Panattoni leased the
properties for $0.88 per square foot or $1,004,319/year. Lease includes base rent and market
rate adjustments over term of lease (55 years + two-ten-year options to extend). Panattoni
built two buildings totaling 458,000 square feet. The new facilities collectively support
approximately 100 employees. The tenant mix includes distribution companies and aviation supportive
logistics. Linear Logistics occupies a facility on an adjacent NERA property that was developed by the
City of Burien.
Des Moines Creek North
Port staff leased the site to Trammel Crow through a competitive RFP. Trammel Crow leased
the properties for $0.85 per square foot or $831,974/year. Lease includes base rent and
market rate adjustments over term of lease (55 years + (2) two - (10) ten-year options to
extend). Trammel Crow built one building totaling 465,000 square feet. Tenants include Amazon
and Alaska Airlines.
Terminal 91 Uplands Development
Port staff is currently in the beginning of the design stage of phase 1 of the Terminal 91 Uplands.
Phase 1 will include two 50,000 square foot light industrial buildings to support maritime
manufacturers and fishing industry suppliers in the Ballard Interbay Manufacturing Industrial
Center (“BINMIC”). These light industrial buildings will be developed by the Port of Seattle and
leased at a market rate. The permitting will include a Major Phased Development land use
permit. This will allow additional and future development at Terminal 91 for the next 15 years.
Pier 2 Redevelopment
COMMISSION AGENDA – Briefing Item No. 7b Page 4 of 4
Meeting Date: March 10, 2020
Template revised September 22, 2016.
Port staff issued an RFP in 2017 to redevelop Pier 2. Staff is currently negotiating a lease with
the preferred respondent to the RFP and expects to finalize a lease agreement this summer.
Terminal 106 Redevelopment
Port staff is currently negotiating a lease provided to us by the top proposer from the RFP that
was issued last spring (2019).
Salmon Bay Marina Acquisition
The Port of Seattle purchased this property in 2018. It is adjacent to Fishermen’s Terminal and
was identified as a strategic acquisition in the 2016 Real Estate strategic plan.
.]
ATTACHMENTS TO THIS BRIEFING
(1) Presentation slides
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
October 25, 2016 – The Commission was brief on the real estate strategic plan.
March 8, 2016 – The Commission was briefed on the development of a real estate plan.
