Networking is key to thriving economies

What makes some regional economies grow faster than others? Recent work by the National Commission on Entrepreneurship reports that 5 to 10 percent of U.S. firms can be called entrepreneurial growth companies. Those companies are responsible for two-thirds of the 240,000 new jobs created each month. Why do some regions nurture these growth companies better than others? In comparing the growth of Silicon Valley vs. slower growing Boston in the last 30 years, and seeing how some regions like Austin apparently came out of nowhere, the commission found that the performance of different regions could not be explained just by looking at such factors as costs and skills of workers, taxes, land and the other inputs. The commission suggested what better explained success was the creation of a regional culture that had a vision of itself, key leaders who shared and communicated that vision, ancestor companies, heroes that promoted success, and most of all vibrant networks that honored and rewarded values like risk taking, openness, and change. Regional economies grew faster when they emphasized both cooperation and competition and not just company competition, start-ups rather than climbing the corporate ladder, building companies and not just making money, and loyalty to an overall network. Corporate and regional cultures influenced each other so the kind of influence a Hewlett Packard had in Silicon Valley, or Dell and others had in Austin helped create a different regional culture than the impact of DEC or Data General had on Boston or the Big 3 automakers had on Detroit. Regions grew faster that valued risk taking, and honoring and learning from failure, rather than risk-avoidance and stigma for failure. In short, networks trumped hierarchies. All regions have their techies, business managers, investor, and community leaders, but regions grew faster which could communicate to themselves a vision of itself that could transcend inevitable changes in technology, markets, elections and even the fate of leading companies. What do these findings have to do with Alaska? A recent survey of 480 members of state business and civic organizations provide some clues. The full results and your chance to take the survey are available at ( The most important success factor was an economy that could produce good jobs to hold young people in the state -- and nearly half, or 49 percent, rated Alaska’s ability to produce these jobs as poor. The next most important success factor was, unsurprisingly, an adequate supply of skilled workers; 36 percent rated the state’s performance as poor in this area and 47 percent as average. The quality of the state’s kindergarten to 12, post-secondary and higher education system was rated the fourth most important success factor. Approximately 7 of 10 Alaskans rated the state’s education system as average or poor. The state was rated lowest on four important factors that 8 of 10 participants rated as important or very important: its dependence on oil and gas revenues to fund public services; its lack of a state fiscal plan; the absence of local economic development strategies; and the absence of a state economic development strategy. The most positive news from the survey is that quality of life was rated as the third most important factor for the state’s economy and 61 percent of respondents rated the state as good or excellent in this area. The encouraging news is that the business community and the state may be poised to start an honest process of benchmarking our common definition of success and measuring our progress. Stronger private-public partnerships will be necessary to improve key parts of our economic infrastructure, such as improving education, creating more risk capital, and having the public and private sectors focus on what must be done to build a larger, more diversified economic base. Perhaps even more importantly, it may be time to create stronger linkages in the economy between educators and employers, industry suppliers and customers, investors and entrepreneurs, and the regulators and the regulated. A number of key organizations have been established or expanded in the last few years, such as the Oil Industry Support Alliance, the Information Technology Career Consortium, InvestNet, the Processor Industry Consortium, and industry advisory groups for different university units. They all seek to address our common need to have a better networked state. What apparently may be lacking may be more fundamental than either a state economic strategy or fiscal plan. It may be our collective sense of Alaska having a sustainable economic future. As important as it is to build enterprises that can compete globally, we may also need to have the confidence and will to construct a common vision that Alaska can grow those enterprises. My hunch is that a common vision of our future will need to combine some existing competitive advantages in terms of our resources and location with the technology and intellectual capital to produce more physical and knowledge products for the world. It will involve an Old Economy most Alaskans will recognize with a New Economy that will look different from what has happened in Austin or California. Almost every respondent, 97 percent, of the statewide survey agreed or strongly agreed that the private sector business and public policy organizations should work with state and local government to improve the state’s economic performance. In a mixed economy in a state of now only average per capita income, the will and need to construct that road map is both appropriate and timely. Jamie Kenworthy is executive director of the Alaska Science and Technology Foundation.

This Week in Alaska Business History February 11, 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 TimesFeb. 14, 1981Large gas field found in reserve south of BarrowBy John KnowltonTimes WriterThe U.S. Geological Survey has made a discovery of what it calls one of the largest natural gas reservoirs ever in the National Petroleum Reserve-Alaska.The find was made in an area southwest of Barrow.It has tested at a rate in excess of 1,000 pounds per square inch of natural gas. That equals about 2.2 million cubic feet of gas a day or enough to operate electrical generating facilities for a city of 8,000 to 10,000 people."From the preliminary results, this would appear to be at least one of the better gas wells discovered on the reserve," said Max Brewer, chief of NPR-A operations for the federal agency.He said earlier drilling in the area indicates that the gas reservoir covers "a fairly sizable area" extending at least four miles from the new discovery."This is something that could very well be bigger than the existing gas fields in Barrow," Brewer said.Those fields are the oldest producing natural gas fields in the world north of the Arctic Circle. In their 31st year of production, the fields are providing more than 1 billion cubic feet of natural gas a year to Barrow.10 years ago this weekAlaska Journal of CommerceFeb. 11, 1991DNR Commissioner wants help with land picksBy Ray TysonFor the Journal of CommerceCommissioner Harold Heinze of the Department of Natural Resources is calling on "knowledgeable" Alaskans to help him pick the last 20 million acres of federal land available to the state under the Alaska Statehood Act. But time is running out."I don’t think a lot of us have thought about the fact only three years are left in the land selection process from the federal government," Heinze said.Under the statehood act, signed in 1959, the state is entitled to 103 million acres of federal land, but the act requires the state to complete its selections by 1994.While Heinze said the Hickel administration has made final land selections a priority, he emphasized that "we don’t have the time, energy and money to get data on everything in the world."Alaska Journal of CommerceFeb. 11, 1991Another Tongass battleAlaska Journal of CommerceJust when you thought it was over, a new fight concerning the Tongass National Forest in Southeast Alaska is under way. The latest skirmish -- between traditional foes, the environmental groups and the timber and, more recently, mining industries -- is being fought over proposed changes in the Tongass land management plan, now being revised to comply with the new law passed late last year by Congress.For the timber industry, the big worry is that despite assurances of steady timber supply put into the new Tongass law, conservation groups will pressure the Forest Service into actual reductions through land plan revisions and other administrative procedures.Actually, Tongass has the capacity to sustain timber harvests well above levels proposed by the Forest Service, the industry argues. The service, in revisions to its Tongass land management plan that are now required by the new legislation, proposes an annual "allowable sale quantity" of about 420 million board feet yearly, a reduction from the 450 million board feet allowed under previous law.... Forest Service studies show the Tongass, the nation’s largest national forest, can actually produce 700 million board feet of annual timber production and remain within the "sustained yield" requirement of law, the industry group said.-- Compiled by Ed Bennett.

Northwest Cargo grows

The addition of two Boeing 747 freighters and the return of the economy in Asia have Northwest Airlines Cargo in need of more space at the Alaska CargoPort. Just four months after it moved into the new Williams Lynx Alaska CargoPort at Ted Stevens Anchorage International Airport, Northwest is increasing its option for more space."We are way over where we were at this time last year; in fact, we had nearly as many flights in January as the whole first quarter of last year," said Mike McKinley, cargo manager for Northwest Airlines Cargo.Northwest Cargo aircraft made 131 landings in January compared with 98 in the first month of 2000, according to McKinley. Currently the cargo airline is operating 32 flights a week through Anchorage with its fleet of 10 Boeing 737-200 freighters and is cross loading as many as four aircraft at a time on some days, he said."In May we will start cross loading five aircraft and due to the extra equipment we will need to do the job we are looking to expand our space here at the CargoPort," McKinley said.Northwest will need an additional 8,000-10,000 square feet of space for ramp equipment used for cross loading and more warehouse space, in addition to the 63,000 square feet the company currently occupies.Northwest moved into the Alaska CargoPort, at the North Airpark at Anchorage International Airport, last October. The company has an option on up to 125,000 square feet, and eight aircraft parking spaces. Currently the cargo airline is using four parking spaces on the ramp.McKinley said Northwest will not need the new building space until the fall, as they can store the new ramp equipment outside during summer months, but will need inside storage by October."We are not sure exactly what we are going to do yet, whether to move to space currently occupied by United that they don’t need, or build new space. We are discussing that right now," McKinley told the Journal.United Air Cargo was the first airline to move into the CargoPort.Northwest Cargo will be taking delivery of two additional freighters -- for a total of 12 aircraft -- one in May, and another in June, according to company officials.Northwest plans on upping its flights to as many as 250 a week by August 2001, with the upward swing starting in March when the schedule goes to 41 flights weekly from the current 32.Northwest posted 165 landings in October, 167 in November and 162 in December during the peak shipping season, according to the company.McKinley said the frequency increase is being driven by a return of the Asian economy."We have been marketing heavily all over Asia, and it is paying off," he added. "Later this year we will start additional flights from Narita (Japan) to Seoul and on to Anchorage, with an additional direct flight from Seoul to Anchorage," McKinley said. With the addition of routes to China and beyond and an alliance with Japan Airlines Cargo for other Asia and Southeast Asia destinations, the airline is now expanding its capacity in the Pacific Rim, which in turn is increasing cargo activity at Anchorage International, according to company officials.

Knowles, Rep. Kott offer plans to raise Alaska minimum wage

Gov. Tony Knowles and Rep. Pete Kott, R-Eagle River, think a hike in the state’s minimum wage is long overdue. But restaurant operators say state legislators should think the issue through very carefully. Restaurants, particularly the fast-food sector of the industry, could be severely affected, according to Jack Amon, president of the Alaska Hotel, Motel and Restaurant Association.Knowles and Kott have both introduced bills raising the current $5.65 per hour minimum wage. Kott’s House Bill 56 was up for a hearing in the House Labor and Commerce Committee, chaired by Rep. Lisa Murkowski, R-Anchorage, in late January.Kott’s bill would raise minimum pay from $5.65 per hour to $6.40 in the first year, and to $6.90 per hour in the second year. The governor’s bill would raise the minimum to $7.15 per hour, and then be automatically adjusted as living costs rise.Legislators on the committee expressed frustration at the lack of information about how many workers in the state are actually paid the minimum wage and who they are."I think a raise in the minimum wage is long overdue, but who exactly is this bill supposed to help?" asked Rep. Norm Rokeberg, R-Anchorage.State Labor Commissioner Ed Flanagan said the best information his department’s Research and Analysis section has is data gathered in the fourth quarter of 1998 that shows there were 14,400 employed Alaskans earning between $5.75 and $6.74 per hour."Because this survey was done in the fourth quarter, October through December, it’s very safe to assume that the number during the summer months is much higher," because the tourist season is in full swing, Flanagan said.The research is part of a national survey paid for by the U.S. Bureau of Labor Statistics, the commissioner said.National data shows the majority of minimum wage workers are adults, Flanagan said, but the department has no data as to ages of the Alaska workers or whether they are heads of households. Other data the state has indicates that about 32 percent work in restaurants and bars, he said."We have a real lack of data," Rokeberg complained. "How many of these 14,000 are heads of households? How many are kids?"A survey of Alaska members of the National Federation of Independent Business, a small-business group, that was sent to legislators indicated that 15- to 19-year-old workers were the largest age group of employees among small businesses in Alaska, at 19 percent of the members’ work force.Eighty-nine percent of the NFIB’s Alaska members also said they paid their employees more than the minimum wage.Murkowski, who chaired the session, said, "We’re here to gather information on this issue and get it out on the table."Kott said one of his goals was to separate the current link between the state and federal minimum wages. Current law has Alaska automatically 50 cents above the national minimum. "We ought to set our own," and not rely on the federal government, he said.Flanagan said there hasn’t been an increase in the U.S. minimum wage for several years. "Until 1981 the federal government did a pretty good job of keeping the U.S. minimum wage in line with inflation. But from 1981 to 1990 there was no increase," he said.The Knowles administration has tinkered before with a hike in the wage, but waited to see if Congress would act, Flanagan said. "We decided not to wait any longer."Knowles chose $7.15 per hour as a proposed new minimum, the commissioner said, because at that level an adult working 60 hours per week -- one parent working 60 hours or one working 40 and a second working part-time at 20 -- would earn enough for a family to be at 105 percent of the established poverty threshold for Alaska.Roxanne Smith, a waitress at The Hangar on the Wharf, a Juneau restaurant, told the committee a minimum wage hike would get her above the poverty level.Her gross income last year was $11,000 including tips, on which she has to support two children. Since her employer doesn’t offer health insurance she relies on Denali Kid Care, a state medical program, for her children, and buys private catastrophic health coverage for herself.Restaurant staff are commonly paid minimum wage and rarely get raises. Tips are not as lucrative as many believe because many foreign visitors who visit Juneau during summer, such as Europeans, are not used to tipping, she said.But she still has 8 percent withheld from her wages for federal tax on assumed tips. Also, her employer requires her to pay the cost of any diners who walk out on checks, she said.Restaurant operators presented a different picture to the committee. Amon, speaking for the hotel and restaurant association, said most restaurant operators pay more than minimum wage and that wait staff earn between $12 and $25 per hour when tips are included. He offered to provide the committee with payroll records of his member companies to prove that.But there are typically no tips in fast-food restaurants, where unskilled or low-skill workers are the norm, Amon said. Generally fast-food operators employ young people, often in their first job, he said.A hike in the minimum wage would force operators to squeeze out young or low-skill workers, according to Bill Pargetter, a veteran restaurant operator who now operates an Applebee’s franchise in Anchorage. He said that if he had to reduce his 85 workers to 75 to absorb cost increases, he would preserve jobs for his most experienced workers. An experienced waiter or waitress can handle five tables, Pargetter said, while an inexperienced waiter or waitress is usually restricted to three."... I’ll wind up cutting off the less skilled," Pargetter said.

High bids delay Wainwright hospital

Construction of a replacement hospital at Fort Wainwright, expected to be one of the major construction projects in Alaska this year, is on hold after bids came in higher than expected. The U.S. Army Corps of Engineers Alaska District canceled the solicitation for bids Jan. 26 without awarding a contract.The project to replace the nearly 50-year-old Bassett Army Hospital was to be completed in 2005."We’re looking into options to save the construction season but at this point it does seem to be in jeopardy," said Corps spokeswoman Pat Richardson. However, she was unable to list possible options for the project.The Corps listed a four-year budget of $99.8 million for the project. The contract was to have been a negotiated, best-value procurement, Corps officials said. Congress had appropriated $133 million for construction of the new hospital and demolition of the old one.The 32-bed, 260,000-square-foot hospital would serve the military, dependents and retirees of Fort Greely, Fort Wainwright, Eielson Air Force Base and remote military sites north of the Alaska Range.Site development began in April."The government canceled the solicitation because of high prices in the proposals received Jan. 19," Corps officials said in a statement. "Reducing the scope of the proposed project was considered not in the best interest of the government."Corps officials told the Journal in late 2000 that design changes had delayed the timeline for construction bidding. The construction contract, which was due to be awarded Dec. 30, was next set to be awarded as early as this month.Bids received by the Corps were high, although Richardson did not disclose the number of bids received nor a dollar value range of the different bids."The bids were high enough that we canceled the solicitation," she said. "The customer (the U.S. Army) still wants the project."The health care facility would provide services including internal medicine, general surgery, orthopedics, obstetrics and gynecology, pediatrics and family practice. The design included other departments like emergency services, radiology, food service, physical therapy, pharmacy, labor and delivery, dental treatment and staff administration.

As tax time begins, here are some strategies

The following items identify planning strategies, tips and facts that could affect your 2000 and 2001 tax liability. Extensive and complicated rules govern the application of many of the items that follow, so please contact a qualified tax professional to see if they can be applied to your personal situation. * A new checkbox on the 1040 form authorizes the IRS to discuss any problems directly with a paid preparer. The IRS says this will reduce the "correspondence burden" on the taxpayers. It won’t authorize the preparer to represent the taxpayer in an audit or collection matter. * The standard mileage rate for business-related travel is up to 34.5 cents per mile for 2001. The mileage rate for 2000 is 32.5 cents per mile. * Parents of children younger than 17 can qualify for a valuable tax break: the child tax credit. This credit allows you to subtract as much as $500 from your taxes for each qualifying child in your family. The credit is phased out for higher income taxpayers with modified adjusted gross income over $110,000 for joint filers, $75,000 for single filers. * Up to $250,000 of qualifying home sale profits can escape taxes. This amount doubles to $500,000 for married people filing jointly. In general, you can take advantage of the exclusion only once every two years; and you must have owned and used the home as a principal residence for at least two of the five years immediately preceding the sale. However, if you sell your residence sooner due to a change in employment, health problems, or other "unforeseen circumstances," you may qualify for a partial exclusion. * Building an adequate fund for your retirement years may be one of your important financial goals. The government encourages retirement saving by allowing employers to sponsor tax-deferred savings plans, such as 401(k), 403(b) and SIMPLE plans. If you have such a plan available to you, take advantage of the opportunity to build a nest egg for the future and lower your current income taxes by contributing. * Individual Retirement Accounts also offer tax advantages. With a "traditional" IRA, investment earnings are tax deferred, and account contributions may be tax deductible if you meet certain requirements. A Roth IRA offers the potential for tax-free earnings. Contributions to a Roth IRA are not tax deductible. If eligible, you can save as much as $2,000 annually in traditional and/or Roth IRAs. * State-sponsored college savings plans are an option to consider if you’re a parent or grandparent interested in building a tax-advantaged education fund. Several states make their plans available to both residents and nonresidents, and most plans allow the account to be used for expenses at any accredited post-secondary school in the country. Investments in an eligible college savings plan grow federal income tax free until distributed. Plan earnings are taxed to the student/beneficiary upon withdrawal to pay qualified tuition and related expenses. * Reinvested mutual fund distributions should be added to the cost basis of your shares. Keep good records of reinvestment transactions so that you don’t pay more taxes than you should when you redeem or sell fund shares. Good records can allow for specific identification of shares sold that could result in favorable tax results. * Several tax strategies may help lower your income taxes if you invest in real estate. For example, the like-kind exchange is a popular technique for deferring taxes on dispositions of appreciated real estate. If you exchange a property for like-kind property instead of selling it outright, you can defer your gain and postpone paying tax. In effect, the like-kind exchange allows you to reinvest your profits without paying immediate tax on them. * The installment sale is also used frequently for real estate. In an installment sale, the buyer makes payments for a property to you in more than one tax year, leaving only part of your gain taxable each year. * Capital gains are taxed at maximum rates that are significantly lower than the rates applicable to ordinary income. The rates vary depending upon the type of asset sold, your holding period, and your regular tax rate. Instead of paying capital gains tax at 20 percent, you can qualify for an 18 percent rate on sales of investments acquired after 2000 and held longer than five years. Starting in 2001, the 10 percent capital gains tax rate drops to 8 percent for assets that have been held more than five years before sale. Unlike the 18 percent rate, the 8 percent rate applies immediately, not to assets acquired after 2000. * In 2001, eligible taxpayers can immediately expense up to $24,000 of business asset purchases. The amount is $20,000 in 2000. The expensing election is a valuable tax break. * Up to $2,000 in student loan interest can be deductible, up from $1,500 in 1999. The amount goes up to $2,500 in 2001. The deduction isn’t available for married couples filing jointly with adjusted gross incomes above $75,000, $55,000 for singles. * Smoking cessation programs and prescription drugs to alleviate the effects of nicotine withdrawal are tax deductible as a medical expense. Laser surgery to correct visual defects is also deductible as a medical expense. Every individual’s tax situation involves numerous variables that may impact the usefulness of any of these ideas in unique ways. If you are considering implementing any of the above strategies, please contact a qualified tax professional. Janet C. Kennedy is co-owner of Kennedy & Co. LLC in Wasilla.  

Movers & Shakers February 11, 2001

Randy Sears has joined Alaska Permanent Capital Management Co. as vice president/senior markets strategist and portfolio manager. Sears most recently served as manager of fixed income investments at the Alaska Permanent Fund Corp. in Juneau. Lisa Sealy has joined APCM as securities operations officer. Sealy previously held positions with Alaska USA Trust Co. and Key Bank Alaska. Sealy has experience in securities clearing and settlement, administration and systems. Petter Jahnsen has been appointed chief investment officer. Jahnsen joined the firm in 1994 and previously served as senior vice president and as a portfolio manager. The company has appointed Bert Wagnon senior vice president. Wagnon has served as a vice president and portfolio manager since 1995. Tim Bryner has joined the Anchorage office of Eagle Insurance Cos. as regional underwriting manager. Bryner most recently served as the underwriting manager for the Anchorage division of Fremont Compensation. Bryner has 17 years experience in his field and will be responsible for underwriting workers’ compensation insurance for Alaska employers. Commerce Secretary Norm Mineta has appointed Rose Ragsdale, an editor with Alaskan Publications in Anchorage, and Elary Gromhoff, an Aleut Corp. board member, to the Export Council of Alaska. Members reappointed for three-year terms include: Chuck Webber, chairman; Tony Follett, vice chairman; Joe Henri, treasurer; Chuck Becker, executive secretary; John McClellan; Lloyd Morris; Bill Noll; John Norman; Ron Sheardown; Steve Smirnoff and Carol Heyman. April Jensen, president of the Anchorage Chamber of Commerce, recently completed a week-long professional development program with the Institute for Organization Management at the University of Arizona in Tucson. Presented by the U.S. Chamber of Commerce, the program helps participants build skills to address greater member needs, tighter resources and increased competition. Justine Polzin, executive director of the Soldotna Chamber of Commerce, recently completed a week-long professional development program with the Institute for Organization Management at the University of Arizona at Tucson. Presented by the U.S. Chamber of Commerce, the program offers continuing education for chamber of commerce and association executives. Steve Dike has been promoted to partner, information technology, at Mikunda, Cottrell & Co. Dike, a certified public accountant and a Solomon Software certified systems engineer, has experience in implementing and converting computerized accounting systems. Dike previously owned a local accounting and technology firm. Mikunda, Cottrell & Co. has promoted Jim Hasle and Noel Dike to audit senior managers. Hasle, who joined the company in 1999, is a CPA and has practiced with Grant Thornton. Dike worked for the company from 1990 until 1992 and rejoined the firm as an audit manager last March. Dike specializes in audits of utilities, school districts and not-for-profit organizations. Alex Beckman has been promoted to audit manager. Beckman joined the firm in 1996 and was licensed as a CPA in 1999. Beckman has experience in assisting tribal entities, nonprofit organizations and school districts. Mikunda, Cottrell & Co. has promoted Michelle Drew to audit manager. Drew joined the company in 1996 and was licensed as a CPA in 1999. Drew’s experience is in assisting not-for-profit organizations and governmental organizations. Tracy Hartung Daniel has been promoted to tax manager. Prior to joining the firm in 1996, Daniel worked as an internal auditor in the oil industry, and has experience in accounting and reporting, compliance auditing, and state and federal taxation. Jonathan Prater has been chosen as the new assistant professor/coordinator of the process technology program at the University of Alaska Fairbanks Tanana Valley campus. Prater has more than 30 years experience in education and the vocational-technical industry. Prater previously served as an adjunct instructor at the UAF Chukchi campus and as mine maintenance/mill operator instructor at the Alaska Technical Center in Kotzebue.  

Capstone nicked in FAA-union crossfire

Glitches in the FAA’s Anchorage Center software for air traffic control over Alaska became the focus of a union squabble with Federal Aviation Administration management -- but not until two labor groups erroneously discredited the Capstone technology project under way in Alaska. Capstone uses global positioning satellites and terrain databases to guide aircraft in areas with poor or nonexistent radar coverage. Its first use in the country was in Bethel, where it was rolled out Jan. 1.A press release issued by the Professional Airways Systems Specialists and the National Air Traffic Controllers Association Jan. 29 titled "Software Glitches Endanger Air Traffic in Alaska" has FAA Capstone officials baffled and refuting the claims of the two unions."These claims are unfounded and factually incorrect," said Gary Childers, with the Alaskan Region Capstone office.PASS represents 11,000 employees nationwide with 125 in Alaska, and NATCA represents 17,000 nationally.Officials from both unions later admitted that the release was intended to get a PASS employee more access to Capstone information meetings.The employee, with the FAA’s Alaskan Region Airways Facilities, has not been allowed critical training and management contact with Capstone related matters, according to PASS spokesman Ron Rahrig.But neither the FAA nor the employee would discuss the claim after the release was issued."The state of affairs up there in Alaska is horrific. This is by far the worst relationship that we have with FAA management in the entire U.S.," Rahrig said.According to FAA officials in Anchorage, the two incidents referred to in the press release involved the Micro En-route Automated Radar Tracking System while it was acquiring data from the Capstone system.The first incident happened on Jan. 19, when the Micro-EARTS software used in the Anchorage Center for air traffic control acquired an F-15 taking off from Elmendorf Air Force Base. The officials said that when the F-15 flew across a latitude slightly south of Anchorage that is the same as Bethel’s latitude, the Micro-EARTS system gave an erroneous reading.Capstone aircraft, much like transponder-equipped aircraft, have a data block on air traffic controllers’ screens, according to FAA officials with the Capstone program.When the F-15 crossed the Bethel latitude, as it was being handed off to Kenai radar, the data block on the Capstone aircraft in the Bethel area identified it as the F-15."Air traffic controllers at the center picked up on it right away and notified their supervisor, who notified John Hallinan, the Capstone program director," said Gary Childers, in the FAA Anchorage Capstone office. "There was no danger to either aircraft, controllers had the traffic, it was just misidentified."Hallinan and the center supervisor decided to monitor the system for other similar occurrences.On Jan. 20 an Alaska Airlines jet climbing to altitude from Ted Stevens Anchorage International Airport crossed over the same latitude simultaneous with a Capstone-equipped aircraft in the Bethel airport area. Once again the data block erroneously indicated that it was an Alaska Airlines jet some three hundred miles away."Center called John (Hallinan) at home and a decision to unplug the (Capstone) ADS/B system from the Micro EARTS system at the center was made," Childers said."This was not a Capstone software problem, but a Micro-EARTS software problem, as it acquired the data from the (Capstone) broadcast data," said James Call, an aviation safety inspector with the Capstone program.According to Capstone’s Call and Childers, programmers from Lockheed Martin, who write programs for the Micro-EARTS system, used a test bed system on the East Coast to simulate the data error. They rewrote the software and flew to Anchorage to rectify the software code to accept the Capstone data correctly."The system was only unplugged for 18-20 hours, and is now up and running perfectly," Childers said."We operate with a double back up system, and as you know we are very safety sensitive. At no time was the flying public or any aircraft in danger," Call said.The press release, however, stated, "The incident prompted the unions to urge the FAA to take the program off line until it’s tested and debugged completely." Also in the release, PASS official Rahrig states, "We are concerned about the testing of an experimental program in a live traffic environment," a statement that the Capstone officials refute."We voluntarily took the system out of the Micro-EARTS system, and this is not an experimental program that is being tested as they indicate," Childers said."We started testing this a year ago and now have the system installed in 84 aircraft. We are online with this, and it became official and is in use in the Bethel area as of Jan. 1, 2001," Childers added.Local NATCA official Rick Thompson, who was listed on the release and quoted in the communique, clarified NATCA’s position for the Journal."Well, PASS was having some labor management problems, and we wanted to give them some help by putting some pressure on Washington, D.C.," he said. "We fully support Capstone and any other new technology. We need it."

Bulletin Board February 11, 2001

In gear   Kronos Incorporated, a developer of labor management hardware and software, has opened an office at Pacific Office Center, 310 K St., Suite 200, Anchorage. The telephone number is 907-264-6674, and the fax number is 907-264-6602. Office hours are 8 a.m. to 5 p.m. Monday to Friday. Kronos offers time and attendance products and services for Windows, AS/400 and client-server platforms. Chris Thompson, a Kronos account executive for six years, will serve as labor management specialist for the Alaska region. A new Veterans Administration community-based medical clinic is scheduled to open within nine months on the Kenai Peninsula. The clinic will serve nearly 1,000 area veterans. Currently, there are no federal health care facility partners on the Kenai Peninsula to cover veterans’ care. The Kenai outpatient clinic will be the second in Alaska with the Alaska Veterans Healthcare System and Regional Office in Anchorage serving as the two clinics’ parent facility. Sen. Ted Stevens, R-Alaska, included language in an appropriations bill last year directing the Veterans Administration to open the clinic. Kudos The Challenger Learning Center of Alaska chose seven contest winners in its Earth Science Distance Learning Mission sponsored by Tesoro Petroleum. Winning schools were Unalakleet, Sterling Elementary School, Seldovia, Central Middle School of Science in Anchorage, King Cove, Finger Lake Elementary School in Palmer and Aniak. The missions included a two-day teacher training session, four weeks of classroom curriculum and a two-hour mission via the Internet from the center to the classrooms. The Alaska Hotel & Motel Association recently presented 2001 Stars of the Industry Awards to four Alyeska Resort employees at its annual banquet held at The Westin Alyeska Prince Hotel. Award winners included: Fred Luecker, front desk supervisor; Mary Whalen, sales coordinator; Ian Kingston, bell captain; and Cella Baker, marketing manager. The award recognizes individuals with outstanding accomplishments in Alaska’s hospitality industry. Seven official judges for the Alaska Symphony of Seafood, a new products contest for retail, food service and smoked products made from Alaska seafood, announced contest winners at the Gala Soiree and Awards Ceremony Jan. 27. Maserculiq Fish Processors of Marshall won grand prize as well as first place and the People’s Choice awards in the smoked products category for its Yukon King Seafoods Traditional Salmon Strips. Salmon Sausage Pizza Topping from Kake Foods won the food service category. Icicle Seafoods of Seattle with Ship Ahoy¨ Teriyaki Salmon topped the retail category. People’s Choice awards also went to Captain Red’s Krab Salad from So-Cal Seafood of Whittier, Calif. and Trident Seafoods’ SeaLegs¨ ExtremersTM Seafood and Crab Bites. Media Epicenter Press has published "Cold River Spirits: The Legacy of an Athabascan-Irish Family from Alaska’s Yukon River." Written by Jan Harper-Haines who was born in Sitka of Koyukon Athabascan and French-Dutch descent, the book explores a Native Alaskan family’s cultural transition in their search for a better life. The hardbound book measures 6-by-9 inches, contains 224 pages, has 50 black-and-white photographs and costs $19.95. Much obliged The Foundation of the Arc of Anchorage recently approved 70 mini-grants totaling $46,000 to children and adults experiencing developmental disabilities. The program provides up to $1,000 per grantee for products and services not supported by public funding for Anchorage and Matanuska-Susitna area residents. A top priority has been medical, dental, hearing and vision expenses not covered by Medicaid or private insurers. Therapeutic equipment is the largest category both in terms of number of applications and total amount requested. The Advocates of Victims of Violence raised more than $40,000 at its Space Odyssey 2001 Gala held recently. The event was underwritten in part by Alyeska Pipeline Service Co. Employees of Alyeska and the Trans-Alaska Pipeline System also provided volunteer support for the fund-raiser designed to eliminate the remaining debt on AVV’s new shelter. Sundries The World Heritage International Student Exchange Program is seeking host families for high school exchange students for the 2001-2002 academic school year. Couples, single parents and families with no children also are encouraged to apply. For details, contact Angeline Fowler at 800-888-9040.  

Around the World February 11, 2001

NATIONBush delays logging WASHINGTON -- A ban on road building and most logging in a third of the country’s national forests was delayed for two months on Feb. 5 by the Bush administration.The forest plan, which President Clinton announced Jan. 4, has been attacked by Republican Western lawmakers, and by energy, timber and mining industries.The delay is in line with an order President Bush made on taking office last month to halt or slow down a series of regulations and rules the Clinton administration issued in its final days.The forest restrictions were published in the Federal Register before Bush took office, so he can’t block or alter them without going through a new rule-making process. The Forest Service held 600 hearings and received 1.7 million comments while developing the plan.The Feb. 5 action changes the plan’s effective date from March 13 to May 12.Blockbuster suedLOS ANGELES -- A group of some 200 owners of private video stores has sued Blockbuster Inc., claiming the company is monopolizing the video rental market and trying to drive independent stores out of business.The lawsuit filed in Los Angeles Superior Court on Jan. 31 claims that because Blockbuster is owned by media giant Viacom Inc., the chain has "substantial market power and influence with the Hollywood studios.’’Deals Blockbuster made with studios in 1997 and 1998 to share rental revenues increased Blockbuster’s market share and drove competitors out of the market, the suit alleges.Blockbuster is the leading video rental chain, with some 7,500 stores worldwide.About 2,500 U.S. video stores went out of business in 1998, according to the Video Software Dealers Association, 10 percent of rental stores.The plaintiffs, seeking class-action status, include the owners of video stores nationwide.Prunes now dried plumsWASHINGTON -- Prunes by any other name would taste the same, but they might sell better.Plum growers have won permission from the government to call prunes "dried plums.’’Industry research shows that women between the ages of 35 to 50 overwhelmingly preferred the term "dried plum.’’By agreement with the Food and Drug Administration, the term "pitted prunes’’ will still appear on packages in small letters for the next two years. "For many years prunes were advertised for a very specific nutritional message. ... It’s strong association with laxation,’’ said Howard Nager, vice president of marketing for Sunsweet Growers Inc.Nager said the name change appears to have reversed a decline in prune sales. He said that monthly sales were now showing flat to single-digit growth.Schwab orders vacationsSAN FRANCISCO -- Charles Schwab Corp. is ordering thousands of its employees to take off three Fridays during five weeks as part of the stock brokerage’s efforts to weather a downturn.All employees that don’t interact with Schwab’s customers in the branches or telephone service centers were told not to report for work Feb. 2, Feb. 16 and March 2. To get paid, the employees will have to use their vacation time.The Friday furloughs will help Schwab pad its profits during what analysts expect to be a poor quarter.To combat the sluggish market conditions, Schwab has already slashed management salaries by up to 50 percent through March and reduced the company’s first-quarter bonus pool by 5 percent.Power of symbolsAlthough Nike spent zilch on Super Bowl television commercials, the athletic shoe and apparel giant may have run away with nine digits worth of free advertising from the game.Sponsors Report, a company that studies sponsor exposure during televised sports and special events, found that Nike’s "swoosh’’ logo appeared clearly on camera for 28 minutes. With 30-second commercials selling for $2.3 million, the company calculated Nike’s Super Bowl benefit at about $129 million.Compiled from business wire services.

Business Profile February 11, 2001

Name of the company: Alaska Option Services Corp.Established: 1983Location: 949 E. 36th Ave., AnchorageTelephone: 907-563-0078Major focus of services: Alaska Option Services Corp. provides shared electronic funds transfer services for automated teller machines and point of sale transactions around the state.History of the company: Alaska USA Federal Credit Union and seven other financial institutions pooled their resources to form Alaska Option in an effort to build a statewide network of ATM machines. In 1986 Alaska Option, National Bank of Alaska and Carrs Quality Centers developed one of the first regional point of sale programs, which allowed customers to buy groceries using electronic funds transfer services. Later that year NBA joined Alaska Option after the financial institutions had previously been competing against one another.In 1997 Alaska Option worked with the state of Alaska to act as a designated agent for electronic distribution of social service benefits via a card.The company has continued to grow during its tenure.Today Alaska Option employs a full-time staff of 15 and is governed by a seven-member board of directors. Alaska USA Federal Credit Union holds 51 percent ownership in Alaska Option, and other shareholders include Credit Union 1, Denali Alaskan Federal Credit Union, Fort Wainwright Federal Credit Union, Matanuska Valley Federal Credit Union and NBA.In 2000 the Alaska Option network processed 19.2 million transactions. Across Alaska 362 ATMs participate in the Alaska Option network.Top accomplishment of the company: "Our biggest accomplishment has been the ability to maintain large participation and to continue to grow," said John Shipe, Alaska Option president and chief executive.Major player: John Shipe, president and chief executive, Alaska Option Services Corp.Shipe’s new employer, NBA, transferred him to Alaska in 1979. He started as a project leader at the bank and was promoted several times, eventually serving as executive vice president and head of the information technology department 18 years later. Since 1996 Shipe has served as president and chief executive for Alaska Option.-- Nancy Pounds

Backbone studies gas line options, offers comparative analysis

The citizens group, Backbone: Standing Up For Alaska’s Future, studied at least 15 variations of potential projects for developing the vast quantities of natural gas on Alaska’s North Slope. The Slope has estimated known gas reserves of 35 trillion cubic feet and another 65 trillion cubic feet of gas reserves yet to be discovered.Backbone released "Alaska’s Gas, Alaska’s Future," a 130-page study, Jan. 25 that examines various gas pipeline proposals now being considered by Alaska gas producers, state lawmakers and others.Backbone said long-term supply, demand and pricing forecasts for both the Lower 48 and Asia are critical to Alaska’s decision on the right gas commercialization project.The study was conducted by Backbone members with the help of industry and legal experts. It examines the history of gas pipeline proposals in Alaska, dating back to the early 1970s and culled research, opinion and literature to develop a unbiased basis for comparing all of the gas line proposals.Backbone and the study’s authors stopped short of endorsing a single project, but developed a comparative analysis of each proposal that has been discussed so far. "Before we turn one shovel on the wrong project, we need to get all the information we can on the right project," said Christy McGraw, Backbone’s director.Such variables as market price, cost of service and wellhead netback were evaluated within a common framework. However, the outcome reflects estimates because of all the unknowns, including the effect that decisions the Canadians make could have on the projects.The analysis included six variations of a tidewater liquefied natural gas project involving different quantities of gas being marketed annually; three variations of an Alaska-Canada Highway project; and the so-called "over the top" proposal that would ship North Slope gas offshore across the Beaufort Sea to Canada’s Mackenzie Delta and then south to market.The analysis also examined the benefits of a Y-line project, combining a tidewater LNG project with a 4 billion cubic-feet-per-day or a 3 Bcf/d Alaska Highway pipeline project.

Calendar February 11, 2001

Confabs The Anchorage Chamber of Commerce is holding a Make It Monday forum called "Economic Impacts and Environmental Initiatives: The Pacific Northwest Cruise Ship Industry" at noon Feb. 12 at the 4th Avenue Theater. Al Parrish, vice president of government and community relations for Holland America, will give a presentation on the Pacific Northwest cruise ship industry and its effects on this region. The cost is $14 for members and $20 for others. For additional information, call 907-272-2401 or visit ( The National Park Service is holding a series of open houses to seek ideas on managing the backcountry of Denali National Park and Preserve from 4-8 p.m. Feb. 12 in Healy, Feb. 13 in Cantwell, Feb. 15 in the Susitna Valley, Feb. 20 in Anchorage and Feb. 21 in Fairbanks. For locations and details, contact Mike Tranel at 907-271-1712. The Anchorage Chamber of Commerce Business Connection Breakfast is planned for 7:30 a.m. Feb. 13 at the Sheraton Anchorage Hotel. Held in conjunction with the Rural Small Business Conference, the breakfast will feature speakers relating to technological changes in rural Alaska. The cost is $12 for members and $14 for others. For reservations or more information, call 907-272-2401. The Mat-Su Borough Small Business Development Center and Brenda Forsythe of Training Solutions are presenting a seminar entitled "Microsoft Mail Merge" from 9 a.m. to noon Feb. 13 at Training Solutions, Lakeview Professional Building, 851 E. Westpoint Drive, Wasilla. The cost is $40. For more information and registration, call 907-373-7232. Situs Inc. is offering a course entitled "Train the Evaluator Office/Industrial Ergonomics" from 9 a.m. to 4 p.m. Feb. 13-15 at Tesoro Alaska Petroleum Co.’s Anchorage office, 3230 C St. Fees vary for different course sections. Space is limited, and registration is required. For more information, call 907-563-0950. The Greater Fairbanks Chamber of Commerce is holding its general membership luncheon at noon Feb. 13 at the Westmark Fairbanks Hotel. George Kitchens, general manager of Golden Valley Electric Association, will address the topic "Energy Future of the Interior, a GVEA Perspective." The luncheon cost is $11.25. For more information, call 907-452-1105. The Greater Soldotna Chamber of Commerce is holding its weekly meeting at noon Feb. 13 at the Riverside House, 44611 Sterling Highway. The City of Soldotna Special Election Mayor Forum is scheduled. For more information, call 907-262-9814. The Greater Wasilla Chamber of Commerce is holding its Must Be Tuesday luncheon program at noon Feb. 13 at the Mat-Su Resort, 1850 Bogard Road. Greg Berberich, president and chief executive of Matanuska Telephone Association will provide an update on MTA operations and direction. Program fees are $3 for members and $5 for others. An optional lunch is available for purchase. For more information, call 907-376-1299. The Internal Revenue Service, the Department of Labor and the Anchorage Small Business Development Center are sponsoring a free seminar on employer payroll taxes from 8:30 a.m. to 4 p.m. Feb. 14 at the Department of Labor, 3301 Eagle St., Room 101. For more information, call 907-274-7232. The Mat-Su Borough Small Business Development Center is offering a workshop on recordkeeping from 9 a.m. to noon Feb. 14 at the SBDC office, 201 N. Lucille St., Suite 2-A, Wasilla. The SBDC has scheduled a small business owners tax return workshop from 1-4 p.m. Feb. 14 at the same location. Individual workshops costs $25. The fee for attending both workshops is $40. For more information and registration, call 907-373-7232. The Kenai Chamber of Commerce is holding its weekly meeting at noon Feb. 14 at the Old Town Village Restaurant, 1000 Mission Ave. The luncheon cost is $10.50. For more information, call 907-283-7989. The Greater Palmer Chamber of Commerce is holding its weekly meeting at noon Feb. 14 at the Palmer Moose Lodge, 1136 S. Cobb St. Dave Holmquist and Fred Stier of Valley Pathways, an alternative high school, are the scheduled speakers. The cost is $9. For additional information, call 907-745-2880. The Resource Development Council for Alaska Inc. is presenting a program at 7:30 a.m. Feb. 15 at the Petroleum Club of Anchorage, 3301 C St. Bob Poe, executive director of Alaska Industrial Development and Export Authority, will present "AIDEA: Report on Statewide Resource Development Endeavors." Breakfast for members cost $12 and $15 for others. Reservations are required. For more information, call 907-276-0700. The Anchorage Chamber of Commerce Business After Hours is scheduled for 5-6:30 p.m. Feb. 15 at the House of Harley Davidson, 4334 Spenard Road. Networking, food and door prizes are planned. For reservations, call 907-272-2401. The Institute of Management Accountants is holding its monthly dinner meeting beginning with a social hour at 5:30 p.m. Feb. 15 at the Golden Lion Hotel, 1000 E. 36th Ave. Neal Fried of the Alaska Department of Labor will speak on the Alaska economic forecast. The cost is $24, a portion of which is designated for the IMA Scholarship Fund. All accounting professionals and students are welcome. For more information, contact Barbara Bryant at 907-257-2325. The University of Alaska Fairbanks Small Business Development Center is presenting a workshop on how to write a business plan from 6-9 p.m. Feb. 15. The fee is $25. For more information, location and registration, call 907-456-7232. The final installment of the four-part Governor’s Millennium Lecture Series is scheduled for 7 p.m. Feb. 15 at the Alaska Center for the Performing Arts Discovery Theatre. Thomas Freidman, New York Times foreign affairs columnist, will discuss world events and how they affect Alaskans and all Americans in the 21st century. The lecture is free and open to the public. For more information, call 907-465-3500. The 2001 Pacific Rim Construction, Oil and Mining Exposition & Conference is slated for 10 a.m. to 6 p.m. Feb. 13-14 at the Sullivan Arena in Anchorage. The PAC COM Expo fosters further development of construction, oil and mining industries in Alaska and the Pacific Rim by bringing together foreign and Alaska personnel from various industries, services and government ministries to the exhibition and related conference. For additional information, call 888-509-7469 or visit ( The Board of Forestry is meeting at 10:30 a.m. Feb. 14 and 8 a.m. Feb. 15 in the Department of Environmental Conservation building, 410 Willoughby Ave., Juneau. The agenda includes the Alaska Clean Water Agenda, salmon restoration funds, Region III legislation and the Kenai Forest Fragmentation study among other topics. Teleconferences also are scheduled in Fairbanks and Anchorage. For details, contact Claudia Dwyer at 907-269-8463. The Division of International Trade & Market Development and the Alaska World Affairs Council are presenting a "Doing Business in Japan" trade seminar from 8:30 a.m. to 3:30 p.m. Feb. 16 at the Anchorage Marriott Downtown. The Japanese Protocol Business Dinner is scheduled from 6-8 p.m. Feb. 15 at Tempura Kitchen. For seminar and dinner reservations, call 907-269-8110.  

Movers & Shakers February 4, 2001

Acclaim Technology has hired Jim Henry as account executive for Alaska. Henry will be responsible for both new business and service to existing accounts. Henry has been involved in the Anchorage information technology industry for more than 15 years, and has experience in systems management, telecommunications and technical sales. IT Alaska Inc. has added Ingrid Gadpaille as an environmental technician to its Anchorage staff. Gadpaille has 13 years experience in oil spill contingency planning, spill response and regulatory compliance. Gadpaille will be responsible for geographical resource database development, oil spill contingency planning and regulatory compliance. Jeannie Yarnell has joined the environmental and engineering firm as a geographic information system specialist. Yarnell will be responsible for GIS support for commercial, state and federal clients. Yarnell previously worked for the U.S. Geological Survey. Greg Liebl, chief structural engineer at Design Alaska, is now a principal at the firm. Liebl joins Jack Wilbur, president; Bill Payton, chief architect; and Bob Gras, chief electrical engineer, as a full partner in the corporation. Liebl has been Design Alaska’s chief structural engineer since 1995. Jennifer McKee has joined Brady & Co. as an administrative assistant. McKee will provide administrative and technical support for the employee benefits department. McKee previously served as regional director of the American Heart Association in Olympia, Wash. Johnathan Limb has joined the Anchorage office of USKH Inc. as a staff civil engineer in the firm’s civil engineering department. Limb, an engineer in training, is a recent graduate of the University of Alaska Anchorage with a bachelor’s degree in civil engineering. The Anchorage Chapter of the Association of Information Technology Professionals recently elected its 2001 officers and board of directors. Elected were president, Jim Henry, Acclaim Technology; vice president, Richard Ender, retired from the University of Alaska; treasurer, Bryan Brown, Alaska Communications Systems; and secretary, Cindy Baldwin, General Communication Inc. Jodi Phelan of Northrim Bank, Lynette Vig of MicroAge and Scott Armstrong of Mercury Data Group were elected to the board of directors. Janice Blanchard of Municipal Light and Power serves as region director. The Alaska Native Tribal Health Consortium board of directors elected Donald G. Kashevaroff chairman of the board and president of the consortium. Kashevaroff is president of the Seldovia Village Tribe, chairman of the Seldovia Native Association Inc. and owner of an Anchorage consulting firm. Paul Sherry has served as the president/chief executive of ANTHC since its inception three years ago and will continue to serve as CEO. Other board officers elected for 2001 are vice-chairman, Lincoln Bean Sr.; secretary, Eileen Ewan; and treasurer, H. Sally Smith. Michelle Stockey and Elizabeth Wicke have been promoted to loan officers at Credit Union 1. Stockey joined the credit union in 1993 and is the main branch manager. Stockey’s additional duties will include processing loan requests at the Eide Street branch. Wicke has been with Credit Union 1 for nearly two years, and is responsible for opening new accounts and consumer type loans at the DeBarr Road branch. William Earnhart has been elected partner at the law firm of Lane Powell Spears Lubersky LLP in Anchorage. Earnhart concentrates his practice in commercial litigation. Earnhart is admitted to practice in Alaska, Washington, Oregon and the Ninth Circuit Court of Appeals. Sen. Drue Pearce, R-Anchorage, has been chosen for the Defense Advisory Committee on Women in the Services. The U.S. Coast Guard nominated her to the committee in recognition of her legislation work assisting the Coast Guard in performing their duties in Alaska. The committee is appointed by the Secretary of Defense to provide recommendations on issues that affect military women.  

Pollock, cod fishing begins with uncertain future in Steller rules

Winter fishing for pollock and cod is under way in the Bering Sea and Gulf of Alaska, thanks to a budget rider pushed through Congress in December by Sen. Ted Stevens, R-Alaska.The National Marine Fisheries Service published emergency regulations Jan. 20 implementing a new fisheries management plan allowing vessels to start fishing."Overall it’s OK, compared with what we thought we would have to live with," under a Biological Opinion published by NMFS on Nov. 30, said Stephanie Madsen, vice president of the Pacific Seafood Processors Association."But it’s still not as good as what we had last year," before a September court injunction closed prime fishing areas, Madsen said.Some good news is that the pollock biomass in the Bering Sea has grown, so the pollock fleet there has a quota of 1.4 million metric tons compared with about 1.14 million tons in 2000. But it will be more difficult to fish that quota because of the restricted fishing areas, Madsen said.The Gulf of Alaska is a different matter. The pollock biomass there is down, and quotas are down 10 percent. There are more fishing restrictions, too."In the gulf, it’s almost as constraining as under the injunction," said Heather McCarty of the At-Sea Processors Association. "Seventy five to 80 percent of the prime fishing grounds may be off limits, instead of 95 percent," McCarty said.Meanwhile, huge uncertainties still hang over the groundfish fleet, a billion-dollar industry that is an economic mainstay of coastal communities like Kodiak, Akutan, Atka and Unalaska.For starters, the reprieve is only for six months. Stevens’ amendment allows a gradual phase-in of a restrictive fisheries management plan based on NMFS Biological Opinion on endangered Steller sea lions.But the plan, which would severely curtail the big groundfish industry, would still come into effect after June, according to Madsen.NMFS must publish revised regulations June 10 to cover fishing during the remainder of the year, according to the Jan. 20 notice.Federal fisheries scientists could find new information before June, causing them to change their opinion that fishing contributes to a rapid decline of Steller sea lion populations. Unless that happens, the June 10 regulations will incorporate recommendations of the Nov. 30 Biological Opinion.The fishery could also be curtailed sooner. U.S. District Court Judge Thomas Zilly, the Seattle judge in a lawsuit brought by Greenpeace over the Steller sea lions, will convene a Feb. 2 hearing to consider whether NMFS’ emergency regulations provide enough protection for the Stellers, which are listed as endangered under the Endangered Species Act.Greenpeace, the plaintiff in the suit, has taken the position that the emergency regulations still leave the sea lions in a state of jeopardy. They are encouraging the judge to reimpose an injunction against fishing inside critical Steller habitat areas issued in September and lifted in November, when the latest NMFS Biological Opinion was published."Even this phase-in may be problematic. If the plaintiffs can persuade the judge that the management plan under the Biological Opinion is the only way sea lions are protected, we may find ourselves out of compliance with the Endangered Species Act," said McCarty of the At-Sea Processors Association.The agency may be in a bind on the legal issue because no matter what Stevens did in Congress, the Nov. 30 Biological Opinion says Stellers are jeopardized by fishing. Zilly could order NMFS to stand by its Nov. 30 opinion, despite Stevens.For the big pollock fishery in the Gulf and Bering Sea, the fishing plan NMFS has implemented is essentially the management plan that was in effect during most of last year, before the September court injunction went into effect. The 2000 plan defined Steller sea lion habitat areas, closed some to fishing and allowed limited fishing in others.In September Zilly’s injunction closed all areas within 20 miles of sea lion habitat to fishing. This blanketed most of the Gulf of Alaska and portions of the Bering Sea coast.The new plan reopens some of these areas to fishing but sets out some new restrictions. For example, while the total pollock quota for the Bering Sea fishery is larger this year, fish taken from a prime fishing area north of Unalaska that is important to boats operating from that community, is capped at last year’s tonnage.But fishing is at least being allowed in that area. Under the Nov. 30 Biological Opinion it would have been closed, as it was when the September court injunction was in place. Fishing boats operating from Unalaska would have had to travel farther to where fishing was allowed, at a time of year when most of the fish are in restricted areas.There are other rough edges. Madsen points out that "50 percent of the critical habitat areas are supposed to be open, but only 40 percent is really open based on the boundary lines we’ve seen.""We hope to get the council to look at this in February, so that we can get up to 50 percent," she said. Some changes are positive, though. One is that 60 percent of the Pacific cod quota can now be fished in the first half of 2001, and 40 percent in the last half, Madsen said.Previously it was reversed, with only 40 percent available in the first half of the year. Cod fishing is usually better in the first half, so the higher quota is important, she said. But even the temporary plan allowed this spring will cost the industry about 45,000 metric tons of fish that could have been taken inside closed or restricted areas, compared with spring 2000 harvests in those areas, according to an analysis by industry and community groups.The analysis was provided to the North Pacific Fishery Management Council when it met Jan. 8 in Seattle. It also showed the revised plan will cost the industry about $11.7 million.Shore-based fishing boats and plants will bear the brunt of this with a $5.8 million loss, according to the analysis; $2.76 million of the loss will be borne by the offshore catcher/processor fleet, $1.05 million by mother ships, the floating processors that buy from smaller fishing boats, and $2.02 million by Community Development Quota groups in coastal villages, which sell or fish their assigned quotas of pollock and cod themselves or in joint ventures.

Feds OK True North permits

FAIRBANKS -- Permits have been issued for the True North gold mine project, clearing the way to start construction of the project 30 miles north of Fairbanks.The U.S. Army Corps of Engineers permits issued Jan.24 go into effect immediately.The permits were the last government approval that Fairbanks Gold Mining Inc. needed."We’re very pleased for the company and for the community," Tom Irwin, general manager of Fairbanks Gold Mining, told the Fairbanks Daily News-Miner.The first True North ore should be available to process by the end of March, according to a statement from the Toronto-based Kinross Gold Corp., parent company of Fairbanks Gold. True North will be in full production by the end of June, the statement said.Fairbanks Gold wants to mine 180,000 ounces of gold a year over three years at True North. The mine will cost $25 million to construct and will employ 110 people. Fairbanks Gold plans to build a $1 million underpass on the Steese Highway to be used by ore trucks and mine employees.Opponents of the mining project have met to discuss options that may include appealing to Superior Court. Under state law they have until Feb. 19 to appeal.

Cruise ship jobs worth $15.2 million to Juneau

JUNEAU -- A new report says the cruise ship industry generated the equivalent of 748 year-round jobs in Juneau with a payroll of $15.2 million in 1999. Juneau’s share accounted for nearly half of the jobs the industry created in four Southeast towns studied.The report, The Economic Impacts of the Cruise Industry in Southeast Alaska, examined spending, tax revenue and jobs associated with the industry in Juneau, Ketchikan, Sitka and Haines during the 1999 tourist season."Anecdotally, people understand that the industry had grown," said Loren Gerhard, director of Southeast Conference, which sponsored the study, "and we wanted to measure that."The conference is a membership organization that includes municipalities, chambers of commerce, visitors bureaus and others. The conference is interested in infrastructure development in the region, Gerhard said."(The report is) not going to please everybody, including some of the cruise ship companies," Gerhard said.Gerhard said the study was paid for with a "sizable" grant from the cruise ship industry with the understanding that the industry wouldn’t have any editorial input or oversight.Results of the project held no big surprises, said Eric McDowell, managing partner of The McDowell Group, which authored the report.Each of Juneau’s 748 year-round equivalent jobs has an estimated $20,400 average income, according to the report. Year-round equivalent jobs combine seasonal jobs to make a comparable one-year job. For instance, three seasonal tourist jobs lasting four months equal one yearly job.The estimated 748 jobs account for 5 percent of total employment in Juneau, but only 3 percent of payroll, the report said. The highly seasonal jobs, were they year-round, would pay about half of what Juneau’s average job pays.The actual number of people employed in cruise-related jobs in the four Southeast towns studied peaked in July 1999 at about 5,100, according to the report.Juneau fared better in spending by cruise passengers, lines and crew than other towns in the report. The McDowell Group estimated the three groups spent $181 million in Southeast, of which $90 million was spent in Juneau. Passengers accounted for more than 80 percent of the spending, according to the report.Juneau also came out ahead in the amount of sales taxes collected. The report estimated Juneau collected more than $2.8 million in cruise-related sales taxes. Ketchikan nearly equaled that amount, and Sitka and Haines combined for just more than $1 million collected.The cruise industry is growing while other parts of Southeast’s economy, such as fishing and fish processing, timber and government have been flat or in decline. The number of cruise passengers grew from 235,000 to nearly 600,000 in the ’90s, a 154 percent increase, the report said."It is safe to assume that cruise-related employment has increased in relation to total cruise activity," it said.

This Week in Alaska Business History February 4, 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 TimesFeb. 4, 1981Mapco sees Earth Resources expansion aheadBy John KnowltonTimes WriterThe new parent company of Earth Resources of Alaska wants to expand that firm’s involvement in the development of a possible petro-chemical industry in Alaska.But Robert Thomas, president of Mapco Inc., isn’t saying how much expansion he is looking at. In the best tradition of corporate management, he says he’s keeping all his options open."We’re not ruling out anything at this point," Thomas said Tuesday.Mapco bought out the Dallas-based Earth Resources Co. in a tax-free stock exchange two months ago. Thomas is in Alaska this week on a "get acquainted, hand-shaking" visit.Anchorage TimesFeb. 7, 1981Arco to build 21-story towerBy John KnowltonTimes WriterArco Alaska Inc. said Friday it will begin construction this summer of a $30 million, 21-story office building in Anchorage. The building will be the tallest and most expensive privately owned office building in Alaska.The company also said Friday it has purchased the multi-unit complex it currently is leasing from Anchorage real estate developers Gene and Dick Silberer. The value of the purchased complex and the 21-story tower will be between $50 million and $60 million.Arco officials said the oil company’s present building and the new tower will be connected with a glass enclosed atrium and total nearly 800,000 square feet of office space. The new tower will consume nearly all of the block bounded by Seventh and Eighth avenues and G and H streets.10 years ago this weekAlaska Journal of CommerceFeb. 4, 1991Southeast may get road accessAlaska Journal of CommerceSoutheast Alaska communities, isolated by a rugged coast, mountains and icefields have long sought access by highway to the Interior. New transportation links, bringing with them new port development and water transportation services, will allow these communities to broaden their economies, now narrowly dependent on nearby coastal resources, such as fisheries and timber, or in Juneau, state government.Start-up of the Greens Creek Mine near Juneau, now the nation’s largest silver mine, has stimulated mineral exploration across Southeast Alaska and nearby British Columbia.At the northern end of Southeast, Skagway and Haines have long enjoyed surface access to the Yukon Territory. Skagway is already the outlet for mines in the Yukon, and new developments in the territory will add significantly to the volume of ore being shipped through Skagway next year.Alaska Journal of CommerceFeb. 4, 1991Alaska means business for Puget Sound, PortlandBy Ralph NicholsFor the Journal of CommerceWhen tourists from Alaska first visit the restaurants, shops and ferry terminal along the Seattle waterfront, they’re quick to notice the name of the street that passes by.It’s called Alaska Way, for here -- almost a hundred years ago -- men and equipment stood in long lines to board steamships that would carry them north to the Klondike gold rush.Business ties between the Pacific Northwest and Alaska have been strong ever since.But even before the gold rush of 1897-1900, prominent businessmen in this rapidly growing city on Puget Sound had acknowledged the importance of trade with Alaska.In April 1882, they organized the Seattle Chamber of Commerce, with a primary goal of expanding trade with Alaska.-- Compiled by Ed Bennett.

Calendar February 4, 2001

Confabs The Anchorage Chamber of Commerce and the Anchorage Convention & Visitors Bureau are sponsoring a Make It Monday forum on the economic impact of Fur Rendezvous on the Anchorage business community at noon Feb. 5 at the 4th Avenue Theatre. Mary Pignalberi, Fur Rendezvous executive director, is the guest speaker. For additional information, call 907-272-2401 or visit ( The Greater Fairbanks Chamber of Commerce is holding its general membership luncheon at noon Feb. 6 at the Westmark Fairbanks. Debbie Sedwick, commissioner of Community and Economic Development, is the scheduled speaker. The luncheon cost is $11.25. For more information, call 907-452-1105. The Greater Wasilla Chamber of Commerce is holding its Must Be Tuesday luncheon program at noon Feb. 6 at the Mat-Su Resort, 1850 Bogard Road. Wayne Carmony, general manager of Matanuska Electric Association, will discuss state vs. local regulatory control. Program fees are $3 for members and $5 for others. For more information, call 907-376-1299. The Kenai Peninsula Small Business Development Center is sponsoring a seminar on how to start a business from 1-4 p.m. Feb. 6 at the Kachemak Bay Campus of the Kenai Peninsula College in Homer. The cost is $15. For more information, call 907-262-7497. WOMEN$fund, a program of YWCA of Anchorage, is offering a 14-week Starting With Success course from 6:30-8:30 p.m. beginning Feb. 6 at the Gateway Learning Center, 801 Karluk St. The course covers the basics for starting a successful business or refocusing an existing business. For additional details, call 907-274-1535. The South East Regional Resource Center is sponsoring Comtech: Connecting Alaskans to the Future 2001, Feb. 7-9 in Juneau. The sixth annual technology trade show will feature more than 50 seminars, seven hands-on computer labs and panel discussions. The keynote address will be given by Howard Charney, senior vice president of Cisco Systems Inc. To register, call 907-586-6806 or visit ( The Greater Palmer Chamber of Commerce is holding its open meeting forum at noon Feb. 7 at the Palmer Moose Lodge, 1136 S. Cobb St. The forum will provide updates to local economic development and agency reports as well as a networking opportunity. The cost is $9. For additional information, call 907-745-2880. The Kenai Chamber of Commerce is holding its weekly meeting at noon Feb. 7 at the Old Town Village Restaurant,1000 Mission Ave. A presentation on Job Shadow Day will be given. The luncheon cost is $10.50. For more information, call 907-283-7989. The Association of Information Technology Professionals is holding its regular monthly meeting at 6 p.m. Feb. 7 at the Regal Alaskan Hotel. Dave Lewis, operations manger of Alaska Fiber Star, will discuss the future of technology in Alaska. For reservations, e-mail ([email protected]). The Resource Development Council for Alaska Inc. is presenting a program entitled "Alaska Business Opportunities in China and Emerging Markets" at 7:30 a.m. Feb. 8 at the Petroleum Club of Anchorage, 3301 C St. Mike Burns, president of Key Bank and Pete Leathard, president of VECO Corp., are among the scheduled speakers. For more information, call 907-276-0700. The Anchorage Small Business Development Center is sponsoring a seminar on starting a business from 8:30 a.m. to 3:30 p.m. Feb. 8 at the SBDC office, 430 W. Seventh Ave. A seminar on developing a business plan is scheduled from 8:30 a.m. to 3:30 p.m. Feb. 9 at the same location. Each seminar costs $30. For registration, call 907-272-7232. The Mat-Su Borough Small Business Development Center is offering a seminar entitled, "Electronic Commerce 101 - First Steps for Business Owners," from 9 a.m. to noon Feb. 8 at the SBDC office, 201 N. Lucille St., Suite 2-A, Wasilla. There is no fee but registration is required. For more information, call 907-373-7232. The International Association of Administrative Professionals’ Billikin Chapter is celebrating its 40th anniversary beginning with a social time at 5:30 p.m. Feb. 8 at the Regal Alaskan Hotel. For reservations, contact Carol Fuller at 907-345-5411. Leisure The 2001 Homer Winter Carnival is scheduled for Feb. 9-11. Activities planned include a parade, competitions, film festivals and a night at the races. For details, contact the Homer Chamber of Commerce at 907-235-7740. Festival of the North, a month-long celebration of the arts, is continuing in Ketchikan until Feb. 28. For information about performances, exhibits and community events, call 907-225-2211.  

Alaska deeds of trust -- a primer of frequently asked questions

Here are some basic questions and answers concerning securing payment obligations (including promissory notes) with real property in Alaska.Q: Is a mortgage or a deed of trust used traditionally in Alaska?A: Mortgages, contracts for deeds and deeds of trust are all authorized under Alaska law. However, deeds of trust have for the past 25 to 30 years or so, typically been used in residential and commercial real estate financing transactions in Alaska.One of the principal reasons is that a deed of trust can be foreclosed nonjudicially, without court intervention, with a foreclosure sale occurring at least 90 days following the recording of a notice of default. In the event of a default, mortgages, and in many cases, contracts for deeds must be judicially foreclosed.Q: How does a deed of trust work?A: In a deed of trust, title to the property is conveyed by the owner/borrower (the "trustor") in trust to a trustee (typically a title company) for the benefit of the lender (the "beneficiary") with a power of sale in the event of a default by the borrower.The deed of trust is recorded, and thereby creates a lien upon the relevant real property in favor of the lender or beneficiary. Upon any default, and the giving of statutorily prescribed notice to the borrower and other parties in interest, the trustee can sell the property at a foreclosure sale conducted at a courthouse.Q: If under a deed of trust, the lender exercises its right under a power of sale, is it still possible to obtain a deficiency judgment for the amount owed in excess of the amount bid, or are there so-called "anti-deficiency statutes" present in the state of Alaska?A: Alaska has a broad form of anti-deficiency statute that precludes a deficiency judgment following the completion of a nonjudicial foreclosure.In some states, such as California, case law and statutes allow anti-deficiency or similar provisions to be waived in the language of the deed of trust. There is no Alaska case law of which we are aware addressing this issue, at least in advance of a default.Q: Is there an election of remedies requirement in the state of Alaska?A: Generally, if a deed of trust is foreclosed judicially, or if the note secured by the deed of trust is sued upon and a judgment is obtained by the beneficiary, the beneficiary cannot thereafter proceed with a nonjudicial foreclosure.The statute was enacted during the mid-1980s "oil patch" recession in Alaska to overrule a pair of Alaska Supreme Court decisions that allowed creditors a broad, all-inclusive set of remedies. In addition, in order to preserve the right to waive the security and sue on the note, a creditor must include a specific form of disclosure within the note or as a separate document.Alaska deeds of trust generally include language to the effect that the exercise of the power of sale in the deed of trust is at the election of the lender/beneficiary, and that the right to judicially foreclose the deed of trust is preserved in the lender/beneficiary’s discretion.Q: In general, what are the usury limits for promissory notes in the state of Alaska?A: In general, loans in which the principal amount exceeds $25,000 are not subject to usury limitations. They would, of course, be subject to concepts of unenforceable penalties, overreaching or unconscionablilty. Special exceptions from the general usury limitations apply to certain types of lenders under applicable state or federal law.Deeds of trust are invaluable instruments in Alaska when one wishes to secure the payment of obligations with a lien upon real property.Frederick J. Odsen is a member of the law firm Hughes Thorsness Powell Huddleston & Bauman LLC. He can be reached at 907-263-8255.


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