Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No. 8f
ACTION ITEM Date of Meeting October 28, 2025
DATE: September 29, 2025
TO: Stephen P. Metruck, Executive Director
FROM: Linda Springmann, Director of Cruise Business & Elliott Bay Operations
Marie Ellingson, Sr. Manager, Cruise Operations & Business Development
SUBJECT: Terminal 91 Cruise Facility Lease Agreement
ACTION REQUESTED
Request Commission authorization for the Executive Director to execute a Term Lease
Agreement with Pacific Cruise Ship Terminals LLC (Metro Cruise) for Smith Cove Cruise Terminal
at Pier 91. The proposed lease term is for five (5) years with a five (5) year option to extend,
effective November 1, 2025.
EXECUTIVE SUMMARY
Smith Cove Cruise Terminal at Pier 91 was opened in April of 2009. The current lease of the cruise
terminal manager expires at the end of October 2025. A Request for Proposals was issued on
April 24, 2025, soliciting offers for a tenant to manage cruise operations. Key services include,
but are not limited to, passenger flow, baggage operations both terminal and pier side, terminal
security, traffic circulation, customer service, berthing plans, long term parking, accommodating
access to accessibility equipment, crew store and services, and facility maintenance.
A diverse review panel was assembled to review the four proposals received. The panel included
port representatives from Finance, Environmental, Facilities, and Cruise. Although all offerors
were well qualified, the Port’s assessment of the proposals revealed that Metro Cruise provided
a proposal that generated the best overall value to the Port and yielded the greatest level of
confidence in successful performance.
JUSTIFICATION
The port is expecting a record year in 2026 with 330 vessel calls and 2 million revenue passengers.
The port will also welcome two new cruise lines to Seattle, MSC Cruises and Virgin Voyages. A
multi-year lease agreement provides a greater degree of certainty to the port and the cruise lines
than shorter-term alternatives. Metro Cruise demonstrated they would bring diverse
perspectives and innovative ideas based on relevant experience in terminal management,
security, and stevedoring.
COMMISSION AGENDA – Action Item No. 8f Page 2 of 3
Meeting Date: October 28, 2025
Template revised June 27, 2019 (Diversity in Contracting).
LEASE TERM DETAILS
Preferential Use of the Terminal 91 Preferential Use Area – applies only to cruise vessels and
associated ship activities during the cruise season.
Term Five years with an option to extend five additional years at port
discretion
Percentage Rent Tenant shall pay the port 93.5% of the port directed cruise fees
(passenger fee and dockage)
Flow Through
Event Revenue
Tenant grants the port an event license.
Tenant shall pay port 50% of flow-through event revenue
Additional
Responsibilities
In addition to percentage rent, tenant shall pay taxes, insurance,
operating expenses, utilities, maintenance & repairs, and any other cost
associated with tenant’s operations
Security Tenant maintains corporate surety bond, letter of credit, or other
security in the amount of $5,000,000
Tenants Operation
of Premises
scheduling, security, passenger transportation, baggage operations,
deliveries, stevedoring, hospitality services, long term parking, traffic
control & directional signage, contracts for goods & services, billing,
tours, marketing, compliance with 100% shore power of homeport
vessels
New to Cruise
Terminal Lease
Green Lease Terms that are now standard to Maritime lease are
incorporated
ALTERNATIVES AND IMPLICATIONS CONSIDERED
To evaluate the implications and requirements of each operating model, cruise forecasts, income
and expenses for the port, income and expenses for a third-party operator, potential capital
programs, and future maintenance requirements were taken into consideration.
Alternative 1 – Port Self Operating (the port assumes all operations currently managed by a third
party)
Pros:
(1) More operational control
(2) Potential for higher revenue
Cons:
(1) Higher direct costs and overhead budget
(2) Constrained by established organizational process and procedure risking the ability to
respond in a timely manner to critical circumstances and time sensitive issues.
(3) Financial Risk
This is not the recommended alternative.
COMMISSION AGENDA – Action Item No. 8f Page 3 of 3
Meeting Date: October 28, 2025
Template revised June 27, 2019 (Diversity in Contracting).
Alternative 2 – Enter into a lease agreement for management of the cruise terminal
Pros:
(1) Updated terms with increased profit share and more favorable terms
(2) Fixed lease payments provide financial stability
(3) Maintenance responsibilities and associated costs fall to tenant
(4) The port cannot achieve the same operational efficiencies as a third-party operator
Cons:
(1) Port responsible for capital programs
(2) May yield less revenue compared to alternative 1
This is the recommended alternative.
FINANCIAL IMPLICATIONS
The proposed agreement is structured as a revenue-sharing lease. The tenant will collect the
passenger and dockage fees (per Terminal Tariff No. 5) from the cruise lines, and the Port will bill
the tenant for its share of the fee revenue. The Port’s revenue share of passenger and dockage
fees would increase to 93.5% in the new agreement, which will have a positive impact on future
cruise revenues to the Port.
Additional costs to the Port are minimal. The tenant will be responsible for leasehold taxes,
insurance, operating expenses, utilities, maintenance & repairs, and any other cost associated
with tenant’s operations. The prior lease included annual capital and maintenance fund
allowances that the Port provided the tenant for repair and maintenance, which are no longer
included in the proposed lease and will reduce costs to the Port.
ATTACHMENTS TO THIS REQUEST
(1) Presentation
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
December 14, 2021 – The Commission authorized to change the term of the Cruise Facility
Lease Agreement for two years with two additional one-year extension options at the
port’s discretion (2024 – 2025)
October 22, 2019 – Commission action to extend Cruise Facility Lease Agreement for two
years with two one-year extension options at the port’s discretion (2020-2024)
September 11, 2012 – The Commission authorized seven years extension of Cruise Facility
Lease Agreement (2013-2019)
December 11, 2005 – The Commission authorized Cruise Facility Lease Agreement (2006-
2012)
