This Week in Alaska Business History February 10, 2002

Editor’s note: "This Week in Alaska Business History" revisits events that shaped our past."Those who cannotremember the past arecondemned to repeat it."-- George Santayana, 1863-195220 years ago this weekAnchorage TimesFeb. 10, 1982NANA, mining company plan ventureCominco American Inc. and NANA Regional Corp. have tentatively agreed to join the evaluation and potential development of the Red Dog mineral deposit in northwestern Alaska.The agreement, reached last Friday and announced by Cominco, provides for the completion of a feasibility study and, if feasible, the development of a mine at the site of the large zinc-lead-silver deposit. The decision is subject to ratification by the boards of directors of both firms, and a final decision on whether to develop the mine is expected to be made in 1983.Cominco, a wholly owned subsidiary of Cominco Ltd., said capital and operating costs of the venture will be "significant" because of the remote location.Anchorage TimesFeb. 10, 1982Watt disappointed with Alaska oil, gas lease saleBy Betty MillsTimes Washington BureauWashington -- Interior Secretary James G. Watt admitted today the results of the first private industry oil and gas lease sale on the National Petroleum Reserve-Alaska were disappointing.Watt, testifying before the Senate Energy Committee on the department’s budget request for fiscal year 1983, told Sen. Frank Murkowski, R-Alaska, "We were disappointed in the NPR-A bidding. We have not yet determined why it happened. We suspect the reason may be the companies are holding out for all the other projects" in Alaska.Murkowski referred to the agency’s accelerated offshore leasing schedule for Alaska, saying, "These areas are much more costly to develop. I wonder if the department has considered the possibility it may not generate the revenues ... realizing industry can only do so much.Watt replied that the department "has a pretty good track record" of increasing its expected receipts from offshore lease sales, and expects to make the $18 million target of revenue received in fiscal 1983.10 years ago this weekAlaska Journal of CommerceFeb. 10, 1992Alyeska: Pipeline volume may drop as much as 200,000 barrels a day in ’92By Ray TysonBased on Alyeska Pipeline Service Co.’s projected daily flow rate for 1992, North Slope oil production and the massive state revenues it generates would be far less than what state officials are forecasting for the year.Alyeska President Jim Hermiller told the Journal of Commerce the company has budgeted an average of 1.625 million barrels of oil a day this year, roughly 200,000 barrels a day less than what passed through the trans-Alaska pipeline in 1991.If Alyeska’s oil budget holds, pipeline throughput in 1992 would fall about 10.8 percent, nearly three times the annual decline rate since North Slope production began slipping three years ago.Average yearly production for all North Slope fields to date has decreased 3.5 percent. Prudhoe Bay alone has slipped 4.7 percent a year.A decrease of 200,000 barrels a day over a period of a year, a total of 73 million barrels, means the state would collect about $180 million less in royalties and taxes, depending on oil prices.Alaska Journal of CommerceFeb. 10, 1992Dutch Harbor opens new dockBy Margaret BaumanUNALASKA -- A jumbo ocean-going container ship pulled out of the Unalaska/Dutch Harbor Marine Center recently, en route to Yokohama, Japan, marking a new era in shipping from this bustling Aleutian port.The newly completed $15 million marine center, which doubles the container-handling capacity for deep-draft ships, was saluted Jan. 31 and Feb. 1 with ribbon-cutting ceremonies at the 790-foot dock, as 36 container loads of Alaska seafood were hoisted aboard Sea-Land Services’ MV Defender for the six day trip to Yokohama.Nearby stood the U.S. Coast Guard Cutter Storis, an auxiliary ice breaker commissioned in September 1942, brought to Dutch Harbor for the occasion.The new dock, financed by a private/public partnership, is a vital step toward making the port a hub for Pacific Rim trade, said Mayor Frank Kelty.-- Compiled by Ed Bennett.

Crouching Grouches Caucus works for cuts before taxes

It appears that the Fiscal Policy Caucus is starting to understand that budget reductions are essential complements to its proposals to close the state’s budget gap by raising revenues. We have a great deal of respect for most of the folks in the caucus, and we appreciate the courage and diligence that they have shown. Nonetheless, they appear to see a somewhat different road to a solution than we do.The caucus realizes that most Alaskans do not understand the magnitude of our fiscal problems, but the caucus does not fully understand that most of the public will not support it until they see significant cuts in government programs, and that Alaskans will not support taxes or the use of the Alaska Permanent Fund earnings without cuts in government spending that hurt.We know that we cannot cut $900 million in general funds from the state budget, but we must make significant cuts before we hope to win public support for any new revenues. Members of the Crouching Grouches Caucus have previously suggested many of these steps to reduce the cost of government: Lowering public assistance and Medicaid qualifying standards, possibly dropping them from 200 percent to 150 percent of the federal poverty level; Cutting legislative expenses, possibly by shortening sessions, or cutting our own pitiful salaries and office expense accounts; Cutting 25 percent from the salaries of appointed state workers paid more than $60,000 per year; Prioritizing all nonessential government functions and beginning to cut back or eliminate services like public broadcasting, parks and recreation, libraries, museums, municipal assistance and revenue sharing, educational support for extracurricular activities, coastal zone management, winterization subsidies and so on; and Limiting travel budgets in favor of increased use of teleconferencing and video conferencing.Although many of our caucus members personally enjoy and support many of these functions, Alaskans are apparently not willing to pay for all of them at this time, and we should not go into debt to continue providing these services at their present levels.When the Canadian province of Alberta, with an oil-driven economy like Alaska’s, was faced with similar budget problems, the province’s leaders responded by making significant cuts in government services, starting with a 20 percent across-the-board cut in education spending. As Alaskans dither, British Columbia is making 25 percent cuts in every department.Though a previous British Columbia administration spent the province into near-bankruptcy, a new, conservative administration is binding its wounds and getting its fiscal house in order. BP just cut executive perks by 25 percent, after significant layoffs. Alyeska Pipeline Service Co. is likewise cutting staff and expenses. What is the Legislature going to do to show the public that there really is a serious crisis?The caucus has apparently not given any consideration to former Gov. Jay Hammond’s brilliant suggestion to set up a tripwire triggering taxes and budget cuts when our fiscal problem reaches some predetermined level. Hammond suggested using the balance of the Constitutional Budget Reserve as the tripwire mechanism; my wife suggested using the level of state income from natural resource extraction. Such a policy would soon convert beneficiaries of every state program into enthusiastic champions of building a natural gas pipeline or opening Arctic National Wildlife Refuge for development.In addition, the caucus makes no provision for revoking taxes or restoring budget cuts if state natural resource revenue should increase significantly. We must protect Alaskans from taxes that only go up. One-way valves or check valves are great in bilge pumps, but they have no place in tax policy.One of the brightest of our former finance chairmen suggested indexing budget cuts and taxes to resource income in an elegant way that would adjust automatically the vagaries of state finances. This certainly works for us in the Crouching Grouches Caucus.If the Knowles administration and/or the Fiscal Policy Caucus succeed in implementing income taxes, then our caucus would suggest we work to implement tax deductions or credits for people investing their own money in alternatives to government programs, such as credits for tuition, retirement plans, private health insurance, foster care, care for handicapped people or care for senior citizens.We do not in any way wish to be disrespectful of the Fiscal Policy Caucus and its work. We propose to work closely with its members to use the legislative process to move our fiscal agenda in a way that provides us all as much comfort as possible, and that will work for all Alaskans.We should never blind-side that caucus or take cheap shots at its ideas. If we are not more successful in convincing them to use our ideas, at least in part, then we in the Crouching Grouches Caucus will try to move our amendments at appropriate times.Rep. Fred Dyson, R-Eagle River, is chairman of the Crouching Grouches Caucus, an ad hoc group of legislators working on alternate approaches to resolving the state’s fiscal crisis. He can be reached at 907-465-2199.

Going broke in Alaska has gotten complicated over years

I have practiced as a commercial lawyer in Alaska for more than 20 years. During good economic times, I have devoted considerable attention to putting together business transactions and real estate purchases and sales. During less prosperous economic times, I have focused on loan workouts, foreclosures and ultimately bankruptcy and insolvency procedures.Twenty years ago, we saw a lot of what one of my former senior partners called "Alaska bankruptcies," in which the debtor simply closed the doors to his or her business, gathered up any remaining assets and essentially dropped out of sight, never to be seen or heard from again.Sometimes debtors in that circumstance actually filed formal bankruptcy petitions in the Bankruptcy Court for the District of Alaska. In some of that type of case, few if any bankruptcy schedules were filed (notwithstanding the earnest efforts of debtors’ counsel) and ultimately the Bankruptcy Court dismissed the cases. However, the debtor was still never to be seen or heard from again.Over the years, we have also observed a good number of legally improper, but nonetheless creative schemes and methodologies undertaken by some debtors to attempt to avoid paying their debts. Outright fraudulent conveyances, or conveyances of assets with intent to hinder, delay or defraud creditors continue to occur and can be set aside as a matter of state law or by a bankruptcy trustee.There are also variations on fraudulent conveyance activities. An example is where a corporate debtor ceases doing business, leaves creditors unpaid, but the same principals of that corporation form another one and essentially operate the same business under another name.Another variation on the old style "Alaska bankruptcy" occurs where the debtor chooses to stay in Alaska, but is constantly on the move, sometimes working in Bush Alaska, but generally keeping out of touch, and sometimes quite successfully, with his or her creditors.Alaska law and the Alaska economy have matured and become more sophisticated in the past 20 years. Alaska courts and state and federal law enforcement authorities in Alaska have become more strict in enforcing both civil and criminal laws in the creditor/debtor arena. In addition, more sophisticated "skip tracing" services as well as the Internet have made it more difficult for debtors to simply vanish.The courts have also played a role in stricter accountability. In 1993, the Alaska Supreme Court issued its decision in Summers vs. Hagen in which the court ruled that the recipient of a fraudulent conveyance could be liable for damages to a creditor of the debtor based on that person’s participation in a conspiracy to commit a fraudulent conveyance.Thus, being a participant in a fraudulent conveyance scheme or activity in Alaska exposes the recipient of the property to liability arguably even if he or she no longer retains the property received. The liability is not limited to returning the property. As a result, the rule in Summers vs. Hagen can be used by creditors to vigorously pursue the personal assets of third parties in circumstances involving fraudulent debtor conduct.In the criminal arena, Alaska governmental lawyers are also more rigorously scrutinizing apparently improper business transactions. In the case of bankruptcy proceedings, the administration of bankruptcy cases is now watched over by the Office of the U.S. Trustee, which is a part of the federal Department of Justice here in the District of Alaska and elsewhere.The U.S. Trustee’s office is charged with seeing that bankruptcy cases proceed in a timely way and in accordance with the Bankruptcy Code and rules. The U.S. Trustee also oversees the actions of the various bankruptcy panel trustees and provides input and guidance to them with regard to pursuing fraudulent conveyances by debtors in bankruptcy.The Office of the U.S. Trustee also makes referrals to the prosecutors of the Office of the United States Attorney in cases of suspected bankruptcy fraud. In the past year or so, at least two cases that were referred to the United States Attorney resulted in prosecutions, convictions and sentencing. One case principally involved a debtor lying under oath in written and oral statements in bankruptcy court proceedings. Another case involved concealing or a failure to disclose the existence of assets.Outside of the bankruptcy arena, the Alaska U.S. Attorney’s Office has in recent years prosecuted as a matter of "white collar crime" actions involving criminal bank fraud in which the defendant knowingly executes or attempts to execute a scheme or artifice to defraud a financial institution.In that regard, the U.S. Attorney’s Office in 2001 did prosecute the principal in a corporate recreational vehicle dealership in Anchorage for bank fraud and obtained a conviction at the trial court level.Serious financial difficulties are generally very stressful and trying for all concerned, including the debtor, his or her family, creditors and various parties otherwise affected. Both Alaska and federal law are tending to become more strict in terms of protection of creditors’ rights and courts are paying attention to those enhanced creditor rights and remedies.Nevertheless, while old time "Alaska bankruptcies" are probably becoming a thing of the past, Alaska state and federal law still provides significant protections to a honest debtor who acts in good faith and performs his or her obligations to the best of his or her abilities.Frederick J. Odsen is a member of the law firm of Hughes Thorsness Powell Huddleston & Bauman LLC.

Farmed salmon oversupply ripples through wild fishery

The surge of farmed salmon on world markets is continuing at unprecedented levels, driving prices of salmon to record lows.Farmed salmon has been encroaching on markets for Alaska’s salmon for years, but in recent months Chilean farmers have been producing at record levels in a bid to gain market share, University of Alaska fisheries economist Gunnar Knapp says.The result is a crisis in the salmon farming industry, the equivalent to farmed fish that $9 per barrel oil prices in 1998 was for the world’s petroleum industry.Knapp outlined the gains salmon farmers have made at the expense of Alaska fishermen in a Feb. 1 talk before the World Affairs Council luncheon in Anchorage."It’s a classic problem of agricultural overproduction," Knapp said in an interview. "It’s a short-term problem, but major adverse effects are felt by the wild salmon fisheries, like Alaska’s."Despite the short-term nature of the current price dip, the long-term trend in salmon farming is toward more production, continued gains in efficiency and productivity, and lower prices.Farmed salmon is also beginning to encroach on other salmon markets. For now most of the competition is in the market for fresh or frozen salmon. But more and more farmed salmon is being canned, Knapp said.For example, Fred Meyer stores in Anchorage are now carrying a Bumblebee seafood smoked canned salmon that is labeled, "Product of Chile," Knapp said. It is obviously farmed because Chile has no wild salmon fisheries.Salmon farmers might also move into the lucrative salmon roe field, an area now reserved for wild salmon. If this happens it could further undermine wild fisheries, Knapp said.But the problem for Alaska fishermen is just not farmed salmon, he said in an interview. "Other challenges include variable and uncertain salmon runs, overproduction for the traditional canned salmon markets when there is a big run, changes in consumer taste and demand and the current world economic slowdown," Knapp said.Like salmon farmers, "these challenges are not going to go away and there aren’t any quick or easy fixes," he said."But if we don’t make changes, we face a bleak future in our salmon fisheries," Knapp said, painting a grim picture of an industry in a death spiral, with fewer and fewer processors, fewer fishermen and shrinking support infrastructure.Knapp thinks it’s possible that Alaska fishermen can innovate and find ways to meet the competition of farmed salmon, but they must find ways of cutting costs.Those efforts could be thwarted "by a management system that is not designed to create a competitive and cost-effective industry. Instead it is designed to achieve social and political goals of spreading the wealth, of maximizing jobs and income.""For a period of time this worked well, but not any more," Knapp said. "The reality is that we can’t achieve social and political goals from the Alaska salmon industry unless the industry is economically viable."One competitive advantage Alaska has is the increasing awareness of food quality issues among many consumers. There are more concerns about chemicals fed to farmed fish, and Alaska’s wild-caught salmon could develop an important marketing advantage, Knapp said.There are new regulations in Europe to label fish as to countries of origin, and the U.S. Congress is debating similar requirements.However, the vast majority of consumers are unaware of these distinctions, so there is a big marketing challenge for Alaskans, he said.

Legislators give salmon industry little hope for marketing help

KODIAK -- It didn’t take legislators long to loft an early volley at Alaska’s salmon industry.Finance leaders in both the House and Senate said Jan. 18 they have no plans to fund marketing efforts this session, and that problems facing the salmon industry "are unlikely to be helped by an advertising campaign."At the same time, a measure was filed to provide $6 million to boost Alaska’s tourism industry, which is anticipating a big drop in bookings because of the Sept. 11 terrorist attacks.Sen. Lyman Hoffman, D-Bethel, offered an amendment to spend $1.2 million on tourism marketing and $1 million for salmon marketing. It failed. Gov. Tony Knowles proposed spending $10 million each to fund marketing campaigns for tourism and salmon."We have our work cut out for us," responded Rep. Gary Stevens, R-Kodiak, who expressed surprise at the move by Anchorage Republicans to dislodge salmon from state funding dollars. Stevens said that in his view, any marketing dollars must include tourism and seafood in tandem.Stevens also introduced a bill that would put $12 million into the Alaska Seafood Marketing Institute’s budget over five years, $4 million the first year and $2 million for the following four years."People from fishing communities will demand equal amounts for salmon," Stevens said. The tug of war could all amount to nothing. The state faces a difficult budget deficit, and policymakers may decide against giving money to either industry.Cotten to represent boroughThe Aleutians East Borough has hired long-time Alaska commercial fisherman and former state legislator Sam Cotten as its chief resource analyst. Cotten will represent the region’s commercial fishing interests before boards, commissions and other fisheries management bodies in his new position.A lifelong Alaskan, Cotten spent a total of 16 years in the Legislature, including serving as speaker of the House. He also served as chairman of the Alaska Public Utilities Commission. He holds a lower Cook Inlet purse seine permit and has fished in several regions of the state. The Aleutians East Borough is home to the villages of False Pass, Nelson Lagoon, King Cove, Akutan and Sand Point.Fish Caucus draws crowdThe first Fish Caucus was well attended, according to Ian Fisk of Kodiak Republican Sen. Alan Austerman’s office."The caucus is directed at legislators not familiar with the fishing industry," Fisk said. The Juneau-based McDowell Group presented an overview of Alaska’s seafood industry, pointing out that while Alaska salmon might be getting clobbered in world markets, the markets for nearly all of the other major fisheries, halibut, groundfish and crab, are stable or positive.The McDowell report said Alaska’s salmon fisheries face serious challenges, "but we have outstanding assets to work with to meet those challenges." The overall value of Alaska’s seafood has remained relatively stable in recent years, and the diversity and size of harvests helps moderate peaks and valleys in individual fisheries. The mainstream media often overlook the big picture when reporting on the seafood industry, the report added.Free for ’small fry’Free educational materials about salmon are available for teachers and students in grades kindergarten through fifth grade. The materials, which were developed by the Alaska Seafood Marketing Institute, meet national science curriculum standards. They can be downloaded from the ASMI Web site. Also available are instructions for ordering an interactive poster for kindergarten through second-grade students, and a 14-minute video on Alaska salmon, which was broadcast as a National Geographic special.Salmon on a stickSalmon lollipops are the hit of the Park Avenue Cafe in New York City. Created by chef David Burke, the smoked salmon offerings take little time to make. WorldCatch provided this recipe, which would be easy to modify:For the center of the pop, mix cream cheese, mascarpone cheese, capers, lemon zest, red onions and a little of the smoked salmon in a food processor. Refrigerate until very firm. Roll them in chopped (not sliced) smoked salmon until they are evenly covered. Then insert the lollipop stick and chill again.As seen on the company’s "gourmetpop" Web page, the salmon pops look like a somewhat smaller version of caramel or candy apples on a stick. Chef Burke says that the salmon lollipops are very simple to do at home, but they require plenty of room in the refrigerator for chilling. Also, he says to "do yourself a favor" and get the lollipop sticks from a local grocer.Kodiak-based free-lance writer Laine Welch can be reached via e-mail at ([email protected]).

Home Depot, Lowe's to open stores in Fairbanks, Anchorage

Several national retailers are set to open this year in Alaska, including home improvement giants Home Depot in Fairbanks and Lowe’s in South Anchorage. With these new stores both companies mark their second Alaska locations. Home Depot and Lowe’s operate one store each in Anchorage. The new stores should add more than 200 full- and part-time jobs to the Alaska retail market. Home Depot is breaking into its northernmost market, opening its first Fairbanks store Feb. 28. The 130,500-square-foot store is on the Johansen Expressway. "This is a last frontier for Home Depot," said company spokesman Chuck Sifuentes. "We had no presence in the middle of the state" before plans for the new Fairbanks store, he said. The retailer now runs stores in every state except West Virginia. Fairbanks store manager John Romeu agrees the retailer’s debut in Interior Alaska is significant. "I think if you were to characterize the 1,250 stores we have, this store is strategically the most important," said Romeu, who has managed Home Depot stores in other cold-weather markets in Wisconsin and Minnesota.

Barge tracker can keep an eye on anything

Satellite-based Internet technology originally developed to track barge shipments in Western Alaska now is being marketed as a means of monitoring anything, from anywhere on Earth.Secure Asset Reporting Services, or SARS, is a tracking system developed by Yutana Barge Lines and Yukon Fuel Co. Inc., Alaska-based subsidiaries of Northland Holdings Inc. of Seattle. The system has been in use for about a year on the company’s ocean-going vessels and on tugs and barges on the Yukon, Kuskokwim and Tanana rivers.It has since been sold to trucking, aviation and marine companies worldwide, including to some of the company’s competitors in Alaska, said Clayton Shelver, vice president of Anchorage-based SARS and Yukon Fuel Co.Special sensors also are being developed to work with the system that will allow companies to monitor such things as temperatures in refrigerated containers or fuel levels at remote fuel tank farms."I think we’ve just kind of scratched the surface on what we have developed here," Shelver said. "It was developed by Alaskans for Alaska and now it has international interest."SARS is based on the U.S. Department of Defense’s Global Positioning System, which uses signals from multiple satellites to compute position, velocity and elevation. SARS uses a special unit about the size of a videotape to receive GPS information and retransmit it to the Internet via satellite.The Web-based interface developed by SARS allows a company to track an "asset" via encrypted e-mail, at intervals of 15 minutes to 24 hours, said Shelver, who helped design SARS.Only those authorized by a company would be privy to the tracking information over the Internet, Shelver said.Since SARS is directly associated with its subsidiary shipping and fuel companies, and the system is being sold to competing companies, Shelver said SARS will be structured as its own entity soon, to dispel any perception that proprietary information may be compromised."The goal is to spin off into a completely separate company within a year," Shelver said.Anyone who can operate a desktop computer can run SARS, said Louis Jennings, marketing manager for SARS in Anchorage.It’s also inexpensive. Computer hardware and one receiver, which is being manufactured in Israel, costs about $2,000, Jennings said. Round-the-clock technical support services provided from the Anchorage-based company runs about $70 a month."It doesn’t cost an arm and a leg," Shelver said.Yutana Barge Lines has been in continuous operation on the Yukon River since 1916. The company, based in Nenana, operates 35 barges and 12 tugs throughout Western Alaska. Sister company Yukon Fuel ships millions of gallons of fuel annually by barge to remote villages in the state.Shelver said the companies had for years tried to find a system of tracking freight and fuel, but found nothing that was consistently accurate. When customers would call wanting to know the status of their shipments, the fuel and freight companies would scramble to raise ship crews via cellular telephone or marine radio, communications links that were expensive and unreliable, Shelver said.At least a dozen versions of SARS were tested over the years, until the current system was developed, Shelver said."Some worked, some didn’t," Shelver said.The entire system was designed by employees of the freight and fuel companies in Anchorage, he said.By logging on to the Internet, company officials can find what they are tracking and contact drivers, pilots or ships’ captains via e-mail. The shipments’ path is marked by dots on a computer monitor, based on the automatic reports from the field."Our system works anywhere in the world, and can track any asset, fixed or mobile," Jennings said.In February SARS is installing special sensors on fuel tanks in Fort Yukon and in Palmer to monitor levels and to detect any leakage. The sensors, which have been tested to withstand temperatures of minus 65, also will be able to detect if anything other than fuel is present in the tanks, such as water.The remote fuel system monitoring will have widespread application in Alaska, where hundreds of fuel tanks are spread around the state."Every village with a school or a power utility has them," Shelver said.To check levels now, a worker must climb onto the fuel tank, a dangerous and often inaccurate approach, Shelver said. With the SARS system, a worker in an Anchorage office or elsewhere will be able to tell how much fuel is in the tank, or if it’s leaking, simply by logging on to the system via the Internet.The company has shown the system to state Department of Environmental Conservation officials, who Shelver said were impressed with the technology.Shelver points out that no government grant money or loans were used in developing the fuel tank monitoring system.SARS can be linked to sensors on truck, ship or airplane engines to check performance and fuel efficiency, Shelver said.The applications are limitless, Shelver said. He suspects there may be a market for owners of remote cabins or home owners who could monitor their buildings from anywhere in the world, to see if the structures have frozen or have been vandalized.

Fairbanks gets jump on summer

FAIRBANKS -- Interior tourism leaders are making strides to boost summer travel between Fairbanks and Europe even during a slump in winter visitors.So far this year fewer Japanese travelers have visited Fairbanks, a market that typically brings up to 7,000 visitors between October and April, said Deb Hickok, Fairbanks Convention & Visitors Bureau executive director."It’s really hit our winter business," she said. "We’re definitely feeling the pinch."She believes the change probably stems from people’s reluctance to travel following last fall’s terrorist attacks on the East Coast.Two popular winter events are still to come. The Yukon Quest International Sled Dog Race begins Feb. 9 in Fairbanks, and the World Ice Art Championships run March 6-16.In preparation for summer tourism, FCVB officials have hired a company to promote the Interior city in German-speaking Europe, Hickok said. Munich-based Best Choice also has offices in Austria and Switzerland, she said.The state marketing association, the Alaska Travel Industry Association, already employs representatives in Europe, but Fairbanks leaders believe their need calls for greater support."We think we have a lot more work to do in Germany," Hickok said.The six-month contract started in mid-December.The move comes as one way to ensure future summer flights from Condor, which last year began a weekly flight between Frankfurt, Whitehorse and Fairbanks.However, there are not enough Europeans coming to Fairbanks to support the flight, and Condor needs more Alaskans to travel to Europe.In late December an official from Fairbanks International Airport petitioned the Fairbanks North Star Borough for funding to support the airline’s future flights. In early January borough officials rejected the request for $50,000 to $250,000.Fairbanks tourism officials are working to guarantee future Condor flights. Hickok said they are working out details for a consortium of businesses that would help fund the weekly flights. Even though Condor has stated its plans to return to Fairbanks this summer, the move would symbolize the community’s support for the airline, she said.Condor advocates also aim to boost the number of people flying from Fairbanks to Frankfurt, she said.Another summer tourism boon will be completion of a downtown parking garage. The facility will increase parking options for people visiting FCVB’s Log Cabin Visitors Center and other downtown attractions.The 379-space, five-story parking garage is scheduled to be completed in October, said city engineer Larry Crouder.Work began in June on the $8 million project, he said. Crouder estimates the project is 50 percent complete with utility and groundwork finished. The project is currently shut down for winter, but building should begin again in April, he said. Remaining work includes building the superstructure, he said.Kiewit Cos. is the general contractor.Once finished, the parking garage should benefit downtown tourism businesses, Hickok said."We’re really looking forward to it," she said. "It’s a great project for downtown Fairbanks."

This Week in Alaska Business History February 3, 2002

Editor’s note: "This Week in Alaska Business History" revisits events that shaped our past."Those who cannotremember the past arecondemned to repeat it."-- George Santayana, 1863-195220 years ago this weekAnchorage TimesFeb. 3, 1982Chugach to seek huge rate hikeBy Ellis E. ConklinTimes WriterChugach Electric Association will file for a permanent rate increase next month of at least 40 percent, and possibly as high as 50 percent, for its 52,000 residential and commercial customers, Larry Markley, spokesman for the utility, said Tuesday.The increase would be the largest in the 33-year history of the financially ailing electrical utility.Markley added that the utility could be forced to seek further rate increases later in the year to offset, in part, the cost of a new $53 million generation plant at its Beluga Station.Also likely to experience increases are 25,000 customers of Matanuska Electric Association, Homer Electric Association and the Seward city utility. All three purchase wholesale power from Chugach.Anchorage TimesFeb. 3, 1982Funding prospects for gas line improveBy Dave CarpenterTimes WriterFour New York banks have informed the sponsor of the proposed Alaska natural gas pipeline that Wall Street has lined up as much as $18 billion in financing for the $30 billion Alaska segment of the project.In a letter last month to John McMillian, chairman of Northwest Alaska Pipeline Co., the financial institutions also said they believe further credit is on the way from insurance companies.The letter, disclosed last week by the petroleum industry publication Oilgram News, was sent by representatives of Bank of America, Citibank N.A., Chase Manhattan Bank and Mortgage Guaranty Trust.Substantial uncertainty remains whether the credit identified by the four banks means the financially troubled project will get off the ground. Northwest projects total costs of the gas line as high as $47.6 billion, and private estimates put it as high as $55 billion.10 years ago this weekAlaska Journal of CommerceFeb. 3, 1992Highway birthday breeds optimismBy Margaret BaumanAlaska Journal of CommerceAll along the Alaska Highway the welcome mat is out for the 50th anniversary celebration of the highway, with a ripple effect on business being felt over the road and beyond.A Good Sam caravan to Alaska for recreational vehicles, advertised by the international camping club’s headquarters in Agoura, Calif., sold out one weekend in November.Telephone orders for the Milepost, a thick guide to every mile of the Alaska Highway route, are coming in steadily to Anchorage.ARA Denali Park Hotels, which operates the Denali National Park Hotel, McKinley Village Lodge and the McKinley Chalet Resort, has sent out more than 8,000 applications in response to advertising to fill 620 jobs.Alaska Journal of CommerceFeb. 3, 1992Japanese study Port MacKenzieBy the Alaska Journal of CommerceA study by a major Japanese shipping firm, Mitsui OSK Lines, concludes the proposed Port MacKenzie is navigable and operationally feasible, provided guidelines are established.In a recent meeting with officials from Matanuska-Susitna Borough, authors of the report also indicated they would dedicate three vessels to Port MacKenzie."This is great news for the borough," said Mayor Ernie Brannon."As shipping agent for the Wishbone Hill Project, Mitsui’s review indicates they have no hesitation in bringing Panamax vessels to Port MacKenzie."The Mitsui OSK study indicates four operations areas will require careful coordination with the borough and other entities.Mitsui asked that the planned dock face be extended from 400 feet in length to 550 feet, and that the trestle be extended into 60 feet of water."Both of these design modifications can be made easily and at relatively little expense," Brannon said.The study also detailed some navigation issues and states that "it is necessary to adjust the navigation route and establish (some) new buoys and radar beacons." That work has been funded by the U.S. Congress and will take place this coming summer.-- Compiled by Ed Bennett.

Health lectures scheduled

The Patient Care Alliance, Mothers Against Drunk Driving and the Brain Injury Association will sponsor free lectures Feb. 4, 7, 18 and 21 on auto accidents and medical bills plus other financial and health care issues.The Feb. 4 and 7 events run from 7-8:30 p.m. in Anchorage at First American Baptist Church, 1200 E. 27th Ave. The Feb. 18 and 21 events are scheduled for Alaska Regional Hospital Medical Plaza.Sessions will address auto accidents, related medical bills and returning to work after an injury.For more information, e-mail ([email protected]) or call Samantha Hudon at 907-333-8307 or Noni Bordwell at 907-745-4378.

FAA program to silence airport noise in nearby houses

Theresa Maser is used to getting an earful.As the noise program director at the Ted Stevens Anchorage International Airport, Maser fields about 350 complaints annually from angry and irritated citizens bombarded by aircraft noise. But she suspects the complaint calls will subside somewhat under a $15 million, decade-long Federal Aviation Administration-funded project to soundproof 650 homes and apartments that border the airport.Beginning this summer, some 30 homes will be outfitted with special sound-deadening doors and windows, denser attic and wall insulation and improvements to ventilation systems to help circulate air when windows and doors are closed to muffle airplane noise.Between 80 and 100 homes will be soundproofed annually beginning in 2003, Maser said.Each home could cost up to $50,000 to soundproof, Maser said.Money from the FAA fund also will include purchasing undeveloped residential land, Maser said.The FAA also plans to install more than $1 million in sound monitoring devices that will be placed around Anchorage this summer to track sound levels and identify the aircraft causing it.The sound-blocking home improvements are voluntary to homeowners and will cost nothing to them if they opt for the upgrades, Maser said.In return for the improvements, homeowners must sign an aviation easement, which allows the airport to use the airspace over the their property. The easement prohibits property owners from suing the airport over noise or for damage caused by vibrations.Commercial property owners or those who built their homes after Oct. 1, 1998, do not qualify for the soundproofing improvements, Maser said.The "quieter home" program in funded by the FAA’s Aviation Trust Fund, through taxes on airplane tickets and fuel, said Patty Sullivan, an environmental specialist with the FAA’s airport division in Anchorage.The state-owned airport will have to contribute about 6 percent of the $15 million Anchorage noise mitigating project, money that comes from airport landing fees and fuel taxes, Maser said.In other words, according to Maser and Sullivan, those responsible for making the noise are paying to help mitigate it.The FAA has funded more than $2 billion in similar projects in the Lower 48 since the program began a dozen years ago, Sullivan said, adding that airports are required to perform studies to get the noise-mitigating money.Anchorage completed its study in 1999.Sullivan said soundproofing homes is only one step in mitigating airport noise in Anchorage and elsewhere. The federal agency is working with municipalities, including Anchorage, to require stricter residential zoning near airports and to develop building codes that would require increased soundproofing in homes.While some communities across the United States need extensive measures to reduce the impact of airport noise, such as home soundproofing, for other communities, like Fairbanks and Juneau, it was a matter of purchasing undeveloped residential land or buying out a homeowner.In 1999, the FAA gave Fairbanks International Airport $350,000 to purchase undeveloped residential property near the airport."We don’t have a noise problem here, certainly not to the extent that we have to ask for any more money,’’ said Doyle Ruff, manager of Fairbanks International."We’re very fortunate ... the community has always been very supportive of the airport," he said.The FAA last year bought out one homeowner in Juneau near the airport. The home and one-acre lot cost the FAA $400,000, Sullivan said."Only one residence met the criteria," said Allan Hesse, manager of Juneau International Airport. "Our airport is a pretty quiet airport."What Juneau residents do complain about is noise from helicopter and airplane flightseeing traffic during the summer tourist season. But those operations are not based out of Juneau International so they don’t qualify for noise-mitigation money by the FAA, said Sullivan.The eligibility for the "quieter home program" in Anchorage was based on studies and computer modeling of aircraft noise during day and night operations. To qualify for the home improvements in Anchorage, an average of 65 decibels or louder had to be recorded for an area.That’s about the same noise level as having a face-to-face conversation, Maser said.Aircraft noise recorded between 10 p.m. and 7 a.m. was weighted with an additional 10 decibels, because that’s when most people are sleeping and more likely to be disturbed by airplane noise, Maser said.According to airport officials, the human ear perceives an increase of 10 decibels as twice as loud.Michael Hotaling, a San Diego-based noise consultant with C&S Engineers Inc., said 65 decibels is the limit at which people begin to find sound annoying.In addition to Anchorage, Hotaling and his company have worked with several communities in the Lower 48 on noise-mitigation projects.Residential development occurs within 1,200 feet of the Anchorage airport boundary on the east side, and a half mile to the south. The airport is bordered by ocean to the north and west.Anchorage rivals Memphis, Tenn., as the busiest cargo airport in the United States, averaging nearly 520 cargo flights weekly. And with hundreds of takeoffs and landings daily from cargo and passenger aircraft, nearby Anchorage residents are inundated with some type of airplane noise. But airport officials are only offering the sound mitigation improvements to those who have decibel levels at or above the 65 decibel level, as outlined on a computer-generated map."A myriad of people would like to participate in the program," Maser said. "We recognize that noise doesn’t stop at the line."Ironically, most complaints the airport receives about noise aren’t from folks who live near the airport, who either accept the noise or are somewhat used to it, Maser said.People most often complain when aircraft are forced into a different flight pattern due to high winds, bad weather, or by maintenance or snow removal operations on one of the airport’s runways, Maser said.Airport officials are planning a symposium sometime in March to give all area homeowners ideas and information on how to soundproof their houses against aircraft noise, Maser said.

Alaska Central Express loses bypass mail, files Chapter 11

Alaska Central Express Inc. has filed for bankruptcy protection after losing a valuable bypass mail contract with the U.S. Postal Service.The Anchorage-based air cargo carrier filed for Chapter 11 bankruptcy protection Jan. 19, six days before its eligibility stopped for flying bypass mail from Anchorage to some 50 rural towns around the state.Alaska Central Express has been locked in a lengthy legal dispute with the Postal Service over the company’s eligibility to carry bypass mail, said Bill Patch, vice president of San Diego-based Western States Investment Corp., majority owner of the airline.Anne Butler, wife of former MarkAir owner Neil Bergt, owns 49 percent of the airline. Bergt’s son, Neil, is Alaska Central Express’ general manager.The dispute over bypass mail began a year ago after at least one of the four major mainline air carriers alleged the airline did not meet Postal Service requirements that required a company to carry payloads of at least 7,500 pounds for a year or more, Patch said.Alaska Central Express has been in business since 1988 and has in the past flown aircraft that meet the requirement, Patch said.The company is certified to fly airplanes that meet the requirement, Patch said, adding that a federal law in 1995 also exempted Alaska Central Express from the requirement.The Postal Service, however, has rejected the company’s arguments. Alaska Central Express filed a lawsuit with the Court of Federal Claims in Washington, D.C., which ruled that it did not have jurisdiction. The carrier then asked the U.S. Court of Appeals for an injunction to allow it to continue receiving mainline bypass mail during the appeal process. That request was denied and the company was notified by the Postal Service it would receive no more bypass mail after Jan. 23.Steve Deaton, network planning specialist for the Postal Service in Anchorage, said the agency would not comment on any matter concerning Alaska Central Express because of pending litigation.Patch said his company turned to the bankruptcy court hoping to get a favorable ruling, or the majority of the company’s 100 employees may be out of work."We’ve tried the other courts and we’re at the point where we don’t know where to go with this,’’ Patch said.Patch said the company can stay afloat for about a month without the bypass mail contract and expects a bankruptcy court ruling soon."We feel we have better than even odds the court will agree with us," Patch said.Whatever happens in bankruptcy court, the issue of bypass mail looms large for Alaska’s air carriers.Sen. Ted Stevens, R-Alaska, and Rep. Don Young, R-Alaska, are sponsoring bills to limit the number of air carriers who deliver bypass mail.Stevens says the Postal Service loses up to $150 million a year in Alaska and the program faces extinction.Stevens in 1970 secured the state’s current bypass mail law, a unique system where shipments of at least 1,000 pounds are stamped air mail but never touched by postal workers and delivered to Alaskans at cheaper parcel post rates.Some 35 air carriers -- large and small -- vie for federal money that comes from the tons of mail dispatched from Anchorage and Fairbanks daily to hub communities throughout the state, and then on to smaller villages.Federal legislation is being drafted to limit the number of air carriers that can handle Alaska mail, which includes everything from food and construction materials to medical supplies.The new legislation is being pushed by large, so-called mainline carriers including Air Cargo Express, Alaska Airlines, Lynden Air Cargo and Northern Air Cargo.Smaller carriers say if new rules become law, many of the carriers will go out of business, and passenger and cargo service to the Bush will be reduced dramatically and will be more expensive.

Cyclist invents way to ride in winter, sells it

Simon Rakower has almost single-handedly made winter cycling into a cool thing to do.Rakower is the owner of All Weather Sports in Fairbanks, inventor of the double-wide Snow Cat bicycle rim, and the technical support expert for Alaska’s Iditasport, known worldwide as the ultimate winter bicycle race, a sort of Tour de France of the tundra.The New York native and former custom bicycle frame builder started a shop out of his Fairbanks home in the early 1980s, working on bikes and ordering parts for people who shared his passion.The business grew too big for his home, so in 1990 he reluctantly moved to a storefront, which thrived during the summer months."Three-quarters of the business happens in three months, that’s the way it is," said Rakower, who has worked in the bicycle industry for 30 of his 47 years.An avid cyclist, Rakower found little time to ride in the summer. So when winter rolled around, he was out on his bike, battling the cold, ice and snow.And the bike shop, for the most part, sat stagnant.That’s when he began building a better bike rim.Winter bike riders and racers needed more flotation over snow than what a normal rim and tire could provide. Rakower began by welding two rims together and cutting out the raised edge in the middle. The double-wide rims fit standard mountain bike frames and allowed for a much better ride over snow.The new rims were quickly snatched up by Iditasport, which was then called Iditabike, racers who rode them to victory.After Rakower and shop employees had made about 50 sets of rims, production was contracted out.Today the rims are made by a San Diego-based company, and Rakower sells about 300 to 600 sets annually.About 10 percent of the rims are sold in Alaska, and the rest mostly go to snowbelt states and Europe, Rakower said. Some go to the Southwest, where riders use them on sand.Downhill racers, who rocket down snowless ski-slopes, also use the Snow Cats. The rims have dominated the Iditasport, and have been used to cross Siberia and on bikes in Antarctica, Rakower said.As popular as the rim has become, the market isn’t big enough for a major rim maker to build the product."It remains an interesting little niche," Rakower said.The rims’ retail at about $60 apiece, or $250 to $350 for a complete wheelset, depending on the hubs and spokes used.Rakower also makes a lighter but more expensive version and a new rim for nonstandard 29-inch wheel mountain bike.Along with the wheels, Rakower began importing Nokian steel-studded tires made in Finland and acted as the company’s sole distributor for years.The tires, which can cost more than $100 apiece, stick to the ice, making once impossible terrain ridable and safer, Rakower said.A complete wheel and tire package can cost upwards of $600, more than most folks spend on an entire bicycle.For many, the price is worth it."The combination of the Snow Cats and the Nokians have opened up a whole new world for recreational riders and racers," said Dohnn Wood, owner the Bicycle Department at The Motorcycle Shop in Anchorage.The wheels and tires also get people in shops during the slow winter months."It gives more options and more reasons for people to come in," Wood said.Rakower has promoted winter biking on his shop’s Web site, giving tips to cyclists on everything from how to dress to the right grease to use in bone-chilling temperatures.He also has written for bicycle industry newspapers, giving tips to other bike shops on how to sell winter cycling.All Weather Sports is one of two Fairbanks bike shops, and employs six to eight people in the winter and about a dozen people in the still-more-popular summer months.In addition to bikes, the shop carries cross-country skis in the winter.Rakower’s promoting of winter cycling has left him little time to ride nowadays, whether it’s hot or cold."I used to ride in the winter because I couldn’t ride in the summer. Now I don’t have time to ride in the winter," Rakower said. "I still fantasize about returning the business to the small house and to my original vision of just providing service and parts."

Marathon, Unocal hit pay dirt in Ninilchik

KENAI -- Working together can be a gas. Marathon Oil Co. and Unocal found this out Jan. 22 when a joint exploration in Ninilchik struck pay dirt, producing a significant natural gas discovery.The Grassim Oskolkoff No. 1 well, the first exploration well drilled under a joint operating agreement between Unocal and Marathon, has been estimated to have the ability to produce 90 billion cubic feet of gross proven recoverable gas reserves.A 39-foot interval in the sand produced restricted flow rates of up to 11.2 million cubic feet per day. The zone tested was at 9,822 feet, and the well was drilled to a total depth of 11,600 feet."We’ve had huge success on this first exploratory well," said Unocal Alaska spokeswoman Roxanne Sinz. "Ultimately, what we’re doing is looking at building a pipeline. With this significant discovery, it has moved to the next step."That next step, plans for a natural gas pipeline running from Homer to as far north as the Matanuska-Susitna area, is well under way. The two companies will again combine forces and join with Enstar to build and operate the Kenai Kachemak Pipeline. Marathon and Unocal will split ownership of the pipeline project, which is scheduled to begin construction this fall and begin transporting gas by late 2003.In the meantime, the two companies have already begun searching for more wells across the Kenai Peninsula. Unocal Alaska Vice President Chuck Pierson said that Unocal has begun a separate three-well exploration program on the southern peninsula."These wells have major implications for natural gas development on the southern Kenai Peninsula," Pierce said. "Based on the results of the Marathon- and Unocal-operated programs, we expect to have sufficient gas resources to support construction of the proposed Kenai Kachemak pipeline."A report commissioned by the Anchorage Economic Development Corp. last year found that Southcentral Alaska will face natural gas shortages by the middle of the decade unless new reserves are discovered.Some gas producers stepped up exploration last year, citing a couple of potential reservoirs that could help heat and power cities across the region for decades.Unocal produces oil and gas in Cook Inlet and on the Kenai. According to the company, the Ninilchik unit and other prospects on the southern peninsula could contain reserves of between 100 billion and 600 billion cubic feet of gas.Unocal’s three wells will begin testing over a three-month period beginning this month. The first, Ninilchik Native Association No. 1 well near Deep Creek, is nearing completion. The second well, Pearl No. 1, will begin operation sometime this month in southern Ninilchik. Griner No. 1 well, located in Anchor Point, will begin drilling around mid-March.Marathon already has three wells completed on the peninsula that are ready to go into operation. John Barnes, manager of Marathon’s Alaska business unit, said one of those ventures is a second well, Grassim Oskolkoff No. 2, at the joint site in Ninilchik. He said two more southern peninsula sites, the Susan Dionne well and the Falls Creek well, that were drilled during the ’60s, have been refurbished and were completed at the end of 2001."The Ninilchik discovery, together with our recent Wolf Lake production coming online (came on production Nov. 17, east of the Beaver Creek field in the Kenai Wildlife Refuge), demonstrates Marathon’s continuing commitment to the Cook Inlet natural gas market," Barnes said. "More drilling is planned to identify whether gas is present and figure out what our overall volume is."The Associated Press contributed to this report.

'02 will be good year; believe it, work for it

 The year 2002 has finally arrived, and like clockwork, everyone wants to "bless" us with his or her opinion on the economy for this year. Good or bad, we get to hear what they think we can accomplish this year based upon their suprior interpretation of economics, finance, business strategy, world events and politics. Only a month after the new year, everyone has put last year behind them and is moving on. And, in the opinion that I want to "bless" you with, moving on is a very good thing. I say this because, in my opinion, 2002 will be a good year. There, I said it. Now, go seize the day. Now that you know this will be a good year, what are you going to do? Are you personally going to have a good year or a bad one? Do you really need to hear this will be a good year before you get to work and make this your personal best year ever? And, furthermore, does "it’s going to be a good year" have to be "true" before you proceed to put in the necessary time, energy, action and thought to make it happen for yourself? More importantly, what if I said this is going to be a bad year? Would you just quit trying to better yourself until someone said it’s going to be a better year? In economics, business and finance, perception is often as important, if not more important, than reality. As a community, if enough individuals believe in and work toward this being a good year, then collectively it’ll be a good year, almost despite a bad forecast. Doctors know this and prescribe placebos. Moms know this and tell their kids "where there’s a will, there’s a way." Expectations are contagious, and you may be susceptible to them just like a smile or a cold. Currently on the national scale, some pundits see only the bad news. And yet, some businesses and some individuals will succeed like true Americans beyond their wildest dreams, in spite of all this negativity. Locally, things didn’t hit us nearly as hard as the Lower 48. Instead, we’re dealing with BP layoffs, fewer tourism bookings, reduced air freight and air travel, and lower oil prices. You know, Alaska really has only one dreary forecast that gets recycled every few years. Once again, many companies and individuals will succeed like true Alaskans beyond their wildest dreams this year, almost in spite of the negativity listed above. Fortunately, we have plenty of good news, too. We still have lots of new construction projects, a strong real estate market, low interest rates, a growing airport system, expanding health care industry, low or no taxes, lots of federal development money coming in to Alaska, more net jobs than last year, a strong and growing services market, and a positive, albeit a small one, rate of growth. Also, plenty of fortune-tellers claim the U.S. economy will climb out of recession by the time flowers bloom this spring. And now, back to real property. Without letting precise numbers, percentages and demographics get in my way, I can safely say that Anchorage has more buyers ready, willing and able to buy than there are homes available. We have more jobs than last year. We have more people than last year, and new people keep moving to town. Most need and take jobs but they also bring their resources, purchasing power and ideas with them. We have a high percentage of homeowners and yet, about a third of our town rents. Many, many people bought over the last several years when prices hadn’t yet caught up to the true market value and have thousands of dollars in equity tied up and now they’re ready to get a bigger place. Taking all of this information into account, I’m here to tell you that more than one huge growth market exists in Anchorage and in Alaska. Real estate, a large part of anybody’s financial security, and all of its related peripheral goods and services, is just one of those industries that will grow. Over the next several years, new construction must expand, but the real nuggets of value available to the general public will be found in remodels, expansions, upgrades, stepping up to larger homes, investment properties and rentals. I predict that lots of real estate professionals will be teaching "First Time Home Seller" seminars to help people take advantage of these trends. This will be a good year! Ken Jelinek is an associate broker with RE/MAX Properties in Anchorage.  

Alaska Air Group posts loss, but plans to add new routes

SEATTLE -- More than $50 million in aid from the government’s airline bailout package wasn’t enough to keep Alaska Air Group profitable, as the company reported a wider loss for the fourth quarter.Hurt by the decline in air travel since Sept. 11, the parent company for Alaska Airlines and Horizon Air said Jan. 18 it had a net loss of $36.4 million, or $1.37 per share, for the fourth quarter ended Dec. 31, compared with a loss of $28.9 million, or $1.09 per share, a year ago.The results included $52.3 million in pretax funding from the government’s airline bailout package and a $10.2 million charge to retire Horizon’s fleet of F-28 aircraft. Excluding those one-time items, the company lost $62.9 million, or $2.37 per share, in the quarter.Analysts polled by Thomson Financial/First Call were expecting a loss of $2.21 per share for the quarter.Revenue for the quarter was $462.2 million, compared with $532.4 million in the same period last year.Despite the loss, Alaska officials said the company fared better than many in the airline industry. The company said traffic at Alaska was down 5.6 percent for the quarter, compared with 19 percent industrywide."The entire airline industry has been struggling in the wake of Sept. 11, but fortunately we’ve been much less impacted here on the West Coast," Alaska chairman and chief executive John F. Kelly said.To date, the company has received $81.4 million in federal assistance. It has applied for an additional $12.3 million in assistance for 2002, the company said.Kelly said there have been few layoffs and a slight increase in passenger loads. He said the company plans to have its schedule back to 100 percent by Feb. 10, and will add new routes on both airlines this year.

Alaska's road conditions slightly off national mark

Alaska compares favorably against other states in the condition of its highway and road infrastructure, Joe Perkins, commisioner of the state Department of Transportation & Public Facilities, told the House Finance Committee Jan. 18. The national road information program reports that 60 percent of Alaska’s highways and roads are in good or fair condition, compared with the national average of 68 percent of roads in good or fair condition, Perkins said."Considering the extreme weather and harsh physical conditions which we deal with in Alaska, like permafrost and thermal cracking, I think we stack up pretty well with the other states," Perkins said.Georgia, Alabama, Florida, Wyoming and Kansas are rated as having the nation’s best highways, while California, Massachusetts, Missouri, Connecticut and Louisiana have the worst, Perkins told the committee.Nationwide, 21 percent of roads and highways are in mediocre condition and 11 percent in poor condition. In Alaska, 34 percent of roads and highway are in mediocre condition and 6 percent in poor condition."We need to concentrate on improving our mediocre roads and moving them into the good category. We can do this by repaving roads," Perkins said.The Jan. 18 hearing was an opportunity for Perkins and commissioners of other agencies to present results of their departments’ "missions and measures," the performance goals set by the Legislature on which they report annually.Another performance goal Perkins is proud of is the measurement of highway lane miles maintained per full-time state employee, compared with the other Western states.During fiscal 2001 the Northern Region of the Department of Transportation and Public Facilities maintained 42.2 lane miles of highway; the Central Region, which includes Southcentral Alaska, maintained 37 lane miles and the agency’s Southeast Region maintained 35.3 miles per employee.This compares with the average of 29.3 miles maintained per employee in the 18 Western states, Perkins told the committee.The commissioner also said the department is contracting out about half of the design and engineering work for state projects under its management, which is about the level of outsourcing maintained over the past three years.Doing half of the engineering in-house and contracting out half is considered the best mix, Perkins said.The department also paid vendors in about 24 days, on average, in the last fiscal year, he said.

Brian Nerland heads KeyBank in Alaska

Brian Nerland has been chosen president of KeyBank’s Alaska district. He succeeds Michael Burns, who had earlier announced his retirement after serving as president since 1985.Nerland began his career at the bank that same year. He previously served as senior vice president and commercial banking team leader.Nerland is a fourth-generation Alaskan, a descendant of Andrew Nerland, the Gold Rush pioneer who established a furniture business in Fairbanks which lives on in Anchorage as Sleep Comfort by Nerlands."Brian brings to the position years of experience in sales and business development as well as an outstanding history of community involvement," said Burns. "I am leaving the bank in excellent hands."Burns will remain in Anchorage. He has not announced his future plans.

Business Profile: PDC Inc. Consulting Engineers

Name of the company: PDC Inc. Consulting EngineersEstablished: 1975Location: 1028 Aurora Drive, FairbanksTelephone: 907-452-1414Major focus of services: PDC Inc. Consulting Engineers provides civil, electrical, structural and mechanical engineering services as well as surveying and environmental work.History of the company: PDC traces its roots to two engineering firms founded the same year in Alaska, Rowen Design in Fairbanks and Fryer Pressley in Anchorage. The two companies merged in 1990. The firm merged with Loftus Engineering of Fairbanks in 1998. In January 2000 PDC completed a merger with Lake Boswell, the oldest Fairbanks engineering firm, started in 1973.The original merger marked the addition of different engineering disciplines. Rowen Design specialized in civil engineering and surveying while Fryer Pressley handled mechanical and electrical engineering. In the 1980s the owners recognized the importance of multiple disciplines, noted PDC Principal Ron Gebhart. Since then company leaders have aimed to add all the different engineering types at both the Anchorage and Fairbanks offices, he said. In the mid-1990s PDC added civil engineering at its Anchorage office, and last year incorporated structural work there as well. The acquisition of Lake Boswell brought electrical engineering to the Fairbanks office.These additions have led PDC to serve as a prime consultant on projects rather than a subcontractor.Past projects include structural design for the new Fairbanks courthouse, work on the Eielson Air Force Base fuel hydrant system, mechanical and electrical design for the Anchorage Consolidated Public Health Laboratory and Medical Examiner’s Office and mechanical and electrical work for the Elmendorf AFB Joint Military Mall.Current design projects include the University of Alaska Fairbanks museum addition, the Chena River Centennial Bridge and bicycle/pedestrian path, the Alaska Railroad passenger depot and the Alaska Psychiatric Institute replacement facility in Anchorage.In Fairbanks PDC employs 44 people plus another 40 employees in Anchorage.Top accomplishment of the company: Gebhart cited PDC’s "growth from a small firm with limited opportunities to the second largest design firm in Alaska." As a result of PDC’s growth, the company has gained opportunities to work on interesting and challenging projects, which attracts top engineers, he said.Major player: Ron Gebhart, principal, PDC Inc. Consulting EngineersGebhart earned a bachelor’s degree in civil engineering from South Dakota School of Mines. He worked as a transportation consultant and for the South Dakota Department of Transportation before moving to Alaska in 1984.-- Nancy Pounds

Bering pollock a fishing success story; Kodiak Tanner crab is not

KODIAK -- Late January marks the start of America’s biggest fishery, Bering Sea pollock. It’s also one of our nation’s best fish stories. Bering Sea pollock not only does great in world markets, but more importantly, thanks to good stewardship by fish managers, the stocks are healthy and at all time highs. Starting Jan. 20, Alaska’s trawl fleets set out their nets to gather a bounteous harvest of more than 3 billion pounds of pollock from the Bering. That accounts for roughly 30 percent of all fish landed in the United States and last year pumped about $800 million into Alaska’s seafood industry. That’s a lot of fish sticks. Trawl fisheries for pollock open on the same day in the Gulf, where another 220 million pounds are available for harvest. In other Alaska fisheries so far this year, by nearly all accounts, Kodiak’s Tanner crab fishery was a big blow out, both in terms of bad weather and scratchy catches. "It’s as close to being a rout as you can get," said Dave Woodruff of Alaska Fresh Seafoods. To make matters worse, much of the catch was "dirty crab," meaning very dark and covered with algae or barnacles. Woodruff, who advanced $2 a pound for the crab before he knew how bad it would look, said that price "was going to stretch him to the limit," as he scrambled to sell the crab to Japanese buyers, who purchase nearly all of the Kodiak catch. Meanwhile, the Bering Sea snow crab fishery also opened Jan. 15. By the following weekend, a fleet of 186 boats had hauled back about 2 million pounds out of a roughly 30 million pound quota. Fish managers in Dutch Harbor said the fishery was uneventful so far, although everyone was bracing for worsening weather. Crabbers there were getting $1.40 a pound for their catch, which will add up to a value of around $42 million at the docks. Alaska’s halibut harvesters will soon find out how much of the big flats will be up for grabs when that fishery opens March 15. The International Pacific Halibut Commission will decide if the Pacific coastwide catch in Washington, Oregon, British Columbia and Alaska, will be boosted to 74 million pounds, up from 73 million last year. Alaska longliners always get the lion’s share of the catch, and this year could be 61 million pounds, up from just more than 58 million in 2001. The pricey black cod, or sablefish, fishery also opens March 15, and an abruptly canceled season in Canada could boost the value of Alaska’s catch. Citing so-called "significant declines in abundance," the Department of Fisheries and Oceans ordered all gear off the water by Jan. 18. The department will assess the situation and decide if fishing for the roughly 8 million pound catch can resume at the end of the month. Alaska longliners typically get more than $3 a pound for their black cod, virtually all of which goes to Japan. There is a very limited supply of only about 25 million pounds of wild black cod each year in the whole world, most of which comes from Alaska. Seafood ratings The 16th annual survey done by SeaFood Business Magazine indicates that chefs, restaurants and grocery stores throughout the United States are optimistic about seafood sales this year. Here are some facts and figures: The supermarket industry posted its highest profits in 30 years for the 2000-2001 fiscal year, according to the Food Marketing Institute. Despite a slowing economy and increased competition from convenience and superstores, 128,000 supermarkets nationwide took in more than $453 billion in 2000. Kroger is the largest retailer with 2,328 stores, and operates full-service seafood departments in 1,500 of its stores. In all, seafood contributes 1.96 percent to total sales in our nation’s supermarkets. The National Restaurant Association projected that, even taking the economic slowdown into account, sales approached $400 billion last year, up more than 5 percent from the previous year. It’s the industry’s 10th straight year of sales growth. People in the food service industry predict that seafood sales will continue to strengthen because the population is getting older, and older folks eat more fish. Shrimp and farmed salmon are the two best selling seafood items in U.S. restaurants. What do restaurant operators look for when buying seafood? In order, they look for quality, service, price, variety and reputation. Their top five seafood sourcing issues are: availability, buying quality seafood, price, consistent supply and service.

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