Hotel chains expand in Alaska

About 380 new hotel rooms will open across Alaska this summer in time for a tourism season facing an uncertain outlook. Four hoteliers have planned these additions, and each property will be another link in their existing hotel chains. For one company, however, a fire in early April ruined plans to open a new downtown Anchorage hotel this summer. Aspen Hotels was to open its fifth property in June with 90 rooms. Although many Alaska tourism businesses saw bookings drop last fall following the East Coast terrorist attacks, some companies later experienced a rebound in customer reservations. Nonetheless, some operators are concerned about filling rooms this summer while others expect sufficient business. Aspen Hotels This year would have marked a milestone for Aspen Hotels, adding its fourth and fifth hotels to its chain. However, last month a fire destroyed its four-story hotel initially expected to cost $4.9 million to build in downtown Anchorage. The hotel was to open June 1. In March, Aspen Hotels inaugurated its fourth hotel, a 63-room property in Soldotna. The company already operates hotels in Fairbanks, Juneau and Valdez. Like the Fairbanks and Valdez properties, business for the Soldotna Aspen Hotel will stem from oil and gas industry clients as well as independent travelers, said Carol Fraser, company vice president. In Anchorage, Aspen executives are planning to rebuild the hotel following an investigation and demolition of the damaged structure. "We want to open next year," she said. "It’s not just rebuilding a hotel. It’s rebuilding lives." The new hotel will be similar to the original. Aspen plans to employ 24-hour security staff during construction, she said.

Three Japanese ships bound for Anchorage port in May

Two training vessels and one destroyer from Japan’s Maritime Self-Defense Forces will call on Anchorage May 6, the first stop on a five-month cruise.The flagship destroyer Kashima and training vessels Matsuyuki and Shimayuki will carry more than 700 sailors, including 161 male cadet officers and nine female cadet officers. Also on board will be 20 band members and two Thai officers, said Jim MacKenzie, a special assistant with the Consulate-General of Japan in Anchorage.The ships will be moored three abreast at the Port of Anchorage through May 9. Because of increased security measures at the Port of Anchorage, tours of the ships will be by invitation only, MacKenzie said.The cruise provides the new cadets with training in leadership and seamanship, and promotes international goodwill, MacKenzie said.Rear Admiral Tohru Izumi, commanding officer of the training squadron, and other senior officers are scheduled to meet with military and elected officials, attend social events and visit the cenotaphs at Fort Richardson of U.S. and Japanese soldiers who died in the Aleutians during World War II.A concert by the Japanese squadron band and the U.S. Air Force military band is scheduled for May 7 at the Alaska Center for the Performing Arts.Japan’s Maritime Self-Defense Forces last visited Anchorage in 1992 and 1994.Japanese naval ships have been making stops in Anchorage at least since the 1970s, said Roger Graves, a Port of Anchorage spokesman.Graves said the stops provide a boost to the Anchorage economy."Sailors are sailors, no matter where they are from. They spend big bucks, especially at their first port of call,’’ said Graves, himself a former Navy man.Graves said the Japanese sailors are particularly interested in Alaska Native arts and crafts and touring the city."Last time they were here, every limousine in town was rented," Graves said.After their stop in Anchorage, the ships will visit eight ports of six foreign countries with a scheduled return to their home port in Harumi, Japan on Sept. 9. The squadron will travel as far south as Bolbora in Panama and as far east as Santo Domingo, Dominican Republic, before beginning its voyage home.

May-Issue-1 2002

Corps awards contract

ANCHORAGE -- A $250 million contract to build test-bed facilities for a national missile defense system was awarded April 16 to Fluor Alaska, the Army Corps of Engineers announced.The contractor will build test silos plus support facilities at Fort Greely, 100 miles southeast of Fairbanks, and upgrade radar at Eareckson Air Force Station on Shemya Island near the tip of the Aleutian chain."It will disturb 260 acres, with the silos and the structures that will be around it," John Killoran, the Corps spokesman in Anchorage, said about the work at Fort Greely.Construction is to begin in June at Fort Greely. The construction season is usually limited to April through October because of cold weather.The project will be funded incrementally over three years and includes construction of a similar nature at other unidentified sites. Fluor Alaska and its subcontractors are expected to provide several hundred personnel at the high point of construction at Fort Greely.The contract calls for the exterior of four buildings to be completed by October, allowing construction to continue inside the buildings during winter.The Missile Defense Agency has applied for a wetlands permit for the defense system work on Shemya. The work proposed included upgrades to the existing Cold War-era early warning radar system, utility extensions, housing and infrastructure improvements, dredging and land-clearing.The agency also would install test equipment related to X-Band radar, the most powerful tracking and detection device in the world and the heart of the national missile defense system.The Corps Engineering and Support Center in Huntsville, Ala., awarded the contract. The Corps Alaska District, with headquarters in Anchorage, will supervise construction.The Missile Defense Agency may eventually locate live missile interceptors at Fort Greely. The agency has said it will store, not launch, missiles from the silos during the testing phase, unless the nation is attacked.

After Enron, managers face growing problem of mistrust

The head of ElectroScientific once said, "Trust is the real grease that keeps an organization going." One of the 12 Boy Scout laws is "trustworthy." How would you like to wake up one morning and find your hard-earned retirement savings just went up in smoke -- worthless. And then you see your executives getting bonuses, cashing in their stock when you can’t and building mansions on all four corners of the country.The Enron disaster will have a greater impact than most people realize. Because of Enron, now anyone in a management position will have to work that much harder proving his or her trustworthiness. Trust is a key needed for effective leadership. The problem today is that you can’t tell or even expect people to trust you. You must prove it first. In God we trust, but all others bring data.Furthermore, maintaining trust is like walking on eggs -- slow going and easily crushed. Even before Enron, my experience as a management consultant shows many executives unintentionally damage their credibility and trust. Here are some ways to maintain a high trust level within your organization. Your personal life is your public life. Your personal life reflects who you really are. If you are in a leadership position, your personal life is open to scrutiny. Your ability to lead others will increase if people respect you. You may not like it, but that is the way it is. Do what you say you will do. How many times has someone told you, "I’ll get back to you on that," but never followed up? Don’t make promises you can’t or won’t keep. Trust breaks down when promises are broken. Tell the truth all the time. The worst thing you can do is not be open and honest with people. Trying to hide information will always catch up with you. Tell people everything they need to know, even if it’s bad news. It’s better to say too much rather than too little. Treat everyone with respect. You may not like everyone you work with but you must treat them as if you do. People want to feel they have value and worth as individuals. Give everyone a chance to improve and attempt to understand and place their interests first. Show appreciation. Surprise people by doing something unexpected for them. When you see one of your employees doing something good write them a note of appreciation or walk up and just tell them. They will appreciate you and trust you more. Avoid favoritism. Don’t turn to the same person for help over and over again. Train and develop all your employees so everybody has equal opportunity to prove themselves and the workload is shared equally. Insure all people of color are fairly represented at all levels of the organization and provided the same opportunity for advancement. Consistently enforce the rules. Eliminate unnecessary rules, regulations and policies, and enforce all the rest. When you selectively enforce policies, mistrust increases. No matter how clear the rules seem to you, everyone has a different perception of the rules. What appears unnecessary to you is important to someone else. Either enforce it or eliminate it. Treat people as equals. Because of the Enron scandal, there will be more pressure on boards and executives to give all employees the same privileges normally reserved for executives. If executives can sell their stock options why can’t other employees? Privileges and perks will be under greater scrutiny by both the media and rank and file. Don’t tell jokes at others’ expense. Telling jokes is a good way to lower your trust quotient. The most harmless jokes will be offensive to someone. Even Dilbert cartoons damage the credibility and trustworthiness of management. They create a perception that all managers are incompetent.Gregory P. Smith leads the management consulting firm called Chart Your Course in Conyers, Ga. He can be reached via e-mail at ([email protected]).

Senate OKs amendment for natural gas pipeline

The U.S. Senate unanimously adopted an amendment April 23 that industry officials say would offset one of the biggest risks for development of a proposed natural gas pipeline project from the North Slope to the Lower 48 -- the worry that natural gas prices might take a nosedive.The amendment, offered April 22 by Sen. Frank Murkowski, R-Alaska, would allow investors in the estimated $15 billion to $20 billion gas line project to take a federal tax credit if gas prices at the Alberta Energy Co. trading hub fall below $3.25 per thousand cubic feet. If prices later rose to exceed $4.83/Mcf, the money saved under the tax credit would be paid back to the government, under the amendment."This provision helps ensure the economic viability of the gas line project," Murkowski said. "Without these safeguards, Alaska natural gas will stay in the ground for a very long time."The nation will benefit because the increased supplies of this clean burning fuel will provide an affordable energy product for American families and allow for expanded uses of new technology at the same time."

Alaska shipping buoys Tacoma

From gold rushes a century ago to oil field development today, Alaska has long been an economic engine for Washington’s Puget Sound. The region’s waterborne transportation companies have continued to see growth in the Alaska market, while ailing Asian economies have had a bottom-line impact on Washington, which claims to be the most trade-dependent state in the union. Alaska in 2001 continued to be an asset for the region’s economy, especially at the state’s leading ports. Alaska continued to receive one-third of Washington’s ocean shipments in 2001. Container exports slipped 4 percent last year at the Port of Tacoma, but shipments to Alaska increased slightly. "Alaska was a bright spot for us, definitely," said Evette Mason, a spokeswoman for the Port of Tacoma. Behind Japan and China, Alaska is the Port of Tacoma’s third-largest trading partner, accounting for about $3.6 billion in two-way trade last year. Tacoma, the Pacific Northwest’s leading container port, handles more than 70 percent of all waterborne commerce from the Lower 48 states to Alaska. Some 2,500 cargo containers arrive in Anchorage weekly at the peak of the shipping season, the majority of which are handled by CSX Lines and Totem Ocean Trailer Express Inc. Shipments, measured in twenty-foot equivalent units, or TEUs, were up for Alaska from 444,327 in 2000 to 454,665 in 2001, or about a third of the 1.3 million total in Puget Sound’s international trade, according to Port of Tacoma officials. A TEU is a 20-foot container, 8 feet tall and 8 feet wide, with about 1,280 cubic feet of storage space, or enough room for about 9,000 frozen chickens or 16,000 bottles of wine, according to port officials.

Chugach, ENSTAR forecast higher prices for natural gas

Chugach Electric Association has entered the preliminary stages of new natural-gas purchase contract talks with Southcentral Alaska gas producers, its general manager Eugene Bjornstad, told the Resource Development Council for Alaska Inc. April 18 in Anchorage.The Anchorage-based utility is also proceeding with permitting on the planned $100 million southern intertie, a new electric transmission line connecting Anchorage with the Kenai Peninsula, Bjornstad said.The new transmission line will replace an existing transmission line that has less capacity and is prone to damage from avalanches, he said.Chugach Electric, which sells surplus power to other electric utilities in the Railbelt grid, has contracts for gas with producers in the Beluga gas field west of Anchorage and on the Kenai Peninsula with Marathon Oil Co.At current rates of gas demand, the contract with Marathon will need to be renewed after 2008 and after 2012 in the Beluga producers, Bjornstad told the RDC.John Lau, vice president for engineering at ENSTAR Natural Gas Co., told the RDC that prices for Southcentral Alaska gas sold under new contracts will be higher.ENSTAR’s new contract with producers allows gas to be purchased at prices linked to gas trading prices in the Lower 48 states. That means ENSTAR, as well as Chugach Electric and other gas purchasers, will be paying more for natural gas in the future.Southcentral Alaska has some of the lowest natural gas prices in the country, Lau said, but that will change as the effects of the new gas contracts are felt.Higher natural gas prices are needed to spur exploration for new reserves, he said. The new ENSTAR contract has resulted in a spurt of new exploration activity by Unocal Corp., Marathon Oil and others, Lau said.Gas is still a bargain compared with other fuels, he said.Residential consumers pay $4.26 per million British thermal units compared with $10.72 per million Btus for fuel oil, or $17.25 per million Btus for someone heating with electricity.Bjornstad also said the utility’s experiments with alternative energy are proceeding. Chugach is operating an experimental 1-megawatt fuel cell to power the U.S. Postal Service facilities at Ted Stevens Anchorage International Airport as well as experimental microturbines at facilities of Alaska Village Electric Cooperative in Anchorage.The systems are performing well but are still costly compared with conventional energy systems, Bjornstad said.Work with wind energy is also under way in response to surveys of Chugach members indicating some would be willing to pay a premium for "green" energy. Potential wind energy sites at Portage and the closed Nike missile site on mountains overlooking Fort Richardson have been surveyed, and Chugach is now looking at the feasibility of a wind energy site on Fire Island in Cook Inlet near Anchorage.Echoes of the fight on the board at Chugach Electric regarding extending labor contracts with the International Brotherhood of Electrical Workers to 2006 were also heard at the RDC meeting.Chugach’s board voted 4-3 to extend the contracts April 17.Ray Kreig, an Anchorage businessman and former Chugach Electric board president who leads Chugach Consumers, an advocacy group, asked Bjornstad if Chugach would be able to meet its goal, set in 1995, of joining utilities within the top 10 percent of efficiency in the nation, given the extended labor contracts.Bjornstad said he didn’t know when Chugach would be able to meet that goal, "given the variables of climate, labor, natural gas prices and labor costs," he said.

State would give breaks to gas pipeline under proposals

State House and Senate committees are considering legislation that would extend state royalty and tax breaks to a North Slope natural gas pipeline.Senate Bill 360, sponsored by the Senate Resources Committee, is now in the Senate Finance Committee, while similar legislation, House Bill 519, is in the House Resources Committee.The House bill, sponsored by the House Rules Committee, essentially reenacts the state Stranded Gas Act, a 1998 law passed by the Legislature aimed at helping a liquefied natural gas project that has expired. HB519 also expands the concept to include a conventional gas pipeline in addition to an LNG project.Senate Bill 360 would accomplish a similar purpose. Both bills would allow the state to negotiate special royalty and tax terms for a natural gas project.Scalzi bill would expand shellfish farming; House sends approvalThe state House unanimously approved a bill requiring state resource agencies 90 sites for new mariculture, or shellfish, farms."The mariculture industry has the potential to increase the availability of fresh seafood to Alaskans, strengthen the competitiveness of Alaska seafood worldwide and provide a premium-product year round," said Rep. Drew Scalzi, R-Homer, sponsor of HB208.Mariculture is the practice of growing oysters, scallops, clams, geoducks or other shellfish in enclosed pens off open waters along the seacoast for commercial purposes."With its clean, nutrient-rich marine environment and vast coastline, Alaska offers an attractive environment for the industry," Scalzi said.Several shellfish farming operations exist in Alaska today, but growth of the industry has been hampered by delays of state agencies in issuing permits for tideland leases.The legislation, now in the Senate, would require the departments of Natural Resources and Fish and Game to survey and identify 60 sites suitable for oyster farms; 20 sites suitable for clam farms; and 10 sites for geoduck farming.Under Scalzi’s bill, the sites would be available under 10-year leases.Recreational liability legislation passes House, moves to SenateA bill expanding protection against liability for recreational businesses has passed the House. HB319, sponsored by Rep. Pete Kott, R-Eagle River, clarifies state insurance law to specify that clients of recreational businesses accept the inherent risk of activities and are partially responsible for injuries or damages resulting from recreational activities.The legislation should discourage unfair injury claims that can hike insurance rates, Kott said. The bill would give added protection to small tourism companies taking clients on river rafting trips, guided hikes, snowboarding, sport fishing and other recreation activity."The bill lays out specific guidelines operators and participants must follow to minimize the possibility of accidents, and it in no ways dilutes the obligation of outdoor recreation businesses to meet standards for safe operations and property training of their employees," Kott said. The bill is now in the Senate.House OKs bill to protect Alaskans from false ’work-at-home’ offersAlaskans looking to develop businesses in their homes would be given more protection from fraudulent marketing under HB393, which passed the state House of Representatives on April 19.Firms selling "work-at-home" business opportunities, such as stuffing envelopes or processing medical forms, would be required to register with the state Department of Law and disclose any history of civil litigation or criminal convictions.The bill would also require specific information about the business to be provided to the potential purchaser, including total cost, exact payment schedule and services the operator will provide."Business opportunities are pre-packaged, small business deals offered primarily to novice entrepreneurs. Promoters use high-pressure sales tactics and promise huge earnings to buyers, and the scams often target those who are vulnerable, such as senior citizens, those at home because of disabilities," according to the sponsor of the bill, Rep. Gary Stevens, R-Kodiak.

Evaluators assess Alaska pollock for possible 'eco-label' certification

KODIAK -- Alaska salmon was the first species to receive an "eco-label" for sustainability and sound management from the Marine Stewardship Council.The Marine Stewardship Council is a nonprofit group that is leading a global "ecological labeling" drive. An MSC label alerts customers that the fish was harvested using sound environmental practices. The Marine Stewardship Council was created in 1995, beginning as a joint venture of the World Wildlife Fund and Unilever, an international maker of packaged consumer goods. Now operating independently, MSC generates some of its funding through eco-label fees. Fisheries undergo intense scrutiny by teams of experts.The company Scientific Certification Systems’ is a three-member evaluation team.Processors who wish to participate in the program undergo independent, company-by-company assessments to receive approval to use the label.The labels are reportedly popular in Europe where people are more "green conscious" than in the United States. The trend is catching on at home. Among the U.S. companies planning to carry eco-labeled products are Shaw’s Supermarkets, Whole Foods Market and Legal Sea Foods restaurants.Now, three independent experts have been selected to work with Scientific Certification Systems to assess whether Alaska’s pollock fisheries can be certified as sustainable under the MSC Standard.In January 2001, the At-Sea Processors Association applied for certification for the pollock fisheries. The Bering Sea-Aleutian Islands and Gulf of Alaska pollock fisheries will be included in the scope of the assessment. These fisheries account for almost 30 percent of all fish harvested by volume in the United States.Joining SCS in the evaluation of the pollock fisheries are Tony Smith of Australia’s Commonwealth Scientific and Research Organization Division of Marine Research, professor Robert Furness of the University of Glasgow’s Institute of Biomedical and Life Sciences, and Tom Jensen, who served as the associate director for natural resources at the White House Council on Environmental Quality, prior to joining the Washington, D.C., law firm of Troutman Sanders. According to Marine Stewardship Council spokeswoman Alexia Cummins, the certification team includes "experts knowledgeable of and experienced in fisheries stock assessment work, assessing ecosystem impacts of fishing and the U.S. fishery management process."The dates for the evaluation team meetings are April 29-May 3, and May 20-24 in Seattle and in either Juneau or Anchorage.The main contact for the Alaska pollock certification is Chet Chaffee, who can be reached at 650-969-1366, or via e-mail at ([email protected]). Cummins said the assessment is expected to be completed within six months.Algae chomp Chilean salmonAn algae bloom has resulted in a loss to Chilean farmers of nearly 4 million pounds of farmed salmon and trout totaling about $7 million in lost sales. Rodrigo Infante, general manager of the Santiago-based Association of Chilean Salmon and Trout Farmers, told WorldCatch News Network that while further analysis needs to be done, higher prices could be a result of the algae outbreak.Major importers in Boston and Miami reported that the bloom’s effect is already being felt in the marketplace."We’re very short of fish right now," they told WorldCatch, adding that a 10 percent rise in prices has hit the U.S. market since the algae bloom took root. It’s anticipated that upward pricing will continue, since winter is starting to move into the Southern Hemisphere, limiting harvests and lessening supply. Most farms harvest their fish inventories before the colder weather sets in, and Infante said most of the farmed coho had already been harvested.The algae bloom began in late March and has spread more than 30 miles along the coastline of a major fish farming area. The bloom has affected both mussel and fish farms in the area, Infante said. Farmed fish die from the thick algae, which gets stuck in the gills and chokes the fish.Chile is the world’s second largest salmon farming nation after Norway, and last year exported more than 660 million pounds of salmon worth close to $1 billion. WorldCatch said Chilean farmed salmon companies are continuing efforts to cut back on the record production of the last two years, and forecast zero growth in production and exports in 2002 compared to last year.Kodiak-based free-lance writer Laine Welch can be reached via e-mail at ([email protected]).

Senate OKs Healy clean-coal plant loan

Alaska Republican Sen. Frank Murkowski won U.S. Senate approval for an amendment in the pending federal energy bill that would permit the U.S. Department of Energy to loan up to $125 million for retrofitting clean-coal burning systems in a 50-megwatt new-technology coal power plant near Healy.The Alaska Industrial Development and Export Authority, the state development corporation which owns the coal plant, is exploring several options to get the $297 million plant back into operation. The facility has been shut down since late 1999.Options include a total retrofit to replace the new technology systems with conventional coal-burning systems, or a less-costly limited retrofit aimed at making the new systems work better, according to Bob Poe, executive director of AIDEA."At this point we’re not sure what the Senate amendment means. We certainly appreciate Sen. Murkowski’s efforts because this will give us a number of options," Poe said."However, any loan must make financial sense. Borrowing an additional $125 million would raise the total cost of this plant to over $400 million, which is very expensive for a 50-megawatt power plant," he said.Terms and conditions of a loan between the DOE and the Alaska Industrial Development and Export Authority would be negotiated under Murkowski’s amendment, and the proposal must still be approved in a conference committee with the U.S. House of Representatives.The House passed its version of national energy legislation earlier, which did not contain a provision for a loan to the Healy plant.The new-technology plant has been idle since completion of a 90-day test of operations in late 1999, Poe said.A dispute developed between AIDEA and the Golden Valley Electric Association of Fairbanks, the regional electric cooperative which had agreed to buy power and operate the plant under a contract with AIDEA.GVEA felt the plant’s new clean-coal burning systems did not operate as efficiently as possible. AIDEA disagreed, arguing that the 90-day test met its goals except for quantities of low-grade coal that were scheduled to be used.The Fairbanks utility was also concerned that the new technology systems, developed by TRW and Babcock and Wilcox, might not be supported in operation by the two companies, Poe said.A settlement between the two parties involved an agreement to seek new funds for a retrofit to more conventional technology GVEA felt would be reliable.The Fairbanks utility and AIDEA were seeking low-interest federal financing to pay for the retrofit, which GVEA estimated would cost $80 million. Additional costs could accrue to AIDEA for the two to four years the plant will be idle during its reconstruction.Poe said another option AIDEA board members are considering is a limited retrofit, which would modify the new clean-burning systems instead of replacing them with conventional systems. The limited retrofit would cost less and allow the power plant to get back into operation faster, reducing the financial drain on the state authority.Whether GVEA would agree to a limited retrofit as a part of the power sales purchase contract is uncertain. However, there is also uncertainty whether air quality permits can be given for a 50-MW coal plant near Denali National Park.Poe said the state Department of Environmental Conservation told AIDEA that the total retrofit to conventional technology would require a new round of air permitting.A limited retrofit, incorporating the very low emissions of the new technology, may not require modifications to the existing permit held by the plant, he said.

Builders expect strong season in Anchorage

The Anchorage residential building market this year should mirror the strong results it posted last year, industry officials said.Builders expect to complete about 1,000 new single-family homes this year plus 500 condominiums and duplexes. In 2001 Anchorage tallied 1,049 new houses and 332 condominiums and duplexes, according to the Anchorage Home Builders Association Inc.Those figures eclipse results when the city issued 776 new home permits in 1999 and another 820 permits in 2000.As of March 31, city officials had issued 265 new single-family permits, up from 219 permits issued in the three-month period last year, according to city reports. Sixty permits have been issued through March for new duplex construction, compared with 63 recorded for the same period in 2001."I foresee a pretty big year on top of a big year last year," said Ron Thompson acting building official from the Municipality of Anchorage Building Safety Division.Several factors should affect the residential real estate market, including low inventory of new and existing homes, low interest rates and climbing lot prices as the number of available lots decreases. A panel of industry representatives addressed the issues during an April 16 presentation by the Anchorage Home Builders Association.Current residential home sales in Anchorage are influenced by a low number of residential properties available to buy, said Ron Pollock, associate broker at Prudential Jack White Real Estate."The bottom line is we don’t have any inventory," he said.As of April 15, 446 single-family homes were listed in Anchorage, compared with 569 homes listed for the same time in 2001, according to Multiple Listing Service data.Condominium sales should still be a growing part of the Anchorage market, Pollock said.Two price ranges had the most listings, from $150,001 to $175,000, and from $175,001 to $200,000, each with 62 homes listed. Those two categories also represented the largest part of homes sales between April 2001 and 2002 with just more than 17 percent each of total sales.The average sale price of an Anchorage house reached a high of $228,825 in March, up from $201,711 last year, the builders association reported.City officials have indicated individual property values increased 10 percent last year, said Daphne Koropp Holfield, a partner at real estate appraisal firm Crosson & Koropp.For 2002 residential property values could climb another 6 percent to 8 percent, she said. The market also will be characterized by a lack of enough houses in all price ranges, she said.So far the residential market has not seen significant impact from announcements of layoffs at BP Exploration (Alaska ) Inc. and Alyeska Pipeline Service Co., she said. However, market conditions could change for other reasons, she said."A significant increase in interest rates could slow down the market," she noted.Low interest rates may continue to drive the market in 2002, said Judy Kemplen, a manager for Wells Fargo Home Mortgage.Last year the United States tallied a record $2.1 trillion in home mortgage refinancing and purchases, she said.This year Fannie Mae and Freddie Mac expect a mortgage origination volume of $1.2 trillion, Kemplen said.Association officials also said fewer available lots now mean higher prices. Developers estimate lot prices increased 10 percent to 20 percent, depending on lot zoning, during the past year."To find lots in general is a challenge," said Chuck Spinelli, the AHBA president, who leads residential building company, Spinell Homes.Another issue for builders is finding enough labor to complete projects, he said.

This Week in Alaska Business History April 28, 2002

Editor’s note: "This Week in Alaska Business History" revisits events that shaped our past."Those who cannot remember the past are condemned to repeat it."-- George Santayana, 1863-195220 years ago this weekThe Anchorage TimesApril 28, 1982Senate OKs seafood safety, quality programBy Jean KizerAssociated PressJUNEAU -- Spurred by the recent botulism crisis in Alaska’s canned salmon industry, the state Senate voted Tuesday to set up a quality control program aimed at assuring Alaska seafood is safe to eat and of high quality. Senators voted unanimously, without debate, to approve a two-tier program worked out by industry officials, lawmakers and Lt. Gov. Terry Miller.The first tier of the program calls for a mandatory seafood inspection program, aimed at guaranteeing product safety, within the Department of Environmental Conservation.Before processing seafood in Alaska, a company would be required to submit a plan of operation that would assure a safe product free of contamination. In order to get state approval; the plan would have to meet several criteria, including a means of inspecting cans to see that they are sealed properly.A state inspection seal would be designed by the Alaska Seafood Marketing Institute and used to signify products have been packed to meet safety standards.10 years ago this weekAlaska Journal of CommerceMay 4, 1992TOTE expands midshipBy Margaret BaumanAlaska Journal of CommerceTotem Ocean Trailer Express Inc. would put a third ship in seasonal service in Alaska next summer if market conditions warrant, says Robert B. McMillen, president and chief executive.TOTE is negotiating in Jacksonville, Fla., with American Shipbuilding to lengthen the 700-foot S/S Puerto Rico by 90 feet to accommodate TOTE’s shipping capabilities, McMillen said. The ship would be renamed Northern Lights.The addition of the Northern Lights to Alaska routes could increase TOTE’s market share, but more importantly it would give TOTE leeway for major rehabilitation needed on its two existing ships, which are 17 years old, officials said.-- Compiled by Ed Bennett

Financial plan provides benefits

Most people have developed piecemeal financial goals. They have random tactics like paying off their house, retiring at 55 or funding their children’s education. Often these tactics have no strategy to back them up - no game plan. Their accountant gives them advice at tax time, their attorney when needed, their stockbroker when they have extra cash, but they have no one to give them answers to bring the whole picture together.Most people need someone with the experience and equipment to act as their financial sounding board. They want someone else to be the "nag" when it comes to staying out of debt, to calm them when the markets are down, to crunch the numbers for them, to simplify the complex and, most importantly, to help them achieve their financial objectives.With a comprehensive financial plan an individual should walk away knowing how to: Increase net worth; Reduce taxes; Fund education and other goals; Plan for retirement; Use insurance effectively; Provide for smooth distribution of an estate; Invest with their risk tolerance and time horizon in mind; Outpace inflation; and Improve cash flow.So, how does a financial plan answer these questions? This is generally a needs-based system. Everyone has different concerns, priorities, needs and goals. The purpose of the plan is so that the advisor has a good understanding of these factors and is in the correct position to make recommendations about the client’s financial future to help them prioritize what is most important now. This information should be easy for the client to understand, illustrated well and the complexity of the calculations explained according to the client’s desire and level of understanding. Every financial decision should be made only after weighing the effects of the decision on the overall plan.The first step in developing a plan is for the client to find someone with experience to be a financial advisor. This person will gather the information necessary to complete the plan. Certain statements and documents will be required. The client should be given a written agreement that specifies the work to be done, explains the fee for completing the plan and discloses any other pertinent information.The client should then evaluate the plan with their advisor and make any necessary changes. Once the strategy is agreed upon, it should be printed out and then re-evaluated annually to make sure the asset allocation and objectives continue to be on track. The advisor should follow up with the implementation of any recommendations made.It is often said that if you don’t know where you are going, any path will get you there. A well-developed plan won’t guarantee that you won’t have any detours or accidents along the way, but it will significantly increase your chances of getting you where you want to go.Charity Carmody is an investment executive at Wedbush Morgan Securities. She can be reached via e-mail at ([email protected]).

Produce arrives in Alaska via land, sea, air

John Baldiviez remembers when biting into peaches fresh off grocers’ shelves was a crunchy affair in Alaska."Tree-ripened peaches were unheard of. They ate like an apple," said Baldiviez, who has been in the produce business in Alaska for more than 20 years."Now you have to use a napkin because the juice gets all over the place," said Baldiviez, who along with his wife, Ginny, own Alaska Carrot Co., a produce wholesaler in Anchorage.Not only have the quality and variety of fruit and vegetables changed in the last two decades in Alaska, advances in produce handling and shipping methods have changed, too.Most major cities in Alaska, and even some Bush communities like Bethel, have produce that is every bit as fresh as what is found on the East Coast, wholesalers and shippers said.By various estimates, a third or more of produce shipped to Anchorage now comes over the Alaska Highway by truck, a mode of transportation that in the last 10 years has taken a big bite out of waterborne produce shipments.Nearly all produce shipments to Fairbanks and to the North Slope come over-the-road directly from the Pacific Northwest, produce wholesalers said."They’ve taken part of our market, and we’re not pleased with it," said Eric Britten, CSX Lines’ manager of business planning and development.CSX and Totem Ocean Trailer Express Inc. have for years brought produce up from the Port of Tacoma on their ships, a voyage that takes about 66 hours to Anchorage.Improvements on the Alaska Highway, as well as more efficient trucks, make the more than 2,000-mile trip from Seattle to Anchorage a 55-hour drive.Produce wholesalers say each shipping method has its advantages. Waterborne shipments are generally cheaper, while trucking is speedier and more frequent.TOTE and CSX combined send five container ships weekly to Anchorage, but none arrive within a day of the weekend market, where the bulk of produce is purchased by restaurants and consumers.CSX’s Britten said there isn’t enough produce to warrant another ship for the weekend market. Britten’s company has taken measures over the years to improve produce shipments, like better climate-controlled containers.Bill Deaver, vice president and general manager of TOTE’s Alaska division, said he believes that trucking accounts for about a third of produce shipped to Alaska.Deaver said he believes that’s about as big a share as truckers will get."I think they are pretty much where they’re gong to be," Deaver said.CSX and TOTE have their own trucking divisions, but most trucks used in hauling produce to Alaska are operated by independents, who work through brokers in Seattle, produce wholesalers said.Frank Dillon, executive vice president of the Alaska Trucking Association Inc., said it all comes down to what method of shipping works best for a particular company."Free enterprise and competition determines how things are going to move," Dillon said.Deaver of TOTE points out that some major grocers in Alaska still transport all of their produce by ship.Other grocers and wholesalers use a combination of trucks and ships, while the warehouse membership clubs like Costco and Sam’s Club use trucks almost exclusively.Air shipments are used by grocers and wholesalers for extremely perishable items like herbs and some berries."The bottom line, (trucking) is faster," said Dick Snyder, manager of the Costco in South Anchorage.Trucking, Snyder said, gives his company more control over its produce. The company uses waterborne shippers for the bulk of its products, but for produce, trucking works best, Snyder said.For example, he said, watermelons are shipped directly from farms in California to his store in South Anchorage, a trip that takes just more than three days. For the watermelons to be trucked to Tacoma, put on a ship and sent to Anchorage would at least double that time. And the melons would have to be handled several more times in the process."We think it makes a difference in quality," Snyder said.Costco has trucks arriving at its Anchorage stores five days a week, Snyder said.Dave Schauer, manager of Anchorage produce wholesaler Rogge Commission, said that his company sends about 95 percent of its produce by truck from Seattle.For more durable produce like apples, potatoes and onions, ships are used by his company, which is a division of Charlie’s Produce Co. of Seattle.Trucking, Schauer said, gives his company "hands-on control."Rick Thomas, customer service manager of DiTomaso Inc. of Anchorage, said his company uses a "blend" of shipping methods to get its produce up from the Lower 48 states.Under the best case scenario, Thomas said, produce arrives in Alaska from the growing fields of California, Arizona or Mexico in seven or eight days, either by truck or ship."Ten to 12 days is more realistic," Thomas said.That time is within a day of when produce shipped from the same source reaches the East Coast, Thomas said.

Biz Fair workshops offer range of information May 4

Current and prospective small-business owners may discover valuable information from several agencies during a free workshop series May 4 in Anchorage.Several federal, state and nonprofit groups are sponsoring the second annual Alaska Biz Fair 2002. The event runs from 9 a.m. to 4 p.m. at the University of Alaska Anchorage Business Education Building, 3211 Providence Drive.Sponsors are the Anchorage Chamber of Commerce, Buy Alaska, the Internal Revenue Service, the Small Business Development Center, the state Department of Labor, the U.S. Small Business Administration and WOMEN$fund.Organizes hope to draw 300 participants, about double the size of last year’s event, said Marie Lozano, committee chairwoman and tax specialist with the IRS Small Business Self-employed Division.The event is similar to others offered in Oregon and Washington, she said.A keynote speaker is a new feature this year, Lozano said. The speaker is Tom Egelhoff, Bozeman, Mont., author of "How to Market, Advertise and Promote Your Business or Service in a Small Town." Egelhoff has 32 years experience in small-business marketing and advertising.The Biz Fair includes information booths from sponsors.One advantage of the Biz Fair is "having everybody under one roof at one time," said Nancy Heckmann, state labor department employment consultant. "It will be very comprehensive," she said."Our ultimate goal is to encourage people who are thinking about going into business or who already are in business," said Heckmann, who helped organize Biz Fair.Jeri Rubin, a workshop presenter and UAA business administration professor, believes information that participants glean from the event can be critical to business survival. "I think its extremely significant because it helps business owners and potential business owners identify some of the challenges of the 21st century," she said.At UAA, Rubin teaches introduction to business, personal selling and marketing courses. She will present a session on advertising at the Biz Fair.For a schedule of events, visit (www.jobs.state.ak.us/jobfairs/biz_fair_brochure.pdf).

BP eliminates tiny tanker hitchhikers

While oil companies go to great lengths to protect the environment, Simon Lisiecki is the first to admit that it’s strange for them to want to find a way to kill tiny sea creatures.But that’s exactly what BP Amoco PLC has been doing in conjunction with the government and an environmental watchdog group.Lisiecki, BP’s manager of marine business developments, said the company has spent about $2.5 million on a device designed to destroy foreign marine species in the ballast water of tankers plying the waters of Prince William Sound.To kill potentially harmful new species that may get an unwanted foothold in Alaska waters, BP for the last year has been bubbling ozone though the ballast water on the double-hull tanker Tonsina."It works. This thing kills the little critters. It’s as simple as that," said Lisiecki. The system killed most bacteria and zooplankton after a 10-hour dose of ozone, Lisiecki said.Larger shrimp survival varied, while crabs were largely unaffected, other than making them a little "groggy," Lisiecki said.Larger creatures, while still microscopic, were taken out of ballast systems by strainers, Lisiecki said.Ozone, which consists of three oxygen atoms in a single molecule, is used to disinfect water.In Los Angeles, ozone has been used instead of chlorine for more than 20 years, Lisiecki said, adding it also is used to treat hazardous waste, industrial wastewater and contaminated groundwater.Lisiecki said ozone-treated ballast water is safe to be pumped back into seawater.The system, developed by an independent company, Nutech O3, incorporates seven miles of pipe that percolated ozone through the ship’s 15 ballast tanks.While the system worked on the Tonsina, the challenge now for the oil company is to make the device portable, cheaper, more reliable and simpler to operate, Lisiecki said.Nonindigenous invasive species, according to Lisiecki, can be any living organism, plant or disease that is brought from one part of the world to another. Under some conditions and without natural predators, the foreign marine species could take hold in new waters, causing dire environmental and economic effects.Lisiecki points to the European zebra mussel that took over the Great Lakes after being transported in ships’ ballast water from the Caspian Sea. The mussels have clogged cooling pipes in power utilities, causing millions of dollars of damage.Harmful marine species are most often transported from one region to another in ships’ ballast.Currently most ballast water is exchanged at sea, where fewer plankton are present than in coastal waters.Tankers bound for Valdez usually take on water from the Puget Sound in Washington or ports in San Francisco or Long Beach, Calif. Ballast water stabilizes a ship and lowers the draft of a vessel so its propellers are underwater."In the San Francisco Bay area, a new species is introduced every three months," Lisiecki said in a report to industry officials. "With the water temperature on the West Coast being roughly the same as in Prince William Sound, the concern is when one of those nasty little beasts ends up on one of our tankers."The Port of Valdez is the single largest receiver of ballast in the U.S., delivered by a small fleet of dedicated tankers. If something is found, we’ve got a problem."So far, studies have found that no harmful species have taken root in Prince William Sound.Marilyn Leland, deputy director of the Prince William Sound Regional Citizens’ Advisory Council, said there is a risk of alien species being introduced in Alaska waters, as has happened in other parts of the world.Some 400 alien species have been re-established in North America, according to Lisiecki."We don’t know if we don’t have the critters, and we don’t know if we do," Leland said.RCAC is an oil industry watchdog group funded by Alyeska Pipeline Service Co. RCAC has helped with the ozone research and grants totaling about $500,000. The group also has a program to monitor tankers’ ballast systems and the waters of Prince William Sound.Lisiecki said the system will continue to be evaluated during the next few months. No decision has been made about incorporating the system on all of the company’s tankers.

Business Profile: Network Business Systems

Name of the company: Network Business SystemsEstablished: 1987Location: 1577 C St., AnchorageTelephone: 907-272-2888Web site: www.nbsys.comMajor focus of services: Network Business Systems provides technical services including computer network design and support. The company also offers courses for Microsoft and Novell technical certifications as well as training in Microsoft programs. Another specialty is software development, including writing Web sites, programming databases and other work.History of the company: Originally handling retail computer sales, Network Business Systems shifted to offer more network services, which are now the primary focus. The company designs, implements, upgrades and maintains local- and wide-area networks.In January 1994 Alaska businessman Scott Thorson bought a majority ownership in the company. In late 1996 he acquired the remaining shares in Network Business Systems.The firm has grown from nine employees to 50. Office space has expanded to total 11,000 square feet. Last year Network Business Systems totaled $4 million in revenue, another growth milestone.Projects for customers range from a two-computer network to a 30-site system with 27 servers and 1,400 users.In 1995 Network Business Systems was designated a Microsoft Certified Technical Education Center. That year the company moved to its current location. Last fall the company started offering classes on Microsoft programs in addition to technical and custom-designed courses.As part of its software development work, Network Business Systems has produced a new Internet tool to easily build Web sites. After a year in development, the company is now beginning to market the product, which allows Web site modification or construction from any location.Top accomplishment of the company: Company president Thorson believes the new Web site-building program is probably the application of which he is most proud. He also is pleased with the level of professionalism Network Business Systems has developed. He cited a business model company officials crafted to outline steps and expectations for customers.Major player: Scott Thorson, president, Network Business SystemsIn 1982 Thorson, who flew for Reeve Aleutian Airways, started working part time for Trans Alaska Data Systems. He later worked full time at Trans Alaska Data Systems until 1986. Thorson subsequently worked as a broker for Merrill Lynch and operated a real estate development company before acquiring Network Business Systems.-- Nancy Pounds

ANWR drilling backers vow fight

Supporters of oil development in the Arctic National Wildlife Refuge say they will fight on, though the U.S. Senate soundly rejected an amendment to limit debate on the drilling plan April 18.First among those disappointed by the 46-54 Senate vote against the proposal was President Bush, who vowed to continue to fight for the exploration measure because it would bring tens of thousands of jobs and more energy independence to the nation."The House has passed comprehensive energy legislation with strong bipartisan support," said a spokesman for the Bush administration in a statement April 18. "And we’ll continue, in conference, to work toward achievement of these goals."Sen. Frank Murkowski, R-Alaska, sponsored the amendment and as leader of the charge on ANWR for Alaska’s congressional delegation, said additional amendments will be introduced in the Senate to get a fair vote that would permit at least some of the coastal plain’s oil to be developed.Murkowski dismissed the lack of a majority vote April 18 for ANWR, saying it was a procedural vote and does not represent the level of support for exploration on just 2,000 acres of the 1.5 million acre Arctic coastal plain. He said some supporters elected to sidestep environmental group attacks until there was a fair vote on final passage."It’s disappointing, but I think what we proved today is that we need more Republicans in the U.S. Senate," he said.Still, eight Republicans abandoned Bush and joined with most Democrats in rejecting drilling in ANWR. "There are other, more feasible options for ... reducing national foreign oil dependence," said Sen. Lincoln Chafee, R-R.I."Development would irreversibly damage this natural resource," argued Sen. Joe Lieberman, D-Conn., referring to the refuge’s coastal plain where thousands of caribou visit and give birth to their young each summer, joined by millions of migratory birds, musk oxen, polar bears and other wildlife.The amendment fell 14 votes short of the 60 needed to break a Democratic filibuster and allow a vote on putting the refuge provision into a broader energy bill.Following the defeat on the procedural vote, Alaska senior Sen. Ted Stevens, also a Republican, withdrew an amendment he had introduced earlier. Stevens had proposed creating a fund to assist retired steelworkers and help revitalize the struggling U.S. steel industry, but drilling opponents say the provision backfired.Murkowski and Stevens also signaled their interest in potentially lifting a 1983 limitation to allow Alaska Natives to explore for oil on their own lands on the Arctic coastal plain, located near the Village of Kaktovik. Under a land trade, the village corporation for Kaktovik and Arctic Slope Regional Corp. gained the right to 92,000 acres of oil lands through a land exchange but were barred from development. Chevron and BP drilled the so-called "KIC" well near Kaktovik in the mid-1980s and since have kept confidential the results.The Alaska senators prevailed in at least one Senate battle on April 18, winning inclusion, by an 88-10 margin, of a Murkowski amendment to ban U.S. imports of Iraqi oil to America until the United Nations certifies that Saddam Hussein is no longer engaged in development of weapons of mass destruction and the Iraqi leader stops financing suicide bombers in Israel.Closer to home, the Senate defeat on the ANWR amendment drew strong reactions."I share the disappointment of the vast majority of Alaskans in today’s 46-54 vote," Alaska Gov. Tony Knowles said after the vote. "I believe the science, technology and environmental stewardship of a future America will ultimately converge to allow the responsible development of oil and gas in ANWR."Surveys in recent years have found that most Alaskans support drilling in the refuge.Knowles also vowed to continue promoting ANWR development among Democrats in the Senate."In addition to ignoring the critical national security implications of our need for increased domestic production, the majority also ignored the voice of organized labor and the Native Alaskans who live and own land in ANWR," said Kim Duke, executive director of Arctic Power.Arctic Power is a group of Alaskans who have lobbied for more than 10 years in favor of drilling. Its funding comes from oil companies, others businesses, labor, state government and individuals.Drilling opponents, however, were ecstatic."People are definitely feeling that this is a tremendous victory," said Nicole Whittington-Evans, assistant regional director of The Wilderness Society.Luci Beach, a Gwich’in Indian, traveled to Washington to lobby against drilling. She spent much of April 18 on the phone, thanking those who supported her efforts."I’m feeling very good that the land we consider to be sacred is safe," she said. But she said the refuge will not be safe "until we achieve our goal of permanent wilderness protection."Al Adams, a director for Arctic Slope Regional and deputy special assistant for resource development for the North Slope Borough, said the Senate, by failing to pass the procedural amendment, "failed not only the Inupiat landholders in Alaska’s coastal plain and Alaskans who rely on a resource economy but all Americans who face rising gas prices and greater dependence on foreign and unstable sources of oil."Jerry Hood, special assistant for energy policy for James Hoffa, president of the Teamsters Union, said April 18 that he was extremely disappointed in the senators who voted against Murkowski’s amendment. "They purport to be friends of organized labor and working American families," Hood said. "They are not, and they proved that by their votes today. This issue is far from over and in the end, we will prevail."The Associated Press contributed to this report.

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