How to fix the Port of Seattle: Splitsville

The core reason for all the mismanagement is an antiquated structure, argues a former Port Commission candidate. A restructured port needs to serve a multi-county region. And we need to split up the fundamentally different businesses of seaport and airport.
The Port of Seattle's Sea-Tac Airport. (Chuck Taylor)

The Port of Seattle's Sea-Tac Airport. (Chuck Taylor) None

Cranes at the Port of Seattle.

Cranes at the Port of Seattle. Chuck Taylor

The hubbub about the Port of Seattle audit is just the latest, most outlandish episode in a string of revelations going back nearly 10 years.

Let me count the ways: Destructive competition between the Port of Tacoma and Port of Seattle's seaport division. No-bid management contracts for the new cruise terminal. Firings of employees who dared to raise objections, deliver bad news, or ask tough questions. Grandiose investment in airport facilities that raise airline costs to the point of losing carriers. Unwise if not illegal retirement compensation deals. Scandalously low return on investments along the Bell Harbor waterfront. Constant wrangling about mitigation of airplane noise. Squeezing out airfreight facilities and hampering industries increasingly dependent on airfreight from Asia. Deferring maintenance and milking cash flows from Fisherman's Terminal and Shilshole marina. And on and on.

What the headlines obscure, however, is the underlying structural problem about how harbor and airport operations are managed for facilitating economic development in the region.

Facilitating economic development is the purpose, but of what? King County alone? Pierce County alone? Or what has evolved into an integrated, complex, five-county metro area? The ports operate under a law from a simpler time, an authority granted by the legislature in 1911 - 97 years ago! Our system is badly out of whack.

It's not just geography that is out of date. The Port of Seattle also fails to recognize that airports and seaports are two very different things. Moving people takes many people. Sea-Tac Airport is a small town of employees ticketing, loading, handling baggage, fueling, controlling, feeding, and retailing. It even has its own fire department and police force. By contrast, the mechanization of moving cargo has increased seaport productivity to the point of needing relatively fewer and fewer people.

Airports are governed in large part by the federal government, layered over with Transportation Security Administration regulations and underwritten by the airlines. Capital investments are repaid by landing fees on airlines and taxes on passengers. Operations are paid for by parking and retail leases. Seaports, by contrast, are run by port authorities which recoup capital costs from terminal leases to shipping lines. West Coast seaports need land for terminal operations and easy connections to railroads and trucks.

For seaports, the focus should be on quick handling and transfer of boxes. For airports, the focus should be on making the gruesome experience of air travel as hospitable and hassle-free as possible.

So what has this disparity of focus brought? The seaport tradition of the Port of Seattle is to engineer and build. (The seaport director once plaintively complained to me, "If we bring projects in on time and on budget, why don't people love us?")

At airports, they also build - garages and lavish terminals. (The Port had the chutzpah to name one after the airport director that envisioned such, and then left.) Airlines and feds pay up – to a point. Squeeze airlines too far and they threaten to leave. It could be that our prohibitive landing fees are the reason Seattle business people cannot fly directly to Shanghai or Beijing.

Meanwhile, there more than 20 airports in the Puget Sound region, each operating under a separate authority, many aspiring to compete with Sea-Tac. And none have the authority to plan, plot, develop, and operate a new regional airport that we will undoubtedly need around 15 years from now.

In the case of the seaport, both Tacoma and Seattle allow shippers to whipsaw them to get lower lease rates and reduce returns on capital - underwritten in Seattle's case by King County property taxes. Each port acts as if it is only for the benefit of one county, which is very old thinking in terms of regional economics.

Given all these anachronisms, I would argue that it's time to re-visit the whole question of how airports and seaports that serve the region are to be developed and managed. The Legislature should create a Puget Sound Regional Airport Commission focused on facilitating passenger travel and air freight and on making air travel as convenient and pleasant as possible. Such a commission would be responsible for rationalizing usage of each airport in the five-county area. (For a model, look at Vancouver, B.C.'s International Airport, which works at making passenger service a top institutional value. And it added a third runway in about five years!)


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Comments:

Posted Fri, Jan 11, 7:22 a.m. Inappropriate

Why Drag Successful Tacoma Port Down to Seattle level?: The author's premise is that competition is destructive. The truth of the matter is that competition makes for a stronger, more robust port system. In the case of the Tacoma port, it is HIGHLY successful and is poised for much greater growth -- all financed locally by the people of Tacoma/Pierce County but for the beneift of the entire region.

NYK's summer announcement is frequently cited. Go back and READ their rationale for leaving Seattle. They required a large facility that was not available in Seattle. Had Tacoma port not been able to provide, they would have certainly moved to Canada, California or Mexico. Thank you Tacoma port!

The argument about shipping lines playing the ports against each other for lower lease rates simply is not accurate. If you have the time, READ the NYK lease on the News Tribune website. There's certainly no Tacoma discount.

The port of Seattle may have its issues, but the Tacoma port is very solid from a business and financial perspective. Why would the people of Tacoma and Pierce County allow a new, large, bloated, King County-dominated bureacracy to take over that success and drive it to the lowest common denominator? It just doesn't make sense.

Unless you're a King County politician. In that case, your mantra is, "if you can't beat them, then get the state legislature to give them to you."

Posted Fri, Jan 11, 7:39 a.m. Inappropriate

Power Point a metro presentation: Is it coincidence or an illusion that you make towards a metro form of government to solve the tri-county Puget Sound megalopolis problems?
Surely transportation issues, the law enforcement problems of strip malls and small municipalities, or the non-profit, non-performing Port, power and environmental issues could better be addressed by a non-partisan 3 county board formed with teeth.
A similar form almost save Lake Washington years ago.
Enough of this MBA "Best Practices" panacea that the Port is Power Pointing while the rest of us are scream "you just don't get it!"
The DRC

Posted Fri, Jan 11, 9:12 a.m. Inappropriate

RE: Why Drag Successful Tacoma Port Down to Seattle level?: Every time the Port of Seattle gets into trouble they push the idea of merging ports - with, of course, themselves as the senior partner. No competition, no comparison, no reason to question the competence and honesty of the POS (an acronym with more than one appropriate definition) administrators. If Seattle wants a unified port authority, fine: Dissolve the Port of Seattle and put the Port of Tacoma in charge of the facilities. *Everyone* would benefit. This "Imperial Seattle" BS is getting tiresome.

dbreneman

Posted Fri, Jan 11, 9:53 a.m. Inappropriate

Suggestions welcome but how about some support: This is a well thought-out article by Fletch Waller. Certainly the idea of a regional port authority (that includes Snohomish, King and Pierce counties) merits more discussion. Right now, however, the Port of Seattle's reputation is on the line because of a devastating audit report by Brian Sonntag which asserts, but does not substantiate, that the "POS is a breeding ground for corruption".

What is puzzling to me about this article is that Fletch Waller neglects to tell readers that he was an outspoken and effective leader on the Port of Seattle's Harbor Development Strategy 21 (HDS 21) advisory committee that convened in 2001. The committee's purpose was to update strategic direction and set policies to guide the future of the Port of Seattle's seaport activities. "A framework for the Port Commission and Seaport staff to make choices among competing projects and investment options." (HDS 21).

Much of the direction of the POS today is based on the recommendation of this committee.

I attended these meetings (Fletch was invited to participate; I had to ask to be included). We spent long hours discussing and debating the direction of the POS and its business practices. We asked tough questions and worked closely with the POS staff - honorable people who are not corrupt.

While I like what was said in this article, what is missing from Fletch is a statement of support for the Port of Seattle and the people who work there. Granted, the Port has some work to do on cleaning up the way it conducts business in the public eye (all Washington Public Ports need more scrutiny).
Ironically and sadly, the only two people from the 40 member HDS 21 committee who attended last Tuesday's public hearing on Sonntag's audit report were Lise Kenworthy and me (the two most vocal and marginalize committee members who consistently advocated for good governance policies).

There is of room for improvement at the Port of Seattle and lots of good ideas (including Fletch's) on how to move forward. Sadly, the Port is not going anywhere if it is bogged down by endless investigations and overblown accusations (by a marginally competent auditor who has little knowledge of how to run a major Port in the middle of a rapidly expanding urban setting).

Let's give our impressive new Port Commission, under the competent leadership of John Creighton, and our very skilled Port CEO Tay Yoshitani a fair chance and some public trust.

Posted Sat, Jan 12, 7:05 a.m. Inappropriate

splitsville is not a solution in and of itself, not relevant: other port authorities in the country manage both sea ports and airports.

however, i agree with fletch that at least a regional authority that addressed
both the seaports in pudgy sound and the airports as one and rationalized them is an idea that has come... and will probably not be realized considering the conflicting local interests.

my own preference would be for a state wide sea port authority that would send enough stuff to gray's harbor, a port that ought to be cheaper - i say this without knowing of the status of the rail lines there.

the audit did not really address the nepotism of i million dollar contracts then being divvied up and slipped in increments of 200 k by the un-staffed unfunded board of aldermen and women that calls itself a commission, some of whose member raise 300 thousand dollars to get elected and then have fund raisers for themselves the insider dealing is as it comes with the parochialism of nepotistic small time seattle. look at the contributors and backers of certain candidates over the past decade or so and see who gets what and you'll see what i mean. however, the media, including crosscut, no one is willing to do the kind of pecayune investigative work that that takes, or really dont want to know why. a now former seattle times reporter told me nearly three years ago that ssa marine, for example, was a sacred cow that you didn't do stories on.

tacoma-seattle combined could write a better deal for the two of them together. for sure. most commissioners endorse that idea.

it's a good commission, the majority is but it voted its teeth out of existence back in 1994 with resolution 3831. no wonder the corruption the no bid contracts the cost overruns. the commission requires staff funding etc. not just the occasional perk of a trip to foreign lands that the local cheapskates then hold against them. best of all it would be an appointed commission of experts in the field that the commission oversees. this is 2007 not 1907.

its not a pretty picture. but that's what you get with the people hereabouts and not only there.
mikerol

Posted Sat, Jan 12, 9:19 a.m. Inappropriate

air travel as convenient and pleasant as possible? are you nuts?: Mr. Waller misses a huge chunk of reality in his article - CO2 emissions.

This language "make air travel as convenient and pleasant as possible." is dangerous to millions of people who live near airports around the globe and to people who understand that flying is the single most polluting way to travel. Over 600 flights per day at SeaTac crop dust thousands of innocent people with toxic and criteria pollutants.

It is pure oil and airline industry fantasy and propaganda. 80% of all air travel is currently used for recreational purposes due to deregulation. Those who do fly for this purpose are trading the future of our planet for a fun trip to Ski the slopes because it already is "as convenient and pleasant as possible."

It is 1975 speak - get with it man!

Posted Sat, Jan 12, 4:04 p.m. Inappropriate

Mr. Waller misses a huge chunk of reality: Maybe he's not a global-warming fundamentalist, maybe that's why he didn't mention CO2.

There's christian fundamentalism and then there's global-warming fundamentalism. I don't know which is worse. I find them both equally repugnant.

Posted Sun, Jan 13, 4:08 a.m. Inappropriate

If you want Tacoma to solve your problems: If you want Tacoma to solve your problems you are going to have to pay for it.

Don't come to Olympia whining about how it's all a structural problem. What a bunch of deadbeat LOSERS. I was at both the Seattle hearing and the Olympia one the following day and heard Mary Margaret Haugen challenge critics apparently with an eye towards this merger idea.

The only thing the current 'reformers' are looking to do is cover their asses for their current mistakes while searching for new victims. No wonder those in the airline industry on an international basis are weighing in on the side of Sonntag.

Attacking Sonntag's well earned, and deserved, credibility only destroys your own. While I agree that Mr. Yoshitani might be capable of solving a problem he did not create 'discipline up to termination' ain't gonna do it.

It is time to start holding the deadbeats accountable, whether they be spoiled rotten middle management or the folks that control them the 'upper' level legal professionals of the Port, and the counsel at their 'constituent' contracting firms. If you'll excuse the correction Mr. Yoshitani, make that discipline STARTING AT TERMINATION. Live is tough dummies, make yourself a big shot and mess up and expect a proportional response.

Don't go blaming it on the subordinates - or leveraging your mess up into a takeover of Tacoma.

It looks like the Port merging idea is DOA - too bad Gardner's assisted suicide law wasn't available to the worst of this overpaid, extorting, SCUM.

Representative Haugen, say hi to your friends at Sound Transit for me, would you? Especially former Port CFO Joni Earl, and if he ever shows up again, the fall guy for Sound Transit's scandal - Bob White.

-Douglas Tooley
Lincoln, Tacoma

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