Bids come in high for new Kodiak High School

(AP) — All three bids received to build a new Kodiak High School have come in over what the Kodiak Island Borough School District had estimated. The Kodiak Daily Mirror reports ( the project, considered the largest ever on the island 200 miles southwest of Anchorage, was budgeted at $58.5 million. The lowest bid came from Watterson Construction of Anchorage, at $61 million. Roger Hickel of Anchorage bid $63.7 million, and Omaha, Neb.-based Kiewit Building Group bid $64.2 million. The project was bid with 11 items, like a music room or running track, which could be dropped if the bids came in too high. The school board will now consider which of the 11 could be dropped to make the bids work, and submit a formal recommendation to the borough assembly.

Turnagain Pass power lines to get upgrade

(AP) — Extreme snowfall, avalanches and icing wiped out power lines across Turnagain Pass on the Kenai Peninsula again this winter, and a project is underway to replace them. Alaska Public Radio reports ( ) in all, 21 spans of the transmission line sagged to the ground during a storm. The fifteen miles being replaced this winter will add to the amount of the 90-mile line that was replaced after 2011 avalanches. A $15 million appropriation from the Legislature will pay for replacing the highest priority section of the line, through the mountains above Turnagain Arm along the Seward Highway. Chugach Electric Association Spokesman Phil Steyer says the line was built in 1962, and is badly in need of replacement.  

Federal appeals court allows railroad extension

Work on a railroad extension in Southcentral Alaska will move forward after the 9th Circuit Court of Appeals on Wednesday reversed its earlier order to halt work. The court lifted the stay on the Alaska Railroad's extension project to Port MacKenzie in the Matanuska-Susitna Borough. A three-judge panel of the court on Oct. 1 agreed with environmentalists, who argued they and the natural environment would suffer irreparable harm if the emergency order had not been issued to stop construction. Attorneys for the petitioners — the Sierra Club, Alaska Survival and Cook Inletkeeper — had argued that an environmental review by the U.S. Surface Transportation Board was inadequate and that the board "merely parroted" the purpose and need for the project articulated by the Alaska Railroad Corp. At the time, the court found there was a "serious question" as to whether the board complied with a federal environmental law, the National Environmental Policy Act or NPEA, in determining the purpose and need of the extension. "Upon further review of the record, the panel concluded that the Board's 'purpose and need' statement complied with the act and that petitioners no longer raised 'serious questions,'" the court wrote in Wednesday's decision. An official opinion will follow later. The court noted that further delay would prevent awarding construction contracts, postpone hiring and increase costs of the project — proponents saying by as much as $12 million. "Because this project is funded largely with taxpayer dollars, these increase costs of construction .... will burden the public upon continued delay," the court wrote. Justices said since they have determined the Surface Transportation Board acted within the law, that agency and not the court should "balance the justifications of planned economic progress in improved rail service against the possibilities of environmental harm." Matanuska-Susitna Borough spokeswoman Patty Sullivan welcomed the news. "We're very happy, and we knew the (Surface Transportation Board) had acted accordingly and had followed NEPA." Bob Shavelson, with Cook Inletkeeper, said there are already three tidewater ports in Southcentral Alaska. "It doesn't make sense to continue pouring hundreds of millions of public dollars into an unneeded project," Shavelson said in a statement. "Port Mac's business model rests on pie-in-the-sky assumptions, and Alaskans cannot afford another public funding disaster." Sullivan said Cook Inletkeeper is against development of any kind. "If you can't build a railroad in Alaska, where can you build one?" she said in an email to The Associated Press. The Surface Transportation Board last November gave final approval to the railroad to build and operate about 35 miles of new rail line in the borough north of Anchorage. The proposed line would run from Port MacKenzie to near Houston. The board said the proposed line would provide rail freight services between the port and Alaska's Interior and said it also would support the port's development as an export-import facility for intermodal and bulk-material resources. In September, the U.S. Army Corps of Engineers issued a permit allowing the railroad to fill in nearly 96 acres of wetlands for the line. Opponents have argued the project would open the door for shipping Alaska coal overseas, but they say that would come at the expense of local families, landowners and salmon fisheries.  

$33M upgrade expands training and adds housing

Construction of more than $33 million worth of new facilities at Kenai Peninsula College in Soldotna is moving ahead as scheduled, College Director Gary Turner said. Kenai Peninsula College, or KPC, is adding a $17.8 million student housing building along with a $15.25 million Career and Tech Center to its Kenai River Campus. The projects are expected to be finished in August 2013, just time for fall classes. “It’s a significant amount of money that’s being injected into our local economy and that’s aside from the fact that it’s going to allow the college to expand some of its most popular programs,” KPC Advancement Program Manager Suzie Kendrick said. The 19,000 square-foot Career and Tech Center will allow the college to expand its training for Alaska’s high-demand fields of oil, gas and electricity production, Kendrick said. KPC expects opening the building to have long-term workforce development implications for the state. Turner said the center will further what is already a strong process technology program at KPC. “We conduct the best training in the process tech field in the country and the major producers have told us that time after time,” he said. The interest oil companies show in the school’s students prior to their graduation is a testament to KPC’s reputation and why providing opportunities for more students with new facilities will pay off, Kendrick noted. She said the school currently has waiting lists for students hoping to get into its process technology programs. “We just had ExxonMobil here giving tests to our students hoping to hire them before BP and Conoco can,” she said. The Career and Tech Center will free up a significant amount of space in existing buildings, Kendrick said, giving the school more room to expand health services education. She said KPC is adding a firefighter-training program for the upcoming spring semester as well. The Kenai Peninsula College campus in Soldotna is situated along the scenic Kenai River and is adding student housing set to open in fall 2013. The site of the $17.8 million housing project, seen at bottom left, will have space for 96 students and six resident assistants. (Photo/Courtesy/KPC) Situated just 300 feet from the Kenai River, KPC’s student housing facility under construction at its Kenai River Campus will be the first of its kind for the college. The school also operates a campus in Homer and extensions in Seward and Anchorage. “KPC, historically, has not had residential on-campus housing available,” Kendrick said. “It will allow students who otherwise wouldn’t have been able to attend the college to attend, that’s what’s so exciting for us.” The housing will give prospective students from rural Alaska an opportunity to continue their education without having to move immediately to a large city or worry about a place to live, she said. “KPC is a great fit for students from small places. Here, they can get their feet wet and see if college is right for them,” Kendrick said. The two-story dormitory will be broken into 24, 1,030 square-foot apartments. Each apartment will have 4 bedrooms, a bathroom, full kitchen and a common area. It will be home for 96 students and 6 resident assistants. The building site is part of a wooded, 309-acre tract of land owned by the college and is within walking distance to the rest of the campus, according to KPC publications. Housing will cost each student $3,200 per semester and applications will be taken in April on a first-come first-serve basis, Turner said.  Students must first register for classes in order to be eligible for on-campus housing, he said. While initial funding for the new buildings at KPC was approved through legislative grants, Turner said all housing in the university system is self-funded and KPC housing will be no different. Plans are for the dorms and other university buildings to be rented out for training events and conferences in summer when students are gone. “There isn’t a conference center on the central peninsula and it’s been a need for many years and folks are talking about it a lot,” Turner said. “I think we can fill some of that niche through our facility.” The school has the support of the Soldotna Chamber of Commerce, he said. Turner recently announced an agreement between KPC and Alaska Christian College for the school to offer meal plan options to some of KPC’s new on-campus residents. Under the agreement, Alaska Christian College will offer breakfast, lunch and dinner to the first 30 students who apply. Meal plans will range in cost from $1,200 for 100 meals up to $1,725 for 200 meals, Turner said. The agreement is part of a long working relationship KPC has had with the school, he said, and gives students at the two colleges the “opportunity to break bread together in Alaska Christian College’s inviting dining hall.” Turner said he’s excited about the prospect of opening the new facilities and what the mean for the future of the Kenai Peninsula as a whole. “It’s a win-win-win,” he said. “That’s such a darn cliché but it’s true for our campus, for our community and for business and industry.” Elwood Brehmer can be reached at [email protected]  

Study: Port of Anchorage replacement flawed

A new federally commissioned study says the problems with the Port of Anchorage replacement go as far back as the project's design. Top engineers with CH2M Hill told the Anchorage Assembly that three of four new sections already built at the Port of Anchorage were not constructed correctly, but even if they were, they risk failure during an earthquake due to shifting earth, the Anchorage Daily News reported Saturday ( "If it starts to move, then you've got potential problems. That's what happened in the 1964 earthquake and that's the worrisome thing about the design right now at the Port of Anchorage," Don Anderson, who led the geotechnical team for CH2M Hill, told the Assembly. He indicated the three new problem sections, which cost tens of millions of dollars, might not be salvageable. But Mayor Dan Sullivan said it's not known whether the work already done will have to be ripped out entirely. Sullivan said perhaps different construction techniques and materials could make the current design more stable, he said. CH2M Hill did the year-long, $2.2 million study for the U.S. Army Corps of Engineers and the federal Maritime Administration. The engineering company also has been contracted for a second phase at a cost of another nearly $500,000. That work is expected to be completed by February or March 2013 and will lay out options for completing the port project. The existing structure probably could be made strong enough, said Larry McCallister, director of programs and project management for the Army Corps in Alaska. "The issue becomes ... how much time, how much money is available and what you really want to do to make a usable facility." The Corps suggested the study after the city asked it to take over management of the project, which had been under the Maritime Administration, a request it is still considering, McCallister said. CH2M Hill's full, 2,200 page report is in draft form and hasn't been released. It won't be finalized and made public until mid-December, after the Corps of Engineers and the city's Geotechnical Advisory Commission review and comment on it. Assembly members on Friday were hearing the conclusions for the first time. They seemed stunned. "I am going to go home and cry," Assembly member Patrick Flynn, whose district includes the port, said after the briefing.  

Nome and Kotzebue projects await bond vote

Proposed port development and improvement projects in northwest Alaska are moving forward with environmental and planning surveys, officials in Kotzebue and Nome said. A $10 million grant for the city of Kotzebue to fund study and initial construction work on the proposed Cape Blossom access road, which would link the future port site to Kotzebue, is a part of the $453.5 million in transportation projects on the proposed state bond package up for a vote Nov. 6. If approved, the money would be appropriated to the city of Kotzebue through the Department of Commerce, Community and Economic Development. In total, Kotzebue requested $28 million, with the other $18 million still awaiting approval. Chris Johnston, project manager for the Alaska Department of Transportation and Public Facilities, said initial work has been done using $4.6 million provided by the Federal Highway Administration. “This summer we went out and did environmental and engineering fieldwork. We did break-up studies along the project corridor at Sadie Creek,” Johnston said. “We went and did some bird surveys, wetland surveys, things like that.” When asked about possible port construction, Johnston clarified that all the money currently awarded is for road development only and that it must be completed before the port project is fully undertaken. The Cape Blossom site is approximately 12 miles south of Kotzebue. A 1983 state DOT study determined it to be the closest viable spot for a deepwater port relative to the city. Overall road development cost will largely depend on the route chosen, labor costs, and, most importantly, where road-base material comes from, according to a 2011 state DOT reconnaissance study on the project. Study estimates range from about $35 million for the shortest route supplied with locally sourced materials, to more than $258 million for the longest route if material must be transported in by barge. While a route final route has not been finalized, Johnston said the more direct southerly paths appear most feasible to avoid Air Force property and trim cost. “We’re looking at the southwest option,” he said. “We may go west to the upstream part of Sadie creek to save money on culverts and bridges and environmental impact.” Using local fill material is of utmost importance for the project, Jessup said, and noted that gravel resources have been located seven miles east of Kotzebue. While it’s not yet clear as to how much usable material may be available at the site, Jessop called the find “significant.” He also said the military assisted in project survey work through the Department of Defense’s Innovate Readiness Training, or IRT, program. IRT is a way to “improve military readiness while simultaneously providing quality services to communities throughout America,” according to the program’s website. The site lists the Cape Blossom project as one that the Marine Corps Reserve and Army National Guard have both already participated in. “Once a (route) recommendation is made the city is hoping the we can continue to utilize the IRT program to lower our labor costs down the road,” Jessup said. Cost estimates from the 2011 DOT study, contingent on local material sourcing, drop as much as 60 percent when IRT labor is employed for construction versus a hiring a private firm. If the project continues on its current timeline and funding is secured, Johnston said the start of construction could be on the horizon. “There’s a lot of variables, but if we’re able to award a contract in the fall of 2014 then the contractor may be able to start work that winter, assuming we get the rest of the funding we need,” Johnston said. “Or we might just build part of the road with the funding we have available.” The timetable for the Nome port and harbor expansion project is not as clear, Joy Baker, Nome’s harbormaster said. “We’re still moving forward with the studies and concept design and looking for funding and all of those steps. When you’re talking about a big project like this it’s a slow process,” Baker said. Nome applied for an appropriation similar to Kotzebue, but for more than $181 million, encompassing the entire project cost. Early port and small-boat harbor designs submitted with the grant application call for increasing the depth of the port from 22 feet to 35 feet at average low tide, along with construction of a third large dock and several smaller maintenance projects. Estimates for the large port project come it at $150 million, according to the design summary. An expansion of moorage for small boats is needed to accommodate the growing fleet of gold-dredging vessels working offshore from Nome. The design summary states three dredging craft launched from Nome in 1996, and that number had grown to 39 in 2011. The fleet doubled in just the past year, Baker said. Small-boat harbor expansion is projected to cost roughly $13 million. The Nome project would receive $10 million through the bond package, the same as Kotzebue. “It’s not approved yet, but we’re hoping,” Baker said. Elwood Brehmer can be reached at [email protected]

Eaglecrest Learning Center construction tentatively set for 2014

The Eaglecrest Learning Center, a planned building that would house a “learning school” for aspiring skiers and snowboarders next to the Eaglecrest Lodge, could open during the winter season of 2014-15, General Manager Matt Lillard told the Eaglecrest board of directors’ Planning Committee Thursday evening. Lillard presented a set of preliminary dates, which he said was provided by Engineering Director Rorie Watt, penciling out the process for the Learning Center. Next year is set to be used for planning and design of the facility, according to the preliminary dates. The project would then go out to bid in January 2014, with construction beginning in the spring and ending by about January 2015. “I would hope it would be done by opening, December 2014,” Lillard added. After sharing the dates with the committee members, Lillard said, “That’s the general timeline right now, and it leaves us a lot of time to plan, figure out exactly how the building lays itself out, and what it looks like, and what sort of energy-efficiency items we want to look after, and other things that will go in there.” Carlton Heine said he wants to be sure the Learning Center will be a profitable proposition. “As a general statement, I’d like to kind of make sure that we are looking at the characteristics of the building such that it enhances revenue with minimal increase (in) long-term operational costs,” said Heine. The Learning Center provides space for the consolidation of ticket windows and other staff-intensive parts of the ski area, Lillard responded. “That’s one of the key things that is so great about this building and what it can house is that it actually does, as it’s proposed, currently even, it creates efficiencies in how we operate,” said Lillard. David Audet, participating telephonically, asked, “Is there time, room or need, or (is it) a completely silly idea, to have any public input on maybe what some of the things this building should be used for?” “We generally know what it should house,” Lillard responded. “There’s only so many facilities that we have at Eaglecrest, and I think we probably stand a better chance of what should go in there rather than the general public. We could probably go out and get some feedback. I don’t know how valuable it would be.” According to Lillard, the Learning Center will be a city project. Eaglecrest is an enterprise fund of the city government. “This will be a city-engineered project, and … they will be assisting us through the process,” Lillard told the committee. “They will be assigning us … a project manager in the fairly near future.” Lillard added, “The good news is that most of the engineers are skiers as well, so I’m sure we’ll get someone who understands what we’re trying to do.” The passage of Ballot Proposition 1, authorizing a $25 million general obligation bond issue, in the Oct. 2 municipal election will fund the Learning Center project, with $3.5 million marked for it. Ahead of the meeting, Lillard said that the ski area’s three snowmaking guns started running late Thursday afternoon. Eaglecrest uses snowmaking guns, which combine air and water to create snow, to fill in “holes and gaps” on the grounds to ensure more even snow distribution, Lillard said. “It’s not a system, in its current capacity, that can open any terrain from top to bottom, but it does assist us in getting open earlier,” Lillard explained. This year, Eaglecrest’s snow guns are all running off Juneau’s electric power grid. None are using diesel fuel, as they have done in the past. “Before the mountain had electric power, it was always just diesel generators,” said Lillard. Eaglecrest is still aiming for an early December opening, Lillard added. “We’re still looking at Dec. 1,” Lillard said. “We’ll hope for more snow earlier.” Lillard said snowmaking is expected to last until Sunday morning, though it depends on the temperature and humidity conditions at the ski area remaining favorable for snow production.

USDA provides nearly $29M in grants for rural infrastructure

U.S. Department of Agriculture officials announced 16 rural Alaska communities will receive funding to improve health and water quality in the villages. The majority of the money will be used in Native villages to fund development of community water and wastewater disposal systems. The USDA will fund the projects through it Rural Alaska Village Grant program, Jim Nordlund, USDA Rural Development Alaska director, said. “The RAVG funding is roughly $21.8 million and will go to the Alaska Native Tribal Health Consortium on behalf of rural Alaskan communities, to provide assistance to construct drinking water and wastewater systems in Kwethluk, Toksook Bay, Eek and Lower Kalskag,” Nordlund said. “The projects will improve public health and sanitation conditions for residents of these communities that currently must collect and haul rain for drinking water and rely on portable waste containers euphemistically called “honey buckets.” The funding will be used to bring water and sewer services to 123 homes by 2015. The State of Alaska received an additional $6.2 million in grants from RAVG to upgrade wastewater infrastructure in 65 homes in Quihagak and Hooper Bay, with remaining money to be used in planning for projects in Seldovia, McGrath and Tununak, according to a department press release. Since 2009, the USDA Rural Development program has provided approximately $950 million to improve wastewater infrastructure and bring potable water into rural homes, according to figures from the departments website.

Kodiak Launch Complex expansion faces delay

KODIAK (AP) — Alaska Aerospace Corporation's plans for a new launch pad have been delayed, not canceled. In a four-hour board meeting Thursday at the Kodiak Launch Complex, CEO Craig Campbell confirmed that Lockheed-Martin's delays in finding customers for a new, larger Kodiak-launched rocket means at least a one-year delay in construction of Launch Pad 3. "Now we're projecting into the 2015 period for the launch of the Athena III," Campbell said. That timeline means construction will not begin until next summer at the earliest. Work isn't standing still on the project that has been hailed as the future of the Narrow Cape complex. Campbell told board members he's keeping the ball moving on the environmental assessment that must take place before the launch pad can be built. "We expect that to roll forward in the next couple months, then go out to a public comment period," he said. During the last session of the Alaska Legislature, Gov. Sean Parnell pledged $25 million in state support for the $125 million estimated cost of the launch pad. Financial "gates" are built in to that amount, ensuring Alaska Aerospace cannot move forward with construction and design until a contract is in hand and private financing in place. Campbell said he has added restrictions of his own and will spend no more than $1 million until Lockheed commits to a launch date and signs a contract. That amount takes the project to about 65 percent of design, but not engineering work, Campbell said. The corporation stopped deliberately short of detailed engineering in an attempt to accommodate Orbital Sciences, another space company that has expressed an interest in launching from Kodiak. Orbital's Antares rocket is designed differently than Lockheed's Athena III, and the new launch pad would need extra equipment to serve both rockets. Orbital is considering both Kodiak and Vandenberg Air Force Base in California as its West Coast launch site for the Antares, but it is not expected to decide between the two until early next year, after it launches its first Antares from a spaceport in Virginia. "I don't want to get into an engineering and design concept for a solid-based rocket only to find out Orbital is coming here with a liquid-based rocket," Campbell said. While the delay may pay off for Kodiak if another customer is willing to spend millions for permission to launch rockets from Alaska, the slow pace of development could continue if Congress drags its feet on the federal budget. The vast majority of America's space projects are at least partially funded by the federal government, and Congress' inability to pass a new defense budget means multibillion-dollar contractors like Lockheed and Orbital don't know how much they can sell. That, in turn, means those companies don't know how many rockets they need to launch from places like Kodiak. In addition, said Alaska Aerospace chief operating officer Mark Greby, companies like Orbital and Lockheed are awaiting the results of November's presidential election. President Barack Obama and Republican hopeful Mitt Romney have similar space policies, but a few percent difference in funding represents hundreds of millions, if not billions of dollars, Greby said. "In all honesty, they're all stalling to see which way the climate is going." Until that weather forecast changes, Launch Pad 3 looks to be stuck in the cold. ___ Information from: Kodiak (Alaska) Daily Mirror,  

Kotzebue airport gets $15.5 million federal grant

Federal Aviation Administration officials say the Kotzebue airport is the recipient of a $15.5 million grant for a runway safety improvement project. Officials say the FAA grant will expand runway safety areas at both ends of the longer of two runways at Ralph Wien Memorial Airport. Such safety areas protect crews and passengers if planes veer off a runway, or overrun or undershoot a runway. Officials say the Kotzebue runway project will move the 5,900-foot runway 200 feet to the east. The work also will involve removing part of a hill and moving a lagoon channel, as well as building a sea wall to protect the west end of the runway. Officials say the work is expected to start in October, with the project targeted for completion in late 2014.  

Ballot opposition group still holds money edge

JUNEAU (AP) — The group opposing a ballot measure that would re-establish a coastal management program in Alaska raised more than $683,800 in three weeks, a majority of that from big oil companies, and held a huge cash advantage heading into next week's primary. In all, "Vote No on 2" has raised about $1.5 million in what's become the most expensive race in Alaska so far this year and had more than $393,100 on hand as of Aug. 18. The Alaska Sea Party, the group behind Ballot Measure 2, has reported raising a total of more than $204,700, including about $54,600 between July 28 and Aug. 20. The bulk of the funding for Vote No on 2 has come from resource development and industry groups, though campaign manager Willis Lyford said in a statement that labor unions, local chambers of commerce and others have also voiced opposition to the initiative. During the recent reporting period, from July 28 to Aug. 18, Vote No on 2 reported raising about $683,800, with the major three oil producers in Alaska — BP Exploration Alaska, ConocoPhillips Alaska and Exxon Mobil Corp. — accounting for about $401,000 of that, in direct and nonmonetary contributions. Pebble Limited Partnership and Sumitomo Metal Mining Pogo LLC, two mining groups, each contributed $75,000. "Our fundraising results reflect the deep concern with Ballot Measure 2 among a broad cross section of businesses and industries," Lyford said. "Ballot Measure 2 is bad for jobs and bad for Alaska's economy, and those donating to us recognize that." Bruce Botelho, chairman of the Alaska Sea Party, said the opposition's fundraising "is really being driven by corporate interests," acting not on behalf of Alaskans but based upon their shareholder interests. The biggest check cut to the Alaska Sea Party during the recent reporting period was $25,000 from Robert Gillam, founder of an Anchorage-based investment firm who also has made a name fighting the proposed Pebble Mine. There are no limits to what an individual, business, union or group can give to a ballot group in Alaska. Botelho said his group went up with its first radio ads on Monday and plans a TV spot heading into Tuesday's election. Vote No on 2 began running its first ads weeks ago. Alaska had a coastal management program for decades, but it ended last year, after the Legislature and governor failed to come to terms on its reauthorization. Ballot Measure 2 will appear on Tuesday's ballot. Opponents of the measure said they're not against Alaska having a coastal management program but have a problem with the type of program laid out by the initiative. Among other things, they said it would create confusion and could hinder development. Supporters said the proposal would give the state a meaningful say on federal decisions affecting Alaska's coastal areas, help coordinate the permitting process and cut through red tape.  

Retailers looking at Alaska, residential sales up slightly

At the Anchorage Chamber of Commerce on Aug. 13, Brandon Spoerhase of Jack White Commercial gave a rundown of new developments to look out for in the future while Michael Droege of Century 21 said home sales are looking good. One new retail development will be as 45,000-square foot Gallo Center on the north side of Dimond Boulevard. Retail space should be available between $2.50 per square foot and $2.80 per square foot. Cabela’s, a large outdoor retailer, will be entering the Alaska market in South Anchorage in 2014. Spoerhase said an interesting thing about this location is that there is no sewer line to that development and the nearby Target operates using a septic system. “So it’ll be interesting to see what Cabela’s does on that,” he said. This deal is being brokered entirely by out-of-state principles between Cabela’s and Target. Spoerhase said this is “kind of” against state law and so it will be interesting to see how that develops. He said deals like this generally do eventually contact a licensee in Ketchikan or Nome, which is legal. The deal is announced but has not yet been signed. In other news from Spoerhase, Ken Brady Construction has received the go-ahead on a 176,000-square foot Wal-Mart on Debarr Road and Muldoon Road. “So that’s going to change the landscape quite a bit in East Anchorage,” Spoerhase said. Pfeffer Development is trying to do some pre-leasing on eight acres near there. Sam’s Club will soon break ground on a 145,000-square foot store and gas station at Tikahtnu Commons. This will be the center’s last big tenant because it has reached full capacity. Walgreens is investigating possibilities for a new store at the intersection of Abbott Road and 88th Avenue. A new, unnamed restaurant will also be going into the vacant Chili’s building at this location. Spoerhase said restaurants like Red Lobster and Texas Roadhouse have been looking around Anchorage but have not committed. Natural Pantry has been negotiating for six months to relocate from the University Center to a $15 million, 40,000-sqaure foot location at the corner of 36th Avenue and A Street. No deal has been signed. Massage Envy is locating to Tikahtnu Commons and is looking for a South Anchorage location. Other newcomers include AutoZone and Verizon. Old Navy and Famous Footwear will be moving out of Glenn Square. Glen Square is trying to replace that space with a single national tenant. Old Navy will head to Tikahtnu Commons. Spoerhase also addressed the office market, saying that Anchorage is healthy with an overall vacancy rate at just less than 6 percent out of about 6 million total square feet. Residential snapshot In the residential market, Droege said Alaska is doing fairly well with modest increases in sales and prices. At the end of July, the average year-to-date prices were up 4.83 percent. There were 2,588 homes sold statewide in the same year-to-date period. This is a 5.2 percent increase. There were 3,312 pending home transactions, 17.4 percent increase. New listings went up 19.7 percent through the month and 4.1 percent for the year-to-date. Droege said Alaska’s supply and demand, plus low interest rates, which popped up a bit but have generally been at record lows over time, are responsible for the average increases. During the same time period, average Anchorage residence sales prices went up 3.68 percent. Condo sales were the exception, dropping 2.59 percent for the year. Sold listings rose 10.1 percent on average for residences. Average condo sales only went up 3 percent and multiple-family sales dropped 20.9 percent. Active listings dropped 2.1 percent in Anchorage. Droege said this is because there isn’t much inventory out there but that might flatten out by the end of the year as new listings become available. New listings rose 0.7 percent in the year-to-date. Eagle River and Palmer rose in average sales by 3.63 percent and 8 percent respectively. Eagle River had a 2.5 increase in sales for the year while Palmer dropped by 19.6 percent. Both had slightly increased new listings.

Army Corps delays Point Thomson decision until November

The U.S. Army Corps of Engineers has delayed its record of decision and final approval of the environmental impact statement for the ExxonMobil-led Point Thomson gas cycling and condensate production project to at least Nov. 1. Construction this winter on the project could be in jeopardy. Previously the Corps had a target date for the ROD in September. “This is just an estimated date, as was the earlier target date,” Corps spokeswoman Pat Richardson in a statement Aug. 10. “The dates we estimate for a Record of Decision are just that – target estimates. With a permit application this large with an associated EIS and many issues to address, our target dates will move, as they have with this proposed project.” Alaska U.S. Sen. Lisa Murkowski and Gov. Sean Parnell criticized the U.S. Army Corps of Engineers for delaying the record of decision. Parnell is asking Interior Secretary Ken Salazar in intervene with the Corps to keep the project on schedule. Point Thomson is a large gas and condensate discovery 60 miles east of Prudhoe Bay. ExxonMobil and other leaseowners, BP and ConocoPhillips, plan a gas cycling and condensate production project. ExxonMobil, BP and ConocoPhillips, the owners, are planning a project to recycle gas and produce 10,000 barrels per day of liquid condensates in the first phase of a development project. The condensates would be moved to Prudhoe Bay by pipeline and mixed with crude oil in the Trans Alaska Pipeline System. Beginning construction this winter is necessary for the project to be complete and in production by 2016, ExxonMobil told a state legislative panel in Anchorage a few weeks ago. "This unexpected delay threatens to set production at Point Thomson back another year, costing the state of Alaska both jobs and millions of barrels of oil that is needed to boost throughput in the trans-Alaska oil pipeline," Murkowski said in her statement. A 500-page environmental impact statement for Point Thomson was finalized in late July and Corps officials said then they would approve the record of decision, the final step in the EIS, in 30 days, Murkowski said in her statement. A Murkowski staff member in Washington said the senator will attempt to meet with the Corps to urge action on the ROD. Murkowski is the ranking minority member on the Senate Energy and Natural Resources Committee. ExxonMobil itself was cautious in its response. “We decline to speculate on the date of issuance of the Record of Decision and the impact, if any, on the project schedule. We are working closely with the U.S. Army Corps of Engineers to provide information requested to support its work to enable issuance of the Record of Decision,” an ExxonMobil spokesman said in a statement. However, in recent briefings to state legislators in Alaska, ExxonMobil expressed concern about delays in the ROD and final approvals of federal permits tied to the EIS if those are pushed too far into late autumn because the delays could affect the winter construction season, which is vital to keeping the project on track for a startup in 2016. The company has told congressional staff in Washington, D.C., that it needs the ROD and permits in October, at the latest, to allow time to mobilize contractors and get an ice road under construction to Point Thomson, which is about 60 miles east of Prudhoe Bay on the North Slope. Other work planned for this winter include an airstrip, gravel roads and installation of vertical support members for a 22-inch pipeline. Parnell wrote a letter to Salazar Aug. 11 asking for help because of the Interior Secretary's initiative to improve the performance of federal permitting on energy projects in Alaska. "As the lead federal agency, the Corps had recently committed to issue the ROD by Sept. 21. On August 1 senior state of Alaska officials were given assurances by senior Corps and Department of the Interior officials that the Corps' Alaska District would meet that deadline," Parnell said in the Aug. 11 letter to Salazar. "State officials have been working hard over the past two years in processing approximately 100 state permits required for the Point Thomson project. The state remains ready to issue these permits as early as next month, enabling construction this winter. If the Corps does not issue its ROD on of near the original target date of September another winter construction season will be lost," Parnell wrote. The Point Thomson gas and condensate discovery was made in the 1970s but its development was delayed due to lack of a natural gas pipeline. ExxonMobil more recently developed the plan to produce the gas, strip liquid condensates, reinject the gas and then ship the liquids to TAPS through the new 22-inch gas pipeline.

Real estate funds lead the pack, but can it last?

BOSTON (AP) — The housing market may finally be coming back, with home prices rising again and mortgage rates at record lows. But there’s far greater strength in commercial real estate. Check out the recent investment returns of stock mutual funds that specialize in companies owning income-producing property, from office buildings to hotels. Real estate funds have posted an average annualized return of 33 percent over the last three years, according to Morningstar. That’s the top performance among the fund categories it tracks. Year-to-date, the funds are up nearly 17 percent. That’s about double the average return for diversified stock funds. What’s more, real estate funds provide dividend income. The stocks that these funds invest in — known as real estate investment trusts, or REITs — are required to distribute at least 90 percent of their taxable income to shareholders in order to escape corporate taxes. REITs generate income from properties they own, and often operate. Funds that specialize in REITs typically hand out quarterly payments, representing the total payout from the fund’s holdings. Investors can either take dividends as cash, or reinvest by purchasing more fund shares. REIT yields are attractive at a time when ultra-low interest rates make it hard for investors to earn much unless they’re willing to take on additional risk. The average dividend yield of a benchmark REIT index is 3.2 percent, substantially higher than the 2.1 percent yield of the Standard & Poor’s 500 index. The recent strength of REITs has not been lost on investors. Real estate funds attracted $2.9 billion in new cash through June of this year, while investors have pulled out of nearly all other stock fund groups. Real estate funds and REIT stocks have defied the broader trends in the market and the economy recently, says Rob Wherry, a Morningstar analyst who tracks real estate funds. But investors should be cautious about making any sizable investment in REITs now, given the outlook for slow economic growth. “Investors should not expect these kind of strong returns going forward,” Wherry says.   ROBUST MARKET REIT stocks have performed better than the S&P 500 in recent years because the decline in commercial real estate wasn’t as severe as the residential market crash. Offices, industrial properties, hotels and apartments weren’t overbuilt to the same degree as homes, and commercial leases and rents have held up better than home prices. The outlook remains favorable, with commercial occupancy climbing and rents increasing in most markets, says Jason Yablon, who oversees REIT investments both in the U.S. and overseas, and co-manages the Cohen & Steers Emerging Markets Real Estate fund (APFAX). Yablon expects commercial property companies this year will post earnings growth in the high single digits in percentage terms. “That’s strong against this backdrop of slow growth for the overall economy,” he says.   POTENTIAL RISKS Despite the strong outlook, REITs face risks from the European debt crisis and the looming congressional battle over cutting the U.S. debt burden. If a government bond default appears likely in Spain or Italy, U.S. banks could further tighten lending. REITs would have a harder time raising cash from banks and through the stock market to finance new projects. With interest rates low, their borrowing costs are currently modest. And any failure by Congress and the president to reach a long-term debt deal shortly after the November election could trigger automatic budget cuts so severe that they could drag the economy into recession. A shrinking economy would hurt REITs, which depend on a healthy job market to maintain a robust flow of income from office and industrial properties. If the economy weakens, health care REITs -- which own medical office buildings, nursing homes and assisted living centers -- would best withstand a downturn. Medical care is a necessity, and owners of these properties typically sign long-term leases that can lock in expected income for years.   TOP OPPORTUNITIES If the economy improves, hotel REITs are likely to outperform. That’s because hotels can raise daily room rates if a strong economy boosts demand. Given the current risks, co-managers Kay Herr and Jason Ko of the JPMorgan Realty Income fund (URTAX) favor REIT stocks that they believe have high-quality management teams and property portfolios. Those traits are likely to help REITs weather any downturn, they say. Their current favorites include Simon Property, the fund’s top holding, and Boston Properties, in the top 10. They like Simon because of its ownership of upscale malls and outlet centers catering to moderately high-income shoppers. Ko believes their spending is likely to hold up relatively well if the economic recovery stalls. The two managers like Boston Properties because of its ownership of high-end office buildings in downtown New York, San Francisco, Washington and Boston. Such offices will continue to be in demand as employers seek out highly skilled workers. Many employers are far more concerned about having access to the best talent than about finding low-cost office space. Says Herr: “It’s a knowledge-oriented economy.”

NANA Construction builds new MagTec camp for Slope

New facilities are still being built for the North Slope. The latest trend is in camps and camp expansions for contractors and service companies who are now hard-pressed for “bed space” for their workers. Most of the work happening on the Slope is related to maintenance and upkeep of aging oil production infrastructure, but it’s enough to keep the service industry hopping — and working — in crowded conditions. The latest is that NANA Construction LLC has completed a new 58-bed camp for Kenai-based MagTec Alaska, a provider of equipment and equipment service for the Slope. The camp includes kitchen, dining and recreation facilities for up to 150. NANA built the camp in 31 modules at its new Big Lake fabrication facility in the Matanuska-Susitna Borough north of Anchorage. The modules were trucked to the North Slope and assembled at MagTec’s site, according to C.O. Green, NANA Construction vice president and general manager. NANA Construction is a four-year old company that is a subsidiary of NANA Development Corp., which is owned by NANA Regional Corp. of Kotzebue. NANA’a fabrication facility is on a 36-acre tract off Big Lake Road and consists of five buildings, each specialized to a different task including heavy industrial modules and lighter commercial-type modules where the MagTec camp was built. The plant was built in 2008 and 2009, and additions and improvements are still being made, Green said. “Two years ago we saw an opportunity to expand our facilities to enter the camp fabrication business. The market was underserviced. We moved fast, investing in new capabilities, and now our vision has become a reality. This camp (for MagTec) is just the tip of the iceberg for our business,” Green said. The market for heavy industrial-type plant modules is well served by a number of local fabricators, although NANA’s plant is capable of building these, too. Also, there has been a general slowdown in building industrial modules because there is little current development of new oil production facilities on the Slope. Most of the work is focused on maintenance. However, the lighter camp module market was growing, a niche NANA is exploiting, because contractors and service companies want to replace and expand older camps. The only competition for this segment of the market is Builders’ Choice, a housing-unit fabrication company with a plant in south Anchorage that has previously built modular homes, and Alberta-based ATCO. For example, veteran Slope service companies Halliburton and Schumberger are upgrading and consolidating their facilities. Green said he has work under way on new camps including one that will house 82 workers. The company is capable of building up to six large- to medium-scale, full-service camps each year. There is enough business on hand to keep 75 to 100 people working through the end of the year, he said. NANA Construction is also putting bids in on new camps that could allow the workforce to expand to 150 next year. Building the large modules at Big Lake instead of Anchorage saves customers time and money since they don’t require the extra oversize load or “Hours of Darkness” permits needed for transportation between Anchorage and Wasilla, Green said. “The location of NANA Construction’s fabrication shop greatly reduced our costs and played a large factor in the bid selection,” said Roger Wilson, MagTec Alaska’s North Slope Operations Manager. “There were two sets of transportation numbers and the Big Lake departure point changed that number dramatically from the other bidders.” The Big Lake area was chosen for NANA’s facility because of the Valley’s available work force and has added a training facility at the site that will open later this month. The oil sector has been a very important customer for NDC for more than 30 years, said Luke Sampson, chairman of NANA Development Corp.’s board. “We knew to continue serving the industry we needed to invest in new capabilities. We see a long future ahead of us with our expanded facilities,” Sampson said. NANA Development’s president Helvi Sandvik said “NANA Construction is also committed to growing Alaska’s work force, and our new training facility is a great opportunity to educate our shareholders for good-paying, skilled jobs.” NANA Regional Corp. is the Alaska Native regional corporation for Northwest Alaska. The company has been active for years in North Slope service industries including camp support and maintenance, and is the landowner and a major service provider at the Red Dog Mine north of Kotzebue, one of the world’s largest lead and zinc mines.   Tim Bradner can be reached at [email protected]

Realtors have new staging tool for selling vacant homes

What’s a cheap way for a realtor to market an empty house? Show what’s like furnished ...without any actual furnishings. Cheryl Campbell, an associate broker with Prudential Jack White Vista in Wasilla, is one of only a handful of realtors in the state to try a new patent-pending digital media tool called virtual staging. The realtor uses this device to digitally add furniture to online images of empty properties. Jay Bell of Virtually Staging Properties, which is based in Atlanta, Ga., said this is a less expansive way to make properties more appealing to buyers. Bell said that staging an Atlanta home the normal way with actual furniture can normally range anywhere from $2,000 to $4,000. He said doing it virtually brings that price tag down to the $225 to $325 range. He said in larger market, using actual furniture can sometimes cost as much as $10,000. “It’s a lot of the same benefits for a fraction of the cost,” Bell said. Campbell is a big fan of saving that money. Besides the savings, she said it helps with buyers because they can see what these places look like as livable rooms and can better visualize their own furniture in there. “It’s been a great marketing tool. I do think that it attracts more potential buyers to look at the home,” she said. Campbell said it’s also given her listings more online traffic and generated more calls. Online realty in general is quickly becoming the norm. Campbell has been a realtor for 24 years and has watched the technology change the way she does business. Physical photos and flyers used to be enough. She said now the Internet is the first tool a buyer turns to. Buyers look online themselves even before calling a realtor. Campbell said this means a “stellar” online presence is becoming more and more necessary in this business. “With technology, it’s turned 180 degrees since I started,” she said. According to the National Association of Realtors, 92 percent of first-time homebuyers and 86 percent of repeat buyers start their searches online. When only looking for information without buying, most also turn to the Internet for that information before asking realtors, banks or friends. “So it looks like in general, that’s where people go first,” said Brenda Miernyk, area manager of Wells Fargo Home Mortgage. Bell said at least 90 percent of homeowners claim to view homes online before arriving in person, and most of them say it’s the photos that help them decide on the house. He said this is what led to the inspiration for Virtually Staging Properties in the first place. Among the biggest groups who influence real estates trends are between ages 21 and 31, known as the millennial group. Miernyk said this generation is bigger than the baby boomers and so its preferences play a lot into real estate trends. She said traditional realtors have had to change their thinking a bit because this generation is so digital-savvy. Miernyk said that nationally, 70 percent of the millennial group looks online first. Wells Fargo didn’t have statistics specific to Alaska, but Miernyk suspects it could be just a little bit lower here. As far as social media, Miernyk said many realtors here have gotten into Facebook and creating brand pages for their listings. Twitter use is a bit slower locally but is picking up in popularity for listings. Campbell uses Facebook for listings. She’s also started with other websites like LinkedIn but says Facebook has been the biggest one for realtors to get their business out there. Wells Fargo recently held a “CineMeeting” for realtors, which involved video of national experts in the field. A big focus at the Anchorage presentation in June was the importance having an online and social media presence. Campbell also said pictures must be perfect online. This is something else that led her to explore more digital tools for her business. “The first thing they’re looking for is location and price range, but the pictures have to stand out and beat the competition and that’s what virtual staging does,” she said.   Jonathan Grass can be reached at [email protected]

Eklutna Inc. breaks ground in Eagle River

Eklutna Inc. is hoping to move into its new headquarters in Eagle River in the next two years. “We’re getting it prepped,” CEO Curtis McQueen said of the 10-acre parcel located across the Old Glenn Highway from Fred Meyer. “We’re excited.” Currently, contractor Davis Constructors & Engineers, Inc. are clearing gravel at the “Eklutna Plaza” site. The project started June 1 and should be completed by mid-August, McQueen said. The high-quality gravel being cleared will also be used for the building pad. “Davis said, ‘We think all this material is perfect,’” McQueen said. “It’s a win-win. During a presentation made to the Eagle River Community Council in September, a mock-up of the property showed room for three commercial buildings with a two-tiered parking lot. McQueen said Eklutna, Inc. — Anchorage’s largest private landowner — wanted to clear the location before reaching out to potential tenants. Having the site cleared makes it easier for potential clients to visualize where their business would be located, he said. Eklutna is hoping to move into the new location and have other businesses operating out of the plaza within 24 months, McQueen said. The Native corporation’s new office, which would face the highway, is a way to remind passers-by of Eklutna, Inc.’s presence, McQueen said. “We want people passing through Eagle River to know they are passing through Eklutna land,” he said.   Contact Mike Nesper at 694-2727.  

Residential construction recovering after 2009 downturn

Home-building is recovering, albeit slightly, after a downward turn following the 2008 economic crisis. Residential construction was booming at a rate of about 3,000 single-family homes per year prior to 2005, according to the Alaska Department of Labor and Workforce Development, but the number of new state residents declined by 60 percent by 2009. That decline reversed after reaching the low point in 2009, and as residential construction picks up, it’s naturally concentrated in Alaska’s two major housing markets: Anchorage and the Matanuska-Susitna Borough. “Things have certainly slowed down but we’ve stabilized,” said Alaska Department of Labor and Workforce Development Economist Caroline Schultz. Mat-Su experienced a population growth of more than 59,000 since 2000, according to 2010 U.S. Census data. This led to more homes being built, and the average home price went up to match. The Labor Department reports that by 2005, 46 percent of new homes were built in Mat-Su even though it held only 11.2 percent of the state’s population. Schultz said this was mostly due to more residents living in Mat-Su who work in Anchorage, a continuing trend that looks to have staying power. Mat-Su also had more than twice the average loan amounts for new construction than the state average, according to the Alaska Housing Finance Corp. Although the Mat-Su Borough’s new construction still leads the state, new home numbers remain below the peak years. The borough reports that there were 631 new homes in 2011 compared to 937 homes in 2007. Mat-Su Public Affairs Director Patty Sullivan said that although the number of new homes slowed, it was still growing at a time when many places in the Lower 48 were wracked by foreclosures and collapsing prices. Unlike Mat-Su, the majority of new residential construction in Anchorage is in the multi-family sector. The Labor Department reports that less than half of residential construction in Anchorage was for single-family units as opposed to more than 80 percent in the Mat-Su Borough between 2000 and 2010. Schultz said Anchorage’s decline could partially tie in to the Mat-Su Valley’s boom because more people may be living there. Mat-Su also has more land availability. Vicki Portwood, executive officer for the Anchorage Home Builders Association and the Alaska State Home Building Association, said Anchorage had been pretty flat in terms of permits but things are trending upward this year. Portwood said one reason new homes declined after the economic downturn was because even though Alaska wasn’t hit as hard as other places, the worry was still there and customers would look but not buy. Portwood said things still look good for the rest of the year. She said people are starting to invest more in homes because the economy looks stable enough to spend money and that Alaska is a very credit-worthy state. “We feel folks have decided to not sit on their money,” she said. Anchorage permit applications for housing are slowly rising. Permit applications took a sharp dive in 2006 with 525 single-family homes, 72 duplexes and 59 multi-family units. The previous year had 673, 188 and 89 applications, respectively, for single-family, duplex and multi-family units. After the economic downturn, applications increased slightly in 2010, and new multi-family units in Anchorage helped build the average sales price for new construction of all building types by 27 percent in the second half of 2011. As home-building dropped after 2005, construction employment went down by 2,500 jobs. The Labor Department states this was the biggest decline in construction employment since the recession in the mid-1980s. “Overall, building activity has been declining over the past few years and sales prices statewide have been nominally stable but declining once adjusted for inflation,” Schultz said. “Building activity has likely already bottomed out, however, and I imagine it will slowly pick up as long as Alaska’s economy keeps doing well.” Portwood said the market looks good while builders and subcontractors report that they’re busy. “We’re really psyched about this year,” she said. Last year ended with 233 new home permits and 925 remodeling permits. This was a smaller number of both permits than in 2010. “We were very concerned in 2012 if we would see same numbers and we’re happy to say they’re up,” Portwood said. Mat-Su had 667 single-family units and 35 multiple-family units. The Alaska Housing Finance Corp. reports that loan volume on new construction statewide fell $15 million, or 11 percent, in the second half of 2011. Building permits can be difficult to quantify in several parts of the state where such permits aren’t required. Portwood said new phone hookups were once used to gauge such areas but that has become unreliable as more homes opt for strictly cell phones.

Fueled by homes, construction spending rose 0.9% in May

WASHINGTON (AP) — A surge in homebuilding pushed U.S. construction spending up by the largest amount in five months, the latest indication that the housing sector is slowly recovering. Construction spending rose 0.9 percent in May from April, the Commerce Department reported Monday. It was the second straight monthly increase and the biggest percentage gain since December. The May increase pushed spending to a seasonally adjusted annual rate of $830 billion. That is 11.3 percent above a 12-year low hit in February 2011. Still, the level of spending is roughly half of what economists consider to be healthy. The construction industry is flashing signs of improvement while others parts of the economy have slumped. Spending on both residential and nonresidential projects rose in May. That shows private builders are starting to have more faith in the housing market and commercial real estate. But spending on public projects fell to the lowest level since November 2006. That largely reflects tighter government budgets at the state and local level and fading federal stimulus dollars. Steven Wood, chief economist at Insight Economics, said the overall picture for construction was brighter. But he noted that the industry has a long way back to full health. “Construction spending appears to be slowly climbing, emphasis on slowly, out of a very deep hole,” he said. Residential construction rose 3 percent to an annual rate of $261.3 billion. Spending on nonresidential projects rose 0.4 percent in May to an annual rate of $299.1 billion, the third straight monthly gain. In May, spending on shopping centers, hotels and office buildings all saw gains. Government construction projects fell 0.4 percent to an annual rate of $269.6 billion. Spending at the state and local level fell 1 percent to $242.6 billion at an annual rate. Federal construction rose 5.6 percent to a rate of $27 billion. Recent data suggest the housing market is gradually improving after struggling for the past five years. Homebuilders started work on more single-family homes in May and requested the most permits to build homes and apartments in three and a half years. Completed sales of new and previously occupied homes were up in May from the same month last year. The number of people who signed contracts to buy homes rose in May to match the fastest pace in two years. Home prices are rising in most markets. And mortgage rates have tumbled to the lowest levels on record, which has encouraged more buying. One reason prices are rising is the supply of homes for sale remains extremely low. There were 145,000 new homes for sale in May. That’s just 1,000 higher than in April, when the supply was the lowest on records dating back to 1963. With the supply is thin and sales rising, builders can charge more. It also means there’s room for more competition. Economists say that may explain why builders are laying plans for more homes and apartments over the next 12 months. Still, the market is long way from returning to full health. A sluggish job market could deter some would-be buyers from making a purchase this year. The U.S. economy created only 69,000 jobs in May, the fewest in a year. The unemployment rate rose to 8.2 percent last month from 8.1 percent in April. While spending on homebuilding has risen, spending on government building projects has fallen. Governments at all levels have been struggling to deal with huge budget gaps caused by the recession. The economy grew at a tepid annual rate of 1.9 percent in the January-March quarter. Residential construction added to growth. But many economists expect growth slowed in the April-June quarter.

AEA honing $4.5B cost estimate for Susitna-Watana dam

The Alaska Energy Authority is standing by the $4.5 billion estimated price tag for the Susitna-Watana hydroelectric project, but also contracting for a review of the Level 4 engineering estimate and creating a permanent “board of consultants” of five experts to monitor the megaproject through conclusion. Current timelines project federal licensing by 2017, construction over the next five years and by 2023 annual generation averaging 2.5 million Megawatt hours, or nearly 50 percent of Railbelt electrical demand, according to the AEA. Meanwhile, opposition to the project is forming. The Coalition For Susitna Dam Alternatives — which opposes any construction and claims membership of more than 1,000 persons growing by 50 per day, according to spokesman Richard Leo —also has plans to collect support through the summer but has other immediate plans. Wayne Dyok, project manager for the AEA, also said it is on schedule to meet the July 16 deadline under its licensing plan for submission of its so-called study plan with the Federal Energy Regulatory Commission. The study plan will include all the environmental, engineering and other studies needed to back the FERC permit application. “I think right now we have lots of work to do to make sure we get the study plans in as good shape as we can by July 16,” Dyok said on June 5. He noted that the list of projects, with fieldwork in 2013 and 2014, was approaching 2,000 pages. The current cost figure was released in April by MHW Global, a contract consultant to AEA on the project. A Level 4 estimate includes a -30/+50 percent margin of error. The estimate “is a good number to use for the elevation 2,000 (feet above sea level) configuration,” Dyok said. He was hired to his job last November, but was a contract consultant on a 1978 proposal that included two dams. The current project is a single, 700-foot tall dam on the Susitna River, 165 miles north of Anchorage. It would also create a 39-mile long reservoir up to two miles wide in some areas. The earlier project did file a FERC application. It was withdrawn in 1986, in large part because the low cost of oil and natural gas from reserves now nearing depletion. Its cost estimate was $5.4 billion (in 1985 dollars). The current proposal’s estimate is based on modeling from the earlier project, according to Emily Ford, AEA spokeswoman. The seemingly low cost against its 27-year old predecessor is also based on the use of “roller compacted concrete.” Developed in British Columbia in the 1970s, use of the technique would vastly decreases the amount of fill needed, but it has never been used in a project of this size in Alaska. “We have found no fatal flaw in the basic concept of building the Full Watana Dam or High Devil Canyon dam using RCC,” according to a 2009 review of the earlier project completed by R&M Consultants Inc. A rockfill dam at the new project would require 60 million cubic yards of material. “With the development in this RCC methodology, we’re looking at a little over five million cubic yards,” Dyok said. Concern with the use of RCC in Alaskan weather conditions was raised at that time and is still lingering in some quarters. Ford noted RCC dams that have been built in Russia, China, Mongolia and at 7,000 feet above sea level near Stillwater, Utah. “Temperature swings at that elevation are much higher than in the Susitna-Watana Hydroelectric Project area,” Ford wrote in an email. The Upper Stillwater Dam is 815 feet tall and 2,673 feet wide. Completion of RCC on that project took two years and came in October 1987 after two seven-month winter closedowns, according to the website of Malcolm Dunstan & Associates, a consulting engineer. The Asian dams are at longitudes south of the Watana site and were completed relatively recently. The 456-foot high Bureya Dam is located about 210 miles northwest of Khabarovsk, Russia, and the same longitude as the northern end of Vancouver Island. It was begun in 1976, but not completed until 2009 and is still being commissioned for generation last year. The 11 MW Taishir, Mongolia, hydroproject, about 1,100 miles northwest of Beijing, at the longitude of Willapa, Wash., is almost 7,700 feet above sea level and began generating electricity in 2008. “We are going to be issuing an RFP to have another entity with construction experience in Alaska and also with RCC-type hydro dams to come in here and do an independent verification of our consultant’s costs,” Dyok said. The RFP is one of two he expects to issue in July. The other, still being designed, will establish a five-member board of consultants, each with a specific expertise, for the life of the project. The anti-dam coalition gained 400 members through its booth at the March sportsman’s show in Anchorage and that some 90 percent of those who stopped at the booth left it opposing the project. “Pretty much everybody who actually understands what’s going on with this dam are opposed to it,” Leo said June 20. The group will have booths at the Alaska State Fair in Palmer and the Salmon Stock Music Festival, in Nikiski, Richard Leo said. Membership requires a signed statement, on its website, through Facebook or on paper, opposing the project, he explained. How it will bring the influence to bear on the project remains to be seen. “There are no plans to bring any signatures to the legislature next session. The whole focus on outreach is education,” Leo said. The coalition says the dam is unnecessary because state-subsidized production of natural gas from Cook Inlet, and increasing alternative energy production, could supply the needed power with far less environmental impact. “Financing by the state to find and develop its Cook Inlet gas resource could be as little as 50 percent of the required investment in the hydropower dam ... An affordable, stable, long-term source of energy for the Railbelt will only occur with state subsidy. This is just reality,” the group said in formal comments on project scoping filed with FERC in May.


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