The Seattle Times, October 30, 2005, Sunday

Copyright 2005 The Seattle Times Company
The Seattle Times

October 30, 2005 Sunday
Fourth Edition

SECTION: ROP ZONE; Local News; Pg. B1

LENGTH: 1930 words

HEADLINE: Port race hits home, really;
Election 2005 - Port of Seattle Commission

BYLINE: Alwyn Scott, Seattle Times business reporter

BODY:
What's at stake: The most heated Port commission election in years could change how one of the region's primary economic engines does business.
You might think you have no stake in the Port of Seattle.
Sure, maybe you use the airport. And you almost certainly buy imported food or clothing.
But the Port, which oversees Seattle-Tacoma International Airport, connects with your life in less obvious ways. It takes property-tax money 25 cents for every $1,000 of home value nearly $100 for a typical King County house.
It determines how large, how new and how convenient the airport is and it affects what you pay there for a ticket, or a bagel.
It provides an estimated 37,000 direct jobs, more than Microsoft or the University of Washington, including well-paid police, fire and dock jobs. It generates economic activity that it says accounts for another 157,000 jobs and $600 million in state tax income.
But the Port is losing money on its docks and spending billions to renew the airport, more than several airlines say they can afford to spend. It is delving into real estate to shore up its finances, despite suffering several black eyes in land deals.
As a result, the rhetoric of the race reached a roaring pitch this year. All of the candidates except longtime incumbent Patricia Davis paint themselves as reformers out for change.
With three of five commission seats up for grabs, this election could set the Port on a new course. The new commission may even pick a successor to long-serving Port Chief Executive Mic Dinsmore.
What that course change is, if any, depends on voters. Here are details of the contests.
Position 4:
Davis vs. Jolley
Jack Jolley, a former bond trader and Microsoft money manager, is trying to unseat four-term commissioner Davis.
If Jolley is the New Economy businessman pointing out that the Port is overspending, wading in red ink and losing market share to other ports, Davis is the old-school technocrat who sticks to her definition of success and says she can't understand what all the fuss is about.
"They're denying they're failing and not doing anything to change," Jolley fumes.
"Saying we're failing is flying in the face of reality," Davis says in her quiet, steely voice.
She acknowledges that the seaport has lost money in five of the past six years. But that's after deducting the cost of depreciation on its facilities, an accounting charge that doesn't affect the cash box. "So?" she asks. "We're doing a bad job?"
Seattle's 40 percent decline in Port market share over the past decade has more to do with faster growth at other ports, Davis says. She says Seattle was the fastest-growing Port in the country last year, thanks in large part to the investments it made years ago.
It covers its operating expenses, and this year it's expected to turn a modest $1.4 million profit from the seaport. "We pay for our groceries," she says.
To Jolley, red ink is proof of poor management. The Port may buy its "groceries," but taxpayers cover its mortgage by paying the cost of depreciation, and debt, on the docks.
What's more, billions of dollars invested in cranes, equipment and deep-water Port land are not yielding any return, Jolley notes. Many investments never recover costs, he says.
Davis worries that Jolley, incumbent candidate Lawrence Molloy and sitting commissioner Alec Fisken would join forces and try to raise rents on big Port tenants such as SSA Marine and APL two years before the rents are due to rise under their lease agreements.
Jolley says changing the leases would turn off a spigot of subsidies to giant shipping companies and cruise lines. The Port of Seattle is the only major port that can't cover the cost of its docks, while Tacoma, Los Angeles, Long Beach and Oakland do. He says those ports can charge more and win business because they are better run and more dependable.
He wants to put incentives in the leases to get cargo moving faster, noting that Seattle handles far less cargo per acre of land than other ports.
Davis says the Port aims to earn a 6 to 10 percent return on its docks but can't push terminal operators too hard or they'll bolt to competing ports.
"We're making the greatest return we can make," she says. Current losses are part of a normal business cycle in which the Port invests, goes into the red and recovers in the long term, Davis says. That's why she says this year's Port race is about far more than accounting.
"It's about whether we stay the course and reap the benefit of our investment, or go in some other direction" just as terminal rents are set to rise. "To turn backwards at this point would be foolish."
Davis is among the largest fundraisers in the field, and much of her backing is from those with an interest in maintaining the Port's status quo. She received $10,000 from Citizens for a Healthy Economy, a political-action committee of developers and businesses.
Last week, she was fined $2,500, the maximum penalty, for six instances of late filing of campaign-finance reports to the Public Disclosure Commission. Citizens for a Healthy Economy was fined $1,000 for late filing and failing to file electronically.
Position 1:
Creighton vs. Molloy
Incumbent commissioner Molloy and opponent John Creighton agree on the need to reform the Port. They differ sharply on tactics.
Molloy, an engineer and former Environmental Protection Agency official, brims with ideas and energy. He would focus on curbing pollution from shipping lines, working for "living-wage jobs" and shifting the Port's tax levy by imposing tolls and other charges on users, and spend taxes instead on "forward-looking initiatives" such as clean-energy research.
"There are models of all three of those," he says.
He would cut the Port's 1,600 staff members, starting with some of its 20 full-time public-affairs officers. During his first term, he pressed labor, environmental and social issues, and he counts among his accomplishments an agreement to stop cruise ships from dumping wastewater in Puget Sound.
His backers include the King County Labor Council, Washington Conservation Voters and gay- and lesbian-rights groups, who like his push for domestic-partner benefits.
Creighton, son of the former Weyerhaeuser chief executive, says he left his spot at Preston Gates & Ellis to stop the Port from losing ground to other West Coast ports and ensure its future as a job creator.
He sees glaring flaws in some Port deals. When the Port sold warehouses to Charlie's Produce, a food distributor, in 2004, it did so without competitive bidding. Charlie's flipped the properties within a year, netting $10 million. Creighton said the Port should have reserved the right to buy them back, and he wants to vet future deals more closely.
In contrast to Molloy, the progressive Democrat, Creighton is a Republican with strong business ties. Citizens for a Healthy Economy endorsed him, and he received cash from many of the PAC's supporters. In that sense he represents the status quo.
But in a twist of logic, Creighton argues he's the real reformer a business-trained person who is free from partisan interests, and supported by some unions, too.
"The PAC has been tarred as business interests that want to keep their noses in the public trough," Creighton says. "But the reform movement, I see as labor and progressive alliances substituting their noses in the public trough."
Position 3:
Berkowitz vs. Hara
The hottest debate this year is between candidates Rich Berkowitz and Lloyd Hara.
Berkowitz works for the Transportation Institute, a trade association of U.S. shipping lines. Hara, a former county auditor and Seattle treasurer, says Berkowitz's job would be a conflict of interest for a commissioner.
Closed-door Port meetings might give Berkowitz information useful to his association members, Hara says.
Berkowitz says he has experience with labor, shipping, Alaska and ports that Hara lacks. He vows to recuse himself from sensitive decisions.
He says his industry and labor-union background enable him to understand the needs of shipping lines and workers. He disagrees with Jolley and other critics who say the Port is failing. But he says the Port will always have trouble making money from sea cargo with current dock leases, which don't charge more as cargo increases.
"It's difficult to make money with the lease structure we have now," he says
He also says the Port has "abandoned Alaska" by proposing to use land near Terminals 90 and 91 for an industrial and office park, rather than staging areas for Alaska cargo. Berkowitz supports drilling in the Arctic National Wildlife Refuge because he says that and other Alaskan projects would bring jobs to Seattle's waterfront.
Hara's strength is accounting and budgets, though he's been out of office since 1992. He would make departments justify their staffing and spending.
Hara also would charge cruise lines a per-passenger fee for using Seattle facilities and would renegotiate the dock leases.
He doesn't buy Davis' argument that the cruise and cargo terminals should lose money initially and pay it back over time.
"Normally, when you're building a brand-new facility, you want to recapture your initial investment as quickly as you can," he says.
Alwyn Scott: 206-464-3329 or ascott@seattletimes.com

Position 4
Patricia Davis, 69
Residence: Seattle
Occupation: Port commissioner since 1986
Background:Bachelor's degree, Stanford University; master's degree, University of Washington; member, Prosperity Partnership's Transportation Policy and Economic Development boards
Top three endorsements: Alki Foundation, Firefighters Local 1257, Longshoreman's Local 19
Campaign Web site: www.patdavis.org

Jack Jolley, 47
Residence: Seattle
Occupation: Former Microsoft assistant treasurer
Background:Worked in financial markets for 10 years; bachelor's degree, accounting, University of Washington
Top three endorsements: King County Labor Council, Washington Conservation Voters, International Brotherhood of Electrical Workers Local 46
Campaign Web site: www.jackjolley.com

Position 3
Lloyd Hara, 66
Residence: Seattle
Occupation: Principal, Print Solutions and Consulting Services; adjunct professor, Seattle University
Background:Former King County auditor; elected Seattle city treasurer four times; bachelor's degree, economics (foreign trade); master's degree, public administration, University of Washington
Top three endorsements: King County Police Officers Guild, King County Democratic Central Committee, former Gov. Gary Locke
Campaign Web site: www.lloydhara.com

Richard Berkowitz, 45
Residence: Seattle
Occupation: Maritime industry trade-association director
Background:Bachelor's degree, industrial and labor relations, Cornell University; master's degree, business administration, University of Washington
Top three endorsements: King County Labor Council, Alki Foundation, ILWU (Longshore District Council)
Campaign Web site: berkowitzforport.com

Position 1
Lawrence Molloy, 43
Residence: Seattle
Occupation: Environmental engineer
Background: Port commissioner, elected 2001; bachelor's degree, Colgate College; master's degree, engineering, Stanford University
Top three endorsements: King County Labor Council, Washington Conservation Voters, Sierra Club
Campaign Web site: www.AhoyMolloy.com

John Creighton, 39
Residence: Seattle
Occupation: Attorney
Background: Left work as a securities lawyer at Preston Gates & Ellis to campaign; bachelor's and master's degrees, international relations, Johns Hopkins University; law degree, Columbia University
Top three endorsements: Citizens for a Healthy Economy, Alki Foundation, Former Gov. Gary Locke
Campaign Web site: www.johncreighton.org