The first phase, now underway, is the $8 million federally funded outer-harbor construction of breakwaters and new rock reefs for sea birds. The artificial reef environmental mitigation project calls for placing large rocks in the water along the nearby coastline as bird habitat, Peterson said.

Inner harbor development, including docks, is budgeted for $25 million, and that portion of the project that will be constructed under city management, Peterson said.

"Fifteen years into the project, we finally got construction started this year," Unalaska city natural resources analyst Frank Kelty said at the ceremonial groundbreaking June 11.

Kelty said the project was delayed five years by environmental studies, followed by another two-year delay when federal funding was diverted to support the wars in Iraq and Afghanistan.

Kelty said the project's price tag was projected at about $20 million in 1995, but now stands at $40 million. He said the harbor aims to attract mainly 60-foot-long boats, in hopes of encouraging more fishing families to live in the community year-round.

Peterson said the city is hoping for additional federal funds for a floating breakwater, but if the money is not forthcoming, the harbor will still open under a "Plan B" scenario.

Upland development plans include a harbor office, restrooms and showers, and gear storage areas.

The harbor is named in honor of former state Rep. Carl Moses, who attended the groundbreaking ceremony. Moses is a former longtime Unalaska resident, who now lives in Sand Point, and was a major harbor booster as a legislator.

Dutra Dredging Co. of Rio Vista, Calif., is the general contractor for the new harbor on Henry Swanson Drive, working directly for the U.S. Army Corps of Engineers.

In other news, construction on a new powerhouse started this year. Two Wartsilla-brand diesel generators will provide 10.8 megawatts of electricity for the municipal utility service.

The general contractor is SKW/Eskimos Inc., of Anchorage. The total budget including generators is about $35 million, Peterson said. The new facility is next door to the existing powerhouse, with a capacity of 6.5 megawatts, located in a heavily fortified structure built by the military during World War II.

A $2.4 million high school renovation project is underway, including major roof repairs, kitchen overhaul and energy saving measures. The contractor is Lakeview General Contracting, of Palmer, Peterson said.

The Department of Parks, Culture and Recreation's community center is in line for a $2.5 million expansion and renovation next year, she said.

The trailer park built as temporary housing for city workers will finally start going away next year. Six of the trailers will be removed and replaced with an eight-unit apartment building, funded by the Alaska Housing Finance Corp. The following year, the remaining six trailers will be replaced with either a six or eight-unit apartment building, Peterson said.