Port lease agreement with developer aims to avoid new ‘Tacoma aroma’
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- Port of Tacoma authorized a 50-year ground lease with Saxum Investment for 30.47 acres.
- Rent escalations occur every five years based on compounded annual CPI.
- Lease requires odor mitigation measures and developers pledged state-of-the-art controls.
A food-processing and cold storage facility planned for Port of Tacoma property is one step closer to reality, and will be contractually bound not to stink up the place.
On June 16, members of the Port of Tacoma Commission authorized the port’s executive director to enter into a 50-year ground lease with New Jersey-based Saxum Investment. The lease involves approximately 30.47 acres at 1221-1225 E. Alexander Ave.
The News Tribune first reported on initial plans for the project in March 2025.
The News Tribune has also reported that the project would involve an expansion of Fathom Seafood’s current Tacoma operations as a project tenant.
Contract negotiations with Saxum ensued in the following months, and the commission had the first reading of the proposed lease in November of last year.
In March of this year, Fathom sold one of its Tacoma sites as it works to consolidate operations ahead of its planned expansion.
Saxum Real Estate proposes an approximately 574,000 square-feet of cold storage and food processing facilities at the site, to be completed in one phase. The site would include not only processing and cold storage, but offices, shipping and receiving, truck loading and a rail dock.
The development is estimated to add up to 400 “new or expanded jobs, $43 million in annual wages, 15,000 trucking loads per year, 17,000 container loads per year, and 26 million pounds of food storage capacity,” according to the action memo sent to the commission ahead of the vote.
It also noted that “Port related commerce could increase by up to 2.5% according to developer’s estimates.”
Matthew Wassel, one of the principals of Saxum, attended the meeting. He told commissioners that it had been a “huge effort by everybody involved” to close the deal.
“It’s been a long fought effort to get it done. Now it’s exciting to finally be on the same side of the table and get this thing built,” he told commissioners.
What’s in the lease agreement, including odor control
As part of the agreement, the port will complete environmental site remediation and invasive snail abatement, while Saxum will build the facilities “and all supporting infrastructure.”
Saxum is also responsible for all maintenance and repairs.
The lease is estimated to begin Dec. 1 of this year, which is the anticipated date that the port will release the property to Saxum, with rent beginning June 1, 2028. The 50-year lease comes with three, 10-year options to extend.
“The rent commencement date will be ... the completion of the first building, or two years, whichever occurs sooner,” Einar Roden, senior manager, real estate and business development with Port of Tacoma, told the commissioners at the meeting.
Initial rent will be $234,000 per month, plus leasehold excise tax, with rent escalations every five years, based upon compounded annual CPI index, not to exceed 3% per year, according to the presentation.
Roden noted that “There’s also fair market rent resets, which will occur at year 26 and every 10 years thereafter.”
Security deposit for the site “is six months rent plus leasehold excise tax,” he also stated. “That’s a variance from our master policy, but the variance is mitigated by the fact that the developers are putting approximately $250 million of their own funds into this project.”
A $500,000 initial deposit is due after lease signing and receipt of zoning letter from the city, according to the terms, and $980,000 entitlement deposit is due within three business days of the lease commencement date.
Port officials at last year’s first reading of the agreement were careful to note that the lease signing wouldn’t immediately spark construction, and that the project would still need to go through permitting and review through the City of Tacoma, including all applicable environmental and regulatory review.
Commissioner Kristin Ang, while praising the deal, also asked Roden at the meeting about odor mitigation at the site, a topic she also inquired about at November’s first reading.
“We built in odor mitigation as part of the lease contract, and the developers pledged to use state-of-the-art technologies to mitigate odors,” Roden responded.
He also noted that “The product that’s coming into the cold storage warehouse is already generally frozen, and so it’s kind of cold going in, cold going out. There’s not going to be a lot of low temperature proteins being processed in any kind of facility, so that the risk of odor is fairly low to start with,” Roden said. “But they’re going to implement odor control mechanisms ... such as climate-controlled garbage areas and a few other ideas to keep the odors down, so that it doesn’t become a nuisance to the community.
“They’ve made a commitment to that.”
Previous reporting from The News Tribune contributed to this report.
