Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8d
ACTION ITEM
Date of Meeting
March 28, 2023
DATE: March 9, 2023
TO: Stephen P. Metruck, Executive Director
FROM: Kelly Purnell, Capital Project Manager
Trevor Panger, Real Estate Property Manager
Kenneth Lyles, Director of Maritime Operations and Security
SUBJECT: Maritime Industrial Center Electric Equipment Procurement
Amount of this request:
$1,800,000
Total estimated project cost:
$6,780,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to execute contract(s) for long-lead
major electrical equipment for the Maritime Industrial Center Electrical Infrastructure
Replacement project. This authorization is for $1,800,000 of a total estimated project cost of
$6,780,000. (CIP# C801241)
EXECUTIVE SUMMARY
This project will replace the electrical infrastructure at the Maritime Industrial Center (MIC). The
site, located just west of Fishermen’s Terminal, currently has a tenant mix of storage, warehouse,
maintenance and repair shops, boatyard and marine services, and fishing vessel support
operations. A large majority of the electrical infrastructure that serves the tenants is
approximately 25 years old. Though electrical systems generally last 20 to 30 years, their
proximity to seawater has caused it to deteriorate at an expedited rate. An arc flash study and
condition assessment were performed on the property in 2020 and determined that several
pieces of equipment need replacement for safety reasons as they are not compliant with National
Electrical Code (NEC) standards and are too dangerous to service properly.
The replacement of the infrastructure is critical to maintaining reliable and resilient electrical
service to the MIC facilities, ensure that the Port meets its tenant obligations, and continues to
leverage the economic opportunities that result in well managed and maintained assets. To not
further delay this essential work, early purchasing of large electrical equipment is necessary due
to extensive long-lead times for procuring the equipment.
COMMISSION AGENDA – Action Item No. 8d Page 2 of 7
Meeting Date: March 28, 2023
Template revised June 27, 2019 (Diversity in Contracting).
JUSTIFICATION
This project supports the following Century Agenda and Maritime Division strategic goals:
Century Agenda:
1. Responsibly Invest in the Economic Growth of the Region and All Its Communities.
2. Be a Highly Effective Public Agency.
Maritime Division:
1. Asset Management.
2. Sustainability.
The project will include necessary upgrades to the electrical system by replacing current
equipment that is dangerous to work on and at risk of failure. This investment will increase the
asset value of the MIC by ensuring that the site facilities are functioning well and efficiently,
removing dangerous water intrusion into electrical areas, and increasing the reliability of power
to the Port’s tenants. Additionally, the upgraded electrical equipment will provide electrical
capacity for future sustainable EV charging capabilities and potential additional shore power that
is not currently available with the existing equipment.
Purchasing the equipment in advance of construction contracting will mitigate risks to the project
schedule due to long-lead times in electrical equipment procurement times, currently estimated
between 72 and 85 weeks.
Diversity in Contracting
WMBE aspirational goals have not been established for purchasing of the electrical equipment.
The procurement of the equipment from available suppliers will be very prescriptive and based
on technical credentials and performance. WMBE goals will be established for the larger general
construction contract that will be solicited when the project is ready to be constructed.
DETAILS
Maritime Industrial Center – 2700 Commodore Way, Seattle, WA 98199
The Maritime Industrial Center (MIC) is a 6.43-acre facility acquired from the US Coast Guard in
1993 and has since been an important addition to the Port’s infrastructure for supporting the
commercial fishing and industrial maritime sectors in our region and beyond. The property
currently serves as a base for a range of private- and public-sector uses, from: fishing vessel
provisioning, maintenance and repair; boatyard operations; and a new informal hub for a state
agency.
COMMISSION AGENDA – Action Item No. 8d Page 3 of 7
Meeting Date: March 28, 2023
Template revised June 27, 2019 (Diversity in Contracting).
Tenant Mix:
Building A-1:
• Mix of office, warehouse, storage, and industrial uses, to include vessel repair and
maintenance shops, silk screen printing, retail product distribution, and boatyard
operations, and fishing sustainability efforts.
Building A-2, yard and West Dock moorage:
• Boatyard and marine services (metal fabrication, woodwork, heating and cooling,
electronics)
Building A-3, A-4, A-5, yard and East Pier moorage:
• Fishing vessel support operations
West Pier and Central Pier:
• Fishing vessel moorage, tribal vessel moorage
The project scope consists of demolishing existing switchboards and structural concrete pads;
decommissioning conduits and wire; and replacing all with new structural infrastructure,
conduits, wires, switchboards, and associated equipment. The switchboards will be upsized from
existing capacity of between 400 and 600 amps to 1200 amps for the smaller switchboards and
from 2500 Amps to 4000 Amps for the main switchboard for future capacity needs (e.g., EV
chargers, shore power). This project will not increase the electrical load at the site at this time.
The estimated electrical equipment procurement is $1,800,000 with total estimated project costs
of $6,440,000. Funding for this project was included in the 2023 capital budget and plan of
finance.
Scope of Work
The following electrical equipment will be replaced:
1. Switchboard 4SP and 2SPN (service entry to site)
2. Switchboard 4W and 2W (wharf)
3. Switchboard 4P and 2P (NE side of Building A-1)
4. Switchboard EY4 (east side of Building A-1)
5. Switchboard SEY4 (lighting connection for east lot)
6. Switchboards EY4 and SEY4 will be consolidated with 4P and 2P in one location that has
better access. Additionally, this will eliminate a stormwater intrusion point at EY4.
Site work:
1. Provide new conduits and conductors from Seattle City Light to new MIC main distribution
switchgear.
2. Provide new conduits and conductors from new MIC main distribution switchgear to:
a. New electrical switchboard at Mooring Pier
b. New electrical switchboard at Wharf
3. Provide new electrical vaults.
COMMISSION AGENDA – Action Item No. 8d Page 4 of 7
Meeting Date: March 28, 2023
Template revised June 27, 2019 (Diversity in Contracting).
The following equipment will be purchased in advance per this authorization:
1. New main electrical distribution
A. Main switchgear, switchboards including main circuit breakers and feeder circuit
breakers, transformer.
2. New electrical distribution at mooring pier
A. Switchboards including main circuit breaker and feeder circuit breakers,
transformer.
3. New electrical distribution at wharf
A. Switchboards including main circuit breakers and feeder circuit breakers,
transformer.
Schedule
Activity
Commission design authorization
Design start
Commission authorization for major electrical equipment
procurement
Commission construction authorization
Construction start
Cost Breakdown
This Request
Total Project
Design
$0
$850,000
Electric Equipment
$1,800,000
$1,800,000
Construction
0
$4,130,000
Total
$1,800,000
$6,780,000
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Require electrical equipment to be procured by general contractor.
Cost Implications:
• Additional $2.3M overall project cost (due to additional escalation and GC markup on
equipment).
• Total estimated project cost $9.1M.
Pros:
(1) Transfers risk to the contractor.
(2) Advances Century Agenda goals and Maritime Division strategic goals.
Cons:
(1) High likelihood of causing project delays due to estimated 72-85 week procurement
lead times for electrical equipment.
COMMISSION AGENDA – Action Item No. 8d Page 5 of 7
Meeting Date: March 28, 2023
Template revised June 27, 2019 (Diversity in Contracting).
(2) Potential for longer equipment design duration due to Port quality control process.
(3) More expensive due to overheads applied to the equipment purchase.
This is not the recommended alternative.
Alternative 2 – Defer project as a whole: maintain the current state and delay electrical upgrades
and repairs.
Cost Implications:
Assuming a 6% escalation is applied to the project over the next four years delaying the project
would cost an additional $250,000 for each year it is delayed. Current maintenance has been
minimal, and the equipment cannot be safely worked on by Port Electricians; therefore, costs to
maintain are not included.
Pros:
(1) Deferred initial capital cost.
Cons:
(1) The equipment cannot currently be serviced safely.
(2) The equipment is already in a state of advanced disrepair due to the proximity to
saltwater and areas of stormwater intrusion.
(3) If the equipment fails, a long-term diesel generator will be required to provide power
to building tenants and moorage customers. This will impact air quality and cost
significantly more over time, in large part due to high fuel costs.
This is not the recommended alternative.
Alternative 3 – Early equipment procurement in advance of construction contract.
Cost Implications:
• No additional escalation and GC mark-up on electrical equipment (savings of $2.3M).
• Overall project cost estimated at $6.78M.
Pros:
(1) Minimizes potential construction delays due to long-lead electric equipment
procurement.
(2) Significantly less expensive due to escalation and GC mark-up avoidance.
(3) Allows for very prescriptive control of equipment procurement.
(4) Advances Century Agenda goals and Maritime Division strategic goals.
Cons:
(1) Maintains Port risk if equipment is delayed or damaged during delivery.
(2) May require temporary storage of equipment if procurement times come down.
(3) Adds some complexity to timing GC construction contract procurement.
This is the recommended alternative.
COMMISSION AGENDA – Action Item No. 8d Page 6 of 7
Meeting Date: March 28, 2023
Template revised June 27, 2019 (Diversity in Contracting).
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$1,500,000
$0
$1,500,000
Revised estimate
$6,780,000
$0
$6,780,000
AUTHORIZATION
Previous authorizations
$850,000
$0
$850,000
Current request for authorization
$1,800,000
$0
$1,800,000
Total authorizations, including this request
$2,650,000
$0
$2,650,000
Remaining amount to be authorized
$4,130,000
$0
$4,130,000
Annual Budget Status and Source of Funds
This project was included in the 2023 Capital Plan under CIP #801241 Maritime Industrial Center
Electrical Infrastructure Replacement at an estimated total project cost of $6,413,000.
This project will be funded by the General Fund.
Financial Analysis and Summary
Project cost for analysis
$6,780,000
Business Unit (BU)
Maritime Portfolio Management
Effect on business performance
(NOI after depreciation)
The project will maintain annual gross revenue over
$500K from MIC tenants. Depreciation will increase by
$135,600 per year, thereby reducing the NOI by the same
amount.
IRR/NPV (if relevant)
No incremental revenue. The NPV is the present value of
the project cost.
CPE Impact
N/A
Future Revenues and Expenses (Total cost of ownership)
This project will provide for reliable and resilient electrical power to the MIC facilities for the next
25-30 years. This upgrade will provide protection of Port assets and extend their useful life,
provide for additional future electrical capacity to support Port sustainability goals, and increase
economic development potential. Maintaining existing assets will preserve the economic vitality
of our operations and serve the Port, tenants, and their customers well by providing a safe and
sustainable working environment.
ADDITIONAL BACKGROUND
None.
COMMISSION AGENDA – Action Item No. 8d Page 7 of 7
Meeting Date: March 28, 2023
Template revised June 27, 2019 (Diversity in Contracting).
ATTACHMENTS TO THIS REQUEST
(1) Presentation slides
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
October 11, 2022 – The Commission authorized design.