Cruise ship pollution bill sails through special session

JUNEAU -- The Alaska Legislature has passed a landmark bill establishing state oversight of cruise ship pollution. The House of Representatives passed the bill 29-5 about 10:35 a.m. June 9, and the Senate followed with a 13-6 vote about seven minutes later, sending it to Gov. Tony Knowles for his signature. The bill, with final touches from a House-Senate conference committee, authorizes the Department of Environmental Conservation to negotiate with the cruise industry on regulations for wastewater discharges, air emissions and solid-waste handling, thereby reinforcing and surpassing federal environmental protections. A $1 per passenger fee will be assessed to pay for the state’s program. Cruise companies will register with the state and agree to comply with the regulations, as well as provide a series of reports. While there was sharp debate about whether the bill went far enough or too far -- including a close vote in the Senate defeating a $10 passenger head tax -- the legislation is groundbreaking. It contains the first regulation on the content of graywater discharges ever passed by any government. "Bam! We’ve kicked it up a notch, haven’t we?" a smiling Knowles said soon after the Legislature adjourned the special session he had called. He said that DEC Commissioner Michele Brown, "a true hero," will start preparing for negotiating rules with the foreign-based cruise companies. "Whatever flag they fly, they must honor, in our waters, our values and our environment," the governor said. Brown said that the bill gives the department the tools it needs to inspect ships, monitor emissions, take water samples and enforce pollution limits. But despite the historic occasion, there was discord along the way. Six Senate Democrats, including Juneau’s Kim Elton, voted against the bill because the final version that came back from a House-Senate conference committee wasn’t as explicit as the Senate-passed bill in guaranteeing testing for all kinds of pollutants in wastewater. "It is a good day, that we passed cruise ship legislation," Senate Minority Leader Johnny Ellis of Anchorage said later, without enthusiasm. "It could have been a better day." House Democrats unanimously supported the bill but also expressed misgivings. "I think this is sort of a wimpy response to the problem," said House Minority Leader Ethan Berkowitz of Anchorage. The bill’s co-author, House Finance Co-Chairman Eldon Mulder, bristled at that, emphasizing that Alaska now has gone where no other state has gone. "This is a huge step; it really is," said Mulder, an Anchorage Republican. Meanwhile, majority Republicans said the Democratic governor’s three-day special session was crassly political because nothing will be achieved before next year that couldn’t have been anyway. The North West CruiseShip Association had agreed to abide by the provisions of the bill, and receipt authority was given to DEC in the operating budget to collect $700,000 in industry fees. The regulations that DEC will negotiate won’t be done before this cruise season is over. "But the fact is, the momentum was there," acknowledged Senate President Rick Halford, a Chugiak Republican. Three instances of wastewater discharges in violation of federal law, all since the May 8 adjournment of the regular session, helped sustain the drive for passing the bill. Brown said that accepting a civil contract with the industry in lieu of law, even if temporarily, would set a bad precedent. And the state wouldn’t have the same enforcement ability to deal with criminal violations, she said. Putting the bill off until next year also would have slowed the rulemaking process. However grudgingly, Republicans moved the bill rapidly through their committee structure and to the floor. Along the way, they made changes delaying the new wastewater discharge requirements for small cruise ships and state ferries, and shored up the bill to ensure DEC access to all holding tanks. Concern had been raised about whether ballast water was being mixed with sewage, as several ships are holding their waste for discharge outside of Alaska waters rather than risk exceeding the new federal limit on fecal coliform colonies in blackwater, or toilet waste. A final amendment clarified that the state can inspect ballast tanks or other holding tanks if they have been used for storage of sewage or graywater, which comes from showers, sinks, laundries and galleys. But the conference committee ended in a dispute about whether the industry should report to the state any discharges of photo-processing chemicals, medical waste and other toxic materials, which are illegal to dump under federal law. The conference committee voted along party lines against requiring such reports, although industry representatives agreed to a statement by the Legislature that it expects them to notify the state of any such discharges. Mulder was angered by the final push for placing another reporting requirement on the industry. He said federal law ensures adequate reporting, although that was disputed. "Do we want to be duplicative, redundant and otherwise repetitive?" Mulder asked after the conference committee adjourned. "It appeared to me to be picking a fight where there was none." Rep. Beth Kerttula, a Juneau Democrat who has been pushing for cruise ship regulation the past two years, said it was a "right to know" issue for the state. If cruise ships don’t discharge illegally, they merely would file a report saying so, said Kerttula, one of the conference committee members. "As an attorney, as an Alaskan, I want it clear in our law that we know exactly what is coming out of these ships." But Republicans on the conference committee, including Juneau Rep. Bill Hudson, wouldn’t go along. "It’s a shame that here we had the Senate pass a bill that made it clear that all discharges could be tested and all discharge systems could be examined, and the House wouldn’t go for that, presumably at the industry’s behest," said Gershon Cohen of Haines, a clean-water activist. "The result is maybe we closed part of a loophole; maybe we didn’t. Maybe we closed most of a loophole; maybe we didn’t ... It is remarkable and noteworthy that a bill was passed." Kerttula said her father, former House Speaker and Senate President Jay Kerttula, gave her some perspective. While it took 10 years to get an anti-trust law on the books, he reminded her, she was able to achieve a comprehensive cruise ship bill in just two. "I feel very good about what we accomplished," she said. "But this voyage isn’t over yet." Halford, who worked with Kerttula on the issue, said he believes the environmental issues mostly have been resolved. The state can test for whatever pollutants it wants to now that it has access to any facilities used for blackwater and graywater, he said. "Whatever you find in the sample, you have all the other laws to act on." But Halford said there are revenue issues remaining, including making the cruise industry pay the apportioned corporate income tax and a passenger head tax. An amendment for a $10 head tax was defeated by a vote of 10-9 in the Senate. It would have raised about $7 million, which co-sponsor Randy Phillips, an Eagle River Republican, said would be a modest contribution toward the facilities and resources that the cruise industry enjoys in Alaska. Sen. Gene Therriault, a North Pole Republican, countered that the industry does a lot more marketing for the state of Alaska than either the state or the domestic private sector. Sen. Alan Austerman, a Kodiak Republican who represents small coastal communities in Southeast that might be affected by cruise ship pollution, voted against the head tax and against the Senate bill on June 8. He refused to discuss his reasons. The Alaska debate has drawn widespread attention, with a recent editorial in a Honolulu newspaper urging Hawaiian lawmakers to pass a similar bill. Former British Columbia Premier Mike Harcourt was at the Capitol watching the proceedings. And Randy Ray of the U.S. Cruise Ship Association said he was aware of several states or Canadian provinces that are studying the legislation. Ray told lawmakers: "This will set the template for the rest of the planet."  

Women-owned businesses

Jean Conn is a Caddo Indian from Checotah, Okla., raised on her family’s cattle ranch, a former manager of the family-owned gas station and convenience store in Checotah, and now president and owner of her own paving, snowplow, construction and equipment leasing business in Anchorage. She is so satisfied with the company, and confident in its future, that she refused a recent buyout offer. Conn was educated to be a teacher -- she has a bachelor of arts degree in elementary education from Northeastern State University in Tahlequah, Okla. -- and loves working with children. But there was no doubt in her mind that she would eventually be in business for herself. "I grew up in a family that ran businesses, including cattle, gas stations, and a part interest in a local bank," she said. "Being in business for yourself was natural. It was part of life." Growing up in rural Oklahoma also taught her to enjoy working outdoors, to endure long hours, and to be quick in taking charge when things happen. In 1998 her husband, James "Shorty" Conn had a stroke. It left him partially disabled. Jean and Shorty Conn had formed their company in 1994, buying out the assets of Custom Paving, a company in which other family members held interest. Conn had been in charge of the business side, leaving equipment management to her husband. After the stroke -- it happened on their 31st wedding anniversary -- she had to take control of everything. In Alaska Women owned 25.9 percent of nonfarm businesses in Alaska in 1997, the latest data available from the Census Bureau. The percentage is about the same as women-owned businesses on the national level, which was 26 percent in 1997, the Census Bureau said. In Alaska, women owned about 16,000 business firms and employed 16,520 people in 1997, according to the U.S. Small Business Administration. The latest data available on women-owned businesses was published April 4 by the Census Bureau in a report, "1997 Survey of Women-Owned Business Enterprises." On a national level, the census data shows women-owned businesses increasing faster than businesses owned by men. Comparing the 1997 data with 1992, the previous year for which statistics on women-owned businesses were reported, the number of firms owned by women increased 16 percent compared with less than 2 percent for men. Also, the number of women-owned firms with employees increased by 37 percent, or three times as fast, as the number of women-owned firms without employees, which grew 12 percent between 1992 and 1997. However, 84 percent of the women-owned firms had no employees, according to the census data. In contrast, the number of firms with employees owned by men declined by 4 percent between 1992 and 1997, according to the data. Nearly all the firms covered in the census studies in 1997 and 1992 were small businesses. Receipts for women-owned businesses were typically small. Nearly 69 percent had revenues of less than $25,000 in 1997, the Census Bureau said.  

Pearce heading for D.C.

JUNEAU -- Sen. Drue Pearce, R-Anchorage, announced June 9 she is leaving the Senate to take a job in Washington, D.C.Pearce said she’s not free yet to discuss details of the new job. She would only say she’ll be continuing to influence Washington decisions that affect Alaska, but from inside the Beltway.It has been rumored for months that Pearce was being considered for a job in the Bush administration.Pearce announced her departure on the Senate floor at the close of a special legislative session on cruise ship legislation."It has been a true privilege and honor to represent the people of Anchorage these 17 years," Pearce said. "I am proud that Alyce Hanley and I were the first two women elected to represent a district in Alaska and I’m proud that while I have served, women -- including me -- have served in every leadership position in the Legislature."Pearce was Senate president 1995-1996 and 1999-2000, has been co-chairwoman of the Senate Finance Committee and this year is chairwoman of the Senate Rules Committee.Senate President Rick Halford, R-Chugiak, said the procedure for replacing a departing senator is that Republicans in her district will forward a list of names to Gov. Tony Knowles who will appoint the replacement. That appointment must be confirmed by Senate Republicans.Republican Reps. Andrew Halcro and Norm Rokeberg are the two House members who live in Pearce’s Senate district, and both said they are interested in the job.Neither Halford nor Knowles would comment on candidates for the job. Halford did say governors have traditionally tried to appoint a candidate who’s not interested in running again for the seat.

Business Profile: Alaska Business Insurance

Name of the company: Alaska Business InsuranceEstablished: 1983Location: 1400 W. Benson Blvd., Suite 410, AnchorageTelephone: 907-272-1825Web site: www.alaskabusinessinsurance.comMajor focus of services: Alaska Business Insurance provides insurance services, chiefly commercial, but also serving personal lines. The agency has developed a niche business by providing insurance services for the Alaska aviation industry as well as guides and outfitters.History of the company: After working for another insurance agency four Alaskans decided to open their own company, Alaska Business Insurance. The company started with the quartet of owners plus one employee.In the mid-1980s Alaska Business Insurance moved to its current office in Midtown Anchorage. In 1988 Alaska Business Insurance acquired Alaska Frontier Insurance with an office in Eagle River and retained the employees.The agency also operates a downtown Anchorage office for life and health insurance.In 1992, two of those owners -- Wayne Burger and Jim Campbell -- bought out the other two.Today, the insurance agency employs Burger and Campbell plus 16 other Alaskans.Last summer Alaska Business Insurance introduced online insurance applications for some services including personal lines and aviation.Top accomplishment of the company: "We’ve been able to attract and keep competent employees," cited Burger, Alaska Business Insurance secretary/treasurer. "Over the years we’ve had very small turnover. We also have some real long-term clientele. We’re one of the few remaining small independent agencies not part of a nationwide firm or a large firm."Major players: Wayne Burger, secretary/treasurer, and Jim Campbell, president, Alaska Business Insurance.Burger worked in the surety bond business in Seattle between 1975 and 1981 before moving to Alaska. Campbell was transferred to Alaska with the U.S. Air Force and decided to stay in the state after completing military service. He began working in the insurance industry in the mid-1970s.-- Nancy Pounds

Home Depot to begin construction in Fairbanks

FAIRBANKS -- Home Depot officials expect to start construction later this month on a Fairbanks store. The start of work on the 130,500-square-foot store would come a month sooner than previously stated. Spokesman Chuck Sifuentes said the store should open next spring. The Anchorage firm of Koonce, Pfeffer, and Bettis is designing the Fairbanks store, Sifuentes said. A general contractor has been selected, but Sifuentes declined to name the company because contracts have not been signed. The store will be larger than most in the Atlanta-based chain, Sifuentes said, but smaller than Anchorage’s 133,179-square-foot store. The Fairbanks store will employ 150 to 200 workers, feature a 20,000-square-foot garden center and offer 500 to 700 parking spaces. Sifuentes said the company will begin construction once the city of Fairbanks issues building permits.  

Hats off to Alyeska for improving safety in Prince William Sound

Our group -- the Prince William Sound Regional Citizens’ Advisory Council -- doesn’t hesitate to criticize Alyeska Pipeline Service Co. when the occasion calls for it. Neither do we hesitate when praise is in order, and this is such an occasion. I am pleased by the improvements Alyeska is making to the crude oil transportation system in Prince William Sound and at the Valdez Marine Terminal, and it is time to say so publicly. The Sound has one of the safest crude oil transportation systems in the world. Alyeska’s contractor, Crowley, operates a fleet of 10 vessels, including five new escort tugs designed specifically to assist tankers in the challenging environment of the Sound. Since 1989, Alyeska and its owners have increased oil recovery capability more than 11 times; have increased containment boom from five miles to 35 miles; and have increased storage capacity for recovered oil from 27,000 barrels to more than 800,000 barrels. The Coast Guard operates one of the most modern vessel tracking systems in the world and closely monitors ice and weather conditions that could affect navigation in the Sound. An excellent system of weather reporting buoys provides critical information to operators of the tankers, their escorts and the public. Major stakeholders -- including the tanker operators, Alyeska, the Coast Guard, the Alaska Department of Environmental Conservation and the Prince William Sound Regional Citizens’ Advisory Council -- provide oversight for these systems and train together in drills and exercises that simulate oil spill response. Our group has not merely reviewed and commented on these developments, but it has taken the lead in some projects like the ice detection radar project. In collaboration with National Oceanic and Atmospheric Administration, the U.S. Coast Guard, the Canadian Coast Guard, the Alaska Department of Environmental Conservation and the Oil Spill Recovery Institute, the council is working on plans for a sophisticated ice detection radar system to be installed on an island near Bligh Reef. This radar will provide the Coast Guard and tanker operators with better information on ice presence and movements than any port has ever had. Alyeska’s support has been central to the radar project. The company has contributed site engineering, the tower for the radar equipment, logistical support and assistance with funding. At Alyeska’s Valdez Marine Terminal, years of deferred work were causing reliability problems in the complex operations of oil storage and tanker loading. Alyeska recognized the needs and has started to address them. A key example involves upgrades to the terminal’s Fire Prevention and Response System. Alyeska tested the seawater intake at the main fire water pumps and confirmed the capability to deliver large volumes of fire water anywhere on terminal grounds. After addressing a critical sludge problem in all 18 crude oil storage tanks, Alyeska tested and confirmed the ability of the foam system in those tanks to pump retardant foam to suppress a tank fire. Alyeska next successfully tested the foam delivery system in the East Metering Building, one of the most critical facilities at the terminal. There are other examples, ranging from upgrades to the tanker vapor recovery system to repairs of the piping that delivers ballast water from tankers to the shore-side treatment facility. With government oversight, continuous improvement, and citizen involvement, we can have both the benefits of oil production and protection of the environment that makes Alaska an incomparable place to live. Our council will never allow a return to the complacency that made the Exxon Valdez spill possible. History justifies our concerns, as do monthly spills on the North Slope. The oil delivery system consisting of the trans-Alaska oil pipeline, the Valdez Marine Terminal and the tankers have all been part of a proven engineering feat that continues to perform after 24 years. Alyeska’s maintenance and special project efforts are essential to ensure that, as it ages, this oil delivery system continues to meet the expectations of Alaskans for safety, integrity and environmental performance. All of this is an effort measured not just in the millions of dollars, but in the dedication of the men and women who work for Alyeska. We salute the company and its people for their work to reduce the risk of catastrophic oil spills from tankers and at the Valdez Marine Terminal. Stan Stephens, who operates a cruise- boat business in Valdez, is president of the Prince William Sound Regional Citizens’ Advisory Council. He can be reached by e-mail at ([email protected]).  

When is a business loan a good idea?

Borrowing money can be appropriate when the purpose is productive and the use of the money will cause liquidation of the loan. Here are a few examples of when it is appropriate to borrow money: * To purchase a piece of equipment used to make a product that will sell at a profit. Increased profits result from the additional equipment, which repay the loan. * To purchase inventory that is then resold, either in the raw form or as a finished good. The proceeds from sales then repay the loan. * To purchase a facility to house a business. The profits generated from the business being housed will repay the loan. In each of these examples, there is an additional source of repayment resulting from the loan proceeds: sale of equipment, liquidation of the inventory, or sale of the facility. Here are a few examples of loans that create greater risk that a borrower or lender should normally avoid: * To pay taxes. Taxes are a part of doing business. There is no repayment source derived from a loan for taxes. A business owner should be planning for this expense and holding back the cash needed. * To cover payroll. There are few instances that a loan should pay for normal operations such as salaries, supplies and rent. Unless salaries are used to generate well-defined revenue, the cash provided from the business should support normal operating expenses. A business owner should ask the question, "Does this salary benefit the business’ bottom line?" One of the few instances where this might make sense could be when a business is seasonal or service-related. Nevertheless, borrowing for operating expenses is higher risk. * To purchase personal assets or cover the cost of a vacation. Both of these reasons for borrowing suggest a lack of planning resources for future desires. There are exceptions for borrowing money for the above purposes. For instance, when money from operations is used to purchase equipment and subsequently the business is short of cash for taxes. A lender will take this into consideration when reviewing the loan request. When the banker requests collateral and will loan less than 100 percent of the value of the collateral, it’s to assure a repayment source is available to cover the full outstanding debt even if the primary source is lost. Neither the borrower nor lender succeed when a secondary source of repayment is insufficient to repay an outstanding obligation. The approach a lender takes to a loan request is exactly the same approach a potential borrower should take. * Do I have the means to repay the loan within the terms provided? * If my plan fails, can I still repay the loan from other sources? * Will the loan increase revenues or improve production, thereby reducing expenses? Borrowers are optimistic or they wouldn’t be requesting the loan. Justification can be easy if a borrower only reviews the positive elements in the request. A quality lender does a better job for a prospective borrowers by measuring the positive elements and comparing them to the risks associated with the loan. Bankers want to make loans when everyone gains from the credit extended. If you are considering borrowing money, even if it’s from Cousin Bob or Uncle Ralph, I encourage you to present your package to a banker and see what he thinks about your project. I can assure you the banker is the "ultimate sounding board" who will help you see the risks, and thereby determine if the rewards are worth it. Ron Kukes is president and chief executive of First Interstate Bank of Alaska. He can be reached via e-mail at ([email protected]).  

Icy Straits to add dry kilns as one of seven companies to receive federal grants

JUNEAU -- Icy Straits Lumber Co. in Hoonah hopes dry kilns will take its manufacturing operations over a value-added hurdle."Right now we sell wood and tell people to make sure they dry it for a couple of weeks inside, under cover," general manager Wes Tyler said.With federal support, Icy Straits plans to purchase two small dry kilns that will give its products more of an edge in the marketplace. Each kiln should hold about 15,000 board feet of timber, Tyler said."It adds value to wood that wouldn’t have very good value. We’re able to make a lot of products we weren’t able to make before. But one of the greatest things is we’re going to put more people to work and keep more people at work," he said.Icy Straits -- a division of Whitestone Logging -- processes a wood mix of about 70 percent Western hemlock and 30 percent Sitka spruce at its Hoonah sawmill. With the dry kilns, the company will be able to tighten its focus on dimensional lumber, paneling and tongue-and-groove decking for floors.Whitestone employs about 95 people, with 15 to 20 people employed at the sawmill. Tyler said the company hopes to expand markets in Hoonah, Juneau, Gustavus, Haines and Interior Alaska. In Juneau, company representative Lloyd Anderson began selling Icy Straits’ products in April from a lot near Costco.Icy Straits is one of seven Alaska forest product companies to get federal support to build new dry kilns, planers and lumber-storage facilities. A dry kiln keeps lumber from shrinking and warping and makes wood stronger.Sen. Ted Stevens, R-Alaska, with help from the Alaska Forest Association, secured $2 million last year to open markets and foster value-added manufacturing, according to the U.S. Forest Service. The agency grants range from $53,000 to $700,000, forester Alan Vandiver said.Grant recipients were selected from a list of 38 applications based on how much money the companies were willing to contribute, how many jobs might be created and how much value could be added to the products, Vandiver said."It turned out we funded some moderate-sized mills, some very, very small ones and a mix in between," he said.The businesses that will receive funding make doors, windows, moldings, hardwood flooring, siding and other products. Kiln drying time depends on the moisture content of the wood."Companies realize that wood is going to get harder and harder to get. The further you can stretch the wood you’re getting, the better utilization you get out of the resource," Vandiver said.Rol-An-Door Enterprises in Ketchikan is a small, family-owned business that will use a $80,000 grant to make doors, window casings and trim out of Southeast Alaska wood. The matching funds will be used to purchase a milling machine and a dry kiln with 12,000- board-feet capacity, according to Uriah Rolando."We’ll be able to take rough, wet lumber and dry it, then mold it into the components we need," he said. "It makes it more economical."The company uses yellow cedar, red cedar, hemlock and spruce and has a small stained glass studio for custom doors, Rolando said. Rol-An-Door hopes to have operations set up by the end of the summer and will market to trade shops and architectural firms in the Pacific Northwest.Rolando said the company’s yellow cedar products are highly rot-resistant."We think we have something fairly unique," he said.In Wasilla, Poppert Milling will use a $205,000 grant to expand markets in Alaska and the Lower 48. The company produces tongue-and-groove flooring, wall paneling and architectural molding, according to production manager Dave Poppert.The company already operates dry kilns and will use the funding for three new 10,000-board-foot kilns, dry storage and a planer, he said."You can’t build cabinets out of a green piece of wood. Kiln drying takes the process into a specific time frame of two to three weeks," he said. It might take birch a year to 18 months to air dry, he said.The bulk of Poppert Milling’s wood comes from the Trapper Creek area, and the family-owned company uses Alaska birch, cottonwood and spruce.The Southeast Alaska Conservation Council supports efforts to set up dry kilns in the region, grass-roots organizer Matthew Davidson said."It’s a step in the right direction. Anything we can do to add value to trees, through in-state processing or finished projects, is good for the resource and good for the economy," he said.Other companies slated to receive federal funding are J&J Enterprises in Willow, The Valley Sawmill in Point MacKenzie, Viking Lumber in Klawock and W.R. Jones & Son Lumber Co. in Craig.

Bush may turn back Clinton mining rule change

FAIRBANKS -- The Bush administration is considering overturning a last-minute Clinton administration rule setting new mining regulations, according to the Fairbanks Daily News-Miner.Opponents to the Clinton-era rule include Sen. Harry Reid, D-Nev., the second-most powerful Democrat in the Senate’s new majority. Overthrowing the rule could affect more than 100 operators on federal land in Alaska.Under the old regulations, only larger mines had to obtain a bond to guarantee that the land would be "reclaimed," that is, naturally contoured and covered with topsoil after mining was complete. The miner also could pledge corporate assets as backing to obtain the bond.If a mine limited its current working area to five acres or less, no bond was required.The new regulations say all miners must obtain a bond, regardless of acreage, and corporate assets can’t be used as backing. The rules also may outlaw the kind of bonding pool that many small miners in Alaska use to meet the requirements.Reid led a fight to limit the Clinton administration’s mining regulations last year.While Reid didn’t succeed in blocking the rules, he did manage to pass a law that said the new regulations had to be consistent with recommendations from a National Academy of Sciences report on the nation’s mining laws. That report recommended few changes.After the final rules were published on Jan. 20, the day Clinton left office, mining groups and others filed suit. They said, in part, that the rules violated Reid’s legislation.In March, Secretary of the Interior Gale Norton proposed to suspend the rules."BLM has concerns about substantial policy and legal issues raised in the lawsuits and wants to resolve such concerns before implementing a new regulatory program," the agency said in explaining why it proposed the suspension.

It's time Alaska competes on salmon

Let’s talk about salmon.The state of Alaska recently released the latest salmon industry statistics. Summed up, canned salmon sales have increased over the past five years and frozen salmon sales have declined. The drop in the frozen market was not offset by the increase in canned sales.Farmed-raised salmon is taking over the market, particularly for high-end frozen and fresh product sales, leaving Alaska little more than a few boutique niches, like Copper River, and the bottom-rung canned market.Within the Alaska salmon industry the outcry about what has happened to the international salmon market has become deafening.If Alaska is to continue to be a major supplier in either the international or domestic salmon market, it is time to quit whining and start working on ways to remain, or more appropriately, return to competitiveness in this arena. We can start by separating some realities from fantasy.First, the farmed salmon industry is here to stay. It will not be legislated or regulated away. It has been so successful because it is responding very effectively to the demands of basic consumer behavior. Reliable supply, consistent quality, competitive prices and improving standards are the basic elements the fish farming industry has used to take control of the market. They are delivering a product buyers believe is both a good value and of high quality.Second, the government can’t save us. The latest bailout scheme is to request a finding that foreign producers are "dumping" their farmed products on the U.S. market, displacing Alaska-caught wild fish.There are glaring problems with the dumping approach. A finding for dumping requires proving the product allegedly dumped is being sold at below production cost. The fact is, farmed salmon, no matter what the source, foreign or domestic, costs less to produce and get to market than Alaska fish.Even if by some political miracle a dumping restriction were to be put in place, the vacuum in the market would be filled with increased numbers of domestically farmed fish, not Alaska salmon.The use of environmental regulations to shut down farming holds little more promise than the dumping argument. The fish farming industry is already moving to "dry land production" to negate water quality, escapement and contamination complaints.Third, consumer behavior is what it is. Price and quality are by far the biggest factors in a buyer’s decision. There may be some consideration give to other intangibles, such as catch methods, sources and organic certification, but they are comparatively small concerns.Therefore, it can be surmised that our uniquely Alaska problems, such as transportation costs, up-and-down runs and inefficient allocation processes will have little to do with a consumer’s choice of salmon products. Not many consumers are going to pay more for salmon just to feel good about supporting the Alaska fishing industry.Despite the difficulties, things can be done to re-establish Alaska as the world’s premier salmon producer. None of them is more important than understanding how important quality standards are to successful salmon marketing efforts.The one bright spot in Alaska salmon’s competition with farmed products is based on taste comparisons. Wild Alaska fish consistently scores better in side-by-side taste tests. This is the cornerstone on which to build. As it comes out of the water, Alaska salmon is the clear choice for best flavor. This superiority can be used to ensure a place in the market as a premium product, one commanding a high margin.Unfortunately, Alaska salmon’s superior value is often lost while the fish journeys from water to table. Those taste tests compare farmed products to hand-selected, carefully prepared fresh Alaska salmon fillets. Very seldom is this the actual Alaska salmon offered to the consumer.More often than not, the supermarket shopper is confronted with a frozen, or previously frozen hunk of fish. Bruises, skin damage and scale loss, freezer burn and deterioration from overlong storage are very common.Initial processing leaves the fish unbled, poorly cleaned and looking like it was butchered with a chain saw. The result is, rather than learning to appreciate the superior quality of Alaska fish, buyers often end up taking fish home that is of marginal flavor and appearance, and is sometimes just plain nasty.Consumers remember when they get stuck with bad products. Alaska salmon producers are asking customers to pay premium prices to gamble on products in a range from great to gross, and the consumers are saying no. If you want to sell at premium price, you have to be able to guarantee delivery of a premium product.In conclusion, let’s talk about what to do about this, who should do it, and -- perhaps most importantly -- who should pay for it.Uniform quality standards for all aspects of the industry should be codified. They should include rules governing handling, grading, processing, storage, transport and shelf life. Regulations of this sort give consumers confidence in other foodstuffs including eggs, milk and meat.These rules should make it impossible for a supermarket shopper in Des Moines, Iowa, to buy a bad piece of Alaska salmon. Ideally the standards would be put in place by the state with the rule of law behind them. However, it is doubtful the Legislature will ever have courage enough to enact this sort of program. Therefore it falls to industry to do it.While AFDF has been speaking out on this issue for some time, broad industry support is required. It is time for those who have a stake in the industry to act. As for who pays, if we want improvements to occur in our industry, helping our bottom lines, making our lives better, we will have to pay for them. Which is as it should be.Marc S. Jones is executive director of the Alaska Fisheries Development Foundation. The opinions expressed are his alone. He can be reached via e-mail at ([email protected]).

Gottschalks weeds its Lamonts stores

In addition to the Gottschalks at University Center, company officials are closing four other stores in the Pacific Northwest. Gottschalks Inc. closed five former Lamonts stores in June including one in Alaska. The Fresno, Calif.-based retailer was due to close the University Center store in Anchorage after deciding earlier not to renew its lease at the mall. "The lease was up, and we chose to remain operating in the two better centers, Northway (Mall) and of course, Dimond (Center)," Gottschalks President Jim Famalette said in a telephone interview. Gottschalks officials sold the leases for four Pacific Northwest stores for a total of $2.9 million, the company reported in its first-quarter earnings statement released in May. Three of these stores were in small locations in eastern Idaho and Oregon in what Famalette called in the earnings statement "markets we determined were not a good long-term fit for Gottschalks and where we were unable to leverage our marketing and logistics costs." Gottschalks closed stores in Pocatello and Idaho Falls, both in Idaho, plus another in Astoria, Ore., Famalette told the Journal. The retailer also closed one store in Anchorage and another in Seattle. "We do not anticipate the store closings will have a material impact on our second quarter financial performance," he said. Gottschalks reported a net loss of $4.6 million for the quarter, compared to a loss of $841,000 for same period last year. Same store sales for the quarter, excluding former Lamonts stores, which have not been operating for 12 months, increased 4 percent for the quarter compared with first quarter 2000 results. "While our same stores continued to meet our top line growth expectations during the first quarter, our recently acquired stores in the Northwest did not perform as we had originally projected," Famalette said. "Our financial performance for the first quarter was adversely impacted by lower than expected sales in our Northwest stores and the resulting gross margin impact of higher markdowns in these stores to move through seasonal inventory. The inventory levels at those stores are now in line with our revised sales expectations going forward." After closing the University Center store, Gottschalks will operate two Anchorage stores, plus one store each in Fairbanks, Juneau, Soldotna and Wasilla. The University Center lease expired in June, Fred Bentelspacher, Gottschalks vice president of marketing, told the Journal earlier this spring. The last day at the mall is set for June 16. The decision was based on lagging sales volume per square foot at the location compared to other stores, he said. Bentelspacher did not offer sales figures for comparison. Location was another factor coupled with prospects for the mall, he said. "We were not sure about the future of the mall so we didn’t want to sign another long-term lease," Bentelspacher said. Gottschalks employed 45 full- and part-time workers at the University Center location, he said. Employees could be transferred to Gottschalks’ two other Anchorage locations. The retailer acquired all but one of Kirkland, Wash.-based Lamonts Apparel Inc.’s 38 stores last year after that company filed for bankruptcy. Gottschalks reopened 34 of the stores under its own name last September.  

Most sockeyes will end up in cans, but Japanese market for reds to rebound

Lots of fisheries are going on throughout the Gulf of Alaska and the Bering Sea, but it’s the time of year when salmon takes center stage in Alaska. It all began with the hoopla over kings and reds at Copper River, and other salmon openers are starting across the state and will continue into October.All five of the Pacific salmon species are economically important for Alaska, but sockeyes are the big money fish. Last year, for example, the statewide catch of 33.5 million reds was valued at more than $154 million at the docks. That compares with chums at $58 million for a catch of 24 million fish; pinks at $32.7 million for a catch of about 74 million; 4.2 million cohos valued at about $17 million; and kings at $10 million for a harvest of 360,000.Frozen and canned salmon are the primary product forms produced from Alaska salmon, accounting for an average 94 percent of production volume during the 1990s. According to the Salmon Market Information Service, in terms of five-year averages, the volume of salmon going into cans has increased by 60 percent during the last 15 years."A product-form shift toward canned salmon occurred during the late 1990s. This shift, combined with lower sockeye harvests and frozen prices, has increased the relative economic importance of canned salmon for Alaska," the SMIS said.The bulk of this year’s red run will again end up in cans. The market outlook is pretty good, as demand is up in Britain, where most of the canned sockeye salmon goes. But unfortunately for fishermen, no matter how you cut it, they get paid less for reds that end up in cans.Nearly all of Alaska’s frozen reds still go to Japan, where they continue to get clobbered by the never-ending flood of farmed coho from Chile. But on a brighter note, a preference for wild, Alaska reds is becoming more apparent in Japan."There is still a healthy group of consumers who prefer sockeye salmon," said market analyst Bill Atkinson. "And as we head into the season, supplies of wild sockeye in Japan are virtually depleted."A thumbnail sketch shows that the market for sockeyes in Japan was depressed from the start last year, with Chilean cohos dominating the market. Wholesale prices started at $1.97 a pound, then dropped to around $1.90 in the fall. By the first of the year, however, inventories were way down, and wholesale price started creeping up. Atkinson reported that the wholesale price for Bristol Bay sockeyes reached $2.91 a pound in March."This year there is a good possibility that the market for sockeye salmon will be somewhat independent of the market for farmed coho," he added. "This is largely due to reduced catch projections. And if this season’s production is lower than last year, the marketing of this year’s sockeye production will be more calculated at all levels."Red salmon for AmericaAsk any salmon fisherman, and he or she will tell you they’d like to get more of their red salmon into American mouths. A fish marketing forum that’s making the rounds in Alaska is intended to help with that attainable goal.Entitled "Salmon Quality -- The View from the Marketplace," the forum includes a panel of seafood heavyweights who will share their insights and observations about how Alaska salmon is performing in today’s marketplace. The free event is presented by the Alaska Seafood Marketing Institute, with funds from a federal grant from the U.S. Department of Agriculture."This is not going to be a seminar that preaches about how to take care of your fish or run your business," said Randy Rice, ASMI’s seafood technical director and project coordinator. "We will be talking about the kinds of quality assurance systems out there in the world that are being used by our competition, as well as some places in Alaska," Rice explained.He added: "There is a noticeable trend that buyers are expecting you to have a defined and comprehensive system, and standards are being drafted and agreed upon by various countries. This seminar will tell people what’s needed to achieve those goals."The seminar will be presented in Dillingham on June 12 and in Kenai on June 29. For more information, contact Randy Rice at 800-478-2903.Origins on labelsThe Japanese Ministry of Agriculture and Fisheries has announced that manufacturers of processed food products will be required to list the country of origin of their major ingredients. According to market analyst John Sackton, the move is aimed at the growing exports of Chinese food products to Japan. The label requirements will be implemented on a product by product basis, beginning in the fall of this year.As of next February, dried fish, grilled eel and processed wakame seaweed will all have to indicate the origin of the product. For seafood products produced domestically, the label will require either the port of landing or the location of the fishing area to be documented. Sackton said Japan is "moving aggressively to increase the amount of consumer information about food products on product labels. They will also be requiring labels on any genetically modified products."Sea lion fundingThe National Oceanic and Atmospheric Administration recently announced the recommendation of 26 projects to be funded that will investigate the causes of Steller sea lion declines. It’s expected that the majority of grants will be awarded in time for the 2001 research season.Pending completion of the NOAA grants process, the projects will be funded through a budget of $15 million. The funding is part of an overall appropriation of $43.7 million -- an increase of $38 million from the previous year’s level -- for Steller sea lion programs. This represents a significant elevation in priority by Congress and the administration for Steller sea lions.Kodiak-based free-lance writer Laine Welch can be reached via e-mail at ([email protected]).

AC operators report earnings

The North West Co. Fund, operators of Alaska Commercial Co. stores, reported first quarter earnings of $4.9 million, up 17.2 percent from the same period last year. The company, which operates stores in Alaska and Canada, reported that first quarter revenue rose 7 percent to total $160.7 million. In Alaska, AC stores listed sales up 0.3 percent for the quarter to total $23.9 million. On a comparable stores’ basis, store sales increased 4.9 percent with comparable food sales increasing 4.1 percent and general merchandise sales climbing 8.1 percent. "Individual store sales fluctuated widely due to AC’s ability to capture market share from local competition while being constrained by weak fishing economies in some markets and unseasonably cold weather across the state," company officials said. Sales at AC’s wholesale business, Frontier Expeditors, dropped 26 percent in the quarter due to the introduction of a distribution tax levied against tobacco wholesalers in Anchorage, according to the company. The company believes the tax no longer makes it economical for Frontier Expeditors to continue selling cigarettes to its rural accounts. The company is considering distribution alternatives outside of Anchorage. According to North West Co. Fund officials, the tax is being appealed, and "a favorable ruling is expected in June." The company also noted that in Alaska utility costs for stores and staff accommodations rose due to higher energy costs. Other expenses relevant to the quarter included legal and appeal fees related to the tobacco tax.  

This Week in Alaska Business History June 10, 2001

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 TimesJune 10, 1981Firm to stick with royalty oil dealAnchorage TimesJUNEAU -- Alaska Oil Co. has changed its mind and decided not to try to get out of its contract to buy 75,000 barrels per day of royalty oil from the state, Natural Resources Commissioner Robert LeResche said.The turnabout comes just days after Standard Oil Co. of Ohio offered to buy nearly 40,000 barrels per day of royalty crude that Alaska Oil initially said it no longer wanted.Alaska oil, which is owned mainly by the Florida-based conglomerate Charter Co., recently scrapped plans to build a major oil refinery. After its plans had collapsed, the company asked the state to find new buyers for the 75,000 barrels per day the company had been receiving under a contract with the state.Anchorage TimesJune 11, 1981Senate vote bars foreign processorsBy Betty MillsTimes Washington BureauWASHINGTON -- The Senate approved legislation to bar foreign fish processing vessels from the internal waters of Alaska during 1981, only days after it was introduced by Sens. Ted Stevens and Frank Murkowski.Stevens said the bill "provides a brief period of federal involvement in this important state matter that will allow the state to continue its role as primary regulator of its internal waters."The legislation is necessary due to a recent U.S. District Court decision, handed down in Anchorage, which found the state’s processor preference statute to be unconstitutional, Stevens said. The court found exclusive state regulations of foreign processing vessels to overreach state power in foreign commerce.Under the bill, the governor of Alaska has the authority to invite foreign processors into Alaska waters if additional processing capacity becomes necessary.10 years ago this weekAlaska Journal of CommerceJune 10, 1991Major development set for UnalaskaBy Margaret BaumanAlaska Journal of CommerceAlaska Diversified Properties Inc. has signed a 100 year lease with Ounalashka Corp. at Unalaska for commercial development of 70 acres at Margaret Bay, including a hotel and deep water port facility.Development will begin this summer, with the intent of making the Margaret Bay area the economic center of Unalaska, said Greg Jones, president of Alaska Diversified Properties, a subsidiary of Alaska International Industries.Unalaska, a major fishing port, has undergone more than $250 million in construction over the past three years, Jones noted.Alaska Journal of CommerceJune 10, 1991Few sale tracts draw bidsBy Ray TysonFor the Journal of CommerceOil company response to the latest state lease sales again demonstrated that the industry is becoming more selective in its bidding on the North Slope. It also showed the state is running out of virgin territory to offer for exploration.The two June 4 sales brought in a scant $7.2 million in earnings, with companies bidding on only 42 of 249 tracts, most of which were offered in state lease sales dating back to 1979.The Kavik Sale 64 area, a 754,542-acre onshore region wedged between the Sag River and the coastal plain of the Arctic National Wildlife Refuge, drew but six bids on 141 parcels for a total of $242,389 in state bonuses.While the Beaufort Sea Sale 65 area, totaling 490,000 acres generated $6.9 million in high bids, the western half of the sale area, located north of the National Petroleum Reserve, failed to draw a single bid.-- Compiled by Ed Bennett.

Around the World June 10, 2001

STATEGoldbelt retains three on board of directors JUNEAU -- Three incumbents were re-elected to Goldbelt’s board of directors at the company’s annual meeting in Juneau on Saturday.Shareholders returned Juneau residents Del Cesar, Edith McHenry and Carl C. Nelson to three-year seats on the nine-member board. Nearly 83 percent of Goldbelt’s nearly 3,100 voting shareholders participated in the election, according to the company. Goldbelt is Juneau’s urban Native corporation.Firm seeks to explore Nenana Basin for oil, gasFAIRBANKS -- An unidentified company is asking the state for an oil and gas exploration license in the Nenana Basin in what is the first significant interest in the area in two decades."I believe this is going to be a conventional gas play they are looking for," said James Hansen, leasing officer with the Alaska Division of Oil and Gas. The identity of the applicant is confidential at this point, Hansen said, because the state must solicit competing proposals before issuing a license."Whoever agrees to spend the most money for exploration would get the license," he said.The request is for 500,000 acres somewhere in the state’s 1.4-million-acre Nenana Basin Study Area, which goes north beyond Old Minto and south to just past the Denali Borough’s northern border. Potential for natural gas in the sedimentary basin around Nenana is unknown. The state has not explored the area, Hansen said, and the scant private exploration occurred about 20 years ago.NATIONWorkers forced to put retirement off longerWASHINGTON -- More older Americans are staying in the work force longer, reversing the decades-long trend toward early retirement.Last year, 12.8 percent of people age 65 and older were in the work force -- the most since 1979, according to the Labor Department. The percentage has been increasing since the mid-1990s after decades of declines.Health is a big factor, said Ryan Helwig, an economist with the Labor Department’s Bureau of Labor Statistics."The older population today is healthier, living longer, better educated and therefore, more suited to continue working than their counterparts in the past,’’ Helwig said.Dwindling retirement savings and escalating health care costs also are keeping older Americans in the work force longer.Employers increasingly are scaling back traditional, guaranteed pension benefits in favor of voluntary, defined contribution plans like the 401(k), and fewer are offering health insurance to retirees.Kmart uses $18 million to boost customer serviceROY, Mich. -- Kmart Corp. is targeting $18 million for bonuses to encourage improved customer service.The Super Service Rewards program aims to recognize sale associates in 1,290 Kmart stores who work toward making customer service better.The cash bonuses, paid quarterly, will be a percentage of the workers’ earnings and depend on how much the store has increased its Super Service Index. That’s a customer feedback program that assigns each store a score based on highly satisfied customers who have responded to a toll-free number printed on store receipts.The program is one of several initiatives Kmart has introduced in recent months to improve customer service, merchandise and pricing.Phillips opens sulfur credits clearinghouseBARTLESVILLE, Okla. -- Phillips Petroleum Co. has opened a clearinghouse where refiners can buy and sell credits to help them meet more stringent motor fuel standards.The U.S. Environmental Protection Agency is clamping down on sulfur in gasoline and diesel with the goal of curbing emissions by the equivalent of 164 million cars on the road.Beginning in 2004, refiners are supposed to manufacture gasoline with an average sulfur content no higher than 300 parts per million per gallon. In 2005, the average tightens to 30 parts per million. Sulfur in diesel is to be lowered to 15 parts per million by June 2006.The EPA began giving credits last year to refiners able to reduce sulfur below averages for fuel produced in 1997-98. Credits are generated based on annual fuel production at a refinery. Refiners can accrue credits through 2004.Ford, Dodge trucks fail crash testsWASHINGTON -- The popular Ford F-150 and Dodge Ram pickups got poor marks after their cabs were smashed in and air bags deployed late in insurance industry crash tests released June 4.In its first crash tests of large pickups more than 3,500 pounds, the Insurance Institute for Highway Safety said the F-150 was by far the worst performer among the four 2001 models tested. The F-150 has been the top-selling vehicle in North America for 19 years.The institute gave its best rating to the Toyota Tundra. The Tundra’s structure was strong and the cab remained intact to protect the occupants, the institute said.WORLDDrought forces Brazil to ration energySAO PAULO, Brazil -- Tough energy rationing measures took effect June 4 with President Fernando Henrique Cardoso calling on Brazilians to accept a "challenge that demands a lot from all of us.’’Cardoso also said in a televised address that the government would roll back some of the harsher penalties envisioned under the rationing plan, which requires Brazilians to reduce consumption by 20 percent or face hefty surcharges on their electricity bills and power cuts of up to six days.Brazil is suffering its worst energy crunch ever after drought has left many reservoirs at record low levels.Compiled from business wire services.

Hyder in water business

JUNEAU -- After four years of work, the community of Hyder is going into the bottled-water business.Construction is complete on a 73,000-square-foot water-bottling plant and production should start this month, said Paul Larkin, Hyder Community Association administrator.The plant will sell water under the name Alaska Chill to Fairbanks-based Aqua Alaska, which plans to market Hyder’s water in the Lower 48. The plant also will sell water under the name Alaska Glacier Blue for its own markets, according to John Pearson, an economic development planner for the community. At full production, 41 people will work in the plant.Funding for the $1 million project came from the community’s reserves, bank loans, state funding and federal grants, Pearson said. The water will come from a glacier-fed well 600 feet from the plant.The nonprofit Hyder Community Association owns the Alaskana Glacier Water Co., commonly called Hyder Waterworks by the town’s residents, said Charles Bishop, association president."It gives us an economic base," he said. "Things were getting pretty slim here for the last couple of years."Water will be produced in half-liter, 20-ounce, 1-liter and 1.5-liter bottles, plant quality assurance manager Erin Hausske said. The project puts Hyder on the map and will help alleviate high unemployment, she said.

Homer air taxis spar over mail delivery and Bergt's influence

HOMER -- Two air taxi services in Homer are locked in an escalating battle of words over an application filed by one seeking to upgrade its operating certificate, a move that could take business away from the other.The owners of Smokey Bay Air Inc. say Homer Air’s application seeking a federal certificate to transport passengers, freight and mail on daily scheduled flights should be denied, in part because former MarkAir owner Neil Bergt is involved.Clifford Jeska, a co-owner of Smokey Bay Air, filed his objections in a letter to the U.S. Department of Transportation. He said Homer Air’s application failed to list Bergt among Homer Air’s key personnel, although Jeska and co-owner Scott Cunningham have signed affidavits saying Bergt is at the Homer Air office on a daily basis.For that and other reasons having to do with doubts about whether Homer Air could fulfill its obligations under a new certificate, that certificate should be denied, Jeska argued.Bergt reaffirmed earlier statements he has made to the Homer News that he is not an owner of Homer Air, and that he knows of no reason why he cannot continue as a consultant to the company. He said Smokey Bay has its own agenda.Homer Air transports passengers and freight on an "on-demand" basis. The company wants to revise its current certificate allowing for scheduled operations, which is a requirement for mail contracts.Smokey Bay has such a contract for four days a week and could lose some of that business if Homer Air gets its upgraded federal certificate."Smokey Bay has a 401 certificate (for mail). We have applied," Bergt said. "Anything Smokey Bay can do or say to slow down that process keeps them flying a bigger chunk of mail longer. They are apt to say anything. We have found them not particularly scrupulous in the accuracy of the comments they are willing to make."Cunningham said his main question was whether Bergt can legally participate in the operation of airline.In 1997, Charles A. Hunnicutt, then-U.S. assistant secretary for aviation and international affairs, said Bergt’s experiences with the failed MarkAir and MarkAir Express "were so consequential" that the U.S. Department of Transportation could not permit Bergt to be involved with Alaska Central Express, a small airline based in Anchorage.The department eventually agreed to allow Michael Bergt, Neil Bergt’s son, to serve as ACE’s director of postal affairs.However, things have since changed. According to Federal Aviation Administration spokeswoman Joette Storm in Anchorage, there are now no restrictions prohibiting Bergt’s involvement in an airline, financially or otherwise."There are no outstanding enforcement actions" against Bergt, she said May 16.Bergt said he has "cleared up" the outstanding MarkAir bankruptcy issues.John Dana Pruhs, president of C&L Inc., which does business as Homer Air, filed a rebuttal to Smokey Bay’s claim, saying Smokey Bay’s contention was not valid."Mr. Bergt is not an owner, officer, director or manager of C&L Inc. dba Homer Air," Pruhs wrote. "Mr. Bergt’s presence and participation in the affairs of Homer Air has been restricted to his role as a consultant to the owner, Mr. John Dana Pruhs. Smokey Bay has provided no evidence to contradict this fact."Jeska responded in another letter May 5."It is true that Mr. Bergt is not an owner, he is not named in corporate documents filed with the state of Alaska Division of Banking, Securities and Corporations," he wrote. But "as a full-time consultant to a $1,000,000 (annual) grossing air taxi, we contend that Mr. Bergt is a significant employee and is ’key personnel.’ We assume Mr. Bergt will be telling Mr. Pruhs how to operate the business more efficiently."Jeska argued that "a consultant who is on location five days a week ’9-5’ is key personnel." He said Bergt has "substantial interest" in Homer Air and its success, and his name and resume should have been included in the certificate application.Bergt said it doesn’t matter what Smokey Bay thinks."I have no need to explain myself. It’s no one’s business. I work for Dana Pruhs, not for Smokey Bay," he said.Cunningham admitted to his own stake in the outcome of Homer Air’s certificate application-- that a growing competitor will have an impact on his business. As far as he is concerned, however, Bergt is running the show at Homer Air, despite his protestations to the contrary."I just want people in Alaska to know that he is back in aviation," Cunningham said. "He is running Homer Air -- it may be de facto, but he’s running the company."

CIRI sets earnings record despite tourism loss

 ANCHORAGE -- Cook Inlet Region Inc. posted record earnings for the year 2000. The regional Native corporation’s profits soared to $102 million last year -- nearly double the $57 million reported in 1999. The $102 million profit is the largest ever posted by an Alaska Native regional corporation. Revenue rose to $380 million from $297 million in 1999. The big jump in profits was due largely to a windfall from the company’s investments in wireless telecommunications companies, including Voicestream and BellSouth. CIRI also reported strong growth in its construction business. But the company’s tourism business was running in the red, posting an $11 million loss for 2000, compared with a $1.3 million loss in 1999. CIRI launched an aggressive move into tourism in 1997. Since then, it has built a hotel in Talkeetna, bought one in Seward, invested in a Las Vegas resort and bought a Prince William Sound boat tour company.  

Work begins on Arctic Slope Regional Corp. new headquarters

Site work has begun on a new headquarters building for Arctic Slope Regional Corp. in Midtown Anchorage.The facility will consolidate ASRC’s offices in the 10-story, 200,000-square-foot building, which could be finished by fall 2002.By late May most of the mobile homes on the site near 36th Avenue and C Street had been relocated, and excavation began in early June, said Leonard Hyde with JL Properties of Anchorage, developer of the project.ASRC will lease the building from Centerpoint LLC, an affiliate of JL Properties, he said. Hyde is a managing member of Centerpoint LLC. JL Properties owns the land being developed.The general contractor is Davis Constructors & Engineers Inc. of Anchorage.Hyde estimates the project will cost about $40 million.Following excavation, builders will handle foundation work then structural steel framing, Hyde said. "The project should take 13 months to complete," he said.The current Anchorage office for ASRC is in South Anchorage.Commercial real estate representatives in Anchorage have noted that ASRC’s consolidation of office space should not hurt the market. Office space is tight in Anchorage, and ASRC’s former office could be absorbed by the market’s natural growth, Chad Frampton, partner at Schwamm & Frampton LLC, told the Journal earlier this year.ASRC is based in Barrow but operates other offices and subsidiaries in Anchorage. The Native corporation lists more than 7,600 shareholders and operates several subsidiaries including Natchiq Inc., Top of the World Hotel in Barrow, Alaska Petroleum Contractors Inc., Houston Contracting Co., ASRC Parsons Engineering LLC and ASCG Inc. among others.ASRC tallied 1999 revenue at $865 million with net income at $15 million.

With Port MacKenzie closed, Mat-Su borough shifts director's responsibilities

A shift in development priorities by the Matanuska-Susitna Borough administration has affected plans for Port MacKenzie. With the exception of one business, activity at the port has ground to a halt since the Corps of Engineers issued a preliminary report last fall, alleging that the port may not be structurally sound.Shortly after that, the Federal Highway Administration issued a recommendation that the port close until the Corps and the borough come up with a plan to make appropriate repairs.Then, in April, the borough administration announced that the position of port director was on the projected budget’s chopping block. In the end, Borough Manager John Duffy kept the position in his budget, but the position changed dramatically."All economic development in the borough has ties to the port, either directly or indirectly," Duffy said. "We need to move forward with strategic marketing and how to attract potential tenants. ... The port director will now attend to all borough economic development."This shift in responsibility means the port director will be tasked with marketing economic development and target the port as the focal point. Duffy admits that marketing the port will be an uphill battle."Other firms are interested in the port but there’s a dilemma the port’s not open."There is one tenant at the port, Alaska Manufacturing Contractors. The company began manufacturing homes for villages in rural Alaska last year, completing 11 homes and then shipping them from Port MacKenzie.The company managed to do this despite a lack of basic infrastructure at the port. Plant manager Bob Gilman said his company has met all its contractual obligations as a tenant, and he hopes the borough will be able to reciprocate."We expected a certain amount of growing pains," Gilman said. "We’ve managed to accomplish every single thing we said we were going to do 2 1/2 years ago, and we fully expect that the Mat-Su borough will accomplish their goals also, including road improvements, permanent power and other infrastructure for the port here."Right now there is no electricity, no gas and no real infrastructure to attract and keep port tenants. Duffy said he has both a timeline and a "to do" list that he said is a priority."The emphasis over the next 18 months needs to be on construction projects," Duffy said. "We need to bring in electricity. We need to finish the dock itself. We have remedial work that needs to be done based on the Corps of Engineers preliminary findings. We know we’re going to have to do something, we just don’t know what that is yet. We need to reduce the grade of the access road, we need to improve the design of the master plan, so the lots are laid out so people can say, yes, this is the lot that fits my needs."Meanwhile, Alaska Manufacturing is moving forward. The Afognak Native Corp., majority owner of AMC, has financed a state of the art manufacturing site at the port, powered by two large generators, and the company has done some economic development of its own."Last year we constructed 11 homes. This year we’re already contracted to ship 34 units to villages. And our projection is to deliver 60 manufactured homes units this summer," Gilman said."I think at this point, it hasn’t cost the borough a dime for us to come out here and set up this business," Gilman added. "Basically the borough, with 5,000 acres of industrial land available, would be very remiss if they didn’t make a concentrated effort to develop it."Duffy said that’s the reason the borough has shifted its focus on port development."On May 15 we appropriated $500,000 for a rail corridor study. This is the main line spur down to the port. We have $11.2 million from the Federal Transit Administration. I’d like to get out to deep water so we can handle larger vessels. We have a lot of construction that needs to get going now."One important breakthrough took place at the port recently: AMC received permission to ship its products from the port."We are working with the Federal Highway Administration to allow the manufactured homes to be shipped from the port," Duffy said. "They are now saying limited use of the port can occur."Still, Gilman said he sees the borough falling behind, but he is holding out hope for the future. "They’re about a year behind their projection at this time. I look for them to fall behind on the ferry service, which we looked forward to, so we had 15 minute access to Anchorage. Some goals will be within reason, some longer than we hoped for."The borough has appropriated funds to repair the dock. It is also projecting that electricity will be at the port by this August.

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