THE NORTHWEST SEAPORT ALLIANCE MEMORANDUM

Transcription

1 THE NORTHWEST SEAPORT ALLIANCE MEMORANDUM MANAGING MEMBERS Item No. 4B ACTION ITEM Date of Meeting February 6, 2018 DATE: January 18, 2018 TO: FROM: Managing Members, John Wolfe, Chief Executive Officer Sponsor: Andre Elmaleh, Sr. Manager, Business Development, Non-Container Project Manager: Carol Rhodes, Engineering Senior Project Manager SUBJECT: Parcel 77 Auto Import Terminal A. ACTIONS REQUESTED DUAL VOTE: NWSA / PORT OF SEATTLE / PORT OF TACOMA: 1. As referenced in NWSA Resolution No , Exhibit A, Delegation of Authority Master Policy, Paragraph 8.c.iii., states project costs exceeding $300,000 require approval from Managing Members. Request project authorization in the amount $33,834,500, for a total authorized amount not to exceed $35,000,000, for work associated with the Parcel 77 Auto Import Terminal project, Master Identification No and Master Identification No Project funding in the amount of $33,834,500 ($16,917,250 from each Port) for a total authorized amount of $35,000,000 for work associated with the Parcel 77 Auto Import Terminal Project, Master Identification No. (MID) and Master Identification No B. SYNOPSIS This request supports the continued diversification of cargo moving through the Pacific Northwest. This investment will commit the current vacant, former Kaiser Aluminum Facility, property to a long-term use. This request is to complete design and construction of an automobile import terminal on this property and relocate the EB1 customer services building from the property to be developed. C. BACKGROUND In support of the NWSA Strategic Business Plan, Goal 3A1, the Parcel 77 Auto Terminal Development project will facilitate new business opportunities for the autos Line of Business.

2 Page 2 of 6 This project will return approximately 90 acres of unused Port of Tacoma property to support water dependent, maritime commercial business use and economic development in the region. NWSA is currently under negotiations for a long-term lease with Wallenius Wilhelmsen Logistics (WWL) for this property. WWL is a current NWSA customer and this auto terminal would be an expansion of their existing business with NWSA. In November 2017, Managing Members authorized $1,000,000 of design funds to further develop the design of an auto terminal to increase certainty of the capital investment requirement prior to reaching a long-term agreement. In April 2017, the Port developed a 15% site design for a terminal to receive, process and ship finished automobiles. The property will include buildings for an auto processing facility and support activities that will be financed, designed and constructed directly by WWL. The new intermodal rail facility will connect to existing Tacoma Rail infrastructure on Taylor Way to the east, and Alexander Avenue to the west. D. PROJECT DETAILS Scope of Project: The scope of the project includes development and construction of utilities and surface improvements for the storage and processing of autos, rail infrastructure, truck loading and security. Project elements include: Building demolition and relocation of EB1 customer service facilities on the property Surface improvements including grading, Hot Mix Asphalt (HMA) pavement and pavement striping and marking Stormwater conveyance and treatment systems New outfall to the Blair Waterway Temporary pump station pending new outfall permitting and construction Railway track work and special track work Site utilities for the buildings (by others) including power, gas, water and sanitary sewer Site lighting, fencing, gates and security Project mitigation required per SEPA

3 Page 3 of 6 Scope of Work for This Request: Project management and coordination Final design Construction permitting Construction Construction management services Schedule Submit for permits February 2018 Early material procurement February 2018 Construction bid advertisement April 2018 Relocation of EB1 Customer Service May 2018 Start of Construction June 2018 Partial Substantial Completion/Operating Terminal December 15, 2018 Final Completion June 2019 E. FINANCIAL SUMMARY Estimated Cost of Project The total project cost including all stages is $35,000,000. In addition to the described project, the tenant will construct buildings at their cost. Estimated Cost for This Request The total estimated cost of the project is $35,000,000. If the cost of this estimate is anticipated to exceed the authorized amount the Managing Members authorization will be requested to expend those funds. Estimated Sales Tax The total sales tax to be paid to local and state governments for this project including total construction is estimated at $2,757,000.

4 Page 4 of 6 Cost Details Project Cost Details This Request Total Project Cost Cost To Date Remaining Cost Design $497,200 $1,662,700 $410,154 $1,252,546 Construction $33,337,300 $33,337,300 $0 $33,337,300 Total $ 33,834,500 $ 35,000,000 $410,154 $34,589,846 Source of Funds The current Capital Investment Plan (CIP) allocates $1,205,000 for these projects. With this authorization, the CIP will be updated to reflect the additional $33,795,000 for a total project authorization of $35,000,000. Financial Impact Project costs will be capitalized and depreciated over an estimated 20-year period resulting in annual depreciation of $1,750,000. If the project does not proceed to construction then the design costs will be expensed. The financial results are expected to meet or exceed the NWSA standard financial requirements. F. ECONOMIC INVESTMENT/JOB CREATION Once opened, the auto facility will create an additional 107 Full Time Equivalent (FTE) jobs. This is in addition to the 61 already created at the East Blair One (EB-1) terminal in support of the WWL Ocean Breakbulk Business. G. ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS Beginning in 2003, the Port of Tacoma has actively marketed this site and explored a variety of alternative uses. Preparing the site for autos and breakbulk will facilitate the growth of an existing customer and create the opportunity to grow Port/NWSA revenues while diversifying non-containerized cargos. WWL accomplished its own alternatives analysis, which identified and evaluated multiple alternative port locations along the west coast of North America. WWL has selected the Port of Tacoma Parcel 77 property (former Kaiser site) as its preferred location. H. ENVIRONMENTAL IMPACTS/REVIEW Permitting: Environmental review (SEPA) will be conducted and all appropriate environmental permits will be obtained prior to construction. Environmental permits will include a City of Tacoma (COT) shoreline substantial development permit with critical areas review, and if in-water work is necessary, a COT conditional use permit, an U.S. Army Corps of Engineers Section 10/404 permit, Washington State Department of Ecology Water Quality Certification (WQC) and

5 Page 5 of 6 Coastal Zone Management (CZM) federal consistency certification, and a Washington Department of Fish and Wildlife hydraulic project approval (HPA). Remediation: The Department of Defense and Kaiser Aluminum Company (Kaiser) ran an aluminum smelter and manufacturing plant at the premises for more than 60 years. Due to years of aluminum smelting, hazardous substances were released to soil and groundwater. The Port did most of the cleanup work through several partial cleanups called interim actions. Now, the most important cleanup tasks are monitoring and preventing accidental release of any of the contaminants still on site. In 2016, the Port entered into a consent decree for implementation of the cleanup plan. Since some contaminated soil is still on site under caps, the cleanup plan includes two protocols to prevent accidental contamination release. A material management plan gives instructions to future developers who could disturb the ground during activities like pile driving or moving soil. An environmental covenant has also been recoded that prohibits activities that could release contamination and only allows industrial use of the premises. This auto terminal development project is not expected to disturb remnant soil contamination in the capped areas. Water Quality: The site will incorporate new stormwater collection, conveyance, and enhanced treatment infrastructure per the Port of Tacoma s Municipal Stormwater Permit (MS4) requirements. The site will incorporate oil water separators and additional enhanced treatment. The project will make reasonable efforts to source non-galvanized building materials, in order to reduce the potential of discharging zinc or other metals into receiving waters. The tenant will obtain and manage their own industrial stormwater general permit. Air Quality: The main air quality impacts will be during operations, conveying automobiles from the ship to the site for continued shipment on rail. Exact air quality impacts will be measured as part of the SEPA process.

6 Page 6 of 6 I. RISKS Risks to this project include: Schedule: The project has an aggressive accelerated schedule. Permitting approvals may delay the project into winter weather. J. PREVIOUS ACTIONS OR BRIEFINGS Date Action Amount December 1, 2017 Executive Authorization EB1 $39,492 Customer Service Conceptual Design November 6, 2017 Commission Authorization Design 1,000,000 April 19, 2017 Executive Authorization Design $47,000 June 22, 2017 Executive Authorization Design $58,500 October 6, 2017 Executive Authorization Design $60,000 TOTAL $1,204,992 K. ATTACHMENTS TO THIS REQUEST Computer slide presentation L. NEXT STEPS Complete final design Incorporate permit requirements Complete project construction.