Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8d
ACTION ITEM
Date of Meeting
October 24, 2023
DATE : October 17, 2023
TO: Stephen P. Metruck, Executive Director
FROM: Jennifer Maietta, Director of Real Estate Asset Management
Lily Ninburg, Real Estate Manager
Julie Yun, Waterfront Capital Project Manager
SUBJECT: Terminal 91 Buildings (M-39, W-28, M-19) Demolition (CIP# C801372)
Amount of this request:
$850,000
Total estimated project cost:
$9,100,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to authorize $850,000 in funding
to proceed with Design and Permitting of the Terminal 91 Buildings (M-39, W-28, M-19)
Demolition project. This request would increase the total project authorization to date to
$1,000,000 out of a total estimated project cost of $9,100,000.
EXECUTIVE SUMMARY
This project addresses the need for demolition of three buildings—W-39, M-28, and M-19—at
Terminal 91. These buildings were originally built in in 1920s-1940s for varied industrial uses,
including cold storage (W-39), food processing and maintenance shop (M-28), and industrial
warehouse (M-19). All three buildings are considered past design life (e.g., roofing, electrical,
mechanical, and fire life safety systems etc.), carry safety hazards and liability associated with
hazardous materials and fire suppression safety, and have no revenue generating potential
identified in their current condition. Recent condition assessments and planning evaluations
around retrofit alternatives have demonstrated that demolition is the recommended option.
Demolishing these 3 buildings will remove existing hazards, protect the Port of Seattle from
potential liabilities, and eliminate continued cost of maintaining unleasable vacant buildings. The
design and permitting effort will include hazardous material abatement and safe disposal,
isolation of all utilities, and coordination with transportation agencies regarding temporary and
permanent impacts to transportation and transit infrastructure.
JUSTIFICATION
This project supports the following Century Agenda goals:
(1) Goal 3: Responsibly invest in the economic growth of the region and all its communities.
COMMISSION AGENDA – Action Item No. 8d Page 2 of 5
Meeting Date: October 24, 2023
Template revised June 27, 2019 (Diversity in Contracting).
Objective 7: Advance maritime industries through innovation, strategic investment, and
capable management of Port facilities.
(2) Goal 6: Be a Highly Effective Public Agency.
Objective 19: Set the standard for high quality, cost-effective, and timely delivery of capital
programs.
This demolition will eliminate high cost of maintaining vacant and unleasable buildings and create
potential revenue through yard storage and laydown lease opportunities. This project will
precede future planning efforts to evaluate the overall use of Terminal 91.
Diversity in Contracting
The project team is in collaboration with the Diversity in Contracting Department to establish a
Women and Minority-owned Business Enterprise (WMBE) aspirational goal for the project-
specific design services contract. Historically, design services contracts of similar project scope
have utilized aspirational goals between 10-16% and this project is anticipated to arrive within a
similar range.
DETAILS
Scope of Work
This authorization will allow for the procurement of a design services consultant that will support
the Design and Permitting effort. The project team will pursue a Project-Specific contract to meet
design support needs while also expediting the project schedule (versus the alternate option to
sustain delays by procuring design support through a new IDIQ contract).
The project scope includes, but is not limited to, the following key elements:
(1) Demolish 3 buildings (W-39, M-28, and M-19) down to slab level.
(2) Abate and dispose of hazardous materials.
(3) Decommission substation 10 inside building W-39.
(4) Disconnect and/or relocate all utilities and equipment as appropriate.
(5) Demolish W-39 apron connection to the Magnolia Bridge. Restore appropriate pedestrian
access and safety barriers.
(6) Coordinate temporary and permanent relocation of transportation infrastructure in good
faith to the public and to collaborating transportation agencies (Seattle Department of
Transportation and King County Metro).
(7) Coordinate with Washington Department of Ecology pertaining to conditions of the
Agreed Order at Terminal 91.
Schedule
The demolition of the three buildings at Terminal 91 will be in close coordination with external
coordinating agencies as well as with Port stakeholders and other projects being executed near
COMMISSION AGENDA – Action Item No. 8d Page 3 of 5
Meeting Date: October 24, 2023
Template revised June 27, 2019 (Diversity in Contracting).
the project area. Demolition of the three buildings will be sequenced to minimize impact to
facility operations and simultaneous projects within the project vicinity.
Activity
Commission Design Authorization
Design Start
Commission Construction Authorization
Construction Start
In-use Date
Cost Breakdown
This Request
Total Project
Design
$850,000
$1,000,000
Construction
$0
$8,100,000
Total
$850,000
$9,100,000
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Defer the scope of work identified for this authorization request.
Cost Implications: Preservation of expense funds in the amount of $850,000.
Pros:
(1) Preservation of expense funds towards other operations/projects.
Cons:
(1) Continued cost of maintaining 3 vacant, non-operational, and unleasable buildings
within the Port Real Estate portfolio.
(2) Potential liability due to security, vandalism, and fire risks associated with vacant
buildings.
(3) Potential liability due to hazardous material exposure, fire suppression inadequacies.
(4) Potential for reactive and uncontrolled demolition project due to future structural and
electrical failure.
This is not the recommended alternative.
Alternative 2 – Demolition of less than full scope of 3 buildings.
Cost Implications: Preservation of expense funds up to $850,000.
Pros:
(1) Preservation of expense funds towards other operations/projects.
Cons:
(1) Loss of schedule and cost efficiencies due to separate design and construction efforts.
This is not the recommended alternative.
COMMISSION AGENDA – Action Item No. 8d Page 4 of 5
Meeting Date: October 24, 2023
Template revised June 27, 2019 (Diversity in Contracting).
Alternative 3 – Proceed with the demolition of the 3 buildings as proposed.
Cost Implications: Allocation of $850,000 in operating expense.
Pros:
(1) Eliminate hazards and liabilities of maintaining 3 vacant, non-operational, and
unleasable buildings.
(2) Eliminate cost of maintaining 3 vacant, non-operational, and unleasable buildings.
(3) Gained efficiency in coordinating design and construction of 3 building demolitions,
versus individual demolition projects.
(4) Creation of potential revenue generating opportunity via ground lease space in the near
term and other future uses.
Cons:
(1) Temporary construction impacts.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$0
$9,100,000
$9,100,000
AUTHORIZATION
Previous authorizations
$0
$150,000
$150,000
Current request for authorization
0
$850,000
$1,000,000
Total authorizations, including this request
0
$1,000,000
$1,000,000
Remaining amount to be authorized
$0
$8,100,000
$8,100,000
Annual Budget Status and Source of Funds
This project has been included in the draft 2024 Budget with a non-operational expense of $1.825
million in 2024. The total cost of the project is included in the draft 2024 Capital Plan as a major
expenditure under C801372.
This project is funded by the General Fund.
Financial Analysis and Summary
Project cost for analysis
$9,100,000
Business Unit (BU)
Maritime Portfolio Management
Effect on business performance
(NOI after depreciation)
This project will increase non-operational expenses by
$9.1 million over the project period.
IRR/NPV (if relevant)
N/A
CPE Impact
N/A
COMMISSION AGENDA – Action Item No. 8d Page 5 of 5
Meeting Date: October 24, 2023
Template revised June 27, 2019 (Diversity in Contracting).
ADDITIONAL BACKGROUND
None.
ATTACHMENTS TO THIS REQUEST
(1) Presentation slides.
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None.