By Coral Garnick, May 7, 2015, Seattle Times
The Seattle and Tacoma port commissioners on Wednesday released the draft Seaport Alliance agreement to unify management of their marine-cargo divisions — now named The Northwest Seaport Alliance.
After extending their deadline in March, the commissioners have held 10 joint private and public meetings in the past six weeks to work out the details, including governance and financial structures, a transition plan and a strategic business plan.
Not included in the documents were the dollar values for the properties to be included in the alliance. The valuation of assets has been a stumbling block for the commissioners. The idea is for an even split, so that once the alliance is formed, each port would receive 50 percent of the revenues and profits.
The commissioners will hold a public meeting at 9:30 a.m. Friday at Federal Way City Hall to discuss the agreement. The two ports expect to submit the final agreement to the Federal Maritime Commission in June, allowing each port to formalize it by Aug. 1.
The commissioners are betting that combining cargo operations will allow them to operate more efficiently as larger container ships are built; the widened Panama Canal opens; and West Coast ports, such as British Columbia and Southern California, up their games.
Last year, British Columbia overtook Seattle and Tacoma in terms of container traffic, for the first time since at least 1980, according to data from the American Association of Port Authorities. British Columbia moved almost 3.6 million 20-foot-equivalent units (TEUs) compared to Seattle and Tacoma’s combined 3.5 million TEUs.
To become more competitive, the ports expect to shrink their current acreage of international container terminals from 1,080 acres to 850 acres. They anticipate this optimization growing their container traffic from 3.5 million TEUs last year to 6 million by 2025, according to the ports’ strategic business plan.
The plan outlines that each port needs a “strategic terminal” that can accommodate two of the mega ships that are coming online, suggesting Terminal 5 in Seattle and the General Central Peninsula in Tacoma, which includes Husky Terminal and the Olympic Container Terminal.
The average ship size to call in Puget Sound is about 6,000 TEUs, with the largest ships carrying 10,000 TEUs. However, mega ships being built now can carry more than 18,000 TEUs.
Optimizing the cargo terminals would leave roughly 230 acres available to diversify the marine-cargo offerings, which could include logs, domestic cargo, breakbulk and autos. The ports plan to form a port development authority (PDA) to manage this marine-cargo division.
Port of Tacoma Chief Executive John Wolfe is expected to serve as chief executive of the Seaport Alliance and remain in his current position for no longer than five years. The Port of Tacoma is expected to create a new and independent management structure and team within those five years.
During an April commission meeting, Tacoma Port Commission President Don Johnson said he appreciates the duality because the Port of Tacoma has capital projects under way and would not want to “change the face of the port” in the middle of ongoing projects.
The proposed alliance excluded grain, liquid natural gas and methanol operations; Seattle-Tacoma International Airport; the cruise business; and marinas, such as Fishermen’s Terminal. Tacoma’s industrial real estate facilities also are not included.