Economic indicators show mixed results for Fairbanks heading into 2001
Construction should play a strong role this year with work continuing on the replacement hospital at Fort Wainwright and at the University of Alaska Fairbanks.
This summer the Interior City expects to see a 20 percent increase in hotel rooms, when 362 hotel rooms are to come on line.
Looking at a handful of years into the future, Fairbanks business leaders are hopeful that construction of a proposed natural gas pipeline would benefit the Interior economy.
"People are anticipating the pipeline coming," said Pamela Throop, Fairbanks commercial real estate broker and president of Alaska Commercial Properties Inc. "And now that Bush is in office there’s a possibility of building a missile defense system (in Alaska), so there is a very positive, upbeat feeling about the economy for the next five to seven years."
However, statistics from the Fairbanks North Star Borough describe varied results in 2000.
The most recent data, from a third-quarter 2000 borough statistics report, shows three business bankruptcies, down from 10 for the same period in 1999. The borough registered 38 nonbusiness bankruptcies for the period ended Sept. 30, 2000, fewer than the 50 recorded for third quarter 1999.
Civilian employment in the borough for third-quarter 2000 climbed 2.4 percent to total 34,200 jobs in a year-to-date average compared with the same period in 1999, according to borough officials.
Total freight handled at Fairbanks International Airport was down 1.4 percent to total 9,087 tons for the second quarter of 2000. Second quarter revenue landings at the airport were down 5.6 percent compared with second quarter 1999 and totaled 6,483.
Incoming passenger figures at the airport rose 1.2 percent for the quarter to total 108,554. Outgoing passengers increased 0.2 percent in second quarter 2000 compared with the same period in 1999, according to borough statistics.
Also, for second quarter, new housing units authorized by building permits were 75, down from 129 for second quarter 1999. The value of new residential permits for second quarter 2000 dropped 50 percent compared with the same period in 1999, according to borough data.
Construction could play a strong role in the Fairbanks economy this year.
"I think construction numbers will come in solid," said Brigitta Windisch-Cole, a labor economist for the Alaska Department of Labor and Workforce Development.
She cited development work for the True North deposit, which will be milled at Fort Knox and could add about 100 jobs this year at the mine.
"It could really be positive for Fairbanks in terms of job growth," she said.
Another major project is the $133 million, 32-bed hospital, which will serve Fort Wainwright and Eielson Air Force Base and replaces the Bassett Army Community Hospital.
A general contractor is expected to be chosen in early 2001 to build the replacement hospital at Fort Wainwright. The project is scheduled for completion in 2005. Site development began in April.
At the University of Alaska Fairbanks, construction continues this year on the $13 million Duckering Building, and work should be complete in October, university officials said.
This year work should begin on the first phase of the $5.6 million Brooks Building project, as well as the $18.7 million Rasmuson Library project.
In the university budget request for fiscal 2002, officials have noted $5 million for renovating the old courthouse, which could be the new home of the Tanana Valley Campus.
In terms of commercial real estate, the market has sufficient vacancies for office space, said commercial real estate broker Throop. However, she does not gauge a vacancy rate for the sector. Throop noted that handicap accessible office space, which is needed for government agencies, is difficult to find in Fairbanks.
Few vacancies are available in warehouse space from 2,000 to 4,000 square feet as well as larger spaces, she said. "There’s definitely not much small warehouse space," she said.
One residential real estate broker expects 2001 to come in similar to last year.
"Our office had a good year in the year 2000," said Margalynn George, owner and broker at Re/Max Associates of Fairbanks. Last year, however, didn’t see any strong market boosts, like an influx of Alyeska Pipeline Service Co. workers needing housing as in past years, she noted.
Rental units are scarce, she said. "The rental market continues to be tight, and rents are still high."
George is another real estate broker who is optimistic about possible future projects like a natural gas pipeline or oil exploration on the coastal plain of the Arctic National Wildlife Refuge.
Tourism officials in Fairbanks also are eyeing the future, including upcoming winter events and summer visitors.
Although December bed tax figures were not yet available, Fairbanks Convention and Visitors Bureau executive director Deb Hickok expects this winter to compare evenly with last year. However, totals for Japanese visitors to the Interior City are up from 2000 thanks to a current peak cycle for the aurora borealis, she said. These visitors usually total 8,000 to 10,000 people or up to 10 percent of total winter visitors, she said.
Several events in February and March should benefit the city and related visitor services, she said.
"Winter events are definitely Fairbanks’ forte," Hickok said.
The Yukon Quest sled dog race starts Feb. 11 in Whitehorse, Yukon Territories, and heads for Fairbanks before returning across the border. The event starts in Fairbanks alternate years, and Hickok believes the originating city gains the largest economic benefit. The event typically generates $500,000 in economic impact for Fairbanks, she noted.
The World Ice Art festival starts March 7 with a lighting ceremony March 18 and runs until the sculptures melt. The Fairbanks Winter Carnival runs March 9-18 with the North American Open sled dog race on the last weekend.
The FCVB is now developing a survey to gauge the economic impact of these events and others, Hickok said.
New this winter is FCVB’s winter coupon book featuring discounts on lodging, shopping and winter activities. The coupon book is aimed at Alaskans this year and may have an increased circulation in the future, she said.
"We think it’s another way to get the message out and get people interested in winter products," she said.
FCVB officials and other Fairbanks tourism companies are looking ahead to summer when two new hotels and an addition at another property will come on line.
"We’ll have a 20 percent increase in room inventory this summer. It will be positive and a challenge," Hickok said.