Construction

Gov. Parnell signs bills expanding AIDEA finance ability

Gov. Sean Parnell signed two pieces of legislation June 12 to promote economic development in economically depressed areas and to facilitate financing for small to medium-sized energy projects in the state. Both measures expand the ability of the Alaska Industrial Development and Export Authority, or AIDEA, to help finance projects. AIDEA is the state’s development finance corporation. One bill Parnell signed was Senate Bill 25, the Alaska Sustainable Strategy for Energy Transmission and Supply Act. Sponsored by state Sen. Lesil McGuire and state Rep. Lance Pruitt, both Anchorage Republicans, the bill establishes a new fund within AIDEA for financing energy projects. Under the bill AIDEA will be able to make direct loans to borrowers for energy projects or participate in loans through banks or credit unions. The authority will also be able to insure project obligations by offering a loan or bond guarantee. Examples of possible projects include improving energy efficiency in commercial buildings and renewable energy development, Parnell said. At the bill signing ceremony with the governor, McGuire gave credit to several of her legislative colleagues in helping with the bill, particularly Rep. Lance Pruitt, who led the effort on the bill in the House of Representatives. The measure is a complex and it took two years to draft and get through the House and Senate. “It is seeded now with $125 million. I would liked to have seen more money placed in the fund, but this is a start,” she said. Pruitt said the key advantage of the bill is having a mechanism to finance medium-to-small size energy projects in Alaska, so that the loan repayments are made here and the money stays in the state to circulate and finance other projects. During the past two state budget cycles, the state has funded more than $1.5 billion for energy infrastructure and investments, Parnell said. “It will bring the state closer to achieving its goal of 50 percent electricity generated by renewable energy by 2025,” Parnell said. Another bill, Senate Bill 66, introduced by the governor, creates a new markets tax credit assistance guarantee and loan program with AIDEA. Working under a federal tax credit program, SB 66 allows the state authority to issue guarantees and finance projects in low-income areas or otherwise serving low-income populations. Hugh Short, chairman of AIDEA’s board and president of Alaska Growth Capital, an Anchorage-based development bank, said there have been several successful projects that have been financed through the use of new markets tax credits including the a seafood plant at Platinum, in southwest Alaska, and the Kotzebue Elder Care Facility and the Yukon-Koyukuk Elder Assisted Living Facility in Galena, Short said. General Communications Inc., or GCI, has taken advantage of the program to help fund the company’s expansion of broadband service to western Alaska communities, Short said. The benefits aren’t only for rural Alaska. Businesses in lower-income urban areas, like Mountain View in Anchorage, have been able to take advantage of the tax credits. “This legislation represents a real hand up, not a hand out,” Parnell said. “Entrepreneurs who want to get businesses up and running in low-income communities should be very excited about this new way to generate capital. By incentivizing development in these regions, our ability to offer an economic boost to areas of the state that need it most is increased significantly.”

Hearings scheduled for coastal zone initiative

JUNEAU (AP) — Ten hearings are scheduled on a ballot initiative that would re-establish a coastal management program in Alaska. The initiative is the first to fall under a state law, passed in 2010, that requires at least eight hearings up to 30 days before the election in which an initiative is to be decided. The law requires pro and con positions be given at the hearings. Lt. Gov. Mead Treadwell, in a news release, says state officials are working to make sure that testimony can be taking by phone during some of the hearings. Hearings begin July 2 in Soldotna and end July 26 in Juneau. Other communities hosting hearings are Barrow, Anchorage, Wasilla, Kotzebue, Fairbanks, Kodiak, Bethel and Ketchikan. The initiative will appear on the Aug. 28 primary ballot.

Alaska unemployment hits 6.9 percent

JUNEAU (AP) — Alaska's unemployment rate last month dropped to 6.9 percent, its lowest level since December 2008. The state labor department says the preliminary, seasonally adjusted rate is slightly lower than March, when unemployment stood at 7 percent. Unemployment in April 2011 stood at 7.5 percent. Alaska's rate hasn't been below 7 percent since December 2008, when it stood at 6.8 percent. The labor department says that while unemployment rates have declined both nationally and in Alaska in recent months, the U.S. rate, unlike that in Alaska, remains higher than before the recession. The department says Alaska also quickly recovered from what it calls mild jobs losses in 2009, and that preliminary estimates call for modest job growth in the state this year. The U.S. unemployment rate for April was 8.1 percent.

University construction under way

The University of Alaska’s three main locations are getting their work crews ready as the spring season allows building to begin. A few big buildings are in store around the state but most of this year’s work remains in standard maintenance. One of those bigger projects belongs to Anchorage’s campus. Clearing out is under way for the new 5,000-seat sports arena. Site clearing for the $109 million, 190,000 square foot project has begun, as the university has gotten the final funding. The design is by McCool Carlson Green of Anchorage with Cornerstone General Contractors doing the building, which is expected to be completed in 2014. “You’ll see a building coming out of the ground in the fall,” said Chris Turletes, associate vice chancellor for facilities and campus services. The new arena will replace the currently used Wells Fargo Sports Complex, which Turletes said is “woefully undersized.” The complex seats around 1,000 and is used for a variety of games like basketball, volleyball and intramural sports. Turletes said it will continue to be used for student recreation and activities like hockey practice. The University of Alaska Anchorage has a few other big projects going on like a $5 million renovation at the wellness center at Prince William Sound Community College, which should be completed next summer. Work should also start soon for classroom additions at the Matanuska-Susitna campus to build more space for nursing and paramedic programs. Design work is being done for the new Mat-Su Valley Center for Arts and Learning theater and the new engineering building, but construction will not begin this year. A significant project under way is a $15.3 million career and technical center at Kenai Peninsula College. Another $17.8 million is going into new student housing, which Turletes said is a first for the campus. Like the other UA sites, several millions of dollars will go into infrastructure projects like roofing and deep maintenance, including plumbing, boilers and air handling equipment. Turletes is optimistic about project funding, saying this is the third year the governor has provided allowance for fund renewal. Other buildings and designs have been completed over the last several years, such as last year’s opening of a $45 million, 65,000 square foot health sciences building that opened last year art a cost of around $45 million. “We’ve been vey lucky with new construction,” Turletes said. The University of Alaska Fairbanks will be working on more maintenance issues than new buildings. Still, these projects are pretty large undertakings. UAF design and construction director Gary Johnston said among the biggest are a utilidor installation as part of a project to expand steam capacity to West Ridge, as well as a sewer line replacement from Lola Tilly Commons to Wood Center. Most of the building work is going into renovations. Johnston gave several examples, like the Community and Technical College getting a new roof plus fourth floor revitalizations that will aid in its health care programs. Other buildings renovations will be at Arctic Health Research Laboratory electrical revitalizations, lobby and office upgrades at the Student Recreation Center and new retaining walls at Cutler Apartments and the Patty Center. As far as new buildings, work is continuing on a new life sciences building that broke ground last year. It’s expected to be completed in 2013. Big work is also happening at the Atkinson Power Plant, as multi-year modifications will renew the deaerator, feeder heater and valves. Renewals will also raise the electrical distribution voltage. Things are also happening in three locations of the University of Alaska Southeast. Director of Facilities Keith Gerken said most of the projects are smaller renewal things like roofing, paving, boilers and system modernization. “They aren’t glamorous but keep the building stock working as efficiently as we want them to be,” he said. Still, there are a few larger projects in the works. The second phase of the work on a pedestrian greenway at the Auke Lake campus in Juneau is going on. Gerken said this is a $4 million project phased over four years. Design is being done on a new $8 million student housing project that is expected to break ground next spring. It will add 60 beds to the Juneau campus. Remodeling is going on to add space at the Sitka campus. This will provide new areas for vocational education, lecture areas and construction technology space. This is part of continuous work to help turn the former PBY aircraft hangar into a modern learning facility. The Ketchikan campus is getting a new principle parking lot plus a boat davit to be used as a lifeboat training facility, something Gerken said is a $750,000 device. The Institute of Social Economic Research states in its 2012 construction forecast that education spending is up 15 percent fro last year due to a large state education general obligation bond package that passed in 2010.

$40M Seward Hwy. project tops summer work

Alaska’s roads always need work, especially after a long winter. The Institute of Social and Economic Research forecasts that $585 million will go into highway projects this year. This is a 10 percent increase over last year’s highway spending, which mostly comes from increased grants in the state capital budget. Federal money will continue as a large contributor for the roads. However, Alaska may see a drop in federal money in future years once Congress replaces the Safe, Accountable, Flexible, Efficient Transportation Equity Act-A Legacy for Users, which expired in 2009 but money has continued to be issued on a continuing resolution. More than $120 billion is appropriated in the state capital budget for various road projects through the Department of Transportation and Public Facilities and now will go to the governor’s office. Anchorage is getting a few big projects going this year. Most notable is the $40 million widening of Seward Highway to accommodate one of the highest traffic volume areas in the state. The work between Dowling Road and Tudor Road will take place over the next few years, expanding the road from four lanes to six as well as improving existing interchanges. Four new bridges at Campbell Creek are part of the project. The additions will add a lane in each direction to accommodate the present traffic flow and expected increases. City officials state the area gets 76,000 vehicles per day on average. This is expected to increase to 92,000 vehicles per day by the year 2035. There will also be work on a $13.5 million project on West Dowling Road to provide better east and west traffic flow and reduce traffic on Dimond Boulevard and Tudor Road. This project is to help develop a more connected roadway pattern as identified in Anchorage’s long-range transportation plan, which identifies West Dowling as a top priority project. Fairbanks is planning several big road projects as well. According to a list from City Engineer and Public Works Director Michael Schmetzer, the biggest is a $9 million reconstruction and extension project at Bentley Mall Road and Helmerick’s Avenue. The project also calls with the inclusion of two roundabouts. Other major projects include the resurfacing of several areas in Fairbanks and North Pole, including Executive Park Estates, First Lewis Street, 2nd Avenue, Yukon Drive, Vue Crest and Parkland Drive. A bike path behind Scenic Park will also be resurfaced. The work is estimated to cost between $1.5 million and $3 million and is part of the Fairbanks Metropolitan Area Transportation System’s preventative maintenance. A $2.5 million street lighting project will involve phase II LED lighting.   Jonathan Grass can be reached at [email protected]

Hearings planned on proposed road in Alaska refuge

The Pacific brant is a small sea goose that likes to forage a mile or more offshore, far from bluffs, where eagles launch attacks from the air. Brant are also herbivores, and to get enough calories, must eat during nearly 80 percent of its waking hours. So it’s no surprise that Pacific brant migrating from breeding grounds to Baja Mexico choose to lard up at Izembek Lagoon, 10 miles of shallow, sheltered ocean near the tip of the Alaska Peninsula, the long finger of land at the start of the Aleutian Islands. The lagoon offers protection from predators and a giant buffet — one of the world’s largest beds of nutritious eelgrass. Virtually the entire 150,000 population of Pacific brant stops at Izembek. So do 70 percent of migrating Steller’s eiders, an endangered species that eats tiny invertebrates — clams, shrimp, and copepods — clinging to eelgrass leaves. So it’s also no surprise that environmentalists are fighting a proposal by an Aleut village to build a road through the Izembek National Wildlife Refuge for land access to an all-weather airport. “It’s really kind of this gathering place for these enormous numbers of birds,” says Beth Peluso of Audubon Alaska. “It’s such a rich area and it’s fairly unique. It’s the size of the eelgrass beds that are drawing a lot of these birds, so you just can’t switch it for some habitat somewhere else because it’s not equivalent.” The U.S. Fish and Wildlife Service begins hearings this week on a draft environmental review of road proposals for King Cove, home to one of the largest salmon canneries in Alaska. Access to the community of 948 is by sea or air — if a plane can make it onto the 3,500-foot gravel runway. Surrounded by mountains, and often besieged by strong wind, scheduled flights are delayed or canceled 50 percent of the time, according to the Aleutians East Borough. In medical emergencies, patients’ lives depend on getting to nearby Cold Bay and its all-weather airport. In the last 14 months, there were 21 emergency flights for villagers, said Agdaagux Tribe spokeswoman Della Trumble. That means a white-knuckle ride on a fishing boat, or if harbors are iced in, a call to the U.S. Coast Guard on Kodiak Island 425 miles away for an emergency helicopter flight. A better solution, according to villagers, state officials and Alaska’s congressional delegation, is a road. Five access options under review include two configurations of a single-lane gravel road from King Cove to Cold Bay that crosses nine miles of refuge. King Cove residents acknowledge the wildlife — they’ve depended on subsistence resources for decades — but in the debate between birds and human health, believe people should be getting more consideration, said city manager Gary Hennigh. Fish and Wildlife Service officials, Hennigh said, have become indignant on the occasions when he summarizes his perspective with a question: “Just how many tundra swans equal one dead Aleut?” “That is basically the theme that is going to keep coming back around, that this is for the human environment of the people in King Cove,” he said. Pacific brant were the rallying cry against the road five years ago, Hennigh said. Studies have indicated the effect of the road will be negligible and minimal, he said, so the focus has shifted to other species. “All the hype and crap that we went through about the black brant, the Steller’s eider, the tundra swan, the caribou, the bear, we are now confident that the final environmental impact statement will say these are not going to be that big of an impact,” he said. Federal officials thought they had a road alternative in place 14 years ago. Congress in 1998 appropriated $37.5 million to improve King Cove access. The centerpiece was a $9 million hovercraft, but the Aleutians East Borough announced in November it was grounding the big boat. It cost more than $1 million annually and didn’t come close to operating six days per week as promised, Hennigh said, mostly because of dangerous waves. Congress in 2009 reopened the door for a road. It authorized the secretary of the Interior Department to exchange lands within Izembek refuge a single-lane gravel road if the secretary concluded it was in the public interest. The only commercial use would be taxis, Hennigh said, and 15 to 20 vehicles per day are likely to use it. The village and the state of Alaska are willing to pay a steep price in land. The federal government would give up about 200 acres of Izembek refuge for the road corridor and 1,600 acres on Sitkinak Island south of Kodiak. In return, the federal government would receive more than 56,000 acres — 43,093 from the state north of the refuge and 13,300 acres from King Cove’s village Native corporation. Ultimately, the Interior secretary will decide if a land exchange and road is in the public interest based on Fish and Wildlife Service environmental review. The agency’s first hearing is Thursday in Anchorage. Environmentalists don’t like the precedent set by allowing a road in a refuge. They question whether traffic limits will be enforced. Despite the whopping difference in acreage of the exchange, Peluso said, not all habitat is equal. “It doesn’t mean it has the same qualities,” Peluso said. “The reason why Izembek is important is that it has this specific habitat, and you can’t just draw another line somewhere else. It doesn’t have the same thing.” Trumble said King Cove was not consulted over creation of the refuge. Her sympathies are with patients who have to endure a boat ride across heaving sea water and a walk or a trip by stretcher up an icy dock on top of their medical condition. “It’s very dangerous,” she said. “It’s very uncomfortable for the patient, adding on to the problems that they’re going through, without having to go through that extra stress of being offloaded in Cold Bay, or a bad boat ride to Cold Bay.”  

Hearings planned on proposed road in Alaska refuge

ANCHORAGE (AP) — The Pacific brant is a small sea goose that likes to forage a mile or more offshore, far from bluffs, where eagles launch attacks from the air. Brant are also herbivores, and to get enough calories, must eat during nearly 80 percent of its waking hours. So it's no surprise that Pacific brant migrating from breeding grounds to Baja Mexico choose to lard up at Izembek Lagoon, 10 miles of shallow, sheltered ocean near the tip of the Alaska Peninsula, the long finger of land at the start of the Aleutian Islands. The lagoon offers protection from predators and a giant buffet — one of the world's largest beds of nutritious eelgrass. Virtually the entire 150,000 population of Pacific brant stops at Izembek. So do 70 percent of migrating Steller's eiders, an endangered species that eats tiny invertebrates — clams, shrimp, and copepods — clinging to eelgrass leaves. So it's also no surprise that environmentalists are fighting a proposal by an Aleut village to build a road through the Izembek National Wildlife Refuge for land access to an all-weather airport. "It's really kind of this gathering place for these enormous numbers of birds," says Beth Peluso of Audubon Alaska. "It's such a rich area and it's fairly unique. It's the size of the eelgrass beds that are drawing a lot of these birds, so you just can't switch it for some habitat somewhere else because it's not equivalent." The U.S. Fish and Wildlife Service begins hearings this week on a draft environmental review of road proposals for King Cove, home to one of the largest salmon canneries in Alaska. Access to the community of 948 is by sea or air — if a plane can make it onto the 3,500-foot gravel runway. Surrounded by mountains, and often besieged by strong wind, scheduled flights are delayed or canceled 50 percent of the time, according to the Aleutians East Borough. In medical emergencies, patients' lives depend on getting to nearby Cold Bay and its all-weather airport. In the last 14 months, there were 21 emergency flights for villagers, said Agdaagux Tribe spokeswoman Della Trumble. That means a white-knuckle ride on a fishing boat, or if harbors are iced in, a call to the U.S. Coast Guard on Kodiak Island 425 miles away for an emergency helicopter flight. A better solution, according to villagers, state officials and Alaska's congressional delegation, is a road. Five access options under review include two configurations of a single-lane gravel road from King Cove to Cold Bay that crosses nine miles of refuge. King Cove residents acknowledge the wildlife — they've depended on subsistence resources for decades — but in the debate between birds and human health, believe people should be getting more consideration, said city manager Gary Hennigh. Fish and Wildlife Service officials, Hennigh said, have become indignant on the occasions when he summarizes his perspective with a question: "Just how many tundra swans equal one dead Aleut?" "That is basically the theme that is going to keep coming back around, that this is for the human environment of the people in King Cove," he said. Pacific brant were the rallying cry against the road five years ago, Hennigh said. Studies have indicated the effect of the road will be negligible and minimal, he said, so the focus has shifted to other species. "All the hype and crap that we went through about the black brant, the Steller's eider, the tundra swan, the caribou, the bear, we are now confident that the final environmental impact statement will say these are not going to be that big of an impact," he said. Federal officials thought they had a road alternative in place 14 years ago. Congress in 1998 appropriated $37.5 million to improve King Cove access. The centerpiece was a $9 million hovercraft, but the Aleutians East Borough announced in November it was grounding the big boat. It cost more than $1 million annually and didn't come close to operating six days per week as promised, Hennigh said, mostly because of dangerous waves. Congress in 2009 reopened the door for a road. It authorized the secretary of the Interior Department to exchange lands within Izembek refuge a single-lane gravel road if the secretary concluded it was in the public interest. The only commercial use would be taxis, Hennigh said, and 15 to 20 vehicles per day are likely to use it. The village and the state of Alaska are willing to pay a steep price in land. The federal government would give up about 200 acres of Izembek refuge for the road corridor and 1,600 acres on Sitkinak Island south of Kodiak. In return, the federal government would receive more than 56,000 acres — 43,093 from the state north of the refuge and 13,300 acres from King Cove's village Native corporation. Ultimately, the Interior secretary will decide if a land exchange and road is in the public interest based on Fish and Wildlife Service environmental review. The agency's first hearing is Thursday in Anchorage. Environmentalists don't like the precedent set by allowing a road in a refuge. They question whether traffic limits will be enforced. Despite the whopping difference in acreage of the exchange, Peluso said, not all habitat is equal. "It doesn't mean it has the same qualities," Peluso said. "The reason why Izembek is important is that it has this specific habitat, and you can't just draw another line somewhere else. It doesn't have the same thing." Trumble said King Cove was not consulted over creation of the refuge. Her sympathies are with patients who have to endure a boat ride across heaving sea water and a walk or a trip by stretcher up an icy dock on top of their medical condition. "It's very dangerous," she said. "It's very uncomfortable for the patient, adding on to the problems that they're going through, without having to go through that extra stress of being offloaded in Cold Bay, or a bad boat ride to Cold Bay."  

Homer Electric to conduct hydro studies this summer

Homer Electric Association will begin field work this summer to fully determine if a hydroelectric project on the east side of the Kenai Peninsula will be feasible. A recent renewable energy grant from the Alaska Energy Authority will spur HEA to award work to crews charged with conducting a battery of tests at Grant Lake near Moose Pass. Crews will look to determine if the body of water would be suitable for producing electricity. According to the project’s website, the idea, if approved, is to install a dam or other structure at the lake’s outlet to control outflow from the lake, and possibly to create storage capacity. The proposed project would have an intake in Grant Lake, near the point at which it flows into Grant Creek. Water would be conveyed from the intake through a pipeline leading to a powerhouse. The powerhouse would be located near the bank of Grant Creek and would discharge into Grant Creek. The Grant Lake watershed, including Grant Creek, is about 44 square miles and the lake has a surface area of about 1,790 acres. Grant Creek, which discharges into Upper Trail Lake, has an average annual flow of 193 cubic feet per second. According to HEA spokesman Joe Gallagher, Kenai Hydro LLC — an HEA subsidiary — began evaluating four hydroelectric sites including Grant Lake, Falls Creek, Crescent Lake and Ptarmigan Lake. Since then, Kenai Hydro has abandoned consideration of all but Grant Lake due to economic feasibility concerns. The project is estimated to cost $35 million. “As studies are completed and more information is obtained, the proposed scope of the project’s features are adjusted from what was initially proposed in 2008,” Gallagher wrote in an email. “A major difference is that current plans call for either a 2-foot-high dam, or no dam, as compared to an initial plan for a 10-foot-tall dam.” The project is still in its study phase, but HEA expects the project would generate about 20,500 megawatt hours annually, which is about 4.2 percent of HEA’s annual demand based on 2010 statistics. HEA would own the project, but reserve the option to sell power to interested utilities. Bradley Lake, a state-owned, HEA-operated hydro project located at the head of Kachemak Bay, generates 300,000 megawatt hours annually. Power from Bradley, a larger lake than Grant Lake, is shared among Railbelt utilities with HEA receiving about 44,000 megawatt hours annually. That figure represents about 9.4 percent of HEA’s power needs. The AEA grant of $1.2 million was received in 2011, as part of the Alaska Energy Authority’s Round IV Renewable Energy Grant Program, and will be used to augment and supplement 2009 and 2010 fieldwork. Crews will study the project’s effects on aquatic, water, cultural, visual and recreational resources. The aquatic study plan will look at salmon spawning distribution abundance, resident and rearing fish distribution and abundance, aquatic habitat mapping and analyzing critical factors as well as in-stream flow studies and others. Gallagher said there are not salmon in Grant Lake as a large waterfall acts as an anadromous barrier, but there are salmon in Grant Creek. Effects on those salmon will be studied. HEA also will examine water quality and temperature, hydrology, botanical and vegetation mapping, survey sensitive and invasive plants, and assess timber resources. Wildlife effects also will be studied including raptor nesting, breeding land and shore birds and surveys of terrestrial mammals. The project also will include cultural use and archaeological field studies. HEA hopes to file a final Federal Energy Regulatory Commission permit in 2014 after field work and other studies are completed. Utility officials are currently spending time making presentations on the issue to area groups such as the Kenai and Soldotna chambers of commerce, Rotary clubs, the Industry Outlook Forum, the Kenai River Special Management Area Board of Directors, Cook Inlet Aquaculture Association, Kenai River Sportfishing Association, Cook Inletkeeper and legislators. Meetings will continue this spring with plans to talk to the Kenai Watershed Forum. Gallagher said the response from those organizations on moving forward with the project’s study phase so far has been “very positive.” “We still have a lot of study work to do before we have a completion date set,” Gallagher wrote in an email. “It is important to note that a decision to move forward with the project has not been made. The results of the study and the licensing process will determine whether or not it is in the best interests of HEA’s members to move forward with the project.”

Legislature awards money for UA engineering buildings

The University of Alaska has been on a mission to increase its engineering students for several years now. That mission got a big push in the final hours of the legislative session, when the House passed the Senate’s capital budget that include more than $100 million for new engineering buildings at two campuses. To be complete, the governor must still sign off on the budget, but both campuses see this as a big step forward in the Engineering Expansion Initiative the university’s Board of Regents adopted in 2007. The Legislature awarded UA $58.6 million for construction on a new engineering building at the University of Alaska Anchorage. The University of Alaska Fairbanks got $46.3 million for its construction. Both of these amounts are roughly half of what each needs to complete the projects. University officials say the plan will most likely involve requesting the rest at next year’s session. Although the engineering buildings were not in the capital request from the Board of Regents, the projects were pushed through in the Senate Finance and received strong support from engineering firms and students. Much of this stems from the current facilities’ inadequacies. The projects include a mix of new construction and renovation of existing space. UAA’s building will be located across from the new Health Sciences Building. Mike Driscoll, UAA provost and executive vice chancellor, said the numbers have gone up dramatically over the last five to six years, and more space is needed. He said the current space is less than half of what’s needed to accommodate the college’s growing engineering program. The new building also will improve modernization of the space and enhance the labs to allow better hands-on studies. “The new facility give us somewhere like 60,000 usable square feet,” he said. The building itself will be a living experiment to showcase things like instrumentation, measuring, heating and cooling systems, and seismic activity potential to the engineering students. Driscoll said the hope is that construction can begin in next spring’s season after additional planning. It would still be a couple of years until the building is usable. The new UAF building will supplement the existing engineering facility, Duckering Building, adding 54,000 square feet, said Doug Goering, dean of the College of Engineering and Mines at UAF. He said Duckering currently has 80,000 square feet. There is the possibility for more space in the new one because one floor will be for future expansion. Goering said the additional space is close to what was determined to be needed, as programs and research expenditures have essentially doubled since 2005. He said the new building will have an open floor plan and some internal glass to increase visibility of how engineers work, which is something Duckering lacks the ability to do. The department also wants plans to build more study space, connectivity, and space for student teams to work and do special projects. Some of these projects include work on rocket and satellite design, civil engineering in bridge building competitions and work with the Society of Automotive Engineers. Goering said they are partway through the design now and construction could start in about a year. UAA’s plans include a code-required parking structure. UAF’s plan does not include such parking, which Goering said contributes to its lower cost. The construction is part of the University of Alaska’s initiative to increase undergraduates in engineering to fill an occupational gap. The university reports that most engineering jobs in the state are filled by non-residents. The Alaska Department of Labor projects an average of 50 new engineering jobs annually through 2018 and another 70 openings from annual turnover and retirement. The university has been focused on expanding its engineering program for some time, particularly its undergraduate engineers. The Board of Regents has called the Engineering Expansion Initiative its No. 1 new construction priority for academic programs. Engineering enrollment has increased by 53 percent between 2007 and 2010 in engineering undergraduates, the university reports. There were 72 baccalaureate degrees awarded in this field when the initiative came through in 2007, compared to 148 in 2010. Driscoll said UAA has more than 1,000 students enrolled in undergraduate and graduate classes. Goering said the university is on track to double its 2006 engineer students by 2014. The Legislature previously awarded $4 million to each campus for planning and design. Private gifts of more than $26 million for the engineering program initiative have come in from nearly 770 individuals and corporations since fiscal year 2007. UAF also able to garner $400,000 in general funds. “We’re very grateful for the engineering companies for all support they’ve given and recognizing the quality of graduates and wanting to see more of them,” Driscoll said.

King Cove access road is one step closer to fruition

A long-awaited road project at the far end of the Alaska Peninsula is one step closer to fruition. The U.S. Fish and Wildlife Service has issued a draft Environmental Impact Statement for proposed single-lane road construction connecting King Cove and Cold Bay. King Cove residents have pushed for this project since a resolution for the road was first passed in 1976, according to City Manager Gary Hennigh. The city has gone through several alternatives in the past for getting better transportation access, especially for emergencies. The proposed gravel road would be approximately 19.4 miles to 21.6 miles long and cross the Izembek National Wildlife Refuge. The road would cost about $24 million, while other alternatives in the draft EIS are more expensive. The EIS also analyzes swapping around 56,000 acres of land between the state and King Cove Corp. in exchange for about 206 acres from the federal government, which would be required under some of the alternatives. The exchanges are authorized under the Omnibus Public Lands Act of 2009. In a statement, Della Trumble, spokeswoman for King Cove Corp. and Agdaagux Tribe, said this type of land exchange is unprecedented. Now that the draft EIS is out, the next step is the public comment period lasting trough mid-May with meetings in five communities surrounding the refuge plus Anchorage. An analysis will follow. “Our plan is to have a final EIS released in the fall,” said USFWS spokesman Bruce Woods. This EIS will lead to a Record of Decision and the Secretary of the Interior’s public interest finding. “We’ve presented five alternatives in the draft EIS. We have not selected a preferred alternative,” he said. A selection will be made after the current comment period. The alternatives include two separate road alignments, hovercraft operations, ferry use between Lenard Harbor and the Cold Bay dock, or no action. The hovercraft and ferry alternatives wouldn’t require land exchanges but are considerably more expensive. According to the draft EIS, the lifecycle cost of the southern or central land exchanges for a road would be $23 million and $26 million, respectively. Hovercraft operations would cost $44 million and Lenard Harbor ferry operations and Cold Bay dock improvements would cost $70 million. No action would still hold a $26 million price tag for its lifecycle. The King Cove and Cold Bay communities have sought a connecting road for some time, primarily for airport access for health emergencies. In 1998, Congress provided the borough with $37.5 million in the King Cove Health and Safety Act. This was to provide airport upgrades, a health clinic and conservation of a marine road transportation system. A hovercraft was purchased and a road was developed. This still didn’t prove to be effective for the residents. “But the community has not found the hovercraft to be a complete solution to the problems, which is why they’ve come back again and asked for the road,” Woods said. King Cove officials and tribal leaders are united in their support of this step forward in a project they’ve been pursuing for years. Assistant City Manager Bonnie Folz said the road is definitely needed and sent a press release outlining their support of something they feel is necessary and overdue. Trumble states this has been a decades-long battle, during which the community has lost too many lives in the struggle to access the airport during emergencies. She also said the testimony during the EIS process shed light on how the Izembek wilderness was created “without any consultation from the people of King Cove.” “These injustices need to be corrected,” said Trumble. “We should be taken seriously by the federal government, and particularly the Secretary of the Interior, who has a trust responsibility to us. We have sacrificed too much already, and it is time to make it right.” King Cove officials state that without the transfer, transportation is limited to small plane travel that is not suitable or safe in emergencies. The other option is through U.S. Coast Guard rescue. The base in Kodiak is 430 miles away. A hovercraft transportation option was attempted but shut down last year due to costs. The release states that severe weather delayed a Coast Guard medevac on at least one occasion and 11 people have died during unsuccessful trips over the last four decades. Hennigh said these deaths were the results of weather-related plane crashes, including short flights between King Cove and Cold Bay. He said the road would eliminate this risk. Flight delays during emergencies are also an issue. “The road (to the Cold Bay airport) is and has always been the only safe, reliable transportation option for the life, safety and health of our residents,” states Aleutians East Borough Mayor Stanley Mack. “It is the only workable long-term solution.” The city isn’t alone in these thoughts. Alaska’s delegation all issued statements upon the draft’s release to praise the progress. “I voted for this land exchange in 2009, and it’s good to see that we’re making progress on a decades-long struggle,” U.S. Sen. Mark Begich said in his release. “As I’ve told Secretary Salazar, it’s time to finish this, build the road, and let the community get on with their lives. The King Cove Corp. is giving up 20 percent of its land for a simple gravel road. That shows how much of a priority emergency access to the airport in Cold Bay is.” U.S. Sen. Lisa Murkowski states the decision to pave the way for an Interior Department ruling is a “welcome one.” “When you consider the number of life-threatening accidents that have occurred due to the challenges of flying into King Cove during foul weather, I believe there is no greater good we could do than to provide safe road access to the all-weather airport at nearby Cold Bay,” she said in her release. “Conserving our natural spaces is important, but we have to balance that with the safety needs of local residents.” Murkowski encourages Alaskans to weigh in on the public comment period. Congressman Don Young also released a statement, saying, “The residents of King Cove have been waiting for over 20 years to build this road and today’s news is a step in the right direction. The next step in this process is for Alaskans to comment and I am confident that Alaskans will make their voices heard. Having worked with King Cove on this project for years, anything that prevents this road from being built and being built soon, is unacceptable to me.”

Spring break program gives construction students an edge

There is no beach trip for 19-year-old DeAnna Amox this spring break. She has something else on her mind: beating the boys at the carpentry game. Amox, a senior at Bartlett High School, is one of 20 students from the Anchorage School District spending their entire break learning the trades as part of a cooperative effort called the Spring Construction Institute. These students — all in the Alaska Department of Labor and Workforce Development’s Senior Job Club — work with trained personnel in both classrooms and hands-on practice to develop skills in carpentry, electrical wiring, weatherization and more. “I like it. It’s fun,” Amox said. “Probably a lot of kids my age think it’s crazy but I’m used to going to school every day anyway so why not do this and get something out of it?” The students there intend to get some valuable training and perhaps a job boost out of it. Shaydi Dejesus, career guide with Labor Department’s Youth Job Center, said the students get an advantage in developing advanced skills and at no cost to them. She said these skills only add to the training they get at school programs like King Career Center and allows them to become more well-rounded trades workers and pursue employment in these high-growth fields. “These are the next generation of workforce leaders,” she said. While there, students can earn general training certification. This is one of five certification opportunities for Senior Job Club members. The students are all juniors or seniors in the Anchorage School District. The spring break course is careful not to duplicate training they’ve already received. The course is voluntary but it’s no cakewalk. It’s structured to be like a job site and those teens are giving up a lot on their spring break, as are the instructors. Classes run 8 a.m. to around 5 p.m. with only 30 minutes for lunch, just like on the job. These days ran from March 9 though March 17 with only a Sunday off. They must pass tests through both practical work and on paper, as well as going through classes and safety procedures. James Elam, who teaches plumbing and electricity at King Career Center, said there is a great deal of math involved in the trades. They must demonstrate applied knowledge of the fractions, geometry, algebra, angles and decibels needed on a job site. “There’s a lot more to it than just pounding nails,” he said. It’s Alaska Works Partnership personnel that do the training. A school district representative is on hand plus a Labor Department representative to help with the job readiness aspect. This is where Dejesus comes in. The Youth Job Center helps them develop resumes and career plans, particularly with a hiring event in April for the Senior Job Club members. There will be 75 employers there. “They generally have nearly a 100 percent hire rate,” Dejesus said. Dejesus said there are 125 Anchorage students in the Senior Job Club. Those students comprise the pool of candidates for the spring break institute and the job fair. “Once they leave, we have good grasp of their personalities and how to get them into those positions,” she said. Elam said the students here are very motivated because they know what they want to do. He said they might not choose college but want to enter trades to be productive members of society. He said becoming a skilled tradesman requires a high level of knowledge in and of itself and many will also do apprenticeships. The best way many of them learn is through that hands-on practice. “These are good kids,” Elam said. “Even if they don’t have the best grades, with a tool in their hands, they will outshine the valedictorian every day of the week. For the most part, these guys are very motivated so their skill level improves very quickly.” The Spring Construction Institute is a collaborative effort by the Labor Department’s Youth Job Center, Construction Education Foundation and Alaska Works Partnership. It’s also coordinated in part by Anchorage School District. The funding starts at the state department and works its way to subcontract the Alaska Works Partnership to provide the free training. That zero price tag is more than welcomed by high school students. Amox is still deciding on what direction she’ll pursue for her future but said she knows that if she can get into carpentry if she wants to since she’s “taking the right classes.” Liridon Papraniku, 18, knows that he wants to pursue electrical work and wanted to use spring break to broaden his tradesman skill set through carpentry. The Dimond High School senior has been interested in electrical work most of his life and wants to give himself a leg-up in getting a job. “My main focus is electrical work but I’m trying to get as much knowledge in carpentry as possible,” he said. He said he’s learned a lot from the class and that the instructors there take time to make sure everyone gets it right. Papraniku intends to try to get into the International Brotherhood of Electrical Workers or perhaps go to the Alaska Vocational and Technical Education Center. Papraniku and Amox both take carpentry classes at King Career Center. For Amox, the competitive challenge of the program makes it all that much more worthwhile. She’s one of only two females in the class and loves showing the guys that she can do the work as well as they can. She said carpentry is a male-dominated profession and many tend to assume that females doing this work need help but she likes to show that she can actually do it better. The department also holds mini-institutions during the year for other certifications like forklift safety, builders levels and lasers and North Slop training. Amox has been to the North Slope lesson and is thinking about doing others. Dejesus said the program started in 2006 as the Summer Construction Institute and was moved to spring break in 2008.

Industry Day event connects contractors with agencies

You won’t find Industry Day on any federal holiday schedules, but it’s still a big day for small contractors. Actually, it’s not a holiday but a networking event to help expose small businesses to bigger outfits and perhaps give them some information on upcoming contract opportunities. The Associated General Contractors of Alaska will sponsor Industry Day for the third time on March 21. It will take place at the Captain Cook Hotel in Anchorage from 9 a.m. to 6:15 p.m. Registration starts at 8:30 a.m. This is a chance for small businesses to network with larger ones while working to strengthen partnerships with the various agencies and organizations. Kimberley Gray of AGC said there are two major opportunities for Industry Day. One is to give an insight into what coming up that can be bid on. Another is to meet other departments and learn specifics about these private companies and state and federal agencies in attendance. The event is open to all small and large businesses. This includes Section 8(a) small disadvantaged businesses and Historically Underutilized Business Zone firms. “We’re trying to help the contractors in terms of everyone, from suppliers to general contractors, to meet the agencies,” Gray said. The U.S. Army Corps of Engineers will be a major participant. The Corps’ deputy for small business, Ivonne Drake, said the Corps will hold a workload presentation with project managers on hand to address questions. “This is for small companies and for big companies,” Drake said. “We want anyone to be able to ask any questions of the Corps.” Although the forecast may fluctuate, AJOC previously reported that the Corps has $460 million worth of construction projects for fiscal year 2012 with $325 million in military construction. Other participants include the U.S. Small Business Administration and the Procurement Technical Assistance Center. Speakers on behalf of the Corps will include Alaska District Commander Reinhard Koenig, Programs and Project Management Division Chief Larry McCallister and Contracting Division Chief Christopher Tew. They will speak during the morning sessions. Agency meet-and-greets will follow with a panel featuring Davis Constructors and Engineers, Osborne Construction Co., Watterson Construction, Kiewit Building Group, Neeser Construction Inc. and Unit Co. Gray said this panel will let smaller companies get a feel for what these contractors need and how to get in touch with them. Other sessions include those on post-award contractor responsibilities, avoiding litigation and presentations from SBA. The last Industry Day was packed with about 100 participants, and Gray is expecting no less than a sell-out crowd again this time.

CH2M Hill launches program to teach welding

Eighteen-year-olds Dakota Rudolph and Andrey Zagorodniy had spent all week behind protective gear as sparks flew by their faces or burning through metals with enough heat to turn a laptop into fertilizer ash. Both agreed: it beat a classroom, especially if it leads to a job. These two were part of CH2M Hill’s structural welding pilot program to help prepare young people to take on welding roles with the company. Two sets of classes of 20 students each used the Anchorage fabrication shop for a week to get hands-on exposure to welding, I-beams, scissor lifts and rigging training to cover the same things they will encounter on the job. The program is free and voluntary for the young folks. For many of them, it didn’t take much convincing. “This is definitely a lot of fun but this is what I love to do and greatest thing in the world. Next greatest is finding a job that’s going to pay you to do it,” Rudolph said. The two teens have a good feeling this experience will help with that. Passing students come away with structural certifications for one-inch plates and are also entered into a continuity log for six months and so can weld for CH2M Hill as opportunities come up. The program is for beginning welders but not necessarily for newcomers. Rudolph and Zagorodniy both are in the welding program at Colony High School, one of the participating partners in this venture, along with the King Career Center, the Alaska Vocational and Technical Education Center and Northern Industrial Training. Students like Rudolph and Zagorodniy have been learning the basics through Colony High’s welding program for a few years now. But their classroom experience has been just that. The idea is to expose them to a real work environment while receiving instruction from seasoned welding professionals. They do the same work they would be expected to on a job site and they’re expected to follow the same safety standards, especially after an intense safety training when they first come in. “They’ve given us a chance to use all their resources,” Zagorodniy said Throughout that work, they were coached by CH2M Hill welders, instructors and safety officers. Resource Manager Sara Gould said when a project manager stopped by to give instructions on what it’s like on a site, the students’ curiosity was so encouraging that this manager answered questions a whole hour longer than scheduled. “Our goal is to have good folks who have expressed interest, and not just the young people who think they want to be welders, they’ve already started somehow,” said David Hopkinson, CH2M Hill vice president of construction. This is why the company looked for students in schools who have made some strides in the profession. Workforce Development Manager Trevor O’Hara said of the majority of those in the program are still in high school. A few are recent graduates. He credited the school as being generous in freeing up the time for them. The program was also timed during the construction slow season, so the fabrication area would be clear and professionals would be more readily available. The participants hope that once things get busy in the summer, so will they. While there are no job guarantees, students are added to a list of available employees for when opportunities arise. Sparking a job plan O’Hara and Gould brought this pilot program into being. O’Hara has been tasked with creating new initiatives like this to focus on Alaska hires and other resources. “Of those plans, this was the one that really stuck,” Hopkinson said. “It’s one we thought we could do well. It’s one that we have the facilities, we have the people, the professional craftsmen that can actually do the training.” O’Hara said an advantage of starting with a structural welding program lies in both the demand for workers plus, the measurability of results. He said the tests involving vertical and overhead positions plus stick and wire are clear-cut ways to determine passing levels. The results are even X-rayed and checked through a third party to make sure students can do the job. Hopkinson said that moving them out of a classroom and into a fabrication shop helps introduce them to the demands of the oil and gas industries, safety standards and must-know features of the work, such as basic rigging and material handling. With this training, students from these four partners will be able to start work immediately as positions become available. Hopkinson said there is a gap in the industry and in Alaska hires, so the purpose is to prepare young people to fill jobs for the next several years. He describes the problem as a “70/30 gap,” with the average jobs filling with about 70 percent local hires over the last several years, but the more skilled labor jobs are more difficult to fill locally. Also, a lot of qualified people are leaving the state. “In this case here, after two class we’ll probably have 18 people certified. That’s 18 welders who weren’t here yesterday,” he said. O’Hara said that even though welding work is cyclical, the demand is there for such skill sets. “I’ve been in this industry for about nine years in the personnel side of things and I’ve seen where you cannot find enough structural welders or other trades as well, so we’re a trade-deficient nation and Alaska is no exception,” he said. With this program under their belts, Rudolph said they expect to be able to jump into work full-time this summer when things pick up. Rudolph would like to stay with CH2M Hill as a welder for at least a few more years to build up some savings before college or whatever else may lie ahead. He said welders make a good living, which is part of the driving force of his volunteering for the program. Rudolph and Zagorodniy are already certified through the Colony program, and this program will allow them to get additional qualifications through CH2M Hill. With the added skills and certifications, they expect to be able to hit the ground running when the work comes around. Rudolph said there’s more to the job for him. It’s become a true passion; it even helped him bring up his grades. “Welding’s definitely turned me around,” he said. The company spent about $1,000 per student for this program. O’Hara said this pilot program was a gamble, but more so with the work factor than the financial investment, since jobs are not immediately available and time will tell how that changes once summer rolls around. “This gamble’s saying yeah, we’re going to have the work or we will in the near future to out them to get them employed,” he said, noting that the company is careful not to overstep by giving false job promises. “Our company needs to gain the work as well,” he said. Hopkinson has been pleased with the results, saying 70 percent of the students have moved up enough to jump into a real work environment. Now that the pilot part is done, the question remains: what’s next? The administrators will evaluate how the students worked out and decide if another program will be in store. Hopkinson said a continuation could consist of another welding program. Another option is a similar program for pipefitting, which also is in high demand. “The long and short of it is this is one of those little operations that can turn into a great outreach,” O’Hara said.

Education construction spending gets boost in 2012

Construction spending for the schools gets another boost this year, and there are several projects to account for it. The Associated General Contractors of Alaska and Institute of Social and Economic Research forecast that education-related construction spending will get a 15 percent boost over last year to the tune of $408 million. AGC’s forecast states the increase comes from a $397 million state bond package passed in 2010 in addition to more local school district spending. The Matanuska-Susitna Borough School District wins a large prize at the local level with a five-year $214 million bond package and no shortage of projects to put it toward. Six new construction projects will go forward for the district. Most notably, there will be new school building construction with additional work on athletic field improvements, heating and ventilation work, generator replacements, bathrooms, signage and various other infrastructure needs. The Mat-Su district’s biggest project will be building its first middle and high school combination at the Knik-Goose Bay Road area. “That will help alleviate the crowding at Wasilla Middle and High School,” said district spokeswoman Catherine Esary. A new Valley Pathways building will be built using a modified design previously used at Su Valley Jr/Sr High School, which was lost to fire in 2007. Valley Pathways is an alternative high school serving about 250 students and is located on borough-owned land that was just re-zoned into the Wasilla area. Also on the list is a new Iditarod Elementary and a permanent building for the Mat-Su Day School, which currently uses portable classrooms on borough property but co-located with the District Operations & Maintenance Department. Mat-Su Career and Technical High School will be getting a phase III addition as well. The investments are subject to up to 70 percent of debt service reimbursement by the state. “The bond passed substantially and so we believe that that’s an indication that Mat-Su Borough voters are in support of education. They see the return on their investment. They see that our schools are doing a good job and they want to provide the best facilities,” Esary said. The Anchorage School District will place a $59 million bond proposition on the municipality’s April ballot with an anticipated 60 percent to 70 percent debt reimbursement for most projects. If passed, work will begin this year. Such work includes $23.9 million for life extension projects for schools based  on the district’s new facility condition index. Projects could include fire alarm upgrades, roof replacements, mechanical system work, lighting upgrades and other site improvements. The bond includes $23.8 million for career and technical education improvements with slightly more than half going toward a new structure for West High School. The rest will be to upgrade the programs at this school and allowing other middle and high schools to develop or enhance their own programs. Also, the bond includes $2.4 million to improve Girdwood K-8’s infrastructure, space and condition to meet educational needs, which it currently doesn’t and is overcrowded. Finally, the district must match $9.1 million to receive a $21 million state grant to renovate Service High School. The scope if this project has been reduced following two previously failed bond proposals. The Fairbanks North Star Borough School District also has quite a bit of projects this year that come from previous bonds and legislative action. Projects throughout eight schools will cover about $17.3 million, according to Assistant Superintendent Dave Ferree, who said this amount is up a little bit from the past couple of years. Ferree said the biggest one is phase III renovation at Barnette Magnet School that will cost $9.5 million, followed by a $3.1 million gym renovation at Lathrop High. Other projects covering septic and sewer systems, lighting, siding replacement, power and mechanical upgrades will each cost around $1 million or lower, some of them half or less. In the Juneau School District, work on Gastineau Elementary’s commons and gym renovations will finish up this summer, followed by its playground. Auke Bay Elementary renovations will immediately follow, allowing simultaneous construction. Building won’t be limited to K-12. The University of Alaska Anchorage will be doing hefty additions. The Seawolves will be getting a new 196,000-square-foot sports arena. It’s estimated to cost $82 million and to be completed in 2014. The school of engineering will get a new 72,000-square-foot building for $55 million while the old one is renovated for $11.5 million. A 500-car parking structure is included in the project for an additional $17 million. The whole thing could be completed by 2015. Lastly for UAA, a new Mat-Su Valley performing arts center should start this year and be completed in 2014 for $15 million. The 35,000-square-foot structure will house a 500-seat theater and classrooms. AGC reports that education spending’s biggest leap was between 2005 and 2006, which had a 107 percent increase due to expansive state grants and local bonds that virtually guaranteed reimbursement by the state for certain percentage of the repayments. The pattern leveled out more until 2008, which saw a 20 percent drop due to lower state spending on the K-12 level and less university spending. The forecast has gradually gone up since.

Anchorage construction to see moderate growth in 2012

Anchorage is in for some moderate construction growth next year, as predicted by ECI/Hyer Architecture and Interiors. Principal architect Brian Miessner recently addressed the 2012 forecast to BOMA Anchorage. Miessner said Anchorage’s construction could be on the rise again after a recent slump. 2011 showed a total of $404.9 million in permit values through November. This is a slight increase over 2010, when total values fell drastically from the previous year. Sixty percent of those building permits were for new construction projects, compared to 53 percent for new construction in 2010. “Which is a surprise because last year we didn’t see a lot of construction when I was doing this forecast,” Miessner said. Almost a third of those new construction permits were for commercial buildings, compared to a quarter being for new commercial permits in 2010. Only 20 percent of 2009’s permits were for new commercial construction. “So we seem to have turned a corner in commercial construction and that is played out with the level of activity we saw last year,” Miessner said. Miessner sees several trends developing, such as more smaller developments as larger projects from the past decade come to a close. An 84,000-square-foot crime lab is one example. It’s expected to be completed in July this year at an estimated construction cost of $68 million. Another trend is a decrease in private home construction to make way for a hot rental market. Miessner said this paves the way for a lot of smaller projects with rentals in mind. Miessner said he’s also seen a lot of homeowners getting ready from backfill opportunities from many of these big projects from the 2000s with many homeowners investing heavily in getting their homes looking good for that backfill. He cited the old veterans affairs clinic moving out of the Alaska Regional Hospital campus, clearing around 98,200-square-feet of possible leasing space for investors. Nearby housing rentals would be open for new workers there. Anchorage will be riper with smaller-scale projects than large ones. Renovations like those at the Sears Mall relate to forecasted projects for more cosmetic renovations to attract investors to the city. Such renovations will be especially prevalent in retail establishments. “There’s this pattern across town: owners trying to look better than the others and it’s because there’s more inventory on the market,” Miessner said. Other smaller projects slated for this year include a depot office for the railroad, a new downtown medical office, new offices on the south side and Verizon’s new switching center for its entrance into the Alaska cellular market. Bigger projects include the Anchorage Neighborhood Health Center and Alaska Native Tribal Health Consortium’s new buildings, both scheduled for completion this year with estimated construction costs of $17.2 million and $24 million, respectively. Construction on the Blood Bank of Alaska’s new facility will also get under way with an estimated cost of $36.8 million. It’s scheduled for completion in the fall of 2014. The forecast accounts for startups on the University of Alaska Anchorage’s new sports arena and engineering school facilities, each costing an estimated $82 million. No contractors have been selected yet. A smaller project will be work on a new performing arts center. The other big projector is for military construction. Miessner said there are 12 planned projects costing a total if $355 million, which he said is about 10 percent less than was spent the year before. Further military spending decline may be in store. “The bigger difference is when we look out in future years, the queue doesn’t exist anymore,” he said. This refers to the backlog of projects in the past that are no longer there due to defense budget cuts. There are several road projects but three in particular the firm is keeping an eye on, believing these could spark further development. These projects include continuing work on 40th Avenue, which Miessner said could open enormous investment potential. Another is on 88th Avenue in South Anchorage that one by Midtown Park. Outside Anchorage, the main projects that catch the firm’s attention are the State Archives in Juneau, a large clinic in the Kenai Peninsula and some UAA projects around Soldotna. Managing member Ted Jensen of Reliant LLC talked about the city’s Class A building construction. These buildings are generally bigger, have nicer finishes and are more expensive than Class B buildings. Jensen said new Class A office market will soften in 2012, but there will still be a healthy vacancy rate that will increase. This projects from the trend of companies moving their operations rather than new tenants coming in. He said this new supply with limited demand could slightly increase the Class A vacancy rate to just over 7 percent in a year’s time. Jensen said 200,000 square feet of Class A construction in Anchorage will go online in 2012. Most of these buildings will be to suit specific tenants. Only the Three Cedars Office Building will be speculative. Class A projects will include the Anchorage Neighborhood Health Center, the Glenn Olds Hall addition at Alaska Pacific University, the new Alaska USA building, the Alaska Native Tribal Health Consortium addition and the Dankor building in midtown.

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.

First hearings hydro project planned for March

JUNEAU — The Alaska Energy Authority and the Federal Energy Regulatory Commission will conduct  “scoping meetings” in March for the planned $5 billion-plus Watana hydro project on the Susitna River north of Anchorage. The meetings, planned for March 27 through March 30 in Anchorage, Wasilla, Talkneetna, Fairbanks and Glennallen, are the first step in a required federal environmental impact statement, or EIS, for the project, AEA officials told a state legislative committee in Juneau Jan. 26. The Federal Energy Regulatory Commission is the lead federal agency on the EIS, and will be the agency conducting the hearings. Following the “scoping” meetings, the next step would be preparation of a draft EIS document followed by a final EIS and record of decision, if the project is approved. On a separate regulatory track, FERC must also issue a federal certificate (a form of permit) for the project. AEA filed a Preliminary Application Document with FERC on Dec. 29 and anticipates filing a full application by the end of 2012, Wayne Dyok, Watana project manager for the Alaska Energy Authority, told the Energy Committee of the state House in the briefing.  An initial estimate of the project cost is $5 billon but Dyok said he expects to receive an updated cost estimate soon. The project would involve a 700-foot-high concrete dam at a location about 185 miles up the Susitna River from its mouth at Cook Inlet. It would create a lake 39 miles long by two miles at its widest, Dyok said. If it is built at the scale now planned, it would have a capacity of 600 megawatts and generate 2.5 million megawatt hours of power annually, which would meet about half of the electricity requirement expected in the future for communities in Interior and Southcentral Alaska now connected to the regional power grid, Dyok said. On its present schedule the Watana project would not be in operation until 2023. “We are still assessing the optimal size of the project and would have this at the time we file our formal application with FERC at the end of the year,” Dyok said. The project would be designed for expansion, most likely by raising the height of the concrete dam, he said. The powerhouse for the dam would be built from the start with sufficient capacity for expansion, he said. The agency is also still considering different route options for a road and transmission line corridor that would be built to the site. One is a route corridor from the Denali Highway south to where the project would be built. A second would be east from the Parks Highway near the Chulitna River bridge, and on a corridor north of the Susitna River. A third, the “Gold Creek” corridor, would also extend from the Parks Highway east to the project, but south of the Susitna River, Dyok said. Watana is a scaled-down version of the much-larger Susitna River hydro project planned in the 1980s which would have involved two dams on the river. If the project is built, it would generate electricity at a constant price for decades. Interior and Southcentral Alaska now depend largely on fossil fuels, mainly natural gas, oil and coal, for power generation, and the prices for natural gas and oil are subject to sharp swings. The state of Alaska conducted extensive studies in the 1980s for the large Susitna River project then planned, but dropped the project because of costs. It would have involved two dams, one at Watana and another upriver at Devil’s Canyon. The new version of the project involves just one dam at Watana and is smaller in scale. However, the AEA is now benefitting from a substantial amount of geotechnical work done in the 1980s that is still valid, Dyok said. That has reduced the amount of new geotechnical drilling needed, he said. Some new geotechnical drilling was done last summer, Dyok said. There were also a large number of environmental studies done for the earlier project which are valuable, although much of that information must be updated for the new EIS, he said. For example, federal definitions of wetlands have changed so that new wetlands mapping must now be done, Dyok told the committee. Last year the state Legislature appropriated $67 million, which is sufficient to fund planning and work on the FERC application through 2012, but more funding from the state will be needed to continue work after the application with FERC is filed late this year, Dyok said. If the project proceeds the state will have to decide at some point whether to make a large equity investment in the project, Dyok said. This could involve an appropriation of several billion dollars. AEA’s current plan for financing is to pursue a model similar to that used for the Bradley Lake hydro project near Homer, where utilities in Southcentral and Interior signed long-term power purchase agreements. On the basis of those the Alaska Power Authority sold revenue bonds to pay for construction of Bradley Lake. However, the state made a direct investment in the project, which lowered the amount of bonds that had to be sold, reducing payments and the price of power the utilities paid. Today Bradley Lake hydro power is some of the least expensive power available to the regional utilities, although coal-fired power, using coal from the Usbelli Mine at Healy, is also very reasonably priced compared with oil and natural gas.

Plea deal for one in massive contracting fraud case

WASHINGTON (AP) — A former Army Corps of Engineers employee has agreed to plead guilty for his role in what prosecutors say may be one of the largest and most brazen frauds involving U.S. government contracts, court papers show. Michael A. Alexander plans to plead guilty to charges of bribery and conspiracy to launder money, his attorney wrote in court papers, requesting a hearing as early as Monday. Alexander, another Army Corps of Engineers employee and two other men were indicted in October on charges of participating in a $20 million bribery and kickback scheme involving the awarding of government contracts. Alexander, a program director, and Kerry F. Khan, an Army Corps program manager, received kickbacks in exchange for directing government contracts to a subcontractor specializing in software encryption devices and other information assurance technology, prosecutors said. The kickbacks paid for luxuries including properties, Rolex and Cartier watches, sports cars and hotel accommodations, prosecutors said. The scheme, which authorities said spanned roughly four years, involved phony and inflated invoices for government contracts and millions of dollars in kickbacks that were funneled through a network of shell companies in the United States and around the world. Also indicted were Kerry Khan's son, Lee, and Harold F. Babb, the director of contracts for Eyak Technology LLC. Eyak Technology is a subsidiary of an Alaska native corporation with Virginia operations. It was the prime contractor for a five-year, $1 billion contract administered by the Army Corps of Engineers. The two Khans and Babb have pleaded not guilty, though two officials with an EyakTek subcontractor — Nova Datacom — have already pleaded guilty. It was not immediately clear whether Alexander planned to cooperate against his co-defendants, though his lawyer wrote that his client has agreed to plead guilty, "among other things," as part of a deal with the government. Alexander's lawyer, Christopher Davis, did not immediately return a call seeking comment Wednesday. A spokesman for the U.S. attorney's office in the District of Columbia, which is prosecuting the case, declined to comment.

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.

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