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October 27, 2016

Emails reveal Port of Seattle prepared for Terminal 46 in post-Hanjin era

King 5

Chris Daniels

SEATTLE -- Hanjin Shipping's bankruptcy filing caused waves near the Port of Seattle and new emails reveal, perhaps, the port has been planning for a post-Hanjin future for more than a year.

The Shipping company has been operating out of Terminal 46 near Safeco and Century Link Fields and in 2016, Hanjin's trips to Seattle had significantly dropped.

Perhaps there was writing on the wall that led to a series of emails behind top managers at the port.

As the port declared publicly that the ingress and egress of T-46 was vital to the future, it was exploring privately new ideas for the 82-acre site.

In August of 2015, Dave McFadden, the Port of Seattle's economic development managing director emailed Stephanie Jones Stebbins, who runs the Seaport Environmental and Planning Department about a new effort.

"Hi Stephanie," he wrote. "We have Kidder Mathews working on a project that could involve redevelopment of Terminal 46. Ted and I have asked them to give us a rough sense of feasibility towards redeveloping that terminal."

A month later, in September of 2015, Christopher Moe, senior vice president at commercial real estate company Kidder Mathews, emailed McFadden, which hinted at turning T-46 in a possible cruise ship terminal.

Moe wrote, in part, "Paul and Stephanie have raised some significant questions regarding the size of the facilities required and we've confirmed there are some very prohibitive restrictions in place regarding floor size on the T-46 site. Input on cruise operations suggests that they would need upwards of another 200,000 SF in addition to the 300,000-350,000 SF for the HQ consolidation as well as parking to support both. Given the limitations on the site it appears that this would not be feasible without applying for rezoning of T-46."

"While that is not impossible it is unlikely and would certainly require years...not achieve." Moe added. "We need input from you and Ted on how much further you want to pursue this as an option or if we should compile our findings and shifts our attention toward third party owned lease/development options and possibility consider expanding our geographic boundaries for that search."

Another email that month from Paul Meyer, the manager of environmental permitting and compliance for the port, to Moe mentioned specifically "cruise terminals," needing zoning changes and "office space on the site."

KING 5 asked Meyer this week about the email and he said "I don't recall" the conversation, but that T-46 "still looks like a working terminal to me."

The emails show that McFadden responded to Moe's note with the subject "Fwd: T-46 (Status Report and Next Steps)" with a suggestion that the "city can rezone in return for putting big $ into tunnel, etc."

The emails also reveal the port has been looking to acquire and develop new property for headquarters.

When asked about the emails and how they play into Hanjin's bankruptcy, Port of Seattle spokesman Peter McGraw called it old news.

"We were making assessments on a bunch of properties, including T-46. It's something we do all the time," said McGraw. "This was something that the CEO (Ted Fick) wanted us to look into and the idea was quickly dropped." He added, "We looked at it and declared it not feasible. We have a lease paying tenant."

When asked why the port would be looking at options in 2015 with an active lease on T-46 through 2025, McGraw said, "Chalk that up to port looking at properties. It doesn't keep the port from looking at options."

But the emails came after the Port of Seattle and Port of Tacoma merged maritime operations in 2015 and formed the Northwest SeaPort Alliance.

In fact, in March of 2016, the port and the alliance kicked off a study called the "Real Estate Strategic Plan."

Port Commission Chair John Creighton said at the time that a renovated Terminal 5 may eventually be able to handle the biggest ships in the world and a volume on par with the entire current harbor. He also said then, that multiple people were interested in the future of T-46 and potential redevelopment for industrial use.

That same month, Port of Seattle CEO Ted Fick also told Seattle Business Magazine that he would "more likely be a buyer, than a seller" of T-46.

Kidder Mathews declined comment on the emails or level of interest. Total Terminals International, which operates T-46, could not be reached for comment.

The Northwest Seaport Alliance says officially it is not focused on redevelopment of T-46.

In a briefing this month, the Alliance's deputy CEO said the organization is firmly focused on redevelopment of T-5 in Seattle and Pier 4 in Tacoma. Alliance spokesperson Tara Mattina says even without Hanjin, T-46 serves Maersk and Mediterranean Shipping and is still a "very busy container terminal, with no plans to change anything."

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