First Amendment to Lease with

Mad Anthony’s at Pier 66

June 23, 2020

Item No. 6g supp

Date of Meeting June 23, 2020

Maritime/EDD Tenant Relief Program

• Terms approved by Commission/ED and within our Delegation of Authority

– Defer all rent and other charges for four months (April-July) without interest.

» Tenant required to make commercially reasonable efforts to remain in operation

and/or reopen consistent with public health orders.

» Tenant certifies it has been significantly impacted by COVID-19

– Deferred payment plan commencing on 10/1/20 with payback in 12 months – but also

negotiate payment plans to fit unique circumstances.

» Offer lease extension if tenant lease term is too short to payoff reasonably

• Proposed relief consistent with what done across the Port

– Extended terms

– Deferred rent

– Waiver of MAG (percentage rent only)

Background

• All restaurants closed by Governor’s first order, March 23

– Anthony’s 19 locations - Washington, Oregon, Idaho

• Also fish distribution and sale, Food truck, take-out at Little Chinook’s

• Long-term lease (20+ years remaining)

• Seriously affected by COVID-19

• Participating in deferral program with hope of lease

amendment

Anthony’s Pier 66

Current

• 22,000+ SF, three restaurants

• Built by Port 1995,

• Lease expires 2041

• Minimum Rent: Greater of

– $31K+/month rent or

– 6% of gross sales

Note: They have paid percentage rent annually

over the last ten years.

Proposal – effective 6/1/20

• Two years

– No Minimum Rent

– 6-1/2% of gross sales only

• After two years: 6-1/4% or

Minimum Rent for remainder

of term

Risks and Benefits

• Risks

– Cruise is huge impact on business, uncertainty in return of cruise

– Increased percentage rent may not cover waived minimum rent

– Shallow recovery may not mitigate this loss

• Benefits

– Retains long-term tenant in very challenging property

– Some revenue to Port during two year period of % rent only

– Increased percentage rent provides possible upside

– Mitigates risk of failure leaving the Port with a challenging and costly

property to reposition