Avenue 55, LLC – LeaseSecond Reading

Presenter:

Scott Francis

Director, Real Estate

Port of Tacoma

Authorize Chief Executive Officer or his designee

to enter into a 50-year lease with a 25-year

extension option with Avenue 55, LLC for the

Premises located at 1514 Taylor Way and 3401

Lincoln Avenue, Tacoma, WA.

Action Requested

Avenue 55 – Lease Location

Avenue 55 – Lease Premises

1514 Taylor Way & 3401 Lincoln Avenue

1514 Taylor Way:

This 10.56 acre parcel was purchased in 2007.

Property is vacant and has minimal lease opportunity

without development.

Property is currently subject to invasive snail

restrictions.

Regarding existing contamination issues, Ecology will

require an Agreed Order to cap this property as part

of development.

Development is the best way to address the Port’s

environmental responsibility for this site.

Avenue 55 will build a new warehouse on this parcel.

Background

3401 Lincoln Avenue:

This 9.13 acre parcel was purchased in 2008.

The 183,000 SF Educator Building is located on this

property.

The Educator Building is at the end of its useful life and

will need to be vacated soon without major repairs and

improvements.

The building is currently leased on a month-to-month

bases to multiple tenants.

Avenue 55 will build a new warehouse on this site.

Background Continued

Avenue 55 – Puyallup West

Avenue 55 – Puyallup West

Avenue 55 – Sumner West

Lease Effective date is estimated at November 1, 2016.

Fifty (50) year lease term with one twenty-five (25) year

lease extension.

Monthly Rent about $44,200 plus excise tax.

Deposit is $150,000.

Inspection Period is 90 days.

Entitlement Period is 90 days with three 30-day extensions

available.

Rent Commencement is at SEPA approval and the fully

executed Ecology Agreed Order.

Avenue 55 – Lease Terms

Avenue 55 – Lease Terms Continued

Rents escalate by CPI not to exceed 3% per year.

Rents reset to market at 15 year intervals.

Security deposit is one-year’s rent plus leasehold

excise tax.

Insurance coverage

o $2 Million general liability

o $2 Million auto liability

o $2 Million pollution liability

Utilities are paid by Lessee.

All building and site maintenance is the responsibility

of Lessee.

• Warehouse development on these properties is the highest

and best use.

• Development puts an underutilized property to work.

• Creates new warehouse space that supports the Port’s

core business and Strategic Plan.

• Addresses the Port’s environmental responsibility for the

1514 Taylor site.

• Development reduces the invasive snail habitat.

• New warehouses will produces dozens of new jobs.

Lease Benefits

Authorize Chief Executive Officer or his designee

to enter into a 50-year lease with a 25-year

extension option with Avenue 55, LLC for the

Premises located at 1514 Taylor Way and 3401

Lincoln Avenue, Tacoma, WA.

Action Requested: