Jonathan Grass

Alaska Air has record year yet lower 4Q

Alaska Air Group has reported record earnings for the second consecutive year. At the same time, fourth quarter results dipped a bit. The Seattle-based parent company for Alaska Airlines and Horizon Air reports a record full-year net income, excluding special items, of $287.4 million. This compares to the previous year’s $262.6 million. On an adjusted basis, earnings per diluted share grew by nearly 10 percent over last year from. $7.14 per share to $7.83. In terms of GAAP, or generally Accepted Accounting Principles, Alaska Air yielded a net income of $244.5 million, or $6.66 per diluted share. Net income was $251.1 million, or $6.83 per diluted share, last year. “Today we reported the best full-year adjusted profit in our history, surpassing the record we set last year,” said Alaska Air Group Chairman and CEO Bill Ayer. Chief Financial Officer Brandon Pedersen said these results translate to an 11.7 percent return on invested capital, eclipsing the 10.7 percent mark set in 2010 as well as the 10 percent after-tax goal. He said this result represents the company’s eight consecutive annual profit and second consecutive year with return on invested capital that exceeds the 10 percent goal. However, Alaska Air also reports a fourth quarter net income, excluding special items, of $37.2 million, or $1.02 per diluted share, compared to net income of $47.4 million, or $1.28 per diluted share. This quarter’s GAAP amounts were $64 million, or $1.76 per diluted share, compared to net income of $64.8 million, or $1.75 per diluted share, for the same period in 2010. Pedersen said the decline results from a 34 percent increase in the company’s economic fuel bill and additional increase in non-fuel operating costs. These factors include a $6 million impairment charge related to an MD-80 leased to another operator. Some of these were offset by improvements in revenue and decreases in non-operating expenses. Ayer said that although this is down from last year’s fourth quarter, it’s still the company’s second best fourth quarter ever. Ayer credits the air group’s efforts in improving customer service, operations, employee engagement and shareholder return efforts to move the company forward in the industry. Some of these accomplishments included record load factors at both airlines, exceeding 80 percent for mainland operations in each month for the first time, and being named for high customer service by J.D. Power and Associates for the fourth consecutive year. He said the record number of passengers served also increased productivity by nearly 5 percent and earned $72 million in incentive pay, which is about $4,000 per front line employee on average. “2011 was a very good year and one that resulted in many accomplishments and new records,” Ayer said. He said the challenge will be to sustain this performance, which is difficult in the airline industry. He said success will be determined on the company’s actions more than the economy, oil process or competitors.

Retail boom slows but new stores still coming

Alaska has experienced a huge retail market boom in recent years as several national brands set up shop here for the first time. That growth will continue, albeit more slowly, in the next few years. 2011 marked the latest year that several brands introducing themselves to the Alaska market. National brands like Apple, Aeropostale, Teavana, Bare Escentuals and most recently Olive Garden opened their first local stores and all in Anchorage. Olive Garden has already begun moving on a second location in south Anchorage. Before then, big names like Target, Walgreens, Bed Bath & Beyond, Kohls and others entered the state over the last several years, with 2007-2009 experiencing huge retail construction. Other stores here expanded into additional locations during that same period. The next few years will have their fair share of retail expansion as well, including new entrants. While the numbers are good, experts say this is still a slowdown from years past. “I think the boom years are probably gone,” said David Irwin, a Bellevue, Wash.-based developer and consultant who works with Alaska retail construction. “We’re at a good level pace. And I think that that’s we’re going to be for the next couple of years.” Commercial sales associate Brandon Walker of Bond, Stephens and Johnson said slowing new entry into Alaska is indeed a trend right now. Some factors to this include national brands achieving their exploratory goals in Anchorage or trying other locations. Some of these even include other parts of Alaska. Still, new entries will be here. Walker said Alaska represents a good growth market for companies that have exhausted other locations down south. This is supported by increased spending for each quarter in 2011, most notably in commercial real estate, which as up 13 percent that year. Alaska can now look forward to Verizon, AutoZone, Buffalo Wild Wings and Sport Clips this year and next. Charley’s Grilled Subs will be expanding into the Alaska civilian retail market this year with its first non-military presence at Anchorage’s Dimond Center. The sandwich chain currently has locations at Joint Base Elmendorf-Richardson and Eielson Air Force Base. Walker said there are several other tenants to watch out for this year, including some new retailers that could each take 20,000 to 40,000 square feet in Anchorage. Another potential fashion industry tenant could be constructing stores in Anchorage and Southcentral Alaska. National name expansion will also be happening. Notably, Petco and OfficeMax have just opened stores in Juneau, which Irwin said is the smallest market brands like that would consider. OfficeMax spokeswoman Nicole Miller said the office supply giant does have some other stores in similar size markets. Irwin worked on the deal for these stores’ placement in the capital city’s Nugget Mall. Irwin said a lot of brand expansions like this stem from retailers finding a good home in Anchorage, leading to the next step of branching out in the state. “You find that they typically enter Anchorage first and then see how they do,” he said. OfficeMax already has two locations in Anchorage and another in Fairbanks. Miller said the company recognized the demand in the Southeast area as well. “We’re very excited about the market. We think certainly based on our services out of our Anchorage stores that the demand for our business services here will be great and certainly with the residential communities as well,” she said. Juneau store manager Chuck Collins said the company already had existing customers in the Southeast, which helped cement the decision. He said the addition of more national brands in Juneau is a sign of the city’s maturation process as more have moved into the area. He said the store covers about 17,000 square feet and the staff of 25 are local hires. The new location also allows use of the office retailer’s newest store design format. Irwin said all but one of the national brands he works with already have presences in Anchorage, and most of them do well. Pier 1 Imports is in the middle of negotiating a second Anchorage location as well as one in Fairbanks. Some brands, like Starbucks and GNC, are expanding their store numbers, which Walker said may include more Alaska locations in the next few years. Walker feels that Alaska’s status as a growth market could also entice brands looking to build more stores, such as Big Lots, Rally’s, Sonic, Panda Express and others. Many other brands have explored here but have not committed to building. Walker said prices and vacancies in retail properties should remain stable due to increased confidence by local users and continued national expansion, although national growth will be tempered by a need for economies of scale. “One of the challenges with many of these tenants is basically that despite Alaska’s status as a growth market, the logistics of opening enough stores here to achieve an economy of scale can pose a hurdle,” Walker said. He said to meet this challenge, Anchorage, which is the hub most national retails had to first, will need more retail property. Walker surveyed about 40 percent of the 10 million square feet of retail space in Anchorage and found a 5.13 percent in Anchorage’s overall retail vacancy compared to a national retail vacancy rate of 12.9 percent. “While sellers may be making a little bit of concession, the buyers are making much greater degrees of concession to meet the sellers,” Walker said. He said that signs point toward good confidence in commercial real estate. Still, there are challenges. Walker said a certain degree of uncertainty is separating consumers and sellers, as property owners don’t need to settle since vacancies and interest rates are low. Meanwhile, buyers are concerned about national markets as well as Alaska’s resource development, contributing to unease for long-term commitments in entering the market here. As such, local business confidence may have slipped after 2010, however national markets have still been exploring Alaska as a growth alternative when they’ve already exhausted many other locations. Irwin said retailers have also been drawn to the state thanks to Alaska’s clamoring for new stores. Olive Garden is one example, as there has been local interest in the company for years. Walker also said co-tenancy is important and that national tenants are experience lower price elasticity of demand than local tenants. “Obviously, tenants want to be near other successful businesses,” he said. “But I think that we can see in price elasticity of demand of this more retail product that properties with the most sought after anchors and best co-tenants, they can generally name their price, whereas more of the aggressive price cuts at similar properties may generally be overlooked by national organizations.” Irwin said it’s not uncommon for names to look here for several years before committing. Even then, it takes a long time to get a store online, especially when having to work around the weather. In places like Fairbanks, construction can often wait until the next summer. Another Alaska construction liability is the inability to offer cheap rates, which Walker said can deter retailers like Dollar General. “It’s a long way to go if you’re just going to put two or three stores,” Irwin said. This matters to retailers even if sales are good. Irwin has been working with several national brand retail projects outside of Anchorage, including an AT&T building in Fairbanks, Petco and OfficeMax in Juneau and 12,000 square feet for a national retailer in Soldotna. Additional 6,000- and 10,000-square-foot retailers are on the docket in Fairbanks. He is also working on adding 8,000 to 10,000 square feet to an existing retailer in Anchorage.

Busy construction season slated for 2012

Alaska’s contractors are back in the upswing, according to the Associated General Contractors of Alaska. AGC released its annual construction spending forecast, and it’s good news for the most part, with total spending up, particularly in the private sector. Total spending for 2012 is expected to be up 3 percent to $7.7 billion compared to 2011. Without oil and gas spending, that amount is $4.6 billion, which is still an improvement. Wage and salary employment will remain unchanged from last year at 15,800. This is still down from the 2005 peak at 18,300. ACG’s forecast draws from data provided by the Institute of Social and Economic Research. ISER economist and researcher Scott Goldsmith joined AGC Executive Director John MacKinnon in addressing the numbers to expect this year. “Things look pretty healthy in spending from our private sector basic industries of oil and gas, mining. Some of us had hoped that they’d be a little bit higher than they are,” Goldsmith said. “In terms of our support industries, utilities and health care are strong and weaknesses in residential and commercial, we shall wait to hear some good news coming out of the economy.” Private spending will be up in all categories, most notably in mining, utilities and health, the latter two being helped by public funding for some projects. The biggest spending will remain in oil and gas construction at $3.1 billion. Most construction concerning the big three oil companies (BP, ConocoPhillps, Exxon) will be on infrastructure maintenance since they will not be doing exploratory drilling. Some will go to BP’s sustained production on light reserves with some heavy oil development. Work with ConocoPhillips and Exxon will go toward developing existing reserves. Work with other smaller operations will their support drilling programs, including ENI, Pioneer, Brooks Range Petroleum, Savant, Great Bear and Repsol. Construction spending relatively flattened over the last several years but is about double what it was in 2004, mostly due to work on existing infrastructure. “We’re seeing a tremendous amount of the increase is largely on the maintenance and structure side. It’s not on getting new production on oil,” MacKinnon said. Mining construction will see an 11 percent increase with significant spending related to the studies from the large-scale prospects of Donlin Creek, Pebble and Livengood. Capital spending will go down slightly at the large mines like Pogo, Kensington, Greens Creek, Red Dog, Fort Knox, Usibelli and Nixon Fork with efforts going more into facility upgrades than production. Utility work will see the biggest jump over last year as more effort goes into power generation, such as a new Anchorage Municipal Light and Power and Chugach Electric Association’s new gas-fired power plant plus wind farms at Fire Island near Anchorage and Eva Creek outside Fairbanks. There are hydroelectric projects under way at Blue Lake near Sitka, Terror Lake near Kodiak and Allison Creek in the Copper Valley. Many of these projects are being aided by increased state funds for fiscal year 2012. Work on other utilities like telecommunications and natural gas transmissions will go up too. Large federal funding will help push Native health projects forward this year, particularly on hospitals. Spending for other basic rural or commercial projects will remain unchanged, as will residential construction spending. Public spending will be down for traditional government purposes, particularly as the state will have to compensate for many projects as federal financing drops. This is especially evident with a sharp 67 percent decrease concerning the Denali Commission. The commission, like many public efforts, will see federal dollars getting tighter. “This may be a sign of things to come,” Goldsmith said of the state-federal partnership. This is also evident in defense construction, which will take a 17 percent hit this year at $460 million. This is compliant with nationwide defense spending cuts. However, many projects, particularly those related to transportation and education, will see hefty increases. Grant funds in the state capital budget will push highway construction spending up 10 percent, although federal funds continue to be the largest contributor in this area. This is also true for airports. Construction includes a number of projects at Ted Stevens Anchorage International Airport, ports and harbor work around the state and capital construction programs for modernizing the railroad. Education project funding will be up in part because of a $397 million statewide bond package that was passed in 2010. Goldsmith said Alaska is fortunate to have adequate funds in the capital budget for many public projects.

The cost of having diabetes in Alaska isn't cheap or easy

Diabetes isn’t cheap. Luckily, the number of Alaskans who have it are relatively few. Still, those who do can expect to pay out the nose ... and in more ways than one. The state Department of Health and Social Services reports that an estimated 6 percent of people in the state are diabetics, slightly less than the rest of the country. Granted that’s not a huge number, but it does amount to more people than those in all but one of our cities. And that means a lot of individuals spending some extra money. I happen to be one of these guys and so I know how much the costs can add up. Actually I don’t. No one does. All I know is it’s an extra expense that isn’t always convenient while residing in a state not known for affordable living. Insurance plays a vital role in giving people like me enough to afford necessary supplies plus the occasional meal. Still, it’s not free. Take the most basic obligations like insulin, followed by glucose testing supplies. These are things you need daily to do what other people do by, say, waking up. Insulin prices vary depending on your insurance and doctor. But mine is fairly reasonable at $10 per month with insurance covering the other $244. This is average pricing for my type (Humalog) among many insurance companies. Blood test strips are something many diabetics forget to get prescriptions for since they’re available over-the-counter. But $15 for a bottle that lasts maybe a month sounds a whole lot better than $50. So now with the insulin paid for, that part’s over, right? Not so fast. Diabetics still need a way to get it into themselves. Again, that costs. Syringes were the most common way for a long time, which by the way, are not for sale in Alaska without prescriptions, although some pharmacies may sell without them. Now I use an insulin pump, which have grown substantially in popularity over the last decade. The pump itself, depending on the type, can cost up to $6,000. That is, unless insurance helps cover all or most of the bill. Then there’s the infusion sets that must be changed regularly. These must be shipped from special companies, as they’re not available from the doctor or pharmacy. The co-pay on each shipment can vary. Mine have been as low as $90 and as high as $170. To give an idea of the actual cost, my insurance paid $376 on my last batch while I shelled out $94. One note to add about insurance, with insulin, supplies and doctor visits, diabetics tend to burn through their deductibles rather quickly, meaning they can spend hundreds at the beginning of each cycle. Insulin itself is a sticky thing that people like me must deal with, namely in getting our hands on it. This seems like the most appropriate of any medication that should be freely available but is extremely regulated in real life. It would seemingly make sense that diabetics — even with proof of an existing prescription — should be able to buy extras to keep around in case of emergencies or be able to grab a new one any time something goes wrong with a current vial. After all, glass breaks from time to time. But prescriptions are set to a timer for renewals. Even working around this, insurance companies don’t cover anything between their set intervals, which could mean shelling out a couple hundred dollars in an emergency ... or for extras if they were only allowed. My endocrinologist told me that this regulation is due mostly to insurance companies’ cost models that don’t take into account the emotional or physical need for spares. An emergency alternative is to purchase an older insulin like regular and Nph, which may be purchased without a prescription. Insurance companies can also dictate which insulin your doctor can prescribe. I found this out with a sudden bill for several hundred dollars for my regular refill, I had been on NovoLog for many years and it always got the job done in terms of keeping me alive. My insurance then decided to stop covering it. which required a waiting period of several days for a different prescription for Humalog by phone. Costs can go beyond the regular doctors too. Diabetics are more prone to problems necessitating more attention from specialists for retinas, feet, teeth and nutrition among others, each demanding a different co-pay. There are more than one ways to measure cost when dealing with a disease like this. There’s the element of danger, and not the fun kind either. I myself have always thought of my diabetes as more of an inconvenience than anything else. Like the others, I have to stop to check up or shoot up, but that’s not a huge deal. However, things can go wrong. Insulin reactions and other insulin-related anomalies can strike at any time and there’s really no way to plan for them, hence the term “anomaly.” Many diabetics can expect to lose consciousness sometime in their lives. We only hope it’s not when we’re behind the wheel. There are long-term risks, e.g., vision loss, immunity problems, circulation issues. However, these aren’t nearly as frightening as knowing something can happen inside you without warning. Even diabetics who take good care of themselves will probably face complications. And once that happens, someone’s going to pay. This was drilled home to me more than a year ago. I had an A1C — which measures average glucose levels — of 6.1, which is a reading you’d expect from a non-diabetic. Still, I awoke strapped in an ambulance one morning. At that point all the paramedics could do was monitor me until my body righted itself as blood sugar spikes can do. This has only happened a few times in my life and will mostly happen again without warning: all part of the price tag. The $1,000 emergency room bill: also part of the price tag. Part of that downside was there were no local specialists to look into this. Alaskan diabetics have a special concern for proper care. Many must rely on family physicians or nurse practitioners for care or insulin prescriptions because there are only a handful of endocrinologists in the entire state, and most of those are concentrated near Anchorage. Even Fairbanks has no endocrinology available. Juneau has one ... who is based in Wasilla and only travels there once a month. Diabetics in rural areas can often be even more restricted from specialized care, as many must travel to find a regular physician to get the basic prescriptions. This doesn’t include referral for more complicated cases. Regular doctors can get the job done but more specialized care can be called for. Location in Alaska can also play a part in medical fees. In Juneau, my A1C lab work had to go through the hospital, which the insurance somehow didn’t feel was medical enough, costing around $500. In Anchorage, the same work was done in-office at an endocrinology clinic and so didn’t cost at all. I admit I’m a diabetic minority: a type 1. The American Diabetes Association estimates that only 5 percent of diabetics have this kind, which is usually diagnosed during childhood. I was diagnosed with type 1 when I was 5 years old, so my comprehension of what was ahead was basically “bleh.” Today, knowing more about the costs, it’s “bleh plus 10.”

Hospitals expanding across the state

Correction: This story has been updated to reflect the correct hospital that Dowl HKM is working on in Nome Alaska’s medical facility expansions have boomed over the last few years. Consensus among hospital administrators reveals that current facilities cannot adequately serve expanding populations. As such, a number of hospital projects have recently gotten under way or have been announced. One of the most prominent expansion projects is with Providence Health and Services in Anchorage. The renovations under way will be one of the campus’ most ambitious ever. The project is called Generations in recognition of the facilities’ purpose to the community for future generations, as well as the focus on both ends of the life cycle. The mini-tower currently under construction on the south side of the campus will expand and renovate the newborn intensive care unit, renovating the labor and delivery unit and building a new postpartum unit plus a prenatal unit. The units have been using the open space standard for years but will be updated to include private rooms and other additional space for families. “So for all of those reasons we’re updating, we’re enlarging the newborn intensive care unit to accommodate the growth that we think will happen in terms of just volume as Alaska’s population grows through this decade,” said Dr. Richard Mandsager, chief executive of Providence Medical Center. Besides the newborn care areas, an additional operating room is being built while nine others are being renovated in order to be able to accommodate modern technological equipment. The new room will be a hybrid cardiovascular surgery room to house a complex cardiovascular and cardiology work and even allow such specialties to be done in the same space. That hybrid room is about to undergo simulation testing before being put into use in February. Infrastructure upgrades within Generations include the pharmacy, sterile processing and material management for receiving. Mandsager said these conditions are needed due to the growth of both the campus and the community. They are also needed to be able to manage the more advanced technologies that wouldn’t work within the old spaces. For example, a standard Providence operating room for complex orthopedic or neurosurgical cases are 400 square feet but should be at least 600 square feet to accommodate the necessary equipment. The new hybrid room will be the biggest at 900 square feet. “These were the parts of the projects and the needs of the campus that were prioritized as the highest need and why we have gone ahead with construction,” Mandsager said. The other part of the Generations construction will be replacement extended care facilities for long-term residents. This part will have the capacity for 96 such residents with each house built for 12 of them. The new houses will have private bedrooms and bathrooms for each resident plus common living spaces and central areas for necessities, like food preparation and physical therapy. Construction started in 2011 and will be completed in intervals over the next few years. The operating rooms will be completed in 2013 due to the complexities of taking them down and bring them back online. The newborn intensive care unit and labor delivery are the most complicated in terms of phasing and maintaining current capacity throughout construction so will be done in 2014. The postpartum unit will be done this fall. The resident care houses will likely open in 2013. Generation is the medical center’s biggest project since a large part of the main hospital was worked on in the early 1990s. There have been several other big projects between these, such as an emergency department, cancer center, an inventory surgery center and other offices. “This set of projects we have under way now are financially more money and bigger in scope,” Mandsager said. The hospital parts of Generations will cost $150.3 million and the long-term care houses will be $62.5 million. A large part of these costs will be covered by $122.72 million in tax-exempt “conduit” revenue bonds from the Alaska Industrial Development and Export Authority. As a not-for-profit hospital, these renovations go toward continually reinvesting funds into the community and looking ahead for future needs. New hospitals The big hospitals aren’t the only ones getting big changes, however. The Chief Andrew Isaac Health Center in Fairbanks Norton Sound hospital in Nome is getting a new 150,000 square foot replacement hospital. Senior project manager Nick Francis of Dowl HKM said the project is about 85 percent done and must be completed before the scheduled December move-in. Once online, the new building will be an 18-bed inpatient facility. There will be plenty of outpatient services too, like dental, physical therapy, respiratory, optometry and others. “The old one is severely outdated. It’s too small to service the community,” Francis said. “It should have been replaced years ago.” He said the total project value is $168 million. The project is being helped with American Recovery and Reinvestment Act funds. Like Providence, work for the elderly is being added. Only in this case it’s a separate, state-funded project. A 19-room skilled nursing wing is being added and will connect to the hospital via a bridge. Francis said it will be completed at the same time as the hospital if the second half of the state funding comes through. “It’s critical that we get approval this year,” he said. The hospital is being built in conjunction with Indian Health Services. Neeser Construction is the contractor. Kumin Associates out of Anchorage is the lead architect while Mahlum out of Seattle is the medical architect. Besides the construction, Francis said a statewide request for proposals have gone out for three pieces of commissioned art. 2012 will also be an important year for hospitals to generate construction funds. Wrangell Medical Center has received most of funding for a $30 million replacement hospital and long-term care facility. Development and Quality Director Mari Selle-Rea said the funding came from various sources but mostly from U.S. Department of Agriculture Rural Development. Other funding support comes from the hospital itself, Rasmuson Foundation, Alaska Mental Health Trust Authority and the state of Alaska. Mari Selle-Rea said the current hospital is outdated and inadequate. The new space will also accommodate a CT scanner along with six additional long-term care beds. Ground could be broken this summer depending on how quickly the funding balance can be secured. Some of the other hospital projects this year include a $1.47 million expansion for Petersburg Medical Center’s clinic and a replacement hospital for Samuel Simmonds Memorial Hospital.

Pacific Alaska acquires Southern Alaska Forwarding

Tacoma, Wash.-based freight company Pacific Alaska Freightways (PAF) has acquired its old partner company, Southern Alaska Forwarding (SAF), out of Kodiak. PAF is an asset-based freight company serving Alaska from Lower 48. SAF did similar work while consolidating shipments from down south to move them to Kodiak and Cordova customers. PAF sales and marketing director Curt Dorn said this acquisition has been in the works for a while. He said it made sense to bring in the smaller Alaskan company because of their shared synergies and efficiencies from consolidating freights. “At Pacific Alaska Freightways, we basically do the same thing, but our coverage area has been Central Alaska, so the Kenai Peninsula, Anchorage and Fairbanks, as well as Southeast Alaska,” he said. This will allow PAF to expand its Alaska footprint to include Kodiak and Cordova customer bases. “This is a great acquisition for us. We know the SAF business model and we expect a seamless transition. We are really excited to have Mike York and his team in Kodiak join PAF, and we are equally pleased that Chuck Kollasch with be joining us at our headquarters in Fife as well,” PAF CEO Ed Fitzgerald said in a release. Dorn said SAF operations and personnel will remain essentially unchanged with key personnel still in place. He said the acquisition adds the more than 20 SAF employees to PAF’s 85. “All the people in Kodiak are still there. They just work for us now,” he said. Dorn said the goal is to improve SAF’s operations by applying the PAF model to further improve efficient and freight visibility. For example, Kodiak customers can track their incoming freight to plan for it. The PAF model mainly revolves around planning of the freight, better accountability, manifesting the containers electronically for better control and a more proactive delivery role through partnerships with local drivers and networks in the rest of the country. He said customers are able to keep track of the whole process themselves. Dorn said the idea is to integrate these practices into the new Kodiak customers.  The acquisition follows the retirement of SAF owner Ronald Sears in November. The transaction was already in place at the time. The two companies have a long history together. Sears started PAF more than 50 years ago then co-founded SAF with Alain Smith as a partner company to serve Kodiak Island. The two companies separated in 2000 but kept their strong partnership. “SAF did a great job but together with us we can do a fabulous job,” Dorn said.

Brewing up power: Beer maker finalizes biofuels project

Alaskan Brewing Co. has entered the final stage of a 16-year process in setting a precedent in renewable energy. The Juneau-based brewery has a new boiler to make its own malt waste a sole energy source and has been selected for nearly $500,000 in federal money to finish the job. Alaskan Brewing is in the commission and testing phases of a $1.8 million steam boiler fueled entirely by the company’s own spent grain. The grain is a protein-rich material that lends itself thoroughly with the combustion technology the company has been perfecting. The idea is that the new boiler will eliminate the brewery’s fossil fuel use in the grain drying process and displace more than half of the fuel needed to create process steam in the brew house. The brewery is currently a fairly intensive oil-related operation, currently running the grain dryer and other process heating from oil. Engineers estimate the completed boiler will help save an overall energy usage from oil and corresponding carbon emissions by more than 70 percent. This translates to a savings of nearly 1.5 million gallons of oil over the next 10 years. The boiler was actually built last year and did an initial startup toward the end of the year. Testing showed the need for additional modifications. The company currently is waiting for additional design modifications to come and engineers hope it will be back up within a few months. Brewing operations manager Brandon Smith said the entire system hopefully would be completed and running by the end of the first quarter this year and no later than the second quarter. “This fuel, nobody’s ever burned it commercially before,” he said. The U.S. Department of Agriculture has selected Alaskan Brewing for $448,366 in Rural Energy for America Program funds to support the development. Despite being a capital city, Juneau’s demographics still qualify the brewery for a rural development grant. Alaskan Brewery communications manager Ashley Johnston said the grant would hopefully offset up to 10 percent of the overall system costs. Smith said paperwork is under way for the official approval, which will be done after the completion of the project. This grant represents the highest amount an Alaska business has been awarded from the USDA Rural Development’s business division. This has been active in Alaska for three years, during which it has approved 49 projects. USDA business and energy specialist Chad Stovall said the business division typically gets $200,000 to $250,000 a year for projects. The national office must approve anything over that amount, which was how Alaskan got its unusually high appropriation. Stovall said that eligible areas are those with populations under 50,000, qualifying all Alaska municipalities besides Anchorage. Alaskan will not accept the grant until after the project is completed, after which the money will be used to continue testing while helping mitigate some of the risks involved. Smith said that since the company is so close to the end of the project, it made more sense to wait until they can document that the entire project works successfully. He said this also shows they are as much a partner in the risk of this as the government and taxpayers. The whole thing started in 1995, when Alaskan Brewery installed a $900,000 grain dryer along with its brewhouse. The company used it to process the grain byproduct so it would make it through shipping times to be used as cattle feed in the Pacific Northwest. Shipping was necessary since there were no local farms to take the grain. About half of this byproduct was also used as a fuel source to heat the dryer itself. Engineers have spent this time learning how this product burns to get the system where it can use more than half the source, since grain burns differently than many other products. The brewery expanded on this in 2008, with the installation of a $1.7 million mash filter press to produce a finer grain with less moisture from the brewing process. The almost coarse powder makes for a better fuel source. The better fuel produced by this press inspired them to invest in a system to convert this fuel for all of its energy, expanding it beyond just heating the dryer. Studies and consulting helped bring about the conclusion to use this boiler system as its sole fuel and still be able to get enough steam to run the dryer and have enough steam left over to power other brewing operations. “The sky’s kind of the limit there,” Smith said. “It’s a very exciting thing.” The cost of shipping the waste south versus keeping it here for use also adds up. Smith said Alaskan Brewery differs from other breweries that can give spent grain away for free since there are nearby agriculture sources to make use of it. Alaskan must ship its spent grain, which builds costs in unloading what is essentially a waste product. “If you look at the value of a spent grain as a fuel in terms of the energy content in it versus its value just as a waste material, it goes from a net value of $30 a ton up to $350 a ton,” Smith said. Johnston said this project represents a huge cost for a small operation, particularly one in a unique location like Juneau. She said capital could be a big challenge even though the brewery is successful. “We are investing a lot of time and capital into our spent grain energy system, but we are confident that it will pay dividends in the future — for both the brewery and for Juneau,” she said. Adding to the uniqueness of the operation is the absence of grain used as a sole source of energy in other small businesses. “We did a patent search just to make sure we weren’t stepping on anybody’s toes and as far as we can tell we’re the only ones in the world that are going to be using spent grain as the sole fuel source for a steam boiler,” Smith said. He said other breweries in Europe have tried using it as a sole source but were unsuccessful, while others have used it as a co-fuel with other sources. “We’re certainly excited to pioneer this,” he said. “Whether we envisioned we would end up where we are today, who knows. But looking back it was certainly an integral part of it, putting in that first grain dryer.” Smith is hopeful that this process, combined with the grant, will serve as an example to other breweries.

'Coast Guard Alaska' renewed for two seasons

The series “Coast Guard Alaska” premiered on the Weather Channel in November and has already garnered at least two more seasons on the air. The show, produced by Al Roker Entertainment, follows Guardsmen from Air Station Kodiak to show what it takes to live and work in this corner of the world where extremely hazardous weather adds to both the necessity and obstacles to their rescue missions. The second season, debuting this April, will feature five 60-minute episodes. The third will have eight and is due out in October. So far, the show has produced a 95 percent increase in the same time period average from one year ago for viewers ages 25 through 54, according to Nielsen ratings. Viewership has increased 91 percent since the premiere episode. Roker said this has jumped to more than 100 percent in some time periods. The Weather Channel reports it was the fifth-highest tending show on GetGlue during the premiere episode. Roker said he thinks the realism of the show contributes to the attraction. Guardsmen go up against some crashing elements with no scripted ending. This is why Roker refers to “Coast Guard Alaska” as a documentary series rather than a reality series. “We’re just thrilled with the access the Coast Guard has given us,” he said. Bob Walker, the Weather Channel’s executive vice president and general manager of networks and content, said this feedback has made it clear that audiences are responding to the show, thus encouraging the demand for additional Alaska filming. While the first season of “Coast Guard Alaska” focused on Kodiak, the producers are exploring other areas to expand the show. Kodiak was chosen as the debut location due to its extreme weather conditions that make being a rescue pilot or swimmer there among the most dangerous jobs in the world. Some of the season was also shot in Sitka. Roker and Walker said they are looking at other future possibilities to expand the Alaska program. For now, the focus will remain on Kodiak. “I think we’re going to go where the rescues take us. Wherever that is in Alaska,” Roker said. Roker said having not one but two additional seasons greenlit and airing so close together was not ordinary but not unheard of. Walker said the show continued to grow throughout the first season’s run. This contributed to its renewal. Walker said before any show is considered for renewal, the producers must be convinced there is enough interesting content that wasn’t all covered the first time and this air station has exactly that. “This is our first show with the Coast Guard,” he said. “We think one reason it works is it shows how the elements affect people’s lives in and around this part of Alaska.” “The great thing about this program and what makes it, I think, special is that whether we’re there or not the Coast Guard is constantly going out doing rescues so we’re just tagging along for the ride and documenting it,” Roker said. Roker first came up with the idea after seeing a YouTube video of local Coast Guard rescues and was impressed by the intensity of it. A phone call later and the ball started moving. He said the exciting part for him is to simultaneously show the Coast Guard’s mission and the beauty of Alaska. “I think people are still fascinated by Alaska and we’re happy to help people get a different look at the state,” he said. Roker said the producers will decide whether to apply for the state’s film tax incentives for these next seasons. Al Roker Entertainment pre-qualified for the incentives for the first season. No amount has been awarded yet. “It’s clear to us that viewers are making ‘Coast Guard Alaska’ appointment viewing,” Bob Walker, executive vice president and general manager of networks and content for Weather Channel, said in a release. “Audiences have really responded to this inside look at life in Kodiak for these real-life heroes who risk their lives daily to save others. We feel privileged to offer viewers more opportunities to get to know these incredible men and women.”

AKRR engine No. 557 comes home

A blast from the past hit the Alaska Railroad Corp. this month with the return of one of its original steam locomotives. There will be no museum or warehouse destination for it either. Engine No. 557 is ready to be renovated and put into service as a tourism vehicle. This was Alaska’s last operating steam engine. The locomotive was constructed in the mid-1940s for the U.S. Army, and last operated as part of the railroad in 1957. It was destined for the scrap heap in the early 1960s, but wound up as part of a museum in Moses Lake, Wash., instead. The Jansen family, owners of the Lynden company among other Alaska-based transportation businesses, later purchased the engine from the estate of the museum’s owner. Alaska Railroad President and CEO Christopher Aadnesen said that both the Jansens and former Sen. Ted Stevens had been trying to bring the engine back for years. The Jansens wanted to donate it and get the engine back home. After he assumed the chief position in late 2010, Aadnesen helped push the deal forward. Engine No. 557 was transported into Anchorage this month, making a pit stop at the Railroad Depot before being carried into storage to await restoration. The railroad has eight years to put it in service but Aadnesen is aiming for as early as 2013. “We have a business case to put it back in a restricted kind of passenger service as a tourist attraction during the summers,” he said. The project will depend on volunteer and foundation donations — money from the railroad can’t pay for it. It will cost more than $500,000 to refurbish the locomotive and get it back into service, then it will need to pay for itself. All that remains is to finish the regulations of establishing a foundation to receive such funds. “We have no doubt that it can be done,” Aadnesen said. Engine No. 557’s needs concern cosmetic issues like cleaning and painting. It will be completely disassembled and put back together to satisfy survey and inspection requirements for federal agencies. After that, 557 will require annual maintenance plus periodic Federal Railroad Administration recertification, which will also have to be covered in the business case. The tender, which holds the oil for the fire, currently rests at the Museum of Alaska Transportation and Industry in Wasilla, and will join the engine for the restoration. Aadnesen said the engine is actually in good working order and even operated a few years ago. Reports indicate the running gear is still in good shape. “We have all sorts of know-how with railroad steam aficionados who live and work in Alaska and around the rest of the country who can make sure that we do it right,” he said. Original trainmen The railroad didn’t have to look far to find train enthusiasts excited to see Alaska’s only living steam engine brought back to life. Several even showed up to see it pull into the station. Jeff Debroeck was among them. His lifelong passion for trains led to his rail career, where he’s now a heavy equipment mechanic for the Alaska Railroad. He’s spent 15 years working with steam locomotives for two Washington railroads and now has the chance to bring that expertise here. “I’ve worked for the railroad for 13 years and that entire 13 years I’ve been waiting for this day,” he said. “We’re going to make this puppy operational.” Also in attendance was Weaver Franklin, one of the two last living engineers who operated 557. Franklin, 89, started out on the railroad in 1946 as a first class mechanic then worked as both a fireman and engineer for locomotives. “They was fun to operate. They had almost a personality all their own,” he said. Franklin talked about the evolution of the railroad and how these machines were a different breed than the diesel engines of today. Back when these machines were the primary trains, the fireman would spend his time shoveling coal or other fuels into the fire, and whistles from the engineers blasted to alert of any movements. Franklin remembered the 1940s, when these steam locomotives were used to rehabilitate the railroad, which was one of the Alaska’s biggest employers then with more than 2,000 employees. These steam engines were vital for freight and passengers, serving as an integral transportation source between Fairbanks and Seward since there was no road system between the towns yet. “We played a major part in keeping these municipalities running,” he said. Franklin and Patrick Durand, a railroad and Alaska historian, said the move toward diesel in the mid-1950s made the engineer’s job easier. Those engines were more efficient but didn’t require as many people to run them. “It was a different world when they went to diesel,” Franklin said. Durand said the fact that steam engines requires water and coaling stations along the tracks, as well as the summer track maintenance crews, contributed to the large employee base that was no loner needed after the transition to diesel. Franklin is sure the railroad will get No. 557 back to operating condition and looks forward to riding it again. He joked that he and Stuart White, 557’s other living engineer, may be the only ones in the state who could still run it. “I’m sure the Alaska Railroad is gonna put it back into operating condition. It will work. It’ll take time and effort and some money,” he said. “It will be quite a sight, I tell you. It’ll go down in history.”

Alaska Reserve group gets early 'Red Tails' viewing

Alaska’s 477th Fighter Group can trace its roots directly to the famed Tuskegee Airmen of World War II. This heritage was honored when Lucasfilm gave select Reserve servicemen an early screening of the company’s new film “Red Tails.” About 200 current and former military members plus community leaders, students and a member of Tuskegee Airmen Inc. were treated to the special showing at the Tikhatnu movie theater in Anchorage in December. A publicity manager for Lucasfilm plus one of the movie’s actors, Marcus Paulk, accompanied their work to Alaska. “Red Tails” tells a fictionalized story inspired by the black airmen group that broke segregation and fought during World War II. It was executive produced by George Lucas and directed by Anthony Hemingway. It stars Cuba Gooding Jr. and Terrence Howard. “Our 477th Fighter group is a direct descendant of the 477th Bombardment Group in which the Tuskegee Airmen were training in B-25 bombers during World War II,” said Col. Bryan Radliff, commander of the 477th. This training originated in Alabama and moved to three different locations in the upper Midwest during the war. The movie is based on the fighter squadrons at the time, one of which was the 302nd Fighter Squadron that now calls Joint Base Elmendorf-Richardson home. The 477th and the 302nd were reactivated here in 2007, when the group became the Air Force Reserve Command’s first F-22 Raptor unit and the only Air Force Reserve unit in Alaska. Previous to being in Alaska, the 302nd Fighter Squadron was at Luke Air Force Base in Phoenix, Arizona flying F-16s. They’ve been activated in several other places throughout the years. The film only covers a small period of the Tuskegee Airmen history, namely how they earned their name “Red Tails.” “The neat takeaway from this is if you’re a fan of military history, World War II history or even racial integration and where we are today, I think this movie gives folks a nice balance of all three of those,” Radliff said. The airmen at the time faced racial discrimination, even when it came to flying alongside their white brothers-in-arms. They proved to be successful and flew more than 1,500 missions between 1943 and 1945. They painted the tails of their bomber escorts a distinctive red pattern and white pilots were soon requesting these agents because of their high skill level. While the film focuses on the broader picture of the Red Tails, the message is an important piece of military history that is not lost on its descendants. “Due to the sacrifices and the success of this organization had a he impact on the ability of the armed forces to integrate,” Radliff said. Lucasfilm selected JBER for a screening after several unit members attended the Tuskegee Airmen Inc. convention in Washington, D.C., last summer. Viewings of the trailer plus a documentary were all it took to convince them to engage Lucasfilm representatives on the JBER link and request an advance screening. Lucasfilm agreed. Alaska is not the only stop on the “Red Tails” tour. Lucasfilm spokesman Marshall Mitchell said the company has been actively screening it for military audiences to help call attention to the Tuskegee Airmen’s story. He said early screenings are a way to honor the troops today. “Sharing this film with airmen in Alaska at the 477th, at the US Air Force Academy with future warriors and leaders, and at large military gatherings goes to the heart of this film. The story has never been fully told and their contribution never fully honored,” Mitchell said. The support of the Air Force Reserve Command finally got the screening here after five months of work. “Tuskegee Airmen across the nation have received this film with both pride and humility. Finally, their story will be exposed to mainstream audiences while many of them are still alive to share firsthand accounts. Dozens of Tuskegee Airmen have attended these screenings across the country. Many others are planned during January,” Mitchell said.

National Guard trade experts spend holidays overseas

Twenty-six Alaska Air National Guardsmen from the 176th Wing started their holidays supporting airfield infrastructure in four countries this year. The Guard deployed experts to Kuwait, Kirguistan, Afghanistan and Cuba to join an expeditionary Prime Base Engineer Emergency Force in support these base operations. “They’re going to established military bases and they’re going to be doing day-to-day maintenance and operations of facilities,” said Lt. Col. Edward Soto, 176th Civil Engineer Squadron commander. The Guardsmen will maintain airfields on such bases and buildings, everything from lodging to hangars to shopping areas. “I have complete confidence our CE personnel will represent the 176th Wing of the Alaska Air National Guard honorably and proudly,” Scott Wenke, 176th Wing commander, said in a written release. “We are sending our finest folks to do our nation’s bidding, many of them who have served overseas before. Throughout the history of the 176th Wing, our Guardsmen and women have made a positive impact in all parts of the world; I anticipate these deployments will be another showcase of our professionalism and excellence.” All will be gone for at least six months, he said. Some started leaving in November while the last will deploy in mid-January. Fourteen of the 26 left over the holidays. These deployments are only done every four or five years. “We certainly understand the additional hardship being gone over the holidays puts on families and Airmen, and we encourage family members to stay closely connected via our Family Programs coordinator,” Wenke said. Deployments such as these may also see changes ahead with Department of Defense budgets due to see drastic cuts. “The Afghanistan locations are very much in flux. I’ve seen a lot of changes regarding the deployment and that’s due to the president saying that he wanted to draw down,” Soto said. “And yet there’s an awful lot of need for engineers. There are bases that are increasing in size. There are bases that are closing or are decreasing in size. And then there are host nation-building.” The Afghani infrastructure is an example that requires additional construction where American engineers could prove to be an invaluable resource both physically and diplomatically. “One of the best tools that the military has for peacekeeping is their engineers,” he said. He said helping build in other nations is an invaluable diplomatic opportunity for building relationships and so will make engineers needed in these areas for a long time even in peaceful scenarios. Civil engineers make up a minority of the Guardsmen deploying while most are tradesman such as plumbers, electricians, heating and air conditioning specialists and power production specialists. “We are sending a host of different skill sets to respond to everyday needs,” Soto said in a release. “They will be able to respond, fix and repair any facility that needs it.”

Bids for Fairbanks' Illinois Street project under review

After 30 years, work is finally pushing forward on improving Fairbanks’ Illinois Street. The Alaska Department of Transportation and Public Facilities has opened bids to reconstruct a major throughway to help correct confusing lane configurations and improve safety conditions. Illinois Street is the city’s main access route downtown from the north. A number of safety concerns has spurred the state into pushing ahead. Bidding for the project is now closed and DOT is reviewing the bids, after which a Letter of Intent to Award will be issued to the lowest responsible bidder. HC Contractors Inc. of North Pole is the apparent low bidder so far with an unchecked bid of $21,965,862 but DOT spokeswoman Meadow Bailey said that all bids are still being reviewed. The work is intended to correct several issues. This includes improving inadequate pedestrian and bicycle facilities, as Bailey said there aren’t adequate sidewalks in the area. The work includes pavement improvements, drainage upgrades, lighting improvements and fixing sight problems. Bailey said this will improve safety condition and enhance the street’s long-term growth and redevelopment. The project also links College Road to a new bridge at the Chena River. Work is scheduled to begin this year and continue through 2013. “Work on the Illinois Street Reconstruction project started over 30 years ago,” she said. “To be at the point where we will see construction begin this summer is very exciting for everyone at DOT.” Bailey said the department fully supports the downtown development and that such work normally doesn’t take so long to get under way, but each case is different. It depends on funding, the state’s priority of the project and the transportation needs involved. “As transportation priorities have shifted, this project has risen to the top,” she said. Factors that helped influence these priorities include an accident rate at Cushman Street and First Avenue that’s three times higher than expected and poor sight distance at Church Street due to the road curvature. The unchecked bid is lower than DOT’s estimate of $22,687,027. The Fairbanks Daily-News-Miner has previously reported that the project would cost roughly $30 million. Bailey said construction has already been going on for three years, such as on the Barnette Street bridge. The bridge is not in use yet but is expected to be completed toward the end of the year.

Russian ship closer to getting needed fuel to iced-in Nome

The Department of Homeland Security has waived the Jones Act for the Russian ice-class tanker Renda, bringing it that much closer to getting much-needed fuel to the city of Nome. The Renda was chartered by Vitus Marine to carry fuel into Nome after a previous fuel delivery by barge was thwarted by the heavy storms along the Bering Strait this fall. It was previously reported that the alternative of air delivery would bring fuel costs up to $9 per gallon. The 370-foot tanker is carrying just more than 1 million gallons of diesel fuel. It will pick up 400,000 gallons of gasoline in Dutch Harbor before heading to Nome. To get there, however, the 420-foot Coast Guard ice breaker Healy, which is home-ported in Seattle, must clear the way. If everything goes according to plan, the delivery will reach Nome in early to mid-January. Eighty crewmembers currently are onboard the Healy, according to Coast Guard spokeswoman Holly McNair. Many are giving up their holiday time to help Nome’s rescue. Requests for interviews with Healy crewmembers weren’t returned by press time. McNair said, “We’re happy to do it.” Coast Guard spokesman Chief Petty Officer Kip Wadlow said the Healy has done a lot of work with the National Science Foundation conducting Arctic research but this is the first time its faced a job like this. However, getting to Nome with a Russian tanker isn’t so cut-and-dry. Regulatory hurdles had to be cleared, and the Jones Act checks an important one off the list. The act prohibits foreign vessels from transporting cargo between U.S. ports. The next phase consists of state approval. “Under state regulations, they must have an oil contingency plan approved by the Alaska Department of Environmental Conservation,” said John Kotula, manager of the DEC marine vessels section within the Industry Preparedness Program. The public comment period has just ended and review is under way. This will be done quickly due to the timely nature of the mission. The Renda’s plan must be modified to deal with the winter conditions it will face with in the icy Alaska waters. It must be itemized to show how it will deal with all of these winter conditions. “Vitus has an approved plan but it doesn’t cover those conditions,” he said. Once the plan is modified and approved, the Renda can proceed to Nome, where personnel can meet it and verify everything is in place. Kotula said the unusualness of the situation calls for cooperation with an array of agencies, including the National Oceanic and Atmospheric Administration, Coast Guard, industry representatives, the city of Nome and the Alaska Marine Pilots Association, among others. He said that state-licensed ship pilots have been pulled in because they will play a big role in this. “There are a lot of moving parts and a lot of experts that are being consulted to help us identify any potential risks, safety hazards and that sort of thing that may be encountered as this evolution continues to movie forward,” Wadlow said. While this specific situation is different, spot-charters for tankers happen frequently, Kotula said, particularly in Cook Inlet, the Aleutians and western areas of the state. Dealing with ice conditions is especially prevalent in Cook Inlet. The main difference in this instance and those is that this particular plan didn’t cover the specific ice conditions. “It’s not really unusual for us but in this particular case with this company coming in, it’s unusual for them so we will handle it through the regulatory process, make sure everything is in place,” he said. Alaska’s delegation has advocated the Jones Act waiver on behalf of Nome and issued statements upon the approval. U.S. Sen. Mark Begich sent letters to Department of Homeland Security Secretary Janet Napolitano on Dec. 9 and 22 to press the waiver. He acknowledged that a lot of work still remains before the mission is complete. “This is great news for Nome residents who either faced a long, cold winter or soaring energy costs,” Begich said in a release. “This decision also recognizes Nome’s key strategic position adjacent to the Bering Straits as well as the Coast Guard’s need for maintained facilities to monitor our northern border. U.S. Sen. Lisa Murkowski and Congressman Don Young asked U.S. Customs and Border Protection Commissioner Alan D. Bersin to support the waiver. “Today is an important step in providing certainty to the Seward Peninsula region, in terms of heat and affordable heating prices through the winter, but it is only a step. We literally have hundreds of miles to go before resolution,” Murkowski said in a release.

ACVB becomes Visit Anchorage, revamps website, logo

What’s in a name? It can actually mean a lot, which is why the Anchorage Convention and Visitors Bureau has changed its name to Visit Anchorage. The title that once spelled out ACVB is officially no more. Other than that, everything remains the same. Tourism promotion, programs and the mission go unaltered as the organization continues its goal of stimulating tourism growth and diversity. “Our mission is to be the destination marketer for Anchorage. We have a contract with the Municipality of Anchorage and that is our job to attract and serve visitors to our community,” Saupe said. In fact, reinforcing Visit Anchorage’s mission of bringing people and businesses into the Anchorage area is one of the main factors in the name change. Visit Anchorage President and Chief Executive Officer Julie Saupe said the new name is very consistent with this mission and states it very clearly. The second reason for the switch is to drive up traffic both online and into the city. Saupe and Visit Anchorage Public Relations Manager Jack Bonney said the phrase “visit Anchorage” is one of the most common terms entered into search engines by those trying to find out more about the city. The name change comes with a few other changes as well. Visit Anchorage is blending elements of the city’s brand image into its own in its promotion. “We kind of redesigned our corporate identity to more closely mirror the city’s Big Wild Life brand,” Bonney said. This is evident in the organization’s new logo that features a combination pattern of human handprints and animal hoof prints. The change also comes with a revamped website (, which Saupe said will launch in January. The new site promises to be more robust and flexible with fresh content for newcomers to Anchorage. Bureau member businesses will also be able to better represent themselves and provide more information. While there have been additions to the website over the years, administrators saw this as an opportunity to redesign the website to streamline some of that information to make it easier to find. Online visitors will be able to connect better to the content of things to see and do. Also, business links will allow them to find contacts for some of those activities and attractions. “Together it really was a very effective way to capture visitors,” Saupe said. “It really inspires and motivates people to actually sign on the dotted line and come to Anchorage,” Bonney said. Administrators studied convention and visitors bureaus in other states and learning that quite a few are starting to make similar changes for the exact same reasons: to help reinforce the mission and drive up online traffic. “I am sure that we are the first convention and visitors bureau in Alaska to do this,” Saupe said. Bonney said the nice thing about the change is that this builds on ACVB’s 36-year history. While the name is different, this is the same organization that has attracted and served Anchorage visitors. The timing also plays a part. The updated website and other materials such as the visitor’s guide will incorporate the name right at the start of the new year. Bonney said that while this was not the primary driver, the timing will still help the integration go more seamlessly. Changing a brand name that has been in place for almost four decades doesn’t happen overnight. Things like signage are currently being switched to the new name. Other things that still carry the old name will be phased out. Bonney said the whole process should be completed very soon.

Alaska still a cool destination for tourists, ski buffs in winter

In the dead of winter, the air outside swings past zero on the Fahrenheit scale around the Anchorage area. Further north around Fairbanks, it gets even colder. But none of this dissuades tourists who see this as a time to take in some of the attractions that have built Alaska’s tourism reputation. Deb Hickok, president of the Fairbanks Convention and Visitors Bureau, said Fairbanks remains a big draw to visitors in the winter despite subarctic temperatures. She said the big attraction there is the Aurora borealis, while other Alaskan-style activities like dog-mushing and ice fishing also draw tourists into the cold. Such attractions have been packing the customers into the Chena Hot Springs Resort in Fairbanks for years. The resort’s Marketing Director Denise Ferree said the top draw is the hot springs themselves. Of course, Aurora borealis viewing is also at the top of the list, flowed by the Aurora Ice Museum, sled dog rides, flying snow machine tours and cross country skiing. Free geothermal renewable energy tours are also bringing in a lot of interested groups, including students. The northern lights in Alaska have still remained a unique business boost for much of the state. Hickok said Japanese tourists are coming in with really strong charter flight numbers to see the northern lights. “The proprietor of the resort, Bernie Karl, always says about viewing the Aurora — ‘you can’t see them if you are not here,’” Ferree said. Alaska’s terrain is also keeping visitors coming to the rest of the state. For example, skiing, snowshoeing, dog sledding and snow machine tours, not to mention the Spring Carnival in April and the Roundhouse Museum, have helped build Alyeska Resort into a staple of Girdwood. Anchorage also holds popular tourist attractions in the winter, namely with the Iditarod, Tour of Anchorage and Fur Rendezvous. Many resorts are gearing up for an anticipated busy winter. Their personnel contend that customers keep coming in during these months. A majority of these customers are domestic but the resorts are seeing more and more customers from overseas. Ferree said a lot of visitors from Japan, Taiwan, Korea and China come between December and March to see the aurora borealis. The resort is also seeing increased visitors from Australia and Germany. Domestically, Chena’s largest visitor groups are from California, Arizona, Florida and Texas. International tourism has grown so much that the resort has a designated vice president of Japanese marketing who partners with Japanese wholesalers and visits the country twice a year to set up groups. “We are fortunate to have our Asian visitors sustain us during our busy season which is winter from mid December to the first part of April. We are an anomaly for the state of Alaska in that summer is our ‘slow’ season from May to mid-August and winter is our busiest season,” Ferree said. Alyeska Resort spokeswoman Sandy Choi said they’re getting strong visitation from both the east and west American coasts as well as Europe. She said there are definitely more domestic visitors but that guests from predominant ski countries like the United Kingdom and Germany are up. She said there are more people from Switzerland and France in recent years too. “They come to us because of the skiing,” she said. Girdwood has a new addition this ski season: a season-wide itinerary of skiing and snowboarding professionals, courtesy of the adventure company EpicQuest, which operates out of Alyeska Resort. Customers will be accompanied by reigning free-skiing world champion Jess McMillan one week or ski film regular Ian McIntosh another. Nine different experts from around the world plus Chugach powder guides will lead guests through their week-long, heli-skiing expeditions. Famed ski photographer Scott Markewitz will also return to EpicQuest for a week this year to teach skiers how to capture their best moments. EpicQuest has brought in renowned professionals before but this will be the first time they will be on-board continuously throughout the season from February through April. “It’s something we always wanted to do,” said Chris Owens, EpicQuest co-founder and vice president of marketing and brand development. He said it can take quite a bit of time to build a roster of professionals. “You’re not going to find another program like this in heli-skiing,” Owens said. The ski business itself for the area is expected to increase. Choi said business has been increasing and the resort sees just more than 200,000 skier visits in the winter. Owens said the ski business went down several years ago, estimating the economy discouraged such trips. He said it took a while for people to get back out there but business has been slowly increasing. At the same time tourists explore what a last frontier winter is about, many Alaskans themselves decide it’s the season to take a trip out of the cold and the dark. Alaska Airlines spokeswoman Marianne Lindsey said California and Mexico are also popular winter destinations for Alaskans. Still, Hawaii is leading the pack here, particularly Honolulu. During the first 2011 quarter Alaska Air had roughly 160 passengers flying daily between Alaska and Hawaii. Alaska Airlines started flying between Alaska and Hawaii Dec. 9, 2007. Now, the airline has seven weekly nonstop roundtrip flights between Anchorage and Honolulu and three weekly nonstop roundtrip flights between Anchorage and Maui. Alaska Air also has flights to Honolulu, Maui, the Big Island and Kauai via connections in Seattle. Alaska Airlines acquired the customer base for Anchorage-based Hawaiian Vacations in 2008. Since then, it started offering its own packages via Alaska Airlines Vacations. There are still other carrier options between Alaska and Hawaii. Hawaii has had 59,700 visitors from Alaska between January and November 2011, a 17 percent increase over the same period in 2010, according to the Hawaii Tourism Authority. Some Alaska residents do choose to see more of their home state while on vacation. But this is not what such resorts bank on. “Although we do have a good in-state business, and provided an Alaska Resident Rate year-round, our larger groups and visitors are from outside the state either domestically or internationally,” Ferree said.

Recent residential construction trends follow national average

Alaska’s home construction continues to follow national patterns: first up, then down, now maybe up again. Alaska’s residential construction rose dramatically between 2000 and 2005, when about 3,000 new single-family homes were built annually in the state. Also during this time period, more than 8.5 million homes went up across the country. Alaska’s numbers dropped along with the rest of the nation’s as early as 2006 and reached a low-point in 2009. Now the decline has stopped and even reversed a small bit. The Alaska Department of Labor and Workforce Development just published a report on these findings in its December issue of Alaska Economic Trends magazine. Department economists Caroline Schultz and Mali Abrahamson found that Alaska’s patterns for new single-family units followed the same overall rises and declines the rest of the country did, only they did so to a lesser extent. “The biggest difference between Alaska’s residential construction activity was Alaska’s home prices didn’t plummet over the last several years as did the nations and that mortgage delinquencies were low in Alaska,” Abrahamson said. Vacancy rates and current building activity levels also indicate that Alaska doesn’t have the housing stock surplus that many other states do because many states employed speculative building during the expansion of the U.S. housing bubble. Avoiding such speculation and having more conservative lending practices also led to a more stable foundation going into the recession. Alaska is only second behind North Dakota in terms of having the lowest mortgage delinquency rates. While the state and the nation both fell and rose at the same time, the differences lie in the scale. Single-family home construction in Alaska experienced negative growth from 2006 through 2009. By the time construction reached its low point in 2009, each year’s new single-family unit decline added up to a total of around of about 74 percent. Abrahamson said the recession temporarily weakened demand for new houses. The national numbers were even higher. For example, the state and U.S. Census data show that the national home construction percentage fell around 22 percent for the year of 2009 as compared to Alaska’s construction only going down about 8 percent for that year. Things turned around slightly in 2010 with Alaska seeing a 7 percent growth in this area while the nation experienced only about 2 percent. Abrahamson said Alaska’s housing activity and construction employment is responding to natural demand during this recovery. Population and employment continue to grow, resulting in increased housing demands, among other goods and services, “Alaska has remained in a relatively good situation and Alaska housing market activity wasn’t driven by speculation,” she said, Speculation is the practice of building a home without having a buyer lined up at the beginning of construction. Abrahamson didn’t have any predictions on what the future holds for new homes. She said one important note is that residential construction employment only grew by 43 jobs in 2010. While construction employment fell between 2006 and 2010, it may actually have led to better average earnings since many such jobs were in the lesser-paying sections of the industry. Construction earnings averages increased by about $8,000 between 2005 and 2010. They even outpaced all other sectors in earnings from 2007 to 2009. One trend that has remained constant is that the Matanuska-Susitna Borough has held the largest percentage of residential construction since at least 2000, even in years of decline. Abrahamson said Mat-Su’s high rate echoes its high population growth over the last decade. People have been buying houses in the borough due to more affordable housing in proximity to the Anchorage job market. Mat-Su’s population grew 30 percent between 2000 and 2006, compared to 7 percent in the state as a whole. By 2005 — the borough’s highest year for single-home construction — 46 percent of new homes were built in the Valley, while the area only grew to 11.2 percent of the state’s population. Even in the 2009 low point, Mat-Su consisted of more than 40 percent of single-family home construction. The Trends report states that the borough’s boom could be a contributor to Anchorage’s single-family home decline. Single-family homes make up a smaller percentage of the city’s residential construction and have leveled off after a peak in 2001. Anchorage and Mat-Su remain the state’s biggest players in new home construction. Newly constructed houses in the Mat-Su Borough don’t cost much more on average than existing homes, according to department data. New homes in the Mat-Su area cost $269,929 on average during the second quarter of 2011, while existing homes averaged out at $223,411. The statewide averages during this period were $320,186 for newly constructed homes versus $282,850 for existing ones. These numbers vary between regions across the state. Average numbers for Anchorage during that period were $425,100 for new homes and $325,446 for existing homes. It was $289,688 for new and $239,861 for existing homes in the Fairbanks North Star Borough. Juneau homes were $379,583 for new and $327,437 for existing. The biggest pricing discrepancy was on Kodiak Island, with $612,500 for new homes and only $291,550 for existing ones. Abrahamson didn’t know exactly what caused this discrepancy, but said one possible reason is that a few high-priced outliers in small areas like this can bring averages up drastically.

Being Santa is a busy, exhausting business

Santa Claus is one busy guy nowadays. The holidays demand a lot of him and the business of being Santa is a busy one indeed. Santa seems especially busy in Alaska, which makes sense given the northern location. He’s appearing everywhere with a little help and — as Santa puts it — a little magic. He said this isn’t a business to him. It’s a way of life. It’s a way to make people of all ages happy and bring them hope, even if it’s just during Christmas. Kids visiting many shopping areas around the state get a firsthand feel of this. While visiting the Fifth Avenue Mall in Anchorage, Santa said it takes a passion for spreading joy to children, patience and a loving spirit to do this every year. “Kids have not changed,” he said. “What has is the presents they ask for.” He said the kids in Alaska ask him for more indoor items like video games while those in the southern states ask for more outdoor gear and even vehicles. Some of those requests have gotten pretty high-end, like all-terrain vehicles and motorcycles. He said the outdoor interests are still present in Alaska’s youth only more for things like snowboards and ice skates. “They’re the friendliest, most respectful kids anywhere in the U.S.,” he said of Alaska’s youth. Santa said the economic areas play a big part in what the kids ask him for, with those in places like Anchorage and Fairbanks interested in deluxe items more often. Of course, little boys will always want trucks and girls will always want dolls no matter what part of the country they’re in, he said. Santa said he’s also noticed that many Alaska families that see him tend to be made up of stronger units compared to others down south. While many kids in other states show up to see him with only one parent in tow, at least half of those here have visited with both parents and even an extra family member like a grandparent. Santa said trips to see him as a family event are unusual these days. He wondered if the military presence here is a factor in that since many military families take their photos with him as keepsakes before deploying overseas. He said it’s a special feeling knowing you’re part of their lifelong memories. Santa doesn’t stick to the urban areas either. Even though there are more people in your average Walmart during rush hour than there are in the village of Allakaket, that doesn’t mean it’s too small to escape Santa’s radar. Santa has been visiting rural areas such as this since 1956 as part of the National Guard’s Operation Santa Claus. Every year, Guardsmen bring toys, books, supplies and, of course, good cheer to different villages. This year, the program selected Allakaket and Wales. The National Guard and Salvation Army work together to bring a gift for every child in these villages. Basketballs, Legos, dolls and board games have stayed among the most popular gifts over the years. The kids also get goody bags with things like toothbrushes, fresh fruit and water among other things those in such isolated areas could use more of. Beanie Babies or other such bonuses delight the kids opening these bags. The Salvation Army also works with Scholastic Books to bring books into the communities through the program. ITunes gift cards have been another goody the Salvation Army has delivered. Jenni Ragland, Salvation Army public relations director for Alaska, said they started this a few years ago since many villages have the necessary Internet capabilities. She said they make better gifts for the teenagers and it’s not unusual to see them walking around with headphones on. “We love the Operation Santa program,” Ragland said. “It’s a great way to visit areas of Alaska where the Salvation Army doesn’t have a regular presence.” She said the Salvation Army has been involved in the program since around the early 1970s, as far as she’s aware. Operation Santa Claus has a new addition this year. Fred Meyer has donated 14,000 winter coats and pants for Alaska communities through the Salvation Army. This is around $100,000 worth of merchandise to be distributed. Wales will be the first Operation Santa Claus destination to receive the winter gear from this partnership. Santa and Mrs. Claus join the National Guard on every trip. This is a treat village residents love, no matter how old they are. Whenever the jolly couple steps off the plane, they’re overwhelmed with cries of delight. Kids wait all year for this chance. Everyone from the babies to the elders get excited to see them. The grown-ups will even sit on Santa’s lap with wish lists of their own. Mrs. Claus said these trips are a wonderful way to connect with the families of these villages. At the same time, the kids feel more connected to the rest of the world while getting supplies that aren’t as easily accessible as in urban areas. For example, the fresh fruits are a welcomed treat in rural areas. Santa and his wife’s presence leaves a mark on the children. They are just as excited to read their lists or simply meet the pair just as kids in bigger areas do. The kids often get more excited, as it’s often the first and sometimes the only time they will get to do so. “It’s a special time for both them and us,” Mrs. Claus said. “We just feel so loved.” Santa and Mrs. Claus recalled several encounters of how the operation touched individual children’s lives. For example, a little boy in Gambell had longed for a stuffed bear, which happened to be the very gift they brought. A 6-year-old girl in another village once wanted a puppy in the worst way. Her parents even asked Santa to bring one knowing if anyone could make this happen it was the Clauses. They later coordinated with the animal organization Friends of Pets to fly a dog out, making the little girl’s dream come true. But this is Alaska, and Santa’s work doesn’t stop on Dec. 25 around here. Santa stays active all year at — fittingly — North Pole. The Santa Claus House there has been receiving and sending Santa’s letters for almost 60 years. Hundreds of thousands of letters have gone out and this remains the House’s biggest thing. Santa recalled one such letter from a 5-year-old boy whose father was deployed overseas. The young boy thought Santa could be the only one to go pick his dad up and bring him home. Although Santa couldn’t promise anything, the father made it home for Christmas anyway. Santa said the house’s location between two military bases has allowed him to visit several children of deployed soldiers. He said the chance to bring even a glimmer of hope to these kids facing uncertain times really reinforces the idea that this is his calling. “One of the other interesting things I see are letters from children letting me know when they move, but I already know when they’ve moved. I’m Santa,” he said. Santa Claus House stays active all year with various events, from ice sculpture competitions during Christmas in Ice to fundraisers to helping with the North Pole Economic Development Corp. Santa Claus House raised around $36,000 for arthritis from this year’s Jingle in July run. Outside vendors also join Santa during the Christmas Creek Market. Other regular appearances include riding in classic cars during the Cruising with Santa Festival in August and Military Appreciation Day in October. He has a large presence at Fort Wainwright. Santa himself stays busy there all year with visits, book readings and public appearances. “Santa is the embodiment of the spirit of Christmas, which is hope, happiness and joy. It’s a gift for me in life to give all I can to those who just need a little love and I am lucky to be able to do this year round at my home in North Pole,” he said. Santa’s advice to parents is to make the holidays special by spending time with their kids and just being there for them. For parents of younger children, he said the best thing one can do is to enjoy the day and get down on the floor and play with the kids since they’ll inevitably grow up to the point where that playtime stops. “Christmas is a time of joy and thanksgiving,” Santa said. “And lots of times parents get stressed out over lists and financial pressures they think they’re under, but lots of times simply being together is what their kids want.” Jonathan Grass can be reached at [email protected]

Women in the Trades program helps women see options

At 35 years old, Myla Odom of Anchorage was at a career crossroads. After years of administrative work, she wanted to explore options for more hands-on physical work. It’s a similar story for Caren Moss, 40, who also made the transition from office work to trade skills. “Construction was something I knew I wanted to try, something I knew I would enjoy instead of something just to pay the bills,” Odom said. Moss has an accounting background  and entered the program because she always liked working with her hands and saw this as a way to get more into physical work rather than accounting. Both women signed up for the Alaska Works Partnership’s Women in the Trades program. They were there mostly to get an introduction to construction-related trades, such as carpentry or electrical work. This way they could explore new future career possibilities in order to keep their options open. The program just graduated its final class of 2011. Ten of the 11 women who entered the program graduated after three weeks of construction training and another week of truck driving instruction. Women spend three to four weeks in classes to get an introduction into the world of construction. They get hands-on training in various trade skills like basic construction, carpentry, electrical work, plumbing and painting. As daily life in such trade fields mandates, they also get the right math and science instruction plus physical training. Equipment and vehicle training is part of the program, as is first aid and CPR certification. There is even training with unions like the Teamsters and the International Brotherhood of Electrical Workers. This allowed them to receive certain certifications, which adds to their resumes when they go job hunting. Women in the Trades doesn’t confine the students to lectures. Students train with seasoned laborers to build simple structures. Odom said having such professionals as training partners was invaluable in helping shape what the students got out of the classes. Of course, all of this is all preparatory work. The idea is for these women to have the basic knowledge for learning more in on an actual job site if they choose. There is an employment assistance program to prep students to apply for such jobs or apprenticeships to start careers in the trades where they can learn more. “Obviously you can’t be a carpenter in a week,” said Alexis Cowell of AWP Apprenticeship Outreach. Cowell said the program is designed as an introduction so it can give an idea of what a trade would entail so that women can decide for themselves if it’s the right career for them. Students vary from those just starting out to those who have been in the workforce for years but want to explore other fields. Many are also single mothers who are looking for ways to make ends meet. The women in the program vary in ages and backgrounds. For example, Odom’s class, which was the one just completed, had women ranging from ages 20 to 47. Odom joined Women in The Trades to help her decide what path to go down since she’s never felt fulfilled behind a desk. She’d taken college classes and worked previously in secretarial and office work. She now works as a parts professional, inspecting vehicle engines for repair needs at Cummins Northwest. “I’m more of a doer than a paper pusher,” she said. She enjoys her job now but didn’t want to eliminate a chance to expand future paths that could consist of physical work. In the program, she got a full hands-on sample of what the physical work on a construction site would be like. She received safety and electrical training through the Occupational Safety and Health Administration and IBEW. She even trained on a forklift and completed the written portion for her commercial driver’s license. Odom said it was a great experience and the hands-on exposure was something she might not have gotten to otherwise. She also felt a sense of accomplishment from the different, physical tasks. “I know what I like to do and what I enjoy, and being able to make that decision as a career life choice is important,” she said. “I want to make sure I don’t fall into the same thing.” Moss had graduated in accounting and worked in that field in Alaska and Wisconsin for renewable energy education organizations. She later decided to switch paths into weatherization and electrical work and is now a project coordinator with Alaska Building Science Network. She does weatherization for community-owned buildings and energy efficient lighting retrofits in villages as part of this job. “I was interested in doing something else but was kind of done with carpentry. It was a passion to do weatherization and still have carpentry skills,” she said. She certainly got those skills. In the program she developed her carpentry skills by building a wall and getting some steel and electrical work training. She also got certified in first aid and CPR, as well as the OSHA 10 class and commercial driver’s license permitting. “They do more than tell us what to so. We did a lot of it,” Moss said. While satisfied with her job, she also thought Women in the Trades could give her ideas for any future aspirations. She is interested in pursuing an IBEW apprenticeship. Women in The Trades started when the Fairbanks Building and Construction Trades Council asked AWP to sponsor such a training program in 2003 to help bring more women into industry jobs and apprenticeships. The training was soon employed in Anchorage and Fairbanks. However, AWP was unable to continue funding it annually. AWP Director Mike Andrews said there was never specific funding for the program but AWP was able to keep it going for many years through various funds cobbled together. This continued until 2010, when the program was included as part of the Alaska Construction Academies. “So now it has a home,” Andrews said. Classes are still scheduled as they can be. They continue to go through Alaska Construction Academies. This last one was in Anchorage in May. Cowell said the next one will hopefully take place in Fairbanks but may be done in the fall. Several graduates have gone on to apprenticeships or direct employment. Andrews said the new Fort Wainwright Hospital and Delta Ground Based Missile System hired program graduates. These projects helped earned the program the Exemplary Public Interest Contribution award from the U.S. Department of Labor Office of Federal Contract Compliance Programs in 2003. The award was for exemplary partnerships in getting women involved in such federal construction projects. “That training was a great success,” Andrews said. Data from the Alaska Department of Workforce Development states that 14 percent of the construction industry was made up of women in 2010. Women made up 40 percent of trade, transportation and utilities jobs that year. These numbers have varied over the years but not by much. Labor Department data shows that women made up 10 percent of construction laborers in 2003. This data set also shows women making 2.5 percent of carpenters and 3.6 percent of electricians. In 1997, women made up 3.8 percent of carpenters, 9.5 percent of construction laborers and 3.9 percent of electricians. Women also made less on average than men in these areas. They made 67 percent of men’s wages on average for construction and 57 percent of men’s earnings in trade, transportation and retail combined. Cowell said there are definitely still sexism issues in construction and other trades and that women often have to go the extra mile to prove themselves. Women also have to show they can handle the physicality demanded in such jobs. Another goal of Women in the Trades is to encourage more women to explore the fields so they realize this and can tackle such challenges. “From what I’ve seen it’s a man’s workplace so that itself is a barrier there,” Cowell said.

Port MacKenzie rail extension clears final regulatory hurdle

The Port MacKenzie rail line extension has cleared a major hurdle. The Federal Transportation Board has issued a record of decision toward its approval, thereby clearing the final regulatory requirement for construction. The Matanuska-Susitna Borough has been developing the 32-mile rail extension since 2007. The line would go from Port MacKenzie to an area on the Alaska Railroad Corp.’s existing line north of Willow. The extension would provide Alaska’s only 100-car industrial loop covering 14 square miles. It’s intended to improve efficiency for industry, storage and transfers between trains and ships. The approval follows a review of public concerns from the Office of Environmental Analysis and the recent approval of the Environmental Impact Statement. There is a 30-day comment period before the decision becomes final. Litigation brought forth during this time may also impede construction. The rail extension project has already collected $92 million from different appropriations over the years. The Mat-Su Borough is asking the state for an additional $60 million during fiscal year 2012 to complete two-thirds of the total project. If the borough receives this funding, that leaves a balance of $120 million to complete the rail extension. Mat-Su Public Affairs Director Patty Sullivan said the borough already has a bid ready to work on the first 5 miles of the rail embankment. There is another bid for February for another 6.2 miles. “So the money is going to work immediately,” she said. Several parties have endorsed the extension in the name of enhanced economic prosperity for the state. American Multiplex owner and former Anchorage Mayor Rick Mystrom talked before the Resource Development Council on this issue recently, as he is a consultant to the borough. He said this extension would make this area the industrial center for Southcentral Alaska within 15 years. “We have limited transportation infrastructure compared to other states,” Mystrom said. “The last big transportation infrastructure project that was built by the government was the Parks Highway finished in 1972. The good news is there’s a major step forward to solve these problems, to improve Alaska’s transportation infrastructure and also to aid in the development of natural gas and hydroelectric project and also to open up the interior to resource development.” He said this extension avoids the most congested part of the mainline railroad from Willow to Anchorage. It also puts the line closer to tide water for mineral transports. He said this makes it perfect for storage and transport of gasline pipes and provide an additional port for heavy machinery. Mystrom said this extension is not intended to detract operations from the Port of Anchorage, but will allow Port MacKenzie to do things Anchorage cannot. Port MacKenzie has a 60-foot draft while the Port of Anchorage has a 39-foot draft. This allows Port MacKenzie to support certain vessels that Anchorage can’t. On the other hand, Mystrom said the Port of Anchorage can handle all the roll-on and roll-off containers that Port MacKenzie cannot. “So there’re not competitive at all,” he said. Another advantage is that the extension will trigger both fuel development and open the Interior to resource development. Mystrom said an efficient transportation is necessary for mineral, natural gas or oil development. He described findings by Exxon that such transportation matters would save any major gasline $100 million in development costs. Mining and geological professor Paul Metz of the University of Alaska Fairbanks has stated that mineral revenues — such as those from limestone, metallic and strategic minerals — plus an increase in Alaskan coal’s global competitiveness could return benefits of $61 million to $773 million annually over the next 100 years. Besides mineral access, industry employment and business opportunities are factors in the extension. Mystrom said estimates show state revenues could reach $300 million in taxes each year while the additional development could create up to 3,500 construction jobs over the next 20 to 25 years as well as 4,000 mining jobs along the rail belt. Sullivan said the construction so far has been to move 3 million cubic feet of soil in the Port district to create a haul road as well as a loop. She said that once the decision is finalized, this will be able to be converted into the rail loop. Port MacKenzie recently singed into two long-term agreements for industrial development. It entered a 20-year lease with PacArctic for logistics and a 25-year lease with Central Alaska Energy to develop a fuel storage area.

Retailers looking at happy holiday sales

Shoppers didn’t even wait until Black Friday as traffic backed up outside stores Thanksgiving evening. On that Friday, the crowds started strong. While the congestion diminished across the weekend, Alaska can still expect strong seasonal retail sales that are on par with the rest of the country. The stores are expecting positive figures with this year’s holiday sales. Studies are showing positive sales outlooks as the nation continues to emerge from the recession and the retailers agree. Wells Fargo’s Economics Group recently released a holiday sales preview using various state and federal and private sources. The bank’s economists predict that although there is diminished consumer confidence. Senior Economist Mark Vitner said holiday retail sales across the country are coming back around after losing headway in 2008 and somewhat in 2009, when average spending was down. As for this holiday season, the report states that retailers nationwide have racked up 16 consecutive months of increased sales, despite a reported lack of consumer confidence. The holidays are expected to add to strong sales, with an estimated over-the-year sales increase of 5.2 percent for the season. Part of this rise is reportedly from lowered average debt burdens. The report states that weakened consumer sentiment is still there, but that decreased spending will likely not come about until early next year. Asher Dymoke, general manager of Dimond Center’s Best Buy in Anchorage, said his store’s crowds have been phenomenal so far this year, especially throughout the Thanksgiving weekend. U.S. Census data also shows increased nationwide retail sales in 2011 over the last several years. It states total sales grew over the last decade, dipped in 2008 and started climbing again after 2009. State-level data was not available from Wells Fargo, the National Retail Federation or the Alaska Department of Labor and Workforce Development. A lot of the sale hikes are predicted to stem from Internet sales. NRF’s eHoliday survey states that nearly 68 percent of retailers expected their online sales to go up by at least 15 percent over last holiday season. This prediction proved to be an understatement, with IBM Benchmark reporting that online sales could be much higher. SalesTracker states that online sales rose 33 percent since the Thanksgiving weekend, particularly on Cyber Monday. This makes 2011 the largest year for online sales and the biggest increase of such sales coming from mobile devices. NRF states that new data shows the average shopper plans to do about 36 percent of shopping online. “There’s no question consumers are eager to hit the Web this holiday season, and online retailers are prepping by optimizing their sites, beginning their marketing and promotions early, and planning plenty of free shipping promotions as they aim to provide value and convenience for their shoppers,” head of research Fiona Swerdlow said in a release. “Online retailers will also leverage their social media and mobile platforms for savvy shoppers on the go, knowing how important customer reviews and comparison shopping applications are to holiday shoppers.” Survey data shows 43 percent of shoppers feel that the 24-hour convenience is a big contributor to this. Other considerations include e avoiding crowds and ease of price comparisons. Best Buy Senior Vice President John Thompson said shopping interest has been increasing, particularly with online shopping. Dymoke said a large part of the sales team’s work now involves promoting online buying as a retail option plus that of in-store pick-up. “We’ve seen it get quite big, especially with remote locations, so it’s great to offer that option,” he said. The National Retail Federation also reports that almost 90 percent of retailers are offering free shipping this holiday season, something those in the remote Alaska areas will be glad to hear. Several of the big retailers concur with the notion that sales will be up this year. Fred Meyer spokeswoman Melinda Merrill said each year has shown more promise since the recession. The stores have had more seasonal help and of course higher sales. “We expect a good season,” Merrill said. “Halloween was really strong for us and that’s often a good indicator.” She said high Black Friday numbers are another good indicator. Walmart also expects the holidays to be profitable. The retail giant’s third quarter report states an expected increase in its fourth quarter. Walmart cites electronics and toys as “critically important sales drivers” in this quarter and it’s not alone in this thought. Merrill said Fred Meyer’s electronics have become a huge sales item this time of year with these sales rising over the last five or six years. Walmart’s report states, “As you know, electronics and toys make up our entertainment business, and are critically important sales drivers for the fourth quarter. Entertainment was 160 basis points better than last quarter, and with layaway, we expect ongoing improvement for Q4. Our comp for Q3 was a mid single-digit negative, reflecting the ongoing impact from electronics deflation.” When pushing through the crowds, it always helps to know what the masses are going for. Electronics are at high on the “hot” list. Merrill said iPads and other tablets like the Kindle Fire, as well as entertainment items, are big sellers. The Wells Fargo report shows a shift in recent electronic trends through a weaker demand for books, CDs and DVDs. This reflects the current trend for digital preferences for such entertainment. Video games, however, are expected to sell strongly. This notion is apparent locally. Dymoke said the games have been the especially big entertainment sellers, especially with several new releases since October. Like Fred Meyer, Best Buy has seen huge holiday sales of tablets and e-readers. Dymoke said these items, plus smartphones, portable devices, apps and accessories, will continue to be big. Electronics aren’t the only big-ticket items out there. The Wells Fargo report states that more than half of consumers polled hoped to receive gift cards. Alaska retailers agree with the Wells Fargo indicator that the early, heavy winter will help promote winter clothing as highly desirable items this year. Merrill said other big items have included novelty appliances and Pillow Pets. As Alaska’s retail market grows, so do the different customer bases. Maegan Kaser-Lee, director of marketing for the 5th Avenue Mall in Anchorage, said the mall’s recent addition of several stores helped generate a larger holiday crowd over last year. This is especially evident with younger shoppers. These additions include Alaska’s first Apple Store and Teavana. Aeropostale is also new to the mall. “New stores always bring in new customers,” Kaser-Lee said. Other crowd draws at this mall include local holiday entertainment, gift-wrapping through local charities and the return of Santa Claus after several years. Dymoke also had a tip for holiday shopping. “I see it every year. We have a tendency as customers to wait until last minute, so make sure you get on those products you want now before you miss it for holiday season,” he said.


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