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.

Calista Corp. housing authority plan doesn't meet federal law, HUD official says

BETHEL -- The federal Department of Housing and Urban Development has rejected a plan by Calista Corp. to start its own housing authority. Donna J. Hartley, director of HUD’s grants management division, in a letter to Calista President Matthew Nicolai, explained that the corporation’s housing plan did not comply with the Native American Housing and Self Determination Act, according to The Tundra Drums. Calista’s plan to use $5.8 million in federal NAHASDA funds drove a wedge between it and the Association of Village Council Presidents Regional Housing Authority in Bethel. For the past two years, federal money for the upkeep of houses built from the 1937 Housing Act has been passed through Calista to AVCP’s regional housing authority. The authority serves 39 of the tribes in the Yukon-Kuskokwim Delta. Ten other villages in the delta administer their own housing program. Calista last year set up the Calista Housing Authority and submitted its own Indian Housing Plan to use the federal funding. Hartley said in the letter that Calista’s plan was rejected because AVCP’s regional housing authority refused to act as a subrecipient unless it received the full amount of the available federal funds. Calista’s plan provided AVCP’s housing authority with only $1.6 million of the $5.8 million available, said Jackie Johnson, deputy assistant secretary of HUD’s office of Native American Program. Forty-nine tribes in Western Alaska have either written letters in support of AVCP or sent resolutions against Calista’s housing plan to HUD. "There have been a lot of resolutions from the villages for Calista not to issue a housing plan under NAHASDA, and they still don’t listen to the people," said George Smith, administrator of the Scammon Bay Traditional Council. Calista wanted to use $3 million to build a community center and office in Bethel that AVCP officials said wasn’t needed. The Calista plan also included building houses in Anchorage for shareholders. Nicolai defended the corporation’s plan, saying it wanted to make sure low-income housing money was available to all its shareholders. There are about 1,000 Calista shareholders living outside the delta in the state’s cities. "There’s a need for the people in Anchorage, Juneau and Fairbanks," Nicolai said. "They want the same services as the villages. We cannot discriminate against them because they live in Anchorage."  

Builders, oil firms expand worker recruitment

The crunch in filling skilled blue collar jobs in Alaska is becoming more serious.Dick Cattanach, executive director of Associated General Contractors, the construction industry’s trade association, says his industry will have to recruit about 1,000 young Alaskans a year into training to meet the expected needs of contractors over the next four years.This assumes the industry’s current load of projects and some expected modest growth, but not a large project like a gas pipeline or a missile defense program, Cattanach said.That’s about one in six Alaska high school graduates.The problem isn’t just in construction. It’s across the work force. Oil and gas companies, who have an aging work force of process facility operators on the North Slope, are seriously concerned.AGC, unions in the building trades and the major industries that operate plants and other process facilities are now doing something about the work force problem.The Alaska Process Industries Careers Consortium, formed two years ago to facilitate training for process operators, is now expanding its scope to other technical occupations in short supply and will also promote training in the construction industry.Alaska Works, a nonprofit organization formed by Alaska building trade unions, has geared up rural construction training programs that are now operating in the Bering Straits, Bristol Bay and Yukon-Kuskokwim regions. The effort is being supported by federal funds.The emphasis is on recruiting, screening and helping organize training for rural housing projects."The idea is for people in these communities to develop the skills to build projects in their own communities, and then become part of the statewide trained work force," said Mike Andrews, director of Alaska Works.Meanwhile, AGC is gearing up its outreach effort in schools, aided by materials developed by the national AGC organization."Build It," a kit of projects for fourth and fifth grades, was offered in 100 elementary schools around the state this past year, according to Cattanach.This is being followed by "On Site," a program for middle schools, which two rural school districts started using this spring. It will be in more middle schools next fall, Cattanach said.High schools in Anchorage, the Matanuska-Susitna Borough and in 10 rural schools have also adopted a core curriculum of more advanced skills developed by the National Center for Construction Education, a program of the University of Florida at Gainesville.The core curriculum is intended to lead into more advanced hands-on vocational education in carpentry, electrical, mechanical and plumbing. There are limits to the ability of some Alaska high schools to offer this, but there’s a lot of interest in the core curriculum, Cattanach said.The unions’ Alaska Works group is cooperating with AGC and also has its own effort under way in schools to interest and recruit young people in construction, Andrews said.The group is working with local school districts in Fairbanks, Bethel and the Matanuska-Susitna Borough on a "tech prep" program for young people with an interest in construction.Building trades unions in Fairbanks began tech-prep there in 1998, Andrews said. It was offered in Bethel schools the following year, and most recently in Mat-Su schools.The program helps channel young people into the University of Alaska’s two-year associate degree program in apprenticeship technology, Andrews said.Meanwhile, the Alaska Process Industry Careers Consortium will see the first fruits of its two years of work this winter when 35 Alaskans graduate from a two-year program conducted on three University of Alaska campuses.The consortium, made up of companies that operate process facilities in petroleum, mining, electric utilities and other industries, worked closely with the university to develop the program and helped fund it, mostly through curriculum development and scholarships.With process operators in high demand, this winter’s graduates are highly likely to be hired into good-paying jobs with companies that operate process facilities, according to Ann Spohnholz, APICC’s executive director. She said some are already working as summer interns for oil and gas companies on the North Slope.Having built this track record, APICC is now expanding its scope, Spohnholz said, to include training for electrical and instrumentation technicians, heavy equipment maintenance technicians, health, safety and environment workers and other occupations that will be in high demand in several Alaska industries, including construction.APICC is close to signing a formal agreement with the Associated General Contractors and Alaska Works to help promote construction careers training in the extensive outreach efforts APICC has under way."Training for the building trades isn’t our prime mission, but there is significant overlap between the industries," Spohnholz said. "The core jobs we are focusing on are the operators, technicians, machinists, health and safety professionals and the engineers. In order for the industry to operate there must be maintenance of new facilities," she said. Part of APICC’s mission is to do outreach to the kindergarten through high school education community, to promote technical training and put an emphasis on math and science, Spohnholz said.APICC’s Career Connections Committee in an informal network that meets by teleconference monthly, consisting of industry people and educators. "We’ve taken a leadership role, along with the Business Education Compact, in assisting industry to partner with local school districts to make curriculum relevant for kids, and to help them know about real jobs," Spohnholz said.Some of APICC’s members are promoting programs in schools, such as AMEREF, or Alaska Mineral and Energy Education Fund, which developed school kits stimulating interest in natural resource sciences.There’s also Science in a Technical World, a series of science projects for seventh and eighth grades that stimulates interest in science, math and science-related reading and writing; and Choices, for elementary schools."All the research shows that young people tend to form opinions about jobs and occupations at about the fifth and sixth grades," Spohnholz said. "This is a critical age."We’ve got a serious problem because the bias not only in the education community but among parents and society in general is toward academics and the college track. Along the way many young people are being turned away from an interest in fields where they could make a good living," she said.

Halibut bycatch forces early closure to yellowfin sole fishery

Thanks to an abundance of big halibut coming up in the trawl nets, the spring yellowfin sole fishery closed early in the Bering Sea. Most of the halibut bycatch is tossed back dead because of a federally mandated waste policy.The factory trawlers targeting yellowfin sole in the Bering Sea were ordered to stop fishing April 26, when they’d reached their seasonal halibut bycatch allowance.In recent years, the fishing boats stayed within halibut bycatch limits and kept on harvesting the small yellowfin that weigh around a pound per fish.But this year, there was no escaping the halibut.John Gauvin of Seattle represents a group of 15 factory trawlers in the Groundfish Forum. He said boats spent much time hunting for cleaner fishing areas. Finally, they started seeing fewer halibut, but then the fishery was shut down."I think people were doing what they could to avoid halibut, but the stars were not aligned for keeping the halibut rates down this spring," Gauvin said. Mike Szymanski of Anchorage represents the Fishing Company of Alaska’s five flatfish boats. He says the halibut were extra big this year."Sometimes they’re so large it takes two people to move them. They’re probably anywhere from 40 to 80 pounds, sometimes as high as 100 to 150 pounds, 200 pounds would be some of the bigger ones they’re huge out there and there’s just lots of them," Szymanski said.Factory trawler skippers confirmed the reports of prolific halibut."They were bigger than usual. Really beautiful fish, probably 20 kilograms and more. We don’t normally see them up that shallow this time of year. It’s usually a pretty clean fishery," said Dave Strand, skipper of the Arica, reporting abundant halibut at 26 to 35 fathoms."Couldn’t get away from them. They were really widespread and looked real healthy. For sure the halibut’s a good stock. There’s a lot of them," Strand said.Butch Taylor, skipper of the Rebecca Irene, reported a difficult season."It’s like everything’s against us. The prices aren’t really good. The fishing’s not piled up. The water’s been unusually warm. The halibut numbers are really high. It was just a tough go this year," Taylor said.Taylor said a virtual absence of higher-value flathead sole left only the lower-value yellowfin as an alternative. Sometimes flathead appeared in test tows, but so did high concentrations of halibut."There was no flathead to start with, and what little you could find, there was so much halibut you couldn’t fish it," Taylor said.Many of the boats won’t start fishing again until July 1, when the National Marine Fisheries Service issues 380 metric tons of "halibut mortality" to the yellowfin fleet.The National Marine Fisheries Service has granted the yellowfin fishery a mortality allowance of 911 metric tons of dead halibut for 2001. That’s the quantity of fish wasted by government mandate because of pressure from halibut fishermen who fish with hooks and line."The problem you run into is the halibut fishery is an allocated fishery. It was turned into an IFQ (individual fisheries quota) program some years ago. As a result, those designated fishermen that have that quota certainly don’t want to see competition in the market from fish that are being brought up in other fisheries," Szymanski said.Szymanski says his company would like to donate its halibut bycatch to food banks, but is prohibited by federal law. Only halibut bycatch from boats delivering to shore plants can legally be donated to food banks."It’s very difficult out there. You have normal mortality, and you have regulatory mortality that is created by the regulations," Szymanski said. "The regulations that are in place create a lot of the waste. But that’s a known given factor. It’s just part of the politics of the fishery."Federal fisheries managers figure that 81 percent of the halibut bycatch in the yellowfin sole fishery dies before being returned to the water. The International Pacific Halibut Commission’s Gregg Williams in Seattle says that figure could be substantially reduced if fishing boats were awarded bycatch allowances on an individual basis, instead of an overall cap for the whole fleet.With individual bycatch limits, trawlers would likely make shorter tows. When trawlers haul their nets for shorter periods, less fish accumulates in the net to kill the halibut, he said. An individual bycatch quota system has greatly reduced halibut mortality in Canada, he said.Jim Paulin is a free-lance writer living in Dutch Harbor. He can be reached via e-mail at ([email protected])

State has boom coming Stevens says

Even without development of the Arctic National Wildlife Refuge, "We do have a boom coming," said Alaska Republican Sen. Ted Stevens at a May 30 press conference in Anchorage. Stevens, citing recent oil and gas discoveries in the National Petroleum Reserve-Alaska and the likelihood of a gas pipeline to the Lower 48, said gas will play a bigger role than oil in Alaska’s energy future.  That’s because in an era concerned with pollution and global warming, Stevens predicts clean-burning natural gas will become more valuable than oil. "We’re going into a new era -- a new crescendo for the state of Alaska," he said. Stevens called the press conference just days before control of the Senate was due to switch from Republicans to Democrats after the defection of Sen. James Jeffords of Vermont from the Republican Party. Stevens was peppered with questions about how the change will affect issues of interest -- and the flow of dollars -- to Alaska. Stevens said not to worry. "It’s not a disaster," he said. "It’s a wake-up call. We’ll be better off for it. We’ll be more cohesive." Stevens will be stepping down as chairman of the Senate Appropriations Committee and handing the gavel to Sen. Robert Byrd, D-Va. But Stevens predicted only a minor impact on his funding goals for Alaska, thanks to a long friendship with Byrd. "We have a very good working relationship," he said. Stevens said one area of uncertainty over funding will involve military construction projects in Alaska. He said that’s because Defense Secretary Donald Rumsfeld has ordered a complete review of military spending, with the results not expected to be known until fall. Stevens remained confident that ANWR will eventually be opened to oil and gas exploration, despite predictions by Senate Democrats that the issue is dead now that they’re in the majority. Stevens said he has 48 votes in favor of ANWR and expects to eventually get more. "When gasoline is $3 a gallon -- and that’s the prediction for the summer of 2002, prior to an election -- we’ll react to that," he said. "The bell is going to toll when it’s time for ANWR, just like it did for the pipeline." Stevens said California’s current electricity shortage will also figure into the ANWR equation, since the shortage is affecting neighboring states and may spread to the East Coast. "It’s a virus," Stevens said. "It’s the AIDS of energy. It’s going to spread east, where it will be more dangerous." Stevens said he fully expects a natural gas pipeline to be built soon from Alaska to the Lower 48. "I think it’s coming," he said. "It could be under construction in 2004, or maybe a year later." He said he didn’t know yet if any enabling legislation would be required for the pipeline to proceed. The trans-Alaska oil pipeline did require such legislation, which is coming up for reauthorization in 2004. Stevens said he will push for more inspections of the aging pipeline as part of the bill. He’s also concerned about permafrost under the pipeline melting as global climate change warms the Arctic. Stevens warned that any congressman expecting a "quid pro quo" for voting to reauthorize the pipeline would get nothing from him. "I don’t think this country will stand still for shutting down the pipeline," he said. "They don’t have any leverage on us. I’ll laugh at them if they try." Stevens was also asked about the National Missile Defense, another issue whose fate may change due to the Democratic takeover of the Senate. Stevens pointed out that the initial phase of the program has been authorized by Congress and was signed by then-President Clinton. "It’s just a matter of implementation," Stevens said. Stevens said he’s unhappy with lukewarm support for the NMD from America’s European allies in NATO. Opponents to the system also cite the 1972 Anti-Ballistic Missile treaty, which has been interpreted as banning construction of a missile defense. Stevens said the ABM treaty was signed with the USSR, which at the time was a major enemy of the United States -- not with Russia, which isn’t. "The ABM treaty is a relic of the past," Stevens said. "We’re not going to leave ourselves open to the threat of missiles (from rogue states)."  

Business Profile: The Chariot Group Inc.

Name of the company: The Chariot Group Inc.Established: 1999Location: 2600 Denali St., Suite 102, AnchorageTelephone: 907-222-5300Web site: www.chariotgroup.comMajor focus of services: The Chariot Group Inc. sells, services and installs presentation equipment including video conferencing equipment, mulitmedia projectors and the latest high-tech plasma projector screens.History of the company: Rick and Denise Thomas founded the company in September 1999 after moving to Alaska from Las Vegas where Rick had worked for a similar company.Last October The Chariot Group relocated to a new office in Anchorage.The company now employs three people, and the Thomases call on contract workers for various projects.Today The Chariot Group sells multimedia presentation products directly from manufacturers -- including major players Toshiba, 3M and Mitsubishi -- to outfit classrooms or boardrooms. The Chariot Group has outfitted clients from consultants with lightweight presentation screens to large companies in Alaska requiring a fully equipped boardroom.In March The Chariot Group began offering its own boardroom equipped with multimedia equipment for rent. The couple decided to provide the service after clients queried them about renting equipment. The rental suite is available by the hour with a one-hour minimum.One industry trend they note is a move from mobile presentation equipment to integrated multimedia rooms for presentations.Top accomplishment of the company: Rick and Denise Thomas are proud of the strong relationships they’ve developed with clients. "That’s a reflection of what the main goal is, which is to provide a positive experience for customers and maintain that relationship," Denise Thomas said.Major players: Denise Thomas, office manager, and Rick Thomas, president, The Chariot Group Inc.Denise Thomas earned an accounting degree from the University of Nevada at Las Vegas and later received her license as a certified public accountant. Rick Thomas earned a finance degree from UNLV and operated an insurance business for about seven years. He next joined a video conference and multimedia company in Las Vegas. He has logged six years in the industry.-- Nancy Pounds

Lowe's ready to restart construction on South Anchorage store

Company officials from Lowe’s Home Improvement are finalizing plans to restart construction work on a new store in Anchorage. Lowe’s representatives still hope to resume construction later this year.The Wilkesboro, N.C.-based chain halted the project earlier this spring. "We did not have a finalized site plan," said company spokeswoman Suzanne McCoy.Site work has been completed, she said. The store, which would be the company’s second in Anchorage, is in South Anchorage.Once company officials finalizes the plan they will release the project for bid, McCoy said.Construction could begin after these processes are completed, she said."We hope to begin construction this year but it has not been finalized. We anticipate and hope," she said.Lowe’s completed its acquisition Jan. 9 of 21.5 acres at the southwest corner of the Old Seward Highway and O’Malley Road.The store was expected to open in January 2002 under the previous construction timetable.A new Lowe’s store should total about 150,000 square feet, including 28,000 to 30,000 square feet for a lawn and garden center, McCoy said.Stores of this size typically employ 175 to 200 people with 85 percent of those employees working full time, she said.This store will be the first Alaska Lowe’s designed after company models, she noted. Lowe’s acquired Eagle Hardware and Garden, including its Midtown Anchorage store, in April 1999.Competitor Home Depot, based in Atlanta, also planned to build its second Anchorage store this year in East Anchorage, although that project has been put on hold. Construction was to begin this year with the store opening in late 2001.Home Depot officials did not return calls by press time to offer an update on the proposed new store.The new Anchorage store was to weigh in at 133,000 square feet and include a 15,000-square-foot garden center.

NC Machinery outfits Russians

Without a lot of fanfare, Alaska equipment dealers have carved out market niches in the last decade selling equipment, parts and services in the Russian Far East.Despite Russia’s economic turmoil and political uncertainties, it’s a profitable business, say Alaskans who are involved.Mining companies working in Magadan are a solid piece of business for NC Machinery Co., the distributor for Caterpillar machinery in Washington and Alaska."Mining accounts for 85 percent of our business in Russia," said Gene Sanderson, Alaska product support manager.NC began its Russian business in the Alaska business unit, but responsibility for sales has mainly been transferred to Seattle. However, parts and service are still coordinated through Alaska and parts shipped by air are routed through Alaska, Sanderson said.It’s a twist of history for the company, because NC Machinery had its roots in Russia through its one-time former parent, Northern Commercial Co., a general merchandise company. In recent years, other parts of NC were sold, such as the Anchorage clothing store that is now Nordstroms and several rural retail stores purchased by Alaska Commercial Co. NC has been Caterpillar’s distributor in Alaska since 1926.Northern Commercial descended from the old Russian America, formed in Czarist times to manage commercial development of Russia’s Alaska colony. It was sold to Americans after the United States bought Alaska in 1867.Parts and service with the Russian Far East amount to several million dollars a year in business for NC. Equipment sales vary, and in some years can exceed $10 million per year. Sanderson said the company’s involvement with Russia began in the late 1980s when Caterpillar, which previously coordinated all sales and services in the Soviet Union itself, could see big changes coming.Mining companies in the Russian Far East, which produce 70 percent of Russia’s gold, were important, and Caterpillar thought they could be better served from the U.S. Northwest, and the NC Machinery office in Anchorage was the closest.Karen Haden, the company’s general parts manager for Alaska, recalled an initial order for 25 D-10 bulldozers, which eventually became an order for 95 machines. D-10s now sell for up to $750,000 per unit. Even then it was a huge order for NC Machinery and Caterpillar.There were already over 100 D-9 size machines in the Magadan territory, which needed parts support.With this much business generated, NC Machinery established a warehouse in Magadan and stocked it with $2 million in parts. Today it is operated by NC International, a Russian company owned by the parent company of NC Machinery. NC Machinery has 14 employees in Magadan.Most parts are shipped by barge from Seattle but about 10 percent are flown through Alaska, on Mavial Airlines’ direct flights from Anchorage to Magadan, Haden said. Because of aircraft loading limitations, there are 400-pound limits to shipments on Mavial.Caterpillar tractors are shipped by barge from Seattle but the time taken in transit, mostly the part in Russia, is very long. It can take almost a year for a unit to arrive at a remote mine site.Ocean barge shipment takes just a few days, but then there’s a slow movement along railroads and roads in the Russian Far East, usually involving a journey inland by river barge, and then, after freezeup, a slow road trip out to a mine. Shipping a D-9 usually adds $20,000 to the cost of the unit, Sanderson said.Sometimes customers need equipment faster. Haden recalled two D-9s shipped by air. They were broken down and carried in Russian IL-76 air freighters, specialized planes capable of carrying outsized cargoes.NC sells to Russian and other foreign companies, and one big customer is the operator of the Kubaka gold mine, which is owned by Kinross Gold, a Canadian company with Russian partners. Kinross also owns the Fort Knox gold mine near Fairbanks.The company also sells to mining companies on the Kamchatka Peninsula and is hoping to see development of a very large gold mine in the southern part of the peninsula, according to Sasha Clark, a former resident of Khabarovsk who has been working with NC for several years. Southern Kamchatka is in an area of environmental sensitivity, however.Doing business in Russia is not without its frustrations. Chief among these are uncertainties in government regulations and customs, Sanderson said.Getting paid can also be a challenge sometimes, he said. NC now accepts payment in both rubles and dollars, and also helps in equipment financing for its major customers. The distributor is able to share financing risks with an international sales division of Caterpillar."It’s very important to know who your customers are, their situation and their debts," said Clark.

The 0.08 DWI limit won't curb alcoholism or accidents

Whether you know it or not, the Alaska Legislature passed a new blood-alcohol content law that takes effect Sept. 1, 2001. The amendment, added to a rural bootlegging and fingerprint bill, was inserted by the House Rules Committee. The actual decision was made in the speaker’s chambers in the Capitol. And while a majority of the public was unaware of the insertion, on May 8 the House passed the legislation, which included a reduction in BAC for driving while intoxicated violation. Aside from the legislative process appearing deceptive, because the 0.08 concept, with three separate legislators sponsoring the bill, could not pass on its own merit, it is also important to note that the context of lowering the BAC was a mandate from none other than former President Clinton. Specifically, the federal government tied highway funding to the passage. No BAC reduction equated to denial of highway funds. However, Alaska has until 2007 to change the law. And the funds the state stands to lose will total $850,000 annually, yet how much will administration of the new law cost the public? During the hearings for the various 0.08 BAC bills, the Department of Public Safety fiscal notes varied because the assumption shifted from a speculated 10 percent increase in DWI arrests to a 5 percent increase in arrests. The lower arrest percentage was recommended by the Department of Public Safety. A fiscal note accompanies a bill and is the cost for a particular state department to implement and administer the legislation. In the case of the 0.08 BAC shift, the public defender will need to hire another attorney, the courts will have an increased docket, the Health Department will receive new clients, the Division of Motor Vehicles will require additional staff -- and the list goes on. So where is the savings? Most legislators go with the flow. But passage of the 0.08 BAC reflects emotions instead of facts. For instance, of paramount concern is the reality that people who are arrested for a DWI violation at the 0.08 BAC level are proven most likely not to reoffend. They are not problem drinkers and generally learn their lesson. They do not require a steep fine or extended jail time to understand their mistake. The multiple offenders are the individuals to be targeted, and it is this group that most often yields a 1.5 BAC and higher. It is the problem drunken driver who is in need of extensive treatment. Without such treatment, they will reoffend and harm more people regardless of the new law. When I attended a meeting of the mayor’s DWI task force last summer, it was our former chief of police who spoke up and informed the members that lowering the BAC would result in more arrests. He reminded the task force that arrests equate to expenditures which equate to the need for additional tax revenue. To that end, this law will not resolve alcohol-related problems. If anything, it is yet another knee-jerk reaction to provide a false feeling of comfort to advocacy groups and loved ones to those who tragically lost their lives in a DWI-related accident. Again -- it is about trying to solve a very complex problem with the wrong solution. The answer is not to impose additional laws. The real answer lies with society understanding alcoholism, a disease accurately identified by modern medicine and our government. Yet society refuses to deal with it as such. Instead, as seen by the current BAC change, it is easier to treat alcoholism as a premeditated crime. The bottom line: The hospitality industry applauds open and honest discussion on alcohol-related topics and legislation. We support the Wellness Court concept because it offers treatment. We do not condone driving under the influence, nor operate our businesses with that intent in mind. However, our industry is not supportive of fast-tracking amendments as add-ons to legislation without thorough and substantive input. Regardless of the numerous hearings for the 0.08 BAC bills, the actual passage of the law came through separate legislation. And sadly, the problem of alcoholism, DWIs and alcohol-related accidents will not be curbed by this law, but the public will certainly bear the cost of its implementation. Frank Dahl is president of the Anchorage Cabaret, Hotel and Retailers Association.  


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