Port of Seattle Proposes Historic Investments to Deliver for People and the Planet

Port of Seattle Executive Director Steve Metruck introduced the Port’s 2023 budget and five-year capital plan today, proposing historic investments in our facilities and organization. These investments will enable the Port to support key industries, lead on environmental sustainability, and deliver for the people who rely on the Port even in uncertain times. Commission will hear the first reading of the proposal at its November 8 public meeting before considering final adoption on November 29.

Investment highlights include a five-year capital plan of $5.3 billion, the largest in the Port’s history, as well as increased funding for airport customer service, environmental programs, community initiatives, and workforce development.

A rebound in travel has allowed the Port to increase reinvestments in its business.  Passenger volume at Seattle-Tacoma International Airport (SEA) rose to nearly 90 percent of 2019 record levels, while cruise ship passenger volume exceeded historic highs by 6 percent. Opening the airport’s new International Arrivals Facility and the modernized maritime container Terminal 5, through the Northwest Seaport Alliance, contributed to increased activity.

At the same time, severe inflation, international conflict, supply chain issues, a tight labor market, surging travel and trade demand, and climate change impacts have brought new challenges to our community, workforce, Port lines of business, and partners.

“Local industries and the community need us to deliver more than ever before,” said Executive Director Steve Metruck.  “This balanced budget and capital plan responds to regional needs with more essential services and programs, as well as historic new investments that deliver in the 8short-term and long-term for people and the planet.

“In periods of change, those who can adapt quickly fare best,” said Port of Seattle Commission President Ryan Calkins. “Because of the vital role the Port plays in our local economy, we need to continue to make major strides on transformative initiatives like decarbonizing port-related industries and modernizing our airport. Careful executive stewardship, values-based leadership from the Commission, and close partnership with industry and community will continue to drive our success.”

Investments in Capital

The 2023-2027 capital plan invests a historic $5.3 billion across the Port’s Aviation, Maritime and Economic Development operating divisions to ensure that our facilities meet the business and sustainability demands of today and for the next generation. The airport’s $4.6 billion in capital investments make travel more predictable and efficient while meeting safety, regulatory, accessibility, and sustainability standards. Featured airport capital projects include improvements to the terminal and concourses through the SEA Gateway program, C Concourse Expansion, and Baggage Modernization Project.

Maritime and EDD projects worth $522.3 million over the next five years improve safety and sustainability, support good-paying construction and maritime industrial jobs, and anchor our region as a maritime leader.  Featured maritime and economic development projects include berth replacements at Terminal 91, electrification at Pier 66, and the development of new maritime industrial space at Terminal 106 and Terminal 91.  The total capital budget proposed for 2023 is $725.8 million.  The Port will also contribute $276.4 million to the Northwest Seaport Alliance for container terminal modernization and expansion in both harbors such as completion of Terminal 5, as well as operational upgrades and environmental sustainability projects.  The Ports of Seattle and Tacoma each contribute 50 percent of costs to fund the NWSA five-year capital improvement plan.

Capital projects continues to be the largest category of Port spending.  In 2023, capital spending makes up 39 percent of the Port’s budget, and up to 43.5 percent including the Northwest Seaport Alliance projects.

Investments in Workforce

The Port depends on a workforce and that is safe, trained, resourced, and ready for the work ahead. To that end, the proposed 2023 budget makes a larger investment in people and programs than any budget in recent years. After pandemic-related hiring freezes, the budget adds full-time employees and contractors to improve customer services and advance initiatives in all Port divisions. New employees will focus on customer service at the airport, capital project delivery, the Port’s growing environmental portfolio, and relationships with tribal governments.

Investments in Community

The proposed 2023 budget invests an additional $2.5 million in community initiatives, for a total of $19.1 million. Featured initiatives include workforce development; the South King County Community Impact Fund; Diversity in Contracting programs; major initiatives from our Office of Equity, Diversity and Inclusion; and tourism marketing support for Washington state’s smaller destinations.

Port operating divisions all utilized an equity in budgeting strategy in proposing staff, initiatives, and funding. An equity in budgeting approach leads to greater investments in ensuring diversity in contracting, expanding employee development and recruitment, new investments in access to Port materials and facilities, and increased outreach funding. Port officials briefed the Commission on the proposed budget and capital plan during multiple public session meetings and offered an additional public briefing during open house sessions in October.

The proposed 2023 budget also includes $17.7 million for environmental initiatives and $11.9 million for customer experience initiatives. Highlights of programs that deliver for people and the planet include:

• $4,962,000 for a multi-year contract to increase airport customer service support
• $1,250,000 to support the delivery of sustainable aviation fuel to SEA airport and advocacy to incentivize greater production and deployment
• $1,000,000 for the Port’s Aquarium Strategic Relationship for maritime industries and habitat conservation education
• $400,000 to accelerate the removal of per- and polyfluoroalkyl substances, known as “PFAS”, from Port fire-fighting foam
• $350,000 to improve parks accessibility, with an early focus on He? apus Park and Shoreline Habitat
• $462,000 to support the Duwamish Valley Community Equity Program
• $200,000 to explore maritime economic development opportunities in the offshore wind industry
• $200,000 to support exploration of a first of its kind cruise-focused Green Corridor between Alaska, British Columbia, and Washington
• $100,000 to explore the feasibility of a South King County Public Market and Commissary
• $100,0000 included to conduct outreach and explore feasibility of a childcare facility to serve airport workers and employees

Property Tax Levy

As a public Port in Washington, the Port may exercise a limited property taxing authority. The Port continues to maintain a low rate of the levy by maximizing operational revenue, fees, and bonds. In 2023 the levy provides just 4.1 percent of the Port’s funds.

The proposed 2023 tax levy is $82.7 million, a 2 percent increase from 2022. The median King County homeowner will pay an estimated $78.42 in taxes to the Port of Seattle in 2023, based on an estimated median King County home value of $830,000 in 2023.

The levy funds debt service payments on general obligation bonds, as well as strategic investments in job creation, environmental sustainability, and community programs. The airport operates without any tax revenue. Funding for SEA comes from fees, rents, or leases in place with airlines, tenants, and travelers.

2023 Operating Budget Summary

• Total operating revenues: $953.7 million; $186.8 million or 24.4 percent above the 2022 budget
• Total operating expenses: $573.4 million; $74.3 million or 14.9 percent above the 2022 budget
• Net operating income before depreciation: $380.3 million; $112.5 million or 42 percent above the 2022 budget