Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8n
ACTION ITEM
Date of Meeting
December 10, 2024
DATE: December 10, 2024
TO: Stephen P. Metruck, Executive Director
FROM: Kyra Lise, Director Real Estate Development
Rick Duncan, Director, AV Business & Properties
SUBJECT: STOC Lease Amendment 9 Contract Extension and Increase
Amount of this request:
$350,000
Total estimated project cost:
$350,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to take all necessary steps to
approve and execute the lease extension of the SeaTac Office Center (AKA International Place),
and the authorization for $350,000 in additional funds to support costs associated with the
extension of the current Port of Seattle lease. Majority of the funds have already been approved
within the 2025 Budget and now require additional Commission authorization to extend the lease
contract to February 28, 2025, and to increase the authorized funding for contract payments
through the extension.
EXECUTIVE SUMMARY
Since 2015, the Port of Seattle has leased approximated 47,000 sf of office space (non-
contiguous) at SeaTac Office Center (AKA International Place) an office property opposite the SEA
Terminal property currently owned by STOC OWNER, LLC. The office and related parking supply
leased by the Port has supported various Aviation related capital projects, mainly for Airport
Building Department, Aviation Project Management, Port Construction Services, Central
Procurement Office, Engineering teams and Port contractors. This leased location allows the Port
to provide a flexible, near-terminal accommodation for employees and contractors supporting
Aviation project delivery. The original lease term was for 5 years and included provisions for both
rent on a per square foot basis as well as Common Area Maintenance (CAM) costs of which the
Port was responsible for its pro-rata share.
The Port has authorized rent and CAM expenditures at STOC over the years in various annual
budgets and has also renewed and modified the original the lease terms under various
amendments; currently under an 8
th
amendment to the original 2015 lease.
COMMISSION AGENDA – Action Item No. 8n Page 2 of 4
Meeting Date: December 10, 2024
Template revised June 27, 2019 (Diversity in Contracting).
The term of the Lease is scheduled to expire on December 31, 2024. Landlord and Tenant desire
to modify the Amended Lease to extend the Term of the Lease to February 28, 2025, and make
certain other changes on the terms and conditions set forth in this Ninth Amendment. This
request for $350,000 is a one-time request to increase the total authorization for lease contract
payments until we close on the purchase of this asset. This extension and funding authorization
will enable the Port to pay lease obligations through February 28, 2025. Without authorization,
our contract will end on December 31, 2024, and our budgeted lease payments will be depleted
on December 31, 2024 – at the end of our existing lease term.
JUSTIFICATION
Over the years of this lease, the Port pursued some time extensions in leased space within the
building, as well as a modest increase in additional parking usage. This incremental funding
authorization request will enable the Port to pay our lease obligations through the end February
2025.
Diversity in Contracting
No new contracting opportunity applies to this request.
DETAILS
Not Applicable
Scope of Work
Execute Lease Amendment 9.
Schedule
Q1 2025
Approving this request will have no incremental impact to the 2025 Budget. This funding request
is needed to allow the Port to extend the term of the existing lease obligations under the
remaining lease term.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Extend Lease for this facility
Cost Implications: $350,000
Pros:
(1) The Port intends to continue their occupancy of the STOC property past the current
term and potential extension, under a new lease. This extension through the end of
February 2025 provides the Port with more time to negotiate terms to better meet our
long term needs.
COMMISSION AGENDA – Action Item No. 8n Page 3 of 4
Meeting Date: December 10, 2024
Template revised June 27, 2019 (Diversity in Contracting).
(2) Extending the lease allows our Port departments that currently work at the STOC to
continue uninhibited and without interruptions in achieving their departmental goals.
Cons:
(1) The Port intends to continue its occupancy of the STOC property past the current term
provision under a new lease. Were we to delay an extension, this might scuttle ongoing
discussions of the Port’s new lease.
(2) Will leave existing departments that work in the lease without existing office
infrastructure and will have to engage in a costly move.
This is the recommended alternative.
Alternative 2 – Do Not extend the lease at this facility
Cost Implications: Save $350,000
Pros:
(1) Preserves funds for other uses and office conversion projects among other port
owned facilities.
Cons:
(1) Requires Port to seek other office options, causing delays, unforeseen expenses and
interruptions to operations.
(2) No lease extension may require the port to lease elsewhere.
(3) No extension will remove leasable area that the port currently has under its control,
hampering its ability to hire and grow within the departments that operate out of
the STOC.
This is not the recommended alternative.
FINANCIAL IMPLICATIONS
Dept
Descriptio
n
Jan-25 Feb-25
Total
AV/PMG, ENG, PCS, CPO
OPEX
$44,823
$44,823
AV/PMG, ENG, PCS, CPO
Rent
$68,194
$68,194
$136,388
ABD
OPEX
$4,262
$4,262
ABD
Rent
$6,295
$6,295
$12,590
Parking (7th Amendment)
Rent
$24,500
$24,500
2025 OPEX increase and Misc costs
OPEX
$26,926
$26,926
Total $175,000 $175,000 $350,000
COMMISSION AGENDA – Action Item No. 8n Page 4 of 4
Meeting Date: December 10, 2024
Template revised June 27, 2019 (Diversity in Contracting).
ATTACHMENTS TO THIS REQUEST
(1) Lease (Fully Executed, dated 7-1-2015; this is the main body of the current lease agreement
which currently has 8 amendments in it’s current form, however all lease issues referenced
in this authorization are contained herein.)
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
July 23, 2024- The Commission authorized an additional $525K to support costs associated
with the lease to meet lease obligations due to the lease extension to Dec 31, 2024.
February 27, 2024 – The Commission authorized an additional $700,00 to support costs
associated with the lease to meet lease obligations due to cost escalation higher than
originally estimated.
August 1, 2023 – The Executive Director approved, under delegated authority, a $294,000
amendment to the existing STOC lease agreement for the lease of additional parking stalls
for employee parking through August 31, 2024
November 14, 2017 – The Commission authorized the Executive Director to approve a lease
amendment for office space for two additional departments to move into the SeaTac
Office Center (STOC) for $6,829,000
October 24, 2017 – The Commission was briefed on a proposal to execute a lease amendment
for office space for two additional departments to move into the SeaTac Office Center
(STOC) for $6,829,000
April 28, 2015 – The Commission was briefed on, and authorized, a request to execute a four-
year lease agreement to provide office space for the IAF Program Management Group in
the SeaTac Office Center (STOC) for $1,995,285