Normally I'd be inclined to let the port do what it wants, but upon reading that there are several industrial companies trying/wanting to sign major leases on this land - including a Boeing supplier with a potential 400-job expansion - in this case I actually agree with the city council.

http://seattlepi.nwsource.com/business/327828_port16.html

Port's plans for Interbay denied
City rejects proposal to expand development
By KRISTEN MILLARES BOLT
P-I REPORTER

In the latest round in the battle over the future of Seattle's industrial lands, the City Council has rejected the Port of Seattle's plans to remake its 99-acre Interbay site to allow substantially larger commercial development.

It is the second time the port's plans for the site -- the largest contiguous undeveloped industrial property left in Seattle -- have been slapped down by the council. The port's plans conflict with the council's policies to protect industrial land and encourage "green" development with less parking, according to a letter the council sent the port last week.

City Councilman Peter Steinbrueck said the port should triple the proposal's set-aside of 350,000 square feet of land for industrial use. What's more, Steinbrueck wrote in the letter, the port should stop stalling on signing up an industrial land tenant that has been waiting for more than a year to lease 10 of the Interbay site's 57 vacant acres. Korry Electronics Co., a Boeing Co. supplier on Dexter Avenue North, is looking to expand in Seattle.

The port had falsely linked the signing of Korry to the council's acceptance of the overlay proposal, Steinbrueck said, and should instead make the deal with Korry and invest to allow Korry to move to the site and keep its nearly 600 family-wage jobs -- with another 400 possible post-expansion -- within Seattle.

"Nothing is stopping the port from proceeding today with signing Korry," Steinbrueck said. "If Korry walks, or leaves town, the port will be held responsible for it, not the city."

The property, known as North Bay, used to be a staging area for trade in autos. It has lain mostly vacant since 2001, except for some major existing industrial tenants currently using 520,000 square feet, including Seattle-based Trident Seafoods and City Ice Cold Storage.

Several businesses -- including a dry storage marina -- have approached the port with interest in using the site under its current zoning, but have until now been rebuffed.

The port is restricted from allowing heavy industrial uses on the property because of a decades-old agreement with the surrounding neighborhoods.

The port said it needed the zoning change from the City Council -- known as an overlay -- to attract the more lucrative commercial tenant leases, which would help the port pay for the infrastructure the site currently lacks.

"The reason for the overlay is that we wanted to be able to share the cost of infrastructure development with other potential tenants," port spokesman David Schaefer said. "We are no less determined than they are to keep Korry in the city."

Doing it piecemeal, said Schaefer, "makes it a lot more expensive, and this is a public cost."

The port's main issue is how to pay for investments in streets, utilities and environmental mediation, which under its current proposal for commercial development would cost $47 million.

In addition to that is a $32 million bridge over the rail lines east of the property, an improvement port staff said would probably not be necessary unless commercial development were to occur on site.

Port of Seattle Commissioner Lloyd Hara said that, as the council has whittled away at the possibility of uses at the site, the dynamic for generating a return for the port has changed.

"When they looked at the initial overlay ... that was an interesting mix of housing, retail, office, and manufacturing and industrial," said Hara, who supports generating a return on the investment in order to wean the port off its property tax levy.

The port previously applied for a zoning change in 2005.

Aside from setting a minimum of 350,000 square feet aside for commercial development, the most recent scuttled proposal capped the amount of permissible research and development space at 3.3 million square feet, including a maximum of 1.1 million feet of commercial office space.

Although that is 1.3 million square feet less office space than is currently allowed, there is an important distinction: The current zoning does not allow office buildings on that property larger than 50,000 square feet. That is because, as an industrially zoned property, the offices contemplated there were meant to be ancillary to the industrial buildings.

The port's return on the project would be based solely on the ground leases of the buildings; because private developers would be responsible for building the project, the lease of the space within the buildings themselves would go to those developers.

The port is now studying what tripling the amount of industrial land on the site would do for its return. Schaefer would not say whether the port would sign Korry without having an overlay assured.

Steinbrueck -- following the recommendation of the Seattle Planning Commission -- said the city would consider sharing the costs of the infrastructure.

Hara and fellow port Commissioner John Creighton seemed open to the idea, which has yet to reach the stage of formal talks between the council and the port.

The latest dispute is part of a growing divergence between the port commission and the port staff, which under ex-chief Mic Dinsmore spent more than $6 million marketing the property as a biotech hub/urban village. The port continues to allocate $500,000 a year of taxpayer funds to market the property as a commercial development site.

It is unclear when the port will return to the council with a revised proposal.

Marty McOmber, Mayor Greg Nickels' spokesman, said Nickels is interested in using whatever solution works.

"The question being raised is really whether the industrial set-aside is large enough," McOmber said. "That is a legitimate question to ask, and it is one for the port to answer."

Thanks for posted it here.

When I first read it today newspaper. I have few thoughts about this issues.

I understand City of Seattle councils' concerns about keeping the industries in Seattle area. SODO is about to lose industries to new developments too. Paul Allen already got rid some of industries in South Lake Union to attacts biotechnology companies and condo dwellers. I think City of Seattle councils are afraid if they let it go and let developers take over to redevelop it might build a new reputation for Seattle as "anti-business environment city." I don't think it will create Seattle as anti-business environment city at all.

My question for Port of Seattle or anyone who might have the answers for this...

What is the total number of jobs in Interby by present day? How many jobs will be created after redeveloped? Will it have more jobs than Interby have it right now?

^
We discussed SoDo in another thread recently.

There isn't really any real "industry" in the portion of SoDo they want to convert to offices (namely, the area around Safeco Field). All it is, is print shops, furniture discount places, a few vehicle repair shops, etc. Those kinds of businesses can easily locate elsewhere.

South Lake Union is largely the same. Boat sales stores and mini-storage places located in converted warehouses don't count as "industry" in my book.

This Interbay issue is different, IMO, because you have an industrial company that actually makes something (electronic parts for Boeing airplanes and similar things) wanting to take up a large chunk of land, and potentially add 400 jobs to its staff as part of its expansion.

That makes me soooooooooooo pissed that they're not going to build it. It would revitalize the area so much.

^^ I agree.

I am not sure what Seattle councils' own defination of industry since SODO and South Lake Union don't really have industries... It is seen to me that their own defination of industries that involves sea of parking lot with warehouses and railroads.

However, SODO does have some manufacturing plants as well. I visited few plants there a while ago for my inteior design classes to show us where they make cabinets, steel/iron, corks, flooring, and some artworks. These plants I visited aren't really factories at all... Just big warehouses.

^^ My post is for Bond James Bond.

I remember cleaning (janitoral services) for cracker factory on 1st ave S. near junction of SR 99, they moved to Kent from Seattle. IT's a small company that produces crackers from scratch to boxes.

By the way, there isn't really many factories in Seattle so it's not famous for that. It's mostly famous for warehouses, mostly. If you want factories, try Chicago or somewhere else. The only major factory that I can think top of my head is Oberto Oh Boy beef jerky which is in Kent, I think.

Seattle is in more trouble with losing this big tenant. I say move all the big cargo to Tacoma.
Seattle PI story
NYK Line move to Tacoma a blow to Seattle

The Port of Tacoma is snatching away one of the Port of Seattle's oldest container shipping customers by agreeing to build a $300 million, 168-acre terminal for Tokyo-based NYK Line.

Seattle port officials reacted bitterly to Thursday's surprise announcement, accusing their neighbor port of inflicting "a very serious blow to the relationship between Seattle and Tacoma" and terming it "another case of Tacoma expanding at Seattle's expense."

However, Port of Tacoma Executive Director Tim Farrell said that if NYK weren't acquiring its own terminal at his port, it would be likely to move to another West Coast state.

NYK Line, a Port of Seattle customer for more than a century, currently ships container cargo through Seattle's 196-acre Terminal 18. The shipper is leaving despite the port's completion of a $300 million expansion of the terminal, nearly doubling its size, just five years ago.

The Port of Tacoma announced it will build a new terminal, its largest, on the industrial east side of Tacoma's Blair Waterway and lease it to Yusen Terminal Tacoma Inc., a wholly owned subsidiary of NYK Line.

The plan was approved Thursday by NYK's board of directors in Tokyo and was to be OK'd by Tacoma port commissioners Thursday evening at a special meeting.

In June, NYK Line shipped the equivalent of 11,319 containers through Terminal 18, accounting for 7.4 percent of Seattle's total international cargo business.

The ports of Seattle and Tacoma have been neck and neck in container cargo volume in recent years although the Tacoma port has enjoyed a faster growth rate. In the first six months of 2007, 949,577 container equivalents went through Tacoma and 944,761 through Seattle.

For Seattle-based SSA Marine, which operates Terminal 18, the move is a double blow.

Not only does the stevedoring company lose a Seattle customer, but it also gains a competitor for a private container terminal that SSA intends to develop with the Puyallup Tribe of Indians on 180 acres of tribal land adjoining the Port of Tacoma on the east side of Blair Waterway.

"We had no idea that announcement was coming," SSA Marine spokesman Bob Watters said. "It was just kind of curious. We're here with private funds getting ready to develop a facility down there, and the port (of Tacoma) is coming out with public funds to do the same thing, build capacity."

In a prepared statement, the Port of Seattle said the move "is doubly unfortunate because we have plenty of capacity at Terminal 18 to accommodate the volume of international trade that NYK brings here."

The statement added: "We had been working hard to cooperate with Tacoma on things like security, the environment and infrastructure, only to find that they had, at the same time, been negotiating to take business away from Seattle.

"It makes no sense from a regional or statewide perspective for them to work to take customers away from Seattle. Their efforts would be better spent -- as ours are -- to focus on the competition with ports in California and British Columbia. In this case, we see public funds being spent to move existing customers around in the state instead of bringing in new business."

However, the Port of Tacoma's Farrell said in an interview that if NYK Line weren't moving to Tacoma, "there was a chance that Washington state was going to lose this business. It could have gone to Vancouver (B.C.), it could have gone to Oregon, it could have gone to California.

"When you've got a company like NYK that is in a multiuser terminal (in Seattle) and is starting to need more elbow room, they have to look elsewhere."

Farrell said that as long as international trade continues growing as rapidly as it has, "we as a region really are going to need to make sure we provide additional (port) capacity if we are to take advantage ... of this growth opportunity in both ports."

The Port of Seattle's statement said it expects "no immediate impact on Seattle's finances. The move is not expected to take place for another five years, and we hope that, working with the terminal operator, we can replace that amount of cargo with new business." The Tacoma terminal is to be completed in 2012.

Apparently a big inducement for NYK Line was the opportunity to operate its own terminal. Tacoma had available land on which to develop a terminal, and Seattle didn't, Port of Seattle spokesman David Schaefer said.

In addition, stevedoring companies operate the Port of Seattle's terminals, but shipping companies operate their own terminals in Tacoma.

"We have long sought to operate our own terminal in the Pacific Northwest," Peter Keller, president of NYK Line North America Inc., said in a statement.

"This (Tacoma) facility features on-dock intermodal rail, which fits our operational preferences. Moreover, it provides NYK Line capacity for long-term success while providing Washington state with another strong export option."

The move seems to be a bigger economic boon to the Port of Tacoma than economic loss to the Port of Seattle.

The Port of Tacoma said the new terminal will provide an estimated 3,000 temporary construction jobs during the two-year development of the terminal and 3,200 permanent jobs -- 1,800 in Pierce County and 1,400 elsewhere in the state -- afterward. The Port of Seattle is losing a customer that uses its terminal but isn't a major tenant as it will be in Tacoma.

Seattle's Schaefer said NYK's business "isn't something where (the port gets) a direct financial return anyway because we lease the facility to the terminal operator, and they pay based on acreage. ... We'll work with the operator of the terminal to try to get other customers in there."


PORT TRAFFIC

The Port of Tacoma grabbed one of the Port of Seattle's oldest shipping customers Thursday. The two ports have been nearly tied in container cargo volume in recent years. In the first six months of 2007

949,577 container equivalents went through Tacoma.

944,761 went through Seattle.

Preservation of industrial land isn't about factories per se. It's about keeping a strong number of blue-collar jobs in Seattle, which truly is important. That can mean driving a forklift, stitching futon covers, or any number of things.

I'm not advocating any particular position on this in general, because both sides make great points. I do favor dense redevelopment around the stadiums though.

Interesting, I find it odd to hear a smaller city with a bigger port while the bigger city has a smaller port.

I passed Interbay twice in the past weekend. I looked at that area while I was passing it. I can see why they wants to redevelop it since that neighborhood needs to improve for the better.