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Tacoma Port Plans Giant Project

by Kelly Kearsley
The News Tribune, September 4, 2007

Officials expect to spend more than $800 million on construction

TACOMA -In the next decade, the Port of Tacoma will embark on more than $800 million worth of construction projects to develop the east side of the Blair Waterway for shipping terminals.

At the center of the projects is a deal the port negotiated with Toyko-based NYK Line to build the shipping company a $300 million container terminal.

The expenses begin to tick up from there. There's property to buy, an existing terminal to move and rebuild, rail lines to construct and roads to improve. There's even a third marine cargo terminal to consider as the port continues redeveloping the former site of Kaiser Aluminum.

The total cost: $812 million.

"It is a large number," Port of Tacoma Commission President Dick Marzano said last week. But he added that the cost is expected as land becomes more expensive.

Bridge cost $849 million

In comparison, the new Tacoma Narrows bridge cost the state $849 million. The Port of Seattle's third runway will cost about $1.2 billion. SSA Marine and the Puyallup Tribe of Indians are developing a container terminal adjacent to the NYK terminal. Bob Watters, vice president with SSA Marine, estimated that the land and the construction of their terminal will cost about $318 million.

The port plans to use a combination of revenue bonds and its own revenue from leases and services to pay for the projects.

The costs of developing the peninsula for shipping terminals are:

Tim Farell, the port's executive director, said that NYK's lease - which will end up paying for the construction of the terminal - varies from other leases the port has with customers.

NYK's lease cost is based on a percentage of the land's value and the amount of debt incurred by the port to build the terminal plus a guaranteed percentage of profit. Structuring the lease this way helps the port and NYK account for unpredictable construction costs, Farrell said. The port estimates that the lease will generate about $40 million per year.

NYK will pay for the terminal's equipment, including the container cranes.

"It's like we are building a new terminal for TOTE," Farrell said.

Kelly Kearsley
Tacoma Port Plans Giant Project
The News Tribune, September 4, 2007

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