Friday, June 8, 2012

Port of Seattle Approves Business Park Lease

The Port of Seattle Commission on June 5 approved the lease of about 42 acres within the new Des Moines Creek Business Park to Puget Sound Energy.

PSE plans to work with developer Benaroya Capital to create a new operations center on the site in order to consolidate facilities that are currently spread out between the cities of Kent, Renton and SeaTac.

“We thank the Port of Seattle Commission and staff for working to ensure we reached an agreement that will allow Puget Sound Energy to be the first tenant at the Des Moines Creek Business Park,” Puget Sound Energy senior vice president and chief customer officer Phil Bussey said. “By developing this site, we will be able to consolidate facilities to provide greater operational efficiency and better service to our customers.”

The lease term is for 20 years with 10-year options to extend the initial term to as long as 50 years. PSE, which is the state’s oldest local energy utility, will pay initial base rent of about $920,000 annually, with the City of Des Moines receiving about $676,000 in ongoing revenue annually, according to the port.

Under the terms of the contract, the base rent is to be adjusted every five years, based on the Consumer Price Index. The present value of the annual lease payments over the 20-year term equals about $11.4 million.

The business park was originally a combination of residential lots acquired in the City of Des Moines as part of the airport’s noise mitigation program and abandoned streets bought from the city, King County and the Washington State Department of Transportation.

The 89-acre site, which has been vacant since 1993, is expected to have the balance of its land made available for long-term lease as the real estate market improves, according to the port.