January 26, 2005

Hanjin, port OK lease for T-46

A private developer's proposal to turn one of the city's maritime shipping terminals into a neighborhood of offices, housing and shops will have to wait until 2015, if not longer.

The Port of Seattle is extending Hanjin Shipping Co.'s lease at Terminal 46 for five years. The deal, which port commissioners approved Tuesday, includes a 10-year extension option through 2025. Hanjin must exercise the option by the end of 2012.

"This is a very exciting day for us," said Charlie Sheldon, director of the seaport.

The lease extension should lay to rest — at least temporarily — concerns that the port is letting the maritime shipping industry slip away.

Port officials have been criticized for pursuing a mixed-use development at Terminal 91, at the foot of Magnolia. The rhetorical fury increased when commissioners heard presentations by officials of Nitze-Stagen & Co. and other private companies interested in redeveloping T-46.

Nitze-Stagen Chief Executive Officer Frank Stagen said port leaders have failed to adequately vet his company's proposal to build a sustainable urban community at T-46.

In addition to offices, retail and condos, the plan included an arena for the Sonics basketball team, a cruise ship terminal and 32 acres of parks.

A report Nitze-Stagen commissioned shows redeveloping the terminal would create nearly nine times more jobs than continuing to operate it as a cargo facility.

"My feeling is that it's very hard to come to any kind of decision unless you've really explored the options," Stagen said Tuesday. Port officials "refuse to do that in an open forum."

He said the port's responsibility is to "the greater Puget Sound region and not necessarily to keeping maritime storage uses" on prime waterfront land.

Port officials counter Hanjin's 88-acre operation takes advantage of a natural deep-water harbor. In recent years, the port has made more than $70 million worth of improvements to the terminal. These upgrades, the facility's proximity to rail lines and other attributes make T-46 Seattle's most efficient maritime terminal in terms of cargo moved per acre.

"We are able to serve our customers best here," said Rick Blackmore, general manager of Total Terminals International, the terminal operating arm of Hanjin. "I look forward to the next 10 years and beyond."

One issue that looms large is replacing the Alaskan Way Viaduct and what effect that would have on T-46 and the rest of the waterfront. The aerial highway, damaged in the 2001 earthquake, separates the terminal from highways and rail routes.

"That's another issue they don't want to debate," Stagen said.

Sheldon said port representatives are working with the viaduct team to help ensure the massive project will not negatively affect shipping operations.