

(Empty Terminal 5, steps away from site of today’s lunch – WSB photo)

By Tracy Record

West Seattle Blog editor

Tough questions for Port of Seattle/Northwest Seaport Alliance leadership at the West Seattle Chamber of Commerce lunch meeting that just wrapped up at port-owned Jack Block Park.

Top topics: The proposed Terminal 5 expansion – and whether it would go forward without a tenant being signed – and the Hanjin bankruptcy.



(WSB photo, L-R: Commissioner John Creighton, deputy CEO Kurt Beckett)

First to speak, Port Commissioner John Creighton, who made note of the recent one-year anniversary of the teaming of Seattle and Tacoma in the Northwest Seaport Alliance. He said that from a variety of standpoints, “it’s really worked wonderfully. … We had to change what we were doing, to remain relevant …”

As for the Port of Seattle itself, Creighton declared it to be “at a good place … we still have a lot of challenges, but they’re good challenges,” such as “growing like gangbusters at the airport.”

He started with an update on the Cruise Terminal, recalling that it started small, with a few trips a year at Pier 66. “Fifteen, sixteen years later, we see almost 200 cruises leaving Seattle every summer,” resulting in half a billion dollars in regional economic activity, and 1 million passengers a year. He notes that Norwegian Cruise Line is so “bullish” on Seattle that it’s sharing the cost of upgrading Bell Harbor. (This year’s cruise season still has more than a month left – here’s the official schedule.)

Regarding Sea-Tac Airport, he said they had set a 25-year goal to double international traffic – and are halfway there after just 5 years. They’re working with TSA to reduce the security lines, he said, acknowledging the “atrocious situation during spring break” with 90-minute waits.

He thanked the Chamber board for its support of the Port’s opposition to the Occidental Street vacation for a potential new arena. “That arena would have really impacted port traffic. … I did not think we would win at the City Council.”

And he said that the port remains “bullish” on the overall shipping industry, despite the Hanjin bankruptcy. That was a segue to deputy CEO Kurt Beckett‘s turn at the podium.

Besides Hanjin, the opening of the new Panama Canal waterway is a competitive challenge, he acknowledged. So how is the NWSA working to be more competitive? Protecting current investments is part of it, Beckett said, as well as evolving strategies as the industry changes.

He gave some updates from the past year:

-Improvement in volume in May, and over the summer, “in some cases we see the cargo coming back from Canada,” with a drop in volume in Vancouver and Prince Rupert

-The February visit of the megaship CMA CGM Benjamin Franklin was a success story

-Construction under way in the “South Harbor” – Tacoma – $141 million invested in facilities, with a 20-year commitment by K Line

-Terminal 5 is at 90 percent design and the final Environmental Impact Statement is due out this fall

-The “heavy-haul network” mapped by the city for the Freight Master Plan is appreciated by the port

-Some movement has happened internal to the alliance – one line has moved from Tacoma to Terminal 18 in Seattle

-He spoke of the Operations Service Center that the NWSA is working on, and elements that they are “trying to innovate” to streamline operations

And as a milestone of sorts, he mentioned the first post-post-Panamax ro-ro carrier, from the WWL line, visiting earlier this year, as a result of the Panama Canal widening.

In Q&A, he was asked first about longterm implications of the Hanjin bankruptcy. “We don’t know fully yet,” Beckett acknowledged. Hyundai is expected to take over the cargo, maybe even the vessels, but other lines are deploying additional capacity, he noted. As for details such as the Terminal 46 lease, he said he can’t get into it deeply, but “the two biggest carriers in the world – MSC and Maersk – call at 46, and that’s who’s going to be using T-46, at least through 2025, and potentially longer.” There’s a Hyundai ship at T-46 today, he added.

Creighton then took the podium and said that while T-46 has been dubbed “the Hanjin terminal,” it’s actually Total Terminals International that runs it, and Hanjin is a partner in that concern.

Next question: Is the Terminal 5 expansion on spec, “or will you have a tenant lined up?” Ultimately up to the commission, said Beckett, adding that he didn’t think it would be in anyone’s interest to make that kind of an investment without a sound financial plan – which would include a tenant. “It’s been a container facility for 50 years, and we think it’s going to be (that) for another 50 years.” Regarding mitigation, he said that if they need to make certain requirements of the customer, “without (chasing) them away .. that’s one thing we’re approaching. (But) we want to be flexible enough not to require something today that would not (make sense in the future).”

The questioner said that without mitigation, the T-5 expansion would “make (conditions) unbearable” because of air pollution. “If we’re not a good neighbor – not that container terminals are parked, there are impacts that come with that – it’s in (our and your) best interest to have as least-impact a facility as we can.” Beckett also noted that some elements of the analysis “are on the conservative side … From that, we can understand that’s what it would really take to go to the full end of the options .. what it is today and what it could grow into.”

Creighton added, “The buck stops with us.” Regarding “whether the terminal would be done on spec,” he said there are some things that could be done without a tenant, but “staff is talking with potential tenants from Asia and Europe … what customer we get would depend on the throughput of that terminal and its growth over a number of years.” He personally “would hesitate to go forward without a customer on the hook, but discussions are going well and I think we’ll have a customer for that terminal fairly soon.”

Next question: What about the Lander Street Bridge (Overpass), which just finalized a federal grant but is still reported to be $40 million short? The person who asked that question noted that not all Chamber members agreed with the organization’s opposition to the Occidental vacation.

“Lander is important to us,” said Creighton, probably “the most important transportation project to the health of (Port of Seattle)” after the 509 extension. “For a long time, we’ve been waiting for Lander – originally part of the Safeco Field mitigation 20 years ago – and we’re still waiting …” Creighton noted that the Port has over the years contributed $500 million to “state and local transportation projects” and also mentioned what it’s going to spend on part of the Duwamish River project. The port’s $5 million contribution to Lander is triple the originally proposed $1.7 million, he noted. He said he has urged Mayor Murray to go look at some other potential funding sources.

Next question, back to Terminal 5: What about the train noise? The speaker said it’s been problematic over the years, along with 24-hour loading and unloading, which he suggested doesn’t work for a port in the middle of a city. “We are looking at all sorts of ways that we can mitigate noise on the terminal itself … and the railroads,” said Creighton. “If the terminal (expansion) leads to a growth in train traffic, that’s something we have to look at.”

And with that, the port’s portion of the program wrapped up and the Chamber moved on to other matters.

Disclosure: As a local business, WSB is a member of the West Seattle Chamber of Commerce, but does not participate in its governance or operations. The organization has 201 members, CEO Lynn Dennis announced today; keep up with Chamber meetings and other events at wschamber.com.