This Week in Alaska Business History March 31, 2002

Editor’s note: "This Week in Alaska Business History" revisits events that shaped our past."Those who cannotremember the past arecondemned to repeat it."-- George Santayana, 1863-195220 years ago this weekAnchorage TimesApril 1, 1982Audit questions Western’s futureBy Deb DavidTimes WriterAuditors are questioning whether Western Airlines can continue to operate because of a burdensome $73.4 million loss in 1981, but a company officer said the threat of dissolution sounds more ominous than it is.The net loss is $4 million more than the Los-Angeles-based company had expected. Earlier it had estimated year-end losses at $69.4 million.Western’s auditors, Peat Marwick, Mitchell & Co., said uncertainty about the company’s future is based in large part on $103 million in losses borne over the last years."This sounds like Western is going out of business tomorrow," said airlines spokesman Ray Silvius. "But you and I know that just isn’t true."Anchorage TimesMarch 31, 1982Two top editors fired by Alaska magazineBy Ellis E. ConklinTimes WriterThe top two editors of Alaska magazine in Anchorage have been fired.Clint Andrews, managing editor of the magazine and his chief assistant, Carol Phillips, received their notices of termination last week from the magazine’s corporate leadership in Edmond, Wash.Andrews, a former managing editor of The Anchorage Times and Anchorage Daily News, said Alaska magazine decided to make some cutbacks, "and I was one of the casualties of that little project."The editorial cutbacks, Andrews added, will not force a shutdown of the Anchorage office. Andrews said there are no plans at this time to replace either him or Phillips. During the interim, the magazine will be run by the 11 remaining staffers, Andrews said.10 years ago this weekAlaska Journal of CommerceApril 6, 1992Anchorage Fourth Avenue Theater is rebornBy Margaret BaumanAlaska Journal of CommerceCraftsmen renovating the old Fourth Avenue Theater in Anchorage are scrambling to ready the art deco building for reopening May 31 as a stylish gift shop with a steady run of free Alaska movies.The project is the work of Anchorage businessman Robert Gottstein, who attended the theater often as a child and is delighting in "bringing this beauty back to life" through his $2 million renovation effort.A soft opening is planned to begin the summer tourist season, with a grand opening in the fall to respond to the community, Gottstein said.The renovation includes creation of a department store-style gift shop on the ground floor of the old theater, with a steady run of short video entertainment that will probably be about a 90-minute loop, said Linda Boggs, general manager of the theater.But the drawing card will be the theater itself, "an atmosphere that can’t be duplicated," she said.For workmen, scurrying to be done by May 31, there are a lot of challenges in the old concrete structure, said Karl Reiche of Locher Interests, the project manager.Alaska Journal of CommerceApril 6, 1992Economists says: Grow up, AlaskaBy Margaret BaumanAlaska Journal of CommerceDeclining revenues in Alaska’s oil patch make it clear our budget is not sustainable and cutbacks over the next decade can and must be made, says a University of Alaska economist.Residents, who enjoy an average of $6,000 in state benefits, have to begin making choices quickly about where those cuts will come, said Scott Goldsmith, a professor of economics with the Institute of Social and Economic Research at the University of Alaska Anchorage.Areas to be considered include, but are not limited to, state dividends to residents, the direction of other Alaska Permanent Fund monies, longevity bonuses, the Pioneers’ Home program, hospital services and other areas, Goldsmith said.And taxes? "I’m talking about some kind of taxes that force households to recognize the tradeoff between taxes and government services," Goldsmith said in an interview.-- Compiled by Ed Bennett.

Murkowski adds gas line route to energy bill

FAIRBANKS -- Companies wanting to build a proposed trans-Alaska natural gas pipeline would get to choose one of two sets of government regulations but would not have a say in the line’s route, under new amendments to a U.S. Senate energy bill.Sen. Frank Murkowski, R-Alaska, proposed the amendments March 21 as the Senate was preparing to leave town for its two-week spring break. The Senate adopted them unanimously.Still missing is much-discussed but little-seen language that would create some sort of tax credit for gas producers if prices fell below a certain level. However, a new version of a proposed federal loan guarantee for part of the line’s financing was adopted.The amendments passed March 21 would allow companies seeking pipeline permits to apply under the terms of the 1976 Alaska Natural Gas Transportation Act or under the more recent Natural Gas Act.Last summer, North Slope gas producers asked for legislation clarifying that the Natural Gas Act could be the controlling federal law. That was in part because the 1976 act designates a southern line route along the Alaska Highway, and companies wanted the freedom to consider a northern alternative that is believed to be cheaper.Murkowski’s amendment would allow either law to be used for permitting, but another amendment mandates the southern route. It replaces an amendment of a similar nature, passed earlier this month, that was sponsored by Senate Majority Leader Tom Daschle, D-S.D.A House version of the energy bill, passed last August, also contains a provision blocking a northern route. Rep. Don Young, R-Alaska, secured that language. The Alaska Legislature has taken a similar stance.When the Senate returns April 8, Murkowski said, he will resume efforts to create financial benefits that improve the line’s economics.Senators from other gas-producing states have objected to tax credit proposals discussed to date.

Around the World March 31, 2002

StateSnow drought forces halt to intertie workFAIRBANKS -- Work on the Northern Intertie construction has shut down a month earlier than expected due to the lack of snow in the Interior.Government permits require the ground to be frozen to a certain depth before electrical tower pilings can be installed for the power line stretching nearly 100 miles from Healy to Fairbanks.According to Golden Valley Electric Association, which commissioned the project, the ground is thawing rapidly without adequate snow cover.Under permit guidelines, construction work could have continued until April 15.Phillips Alaska plans exploration next winterANCHORAGE -- Phillips Alaska Inc. is planning exploratory drilling next winter in some of the farthest west leases in the National Petroleum Reserve-Alaska.The company has applied to build a 1.5 acre insulated ice pad in order to keep a drilling rig in the area over the summer, according to a report in Petroleum News Alaska.The Puviag insulated pad would be west of Teshekpuk Lake about 67 miles southeast of Barrow, according to the U.S. Army Corps of Engineers. No drilling is planned for this site.The rig would be moved to a nearby winter exploratory drilling site after tundra travel is approved for the next winter season, the Corps said.Construction is expected to begin in March. The ice pad will be covered with polystyrene foam insulation.Canned salmon out of British shopping basketANCHORAGE -- The British government’s Office for National Statistics has booted canned salmon from the "basket" of goods and services it tracks to compile a monthly Retail Prices Index, and Alaska marketers worry that the country’s taste for the product is dying out.The statistics agency said it reshuffled the 650 items in the basket to better reflect changing consumer spending patterns.Great Britain has long been the most important market for canned Alaska salmon, particularly the premium red, or sockeye, salmon. In recent years, Britain has proven a reliable customer of Alaska’s wild fish.A big worry for salmon packers is that the British taste for canned salmon is dying out with World War II-era generations raised on canned fish.But Barbara Belknap, executive director of the Alaska Seafood Marketing Institute, said March 15 that canned salmon’s boot from the British price index is no big deal."It’s still a staple," she said. "It’s like peanut butter in America, you know? It’s there."-- Compiled from business wire services.

Through record snow, crew has airport open

It was a day snowplow crews at Ted Stevens Anchorage International Airport will talk about for years to come.Call it the "St. Patrick’s Day snow massacre.""It was a snow emergency, one heck of a dump, and we handled it," said Corky Caldwell, the airport’s aviation operations manager.The record snowfall March 17 that heaped about 26 inches on Anchorage caused some flight cancellations and diversions at the airport. But snowplow crews can still boast Anchorage International has never been closed because of snow.The state-owned airport averages almost 70 inches of snow from October through April, with December having the highest snowfall of about 15 inches annually.More than a third of the airport’s annual average dumped on the tarmac in slightly more than 20 hours.The old 24-hour snowfall record for Anchorage was 15.6 inches, set Dec. 29, 1955, according to the National Weather Service.Caldwell said accumulation at Anchorage International was more like 30 inches in less than 24 hours."It was huge," said Dan Hartman, the airport’s manager of airfield maintenance. "Our guys stood the test and our record is still intact. Our guys did a great job."None of the 90 or so men and women of the Field Maintenance, Operations and Safety Division can ever remember a time that Anchorage International has been closed because of snow or ice.And none wanted the no-closure-from-snow record to end, said Doug Hunter, the airport’s assistant manager of airfield maintenance.As the snowstorm began to unfold about 7 p.m. on March 16, an army of plows, graders, loaders, dump trucks and sanders began attacking the airport’s three runways.It was an orchestration that lasted for an entire day, with crews continuing to move piles of snow three days after the last flake fell.Four plow trucks with 19-foot-wide blades, towing high-speed brooms and snowblowers can usually clear a 2-mile-long, 150-foot-wide runway within a half hour. But snow was falling at a rate of more than two inches an hour, for much of the day."Snow was just coming down to end all. We’d clean it, and the snow would come down and fill it in," Caldwell said.An accumulation of just a half-inch an hour is considered a major snowstorm, Caldwell said. The snow fighters kept two of the three runways open at all times.Alaska Airlines spokesman Jack Walsh said keeping any of the runways open at Anchorage International was nothing short of a miracle."Thirty percent of our flights were canceled," Walsh said. "The amazing thing was that 70 percent of our flights didn’t cancel."Walsh said 29 of the 41 Alaska Airlines flights departed March 17 and 29 of the 43 arrivals landed in Anchorage.Only two of the scheduled departures made it out on time, Walsh said.The record snowfall did not cause the airline to cancel any flights outside of Alaska, Walsh said."It took a lot of work from our team there and the airport personnel," Walsh said. "It was quite a feat."Some 20 cargo planes were diverted from Anchorage to Fairbanks International Airport, said Jim Fiorenzi, Fairbanks’ assistant airport manager.Two other cargo jets had to be diverted to Eielson Air Force Base."It was an exciting day," Fiorenzi said. "We were glad to see the activity and we were happy to accommodate it."Hartman, Anchorage airport’s manager of airfield maintenance, said most workers pulled at least 12-hour shifts, never leaving the equipment, during their shift. Most of the airport’s heavy equipment can operate more than 12 hours before refueling, he said.Every available person was on shift at one time or another, Caldwell said.In all, airport crews have to clear snow from nearly 25 million square feet of asphalt, everything from runways and taxiways to parking lots and sidewalks.Caldwell said janitorial staff who normally work inside the airport’s terminals were given snow shovels to clear entryways and sidewalks.Airport manager Mort Plumb brought hamburgers to snow crews who ate their meals on the fly, Hartman said."I’m so proud of these guys," Plumb said.Snow crews are subjected to annual training and dry-runs before the first snow, since familiarity with the tarmac is important when the airport encounters white-out conditions.Plumb said the training paid off."We have a great team, that’s all I can say," Plumb said.Added to the mix for the airport March 17 was a 3 a.m. collision between a taxiing Alaska Airlines MD-80 passenger plane and a taxiing EVA Airways MD-11. Both planes were damaged, but no one was injured.The incident is under investigation and it is unclear whether weather played a factor, airport officials said.Anchorage International in 1998 and 1999 won the Balchen/Post Award for excellence in snow and ice control, and has once placed as runner-up in the large airport division.The award, named for famed arctic aviators Col. Bernt Balchen and Wiley Post, is the biggest award for snowplow operators.Caldwell said the Anchorage airport, which experienced a relatively mild winter last year, did not nominate itself for the award in 2000 because many Lower 48 airports suffered from more severe snow storms.Hartman said the airport will enter for this winter."We should be a shoe-in," he said.

Mining activity falls 23% in 2001 thanks to low prices

Hit by low metals prices, Alaska mining industry activity dropped in 2001, according to a new report by the state Division of Geological and Geophysical Surveys.The combined value of the mining industry last year was $992 million, a 23 percent decline from $1.28 billion in 2000, according to the report. The division annual survey combines exploration and development investments by mining firms with the value of minerals produced during the year.The 2001 results show $22.1 million spent by minerals companies in exploration; $83.2 million in development of new mines; and the value of mineral production at $886.9 million.Alaska exploration spending is 60 percent of 1997 levels, similar to a decline of worldwide investment in mineral exploration of the same magnitude.About half of the $22.1 million spent for exploration last year was in the eastern Interior of the state, the division reported. Development expenditures declined after Teck Cominco Co. completed work in upgrading its ore processing mill at the Red Dog Mine north of Kotzebue."Higher fuel costs during 2001 increased operation costs; low metals prices, with gold prices at historic low levels, and 2001 zinc prices 22 percent lower than in 2000, affected companies’ ability to raise venture capital for exploration, not only in Alaska but globally," the division said in its report.Low metals prices may continue through 2002, the division said.There were some upbeat aspects to the report, however. Production from both the Red Dog lead zinc mine and the Greens Creek polymetallic mine near Juneau reached record levels, and production began from a new gold deposit, True North, near the Fort Knox gold mine northeast of Fairbanks.Meanwhile, the Usibelli Coal Mine near Healy continued producing coal at levels similar to previous years.

Healy coal mine may lay off one-third of workers

FAIRBANKS -- Jeff Cornelius had told his wife, Linda, to quit her job as a bank accountant so the family could move from Fairbanks to Healy, where he works as a heavy equipment mechanic at Usibelli Coal Mine.On Linda’s last day at work, 36-year-old Cornelius found himself dealing with some sour news: the possible loss of his job.Usibelli officials told Cornelius and other employees March 21 to anticipate layoffs of up to a third of the 120-person work force because the company has not been able to renew a South Korean coal export contract. The contract accounts for about half of the company’s 1.5 million ton yearly production."I like my job there," said Cornelius, a father of four. "Usibelli has certainly given me a big break in life."Steve Denton, Usibelli’s general manager, said he didn’t have the exact number of people who could be laid off, but he said it would be companywide, from miners to management.An export contract could still be signed with South Korea-based Hyundai Merchant Marine, he said, but if not, layoffs could come as early as May 21 after the company develops a new structure."We wanted to give everybody as much advance notice as we could," he said.Usibelli has a consultant in South Korea trying to develop a contract with the coal buyer, Denton said.Usibelli renews its contract with Hyundai annually, but the last agreement expired at the end of 2001, Denton said. Usibelli has shipped an average of 750,000 tons of coal to South Korea annually since 1984, he said.Usibelli spokeswoman Becky Phipps cited several reasons why the coal contract has not been renewed.Shipping costs to South Korea put Usibelli at a disadvantage with coal mines in Indonesia, China and Australia.In addition, Korea’s single electric company was privatized and broken into six companies, creating a big push for profits, she said.Add a strong U.S. dollar, which has made it cheaper for South Korea to buy coal elsewhere, and Usibelli doesn’t have a contract, Phipps said.The cutbacks could affect the Alaska Railroad. Usibelli sends three trainloads of coal a week to Seward, where it is loaded onto ships bound for South Korea.

Catnip venture provides income, wealth of funny tales

EAGLE RIVER -- Cats across Alaska are having more fun because of Diane and John Vandike’s work.The Eagle River couple makes Alaska Happykat catnip, which is available in Carrs stores throughout the state."My husband was getting ready to retire and we needed some spare cash," Diane Vandike said.Though the catnip idea was Diane’s, it didn’t spring from the desires of her own cats. The Vandikes own three dogs and no cats."I can’t have a cat," Diane Vandike said. "I’m allergic to them."This will be the fifth summer of production on five acres leased from a friend near the intersection of the Glenn and Parks highways. Sales of the half-ounce packs bring in about $1,200 a month, Diane Vandike said.Besides the financial boost, the venture has also provided lots of stories about people who believe they’re running a marijuana business at their Mercy Drive home. The Vandikes frequently hang the plants outdoors under awnings to dry."It looks like a pot plant," Diane Vandike said. "The cops did come last year. They walked through and were laughing as they left."Alaska State Trooper cars used to circle the Matanuska-Susitna field frequently during the first year or two of operation, she added.John Vandike recalled driving from the Mat-Su area to Eagle River with clumps of the distinctive-looking plant sticking out from under a tarp on the pickup bed. A trooper pulled alongside and looked over but drove on when the couple smiled and waved.Catnip, a member of the mint family, also draws the interest of neighborhood cats when it is drying outside. They’ll scale the backyard fence and leap up to grab a bundle, Diane Vandike said.Once, the Vandikes were awakened at 3 a.m. by strange sounds in the back yard. A cat had hopped into a 55-gallon drum of catnip and was trapped, too incapacitated to get out. John Vandike had to go outside to rescue the stoned feline.Dr. Liz Hoffmann of Ravenwood Veterinary Clinic said there’s no danger in giving Fluffy some catnip now and then. There are no toxic side effects and it’s not addictive.The oil in catnip, known as cataria oil, is what creates its sensation."Some cats love it, and others don’t even care," Diane Vandike said.The Vandikes process and bag the product in their garage. Several big plastic bags filled with catnip leaves sit on the floor, next to a big screen that John Vandike places over a metal drum for sifting.The final step is to weigh out half an ounce on a small scale, and pour it into a bag. The label is striking, showing an orange sky over the mountains. "Grown under the Great North Star in the Land of the Midnight Sun," the label reads. "You can’t ask for a better job," Diane Vandike said. "I’m outside all summer long."Harvests take place from July through mid-October.

Commercial leasing market tight, but stalled

New office space is a statewide topic of interest in the commercial real estate sector. Several office construction projects are under way or planned in Anchorage.Fairbanks lacks office space with some specific requirements, according to one industry representative. Wasilla is filling its need with current construction of a new Class A office building.Overall, the market continues to be tight in Anchorage with a 2 percent vacancy rate in Midtown and 1 percent to 2 percent downtown, said John Opinsky, associate broker at Schwamm and Frampton LLC.Currently, few clients are shopping for new space, he said. One reason may be due to ongoing debate about construction of a new gas pipeline, Opinsky said. If project contracts eventually are awarded, engineering firms and others may scramble for office space, he said.A lack of significant office leasing activity affects new construction projects, he noted. Schwamm and Frampton is handling leasing and property management for the proposed Saunders Office Complex at 36th Avenue between Denali Street and the Old Seward Highway.That project does not have a fixed construction schedule because the property owner aims to lease half the property before building begins, Opinsky said.The Class A office building would include two three-story buildings, each totaling 45,000 square feet. Construction on the buildings could occur simultaneously or in two phases. RIM Architects of Anchorage designed the facility, and Davis Constructors & Engineers Inc. would serve as general contractor.Also in Midtown, construction is nearing completion on a new office building at 3000 C Street. Work should be complete in late May or early June, said owner’s representative Derrick Chang. Some exterior work remains to be done as well as other tasks to complete the lobby and landscaping efforts, he said.No tenants have been signed to the new building, although Chang has been working with several groups, he said.Work also continues on the new Arctic Slope Regional Corp. headquarters in Midtown, which will include some leasable office space.ASRC will be the primary tenant for the new 10-story, 200,000-square-foot building, although 40,000 square feet on the top two floors will be available for lease.In Fairbanks the commercial real estate market is characterized by needs for warehouse and office space, according to Pamela Throop, commercial real estate broker and president of Alaska Commercial Properties Inc.The Department of Transportation and Public Facilities has issued a bid for 30,000 square feet of office space in Fairbanks, but there’s not much available that meets the state requirements for the Americans with Disabilities Act or heating, ventilation and air conditioning, she said.Despite these factors the 2002 market should still be fairly strong, she said.The Matanuska-Susitna area is adding office space, too.A new Class A office building is under construction in Wasilla. The 43,000-square-foot, three story Centennial Plaza is about 40 percent leased, according to industry representatives.

Higher interest rates could cool house sales

Much of Alaska’s residential real estate market is characterized by low inventory and climbing prices, but the market could see slackening demand if interest rates increase, industry officials report.Last year falling interest rates helped spur brisk sales, and some residential brokers expect a strong market to continue in 2002 although interest rates still remain a factor."I think you may see the market flatten out as interest rates go up," said Don McKenzie, associate broker with RE/MAX Properties Inc.The real estate industry looks strong overall, including commercial and residential sectors, said McKenzie, who is president of the Alaska Association of Realtors Inc."What really helped everything was interest rates," he said.Currently, the Anchorage market favors home sellers, with sale prices increasing and limited choices for buyers."We’re still very short of inventory in all price ranges especially entry level," McKenzie said.High demand affects prices, industry officials said."We have more buyers in the market than sellers," said Ron Pollock, associate broker at Prudential Jack White Real Estate in Anchorage. "We have more demand than we have supply. As a result I expect prices to increase during the next few months until the supply and demand balance out a bit."Pollock also notes other trends in the market. One issue is climbing costs of land which in turn affects builders’ prices, despite the public’s need for affordable housing, he noted."The only solution is for smaller lots and higher density concepts," he said.Last year condominium sales rose, a trend Pollock expects will continue in 2002.In the Municipality of Anchorage, home listings and sales activity in early 2002 showed some declines compared with last year.For February the area had 516 active residential listings, down from 699 recorded in February 2001, according to statistics from Multiple Listing Service Inc.Anchorage area active condo listings climbed to 366 so far in 2002, ahead of 292 condos listed a year ago.Total home sales for 2002 also lagged behind last year’s figures. In the municipality, MLS listed 350 residential sales for the first two months, a decline from 395 reported for the same period in 2001.The average time on the market has slimmed down so far this year. Average market time to date in 2002 is 58 days compared with an average of 69 days for the same period last year, according to MLS reports.This year’s average list prices have posted gains from 2001. For the first two months of 2002 the average list price is $212,795, an increase from $197,747 recorded for January and February last year, MLS statistics showed.Average sale prices also increased, to $209,189 in 2002 from $191,196 in the first two months of 2001.One factor affecting the Anchorage market is the role of the neighboring Matanuska-Susitna area, which has more available land and new construction, McKenzie said.MLS reports 867 active land listings in the Matanuska-Susitna area in February, up from 614 land listings last year, compared with 397 land listings in the Municipality of Anchorage, down from 627 last year.Residential properties sold this year in the Matanuska-Susitna area dropped to 35 from 47 sold in early 2001, MLS reported.The average Matanuska-Susitna area list price to date is $146,234, up from $133,642 recorded a year ago. The average sale price for residential properties in that area is $140,820, a increase from 126,072 listed in 2001.Some buyers are choosing to renovate Anchorage homes instead of commuting to Palmer and Wasilla, McKenzie said."The fixer-upper market is strong," he said.The Municipality of Anchorage has issued 42 residential renovation permits in 2002, a decline from 53 issued for the first two months of 2001. The city has issued 132 permits for new single-family home construction, up from 125 for the same period last year.New home construction should play a part in this year’s residential market, McKenzie said.MLS reported 136 active listings in February for current and recently completed residential construction, compared to 103 active listings last February. The average price for these new construction listings is $297,830, compared with $241,289 in February 2001.Another 122 active listings remain to be built this year, a drop from 184 to-be-built active listings recorded in February 2001.MLS recorded 79 total new construction listings sold in 2002, down from 95 for the first two months of 2001.In Fairbanks the residential market should hold steady this year, according to one real estate representative."Last year was huge," said Jim Chumbley, broker and owner of Northern Homes and Land of Fairbanks. "This year seems to be shaping up to be just as active."Inventory is limited in the Interior city, and homes in good shape sell quickly, said Chumbley, who is president of the Greater Fairbanks Board of Realtors.Interest rates and a growing Fairbanks economy probably contribute to the strong residential real estate market, he said.In Anchorage continued population and job growth should spur an active market through 2002, Pollock said. Interest rates, despite recent increases, are still favorable, he said.RE/MAX’s McKenzie is optimistic about the remainder of the 2002 residential real estate market."I expect the market to stay very strong for the rest of the year," he said.

Mayor says Fairbanks to see several projects

The natural gas pipeline being considered to transport North Slope gas to the Lower 48 will be built, Mayor Rhonda Boyles of the Fairbanks North Star Borough said March 21 in Anchorage.Boyles gave members of the Resource Development Council for Alaska meeting at the Petroleum Club an overview of the Fairbanks area economy as well as recent and current development projects and concerns.Unlike Anchorage, which has a consolidated government structure, Boyles said Fairbanks must contend with the challenges of three different governments: the cities of Fairbanks and North Pole and the borough, operating in close proximity and finding ways to work together on economic development. She said the task has been made easier by the fact that all three mayors have managed businesses and bring those skills to their public service jobs.One outgrowth of recent cooperation is the Alaska Port Authority, an entity that renders the All-Alaska Gas Line initiative that will appear on the November ballot unnecessary, Boyles said."This initiative sets us back two years," she said.Some $3 million to $4 million has been spent on the port authority, organized about two years ago. Changing its bylaws and making a few other modifications would enable it to be used to develop a gas line to Valdez, she said.Boyles predicted that the proposed North Slope-to-Lower 48 gas pipeline will have a profound effect on the Fairbanks economy. But the Interior City has a number of other initiatives under way, she said.These include a new skiing and recreation area, Birch Hill, that features a $2.25 million ski chalet; the new 37-bed Bassett Army Hospital at Fort Wainwright; an effort to lift building restrictions at AlaskaLand that will lead to more aggressive development of this centrally located attraction; and a $42 million construction project that calls for either remodeling two 50-year-old elementary schools or building new ones. Building new schools is only $1 million more costly than remodeling, but Fairbanks voters will decide in November.The military’s decision to build a missile defense system with sizable installations at Fort Greely, about 90 miles south of Fairbanks, will offer significant opportunities for Fairbanks businesses and create a lot of traffic on the Richardson Highway, "which is in pretty sorry condition right now," Boyles said. Fairbanks hopes to work with the Alaska Department of Transportation and Public Facilities to improve the artery before the missile defense traffic begins, she said.The mayor praised the Fort Knox gold mine, which currently employs 395 workers and will produce 439,000 ounces of gold this year. Operators have begun offering tours of the mine and plan an expansion at True North that could add 23 more "high-paid" jobs, she said.Boyles, who owns several Wendy’s restaurants in Fairbanks, cited her background in the service industry -- including working for years as a waitress -- as giving her a special appreciation for high-paying industries like mining and petroleum.Thus, recent reports that Alyeska Pipeline Service Co. is considering moving some jobs from Fairbanks back to Anchorage worries her."In Anchorage, 20 jobs is a blip on the radar screen, but they are very important for a city like Fairbanks," she said.Also, a recent citizens effort to get a 2-cent-per-gallon fuel tax referendum on the November ballot is troubling, Boyles said. The tax would primarily hit Williams Alaska Petroleum Inc., which operates a large petroleum refinery in North Pole and other related businesses. Already, Fairbanks’ top 50 taxpayers like Williams pay 22 percent of borough’s property taxes, she said.Boyles said such measures reflect the domination of public debate in Alaska by a "vocal minority" and that residents are becoming "takers" who feel no responsibility to give something back to their communities.If the fuel tax becomes law, it will cost Williams about $20 million a year and essentially put the company out of business over the long term, Williams Alaska President Diane Prier told the Oil & Gas Reporter at the RDC meeting.

April-Issue-1 2002

Airlines considering Russia flights

Bill Cheek offers this advice for anyone traveling to the Russian Far East: "Have a lot of patience and a cast-iron stomach."Cheek, chief executive of Natchiq Inc., is a veteran of many travels to Sakhalin Island in the Russian Far East.Cheek’s company and joint-venture partner Natchiq Sakhalin LLC have about 120 workers developing promising oil fields on Sakhalin Island. Many of the workers are Alaskans.Since Reeve Aleutian Airways folded shortly before Christmas in 2000, freight forwarders and executives like Cheek have been forced to use a long and expensive route through Asia, a flight that sometimes takes several days because of layovers.It’s a trip he only takes a few times a year, but he never looks forward to it, at least travel-wise.A Reeve flight to the Russian Far East from Anchorage used to take about seven to eight hours and cost less than $1,000. Now, it’s a more than $6,000 one-way journey that takes two to three days to complete, usually with a lengthy layover in South Korea."It has been terrible ever since Reeve folded," Cheek said. "The time and money it takes to get there is ridiculous."We and others are anxiously awaiting the return of that connection and I know a lot of people want to make it happen," Cheek said of the direct flight from Anchorage.Cheek said as drilling activity increases so does the need for a direct travel link to Sakhalin. But then again, Cheek said, he’s not an aviation marketing expert."I’m not an airline executive, and I know airlines operate on razor-thin margins," Cheek said. "But to me, it’s low-hanging fruit."Several airlines have studied the possibility of offering a direct link to the Russian Far East from Alaska, but as yet, the flights have not taken off."It’s still up in the air, so to speak," said Jeff Berliner, trade specialist with the state’s International Trade and Market Development office, which has worked hard to re-establish Alaska as a Russian gateway. "It’s tough. We have not yet solved the problem."The greatest hope of a Russian Far East-Alaska link probably comes from Evergreen International Airlines Inc., which last July was awarded a federal contract to provide jet service to Adak. The $1.5 million annual subsidy would allow the airline to provide service to the Russian Far East, company officials said at the time.Evergreen had intended to provide the service by February in a 727-100 combi aircraft. But after the Sept. 11 terrorists attacks, new regulations on combination cargo and passenger airplanes forced the company to rethink its plan.Now, says Evergreen President Jerry Rock, the company will bring on line three 727-200 passenger jets to Alaska, at least one of which will service Sakhalin.Rock said the air carrier expects the service to start within 100 days.Northern Air Cargo Inc., too, is considering offering both cargo and passenger service to the Russian Far East, said Todd Wallace, NAC’s vice president of sales and marketing."We’re exploring the possibility," Wallace said.The airline operates three 727 all-cargo airplanes in Alaska."This is pretty exciting stuff for us," Wallace said, adding that the company is working with the Russian and American governments to obtain the necessary clearance, some thing he expects will happen within six months."There are always a lot of hurdles," Wallace said.Before Reeve ceased operations, Alaska Airlines and Russia’s Aeroflot had offered service from Anchorage to Magadan, Khabarovsk, Yuzhno-Sakhalinsk and Vladivostok. Alaska stopped its service in 1998, and Aeroflot, a year later.Mavial or Magadan Airlines, a Russian carrier based in Magadan, also had monthly scheduled service between Anchorage and Magadan, but ceased operations in 2000.Natasha Johnson, Mavial’s sales manager in Anchorage, said the airline soon will offer scheduled weekly flights between Anchorage, Kamchatka and Magadan.The airline, however, has no intentions of matching Reeve’s old service."Everybody is talking about it, and I’m pretty sure we’ve considered it, " Johnson said. "We have the capability, but it probably is not profitable."Yoshi Ogawa, president of ITC Travel Inc., said it’s a gamble for an airline to provide service from Anchorage to the Russian Far East.Ogawa, whose company specializes in booking travel from Alaska to the Russian Far East, said he’s not confident the numbers of people and freight can justify service yet."The risk is very high," Ogawa saidEra Aviation in 2000 studied the possibility of flights to the Russian Far East, and said it would offer service to oil-related businesses if given a contract.But Philip Bray, director of operations for Era’s fixed-wing operation, said his airline is not looking at service to Sakhalin anytime soon."We don’t foresee any activity in the Russian Far East presently," Bray said.Bray pioneered the Russian Far East routes for Reeve and left for Era before the airline stopped operations.Bray said Reeve didn’t lose money on the Russian Far East flights."They didn’t go under because of Russia," Bray said.He hopes some airline will eventually service the Russian Far East, to help the economies there and in Alaska."I’d like to see it work," Bray said.

New highway scale will weigh, check trucks on the move

A new electronic screening system planned for Alaska’s busiest stretch of highway will allow weight- and safety-compliant commercial vehicles to keep on trucking past a state inspection station.The $1.2 million project features a scale imbedded in a northbound lane of the Glenn Highway between Anchorage and Eagle River that will weigh commercial vehicles at freeway speeds. The system also will use transponders from participating truckers to relay safety and registration information on the fly to state commercial vehicle inspectors at the weigh station there.Slated for construction in late spring, the project is being touted by state officials and truckers as a way of reducing stops for model carriers, while allowing vehicle inspectors more time with higher-risk rigs, said Paul Varady, commercial vehicle operations program manager with the state Department of Transportation and Public Facilities.The entire project is scheduled for completion in September 2003, Varady said.Fewer illegal oversized loads traveling on the highway will cause less damage to the asphalt and make driving safer for everyone, Varady said. The new system also is designed to ease the flow of traffic and reduce emissions as trucks won’t have to gear down to exit for the weigh station and accelerate to re-enter the highway, state inspection officers say.Similar pre-screening systems are being used with success in the Lower 48, Varady said.A "weigh-in-motion" device will be installed in the right lane of the Glenn Highway, about a half mile south of the weigh station. A 100-yard stretch of the pavement will be removed and replaced with concrete to install the device, which measures truck weights and axle configuration.Concrete is more stable than asphalt and provides more accurate measurements for the weigh-in-motion device, Varady said.Sensors also are being installed in the other two lanes of the Glenn Highway to detect trucks that bypass the weigh-in-motion lane, Varady saidWeigh-in-motion devices are in use on Minnesota Drive north of Dimond Boulevard, and at the Port of Anchorage, where about 100,000 containers are shipped out annually by truck. Eleven more weigh-in-motion devices are planned on the state’s highway system over the next few years, at a cost of about $10 million, according to state transportation officials.Those sites, however, only collect weight and traffic data, and do not specifically identify a vehicle, like the proposed Glenn Highway project, known as the Commercial Vehicle Information Systems and Networks, or CVISN.Truckers welcome the new technology, said Frank Dillon, executive vice president of the Alaska Trucking Association Inc."We look forward to it," Dillon said.To participate, trucks must be equipped with a special transponder that will relay information regarding the vehicle’s size, weight, load, safety rating and other credentials, like insurance.For about $40 truckers or their companies can buy a transponder, a short-range communication device that can send and receive radio signals containing vehicle information, Varady said.Trucks equipped with transponders will automatically send information to vehicle enforcement personnel at the weigh station ahead. Within seconds, the information is checked against the state’s databases. Truckers that meet weight and safety requirements are signaled with a green light on their transponders and are allowed to bypass the weigh station.Those that don’t check out are given a red light, which means a mandatory pull in at the weigh station for further inspection, Varady said.As it is now, all trucks must pull into the weigh station to be checked for weight, safety equipment and information from a driver’s logbook.Some trucks are subjected to additional safety inspections.Trucks can spend valuable time waiting in long lines at weigh stations, Dillon said.Varady said that when lines get too long, the weigh station is temporarily closed, which allows some vehicles with poor records to bypass the station now. Meanwhile, a weight-compliant commercial vehicle with a good safety record may have to wait needlessly at the station.The new system, Varady said, "will level the playing field."Pre-screening will offer safe truckers and companies with the proper credentials a competitive advantage, where in trucking, like most everything else, time means money, Dillon said."There is no question it’s a benefit," Dillon said of the electronic screening. "Within five years, I think you’ll see 99 percent of the trucks participating."

Scientific Fishery Systems wins contract to hunt mines

When he was in college studying for his computer science degree, Patrick Simpson got interested in a way to program computers that is similar to how human neurons are wired together in the human brain.Call neural networks, these systems can learn from experience. They are especially good at extracting patterns from large volumes of data. Simpson eventually wrote a book on the subject and has spent much of his professional life devising computer systems that recognize things.Work after college for the U.S. Navy led him to develop sonar-based technologies that recognize things under water. Those things include fish. That makes sense, given that Simpson was born and raised in Cordova and is the son of a fisherman.Today, Simpson owns Anchorage-based Scientific Fishery Systems Inc., which sells a variety of fishing-related products, including one designed for the groundfish fleet that shows where schools of pollock are located. It can tell how big the schools are, and even if the pollock are small, medium or large. Thanks to a combination of sonar and neural networks, it can also tell the difference between fish, plankton and jellyfish.The product, called SciFish 2000, uses what is known as broadband sonar. Instead of the single-frequency "ping" heard on old World War II submarine movies, Simpson’s sonar sends out a range of frequencies. Since each frequency is reflected by a target in a different way, the neural network gets additional information that helps it tell what the target is, where it is located, and how big it is. It can also tell two targets apart that are close together.Simpson received a patent for the technology used in the SciFish 2000 in 1994, two years after he started the company. Since then, he has continued to have more ideas and has rolled out a variety of products. They include: Fish Trek, which tracks a fishing boat’s progress and keeps track of where fish are caught, by linking global positioning system information with a map of the bottom. Simpson said the maps, which are available for Alaska, the West Coast and the East Coast, are the most accurate of their kind and have sold better than the original software. Flipper, which automatically logs where large trawlers drop their nets and retrieve them. An Electronic Fish Catch Logbook, designed for both fishing boat captains and federal on-board observers to keep track of a vessel’s catch and then transmit the information to a shore-based location.Each of the products builds on the knowledge gained from the previous one, Simpson said."One idea leads to another," he added.Simpson said that in 2001, Scientific Fishery Systems worked on a total of 19 projects that generated $1.1 million in revenue. He said this year, he has 10 projects and $1.5 million in projects in the pipeline.Besides offering hardware and software for sale as commercial products, much of Scientific Fishery’s revenues come in the form of grants and contracts from federal agencies.The most recent is a $600,000 contract with Sonetech Corp. of New Bedford, N.H., which is planning to test a new kind of sonar this summer for the U.S. Navy. The system, called Parametric Sonar, sends highly focused beams of sonar at long distances through the water.Simpson said the test will determine the system’s ability to detect mines in the water, both on the bottom and floating in the water column. His company will develop the detection and classification processing for the new system.In plain English, that means Simpson and his staff will teach his neural network-equipped computers to recognize mines and then see how well the system can find real ones, using the new kind of sonar.Closer to home, Simpson is working on a really tough problem: how to tell different species of salmon apart when they’re the same size. He plans to field test his system in the summer of 2003 by setting it up alongside existing state Department of Fish & Game sonar fish-counting stations on the Kenai and Copper rivers.In the meantime, he’ll be teaching his neural networks how to recognize different kinds of salmon, including by repeatedly pinging tethered fish until the system develops a distinctive "signature" for each species. Simpson says he’s confident he can make the system work."If you can see the difference, my sonar can tell them apart," he said.

Best Buy construction to begin this month

Earlier this month crews tore down the former Alaska Marketplace at Dimond Center, making way for construction to begin on new retailer Best Buy.The retailer expects to open its doors in late September or early October, said Mary Fairbanks, who handles marketing for Dimond Center.A majority of building efforts should be completed in July, and Best Buy officials will fine-tune the interior in August and stock shelves in September, she said.In late February Minneapolis-based Best Buy Co. Inc. said it had signed a lease for the new South Anchorage store. The 45,000-square-foot store will employ about 125 full- and part-time workers. Best Buy sells consumer electronics, personal computers, entertainment software and appliances.General contractor Watterson Construction Co. of Anchorage plans to start foundation work in late March, said project manager Brent Carlson. That phase is to last three weeks, he said.Steel and block framework, expected to take shape by mid-April, is scheduled to be finished after about three weeks, Carlson said.In early May builders will pour floor slabs and tackle roof work, he said. Inside, drywall efforts are scheduled to begin in late May or early June, he said.Watterson Construction expects to work on exterior finishes in June. At the same time, site work will be under way, including adding new parking lot lighting, landscaping and curbs, he said.Painting, flooring and finishing touches should be done by July, he said.Best Buy chose to demolish the former grocery store since the new store will be larger, and rebuilding rather than renovating best suited its needs, he said.

Inspector has heat-seeing eyes

The business of repairing brakes on big rigs will likely speed up.The state Department of Transportation and Public Facilities has purchased a $325,000 mobile infrared inspection system that can detect bad brakes and other mechanical defects on trucks or buses traveling at highway speeds.State commercial vehicle enforcement officials say the new technology will make Alaska’s highways safer. Commercial vehicle inspections also will be more efficient, saving time for truckers and vehicle safety enforcement personnel.Housed in a Ford F-350 four-wheel-drive van, the Infra Red Inspection System, or I.R.I.S, uses heat sensors to screen commercial vehicles for safety defects by comparing temperature discrepancies.The special van, which was delivered in late February, should be inspecting big rigs by spring, state transportation officials said. About 30 of the state’s 50 commercial vehicle enforcement officers are being trained to use the equipment, a process that started in March.Key to the I.R.I.S. system is a round infrared camera about the size of a volleyball that is mounted atop the unmarked van. Operators inside the van use a video gamelike controller to point the camera at a moving vehicle as it passes by.Although the equipment is complex and expensive, the idea behind it is simple, according to the system’s manufacturer, Infra Red Inspection System Ltd. of Burnaby, British Columbia.Brakes generate friction, which generates heat. A hot wheel, which glows white on the system’s inside monitor, means the brake is working. A cold, or dark image, means the brakes are in need of repair or replacement.Operators in the state’s I.R.I.S. van, usually positioned near a weigh station, will notify enforcement personnel that the commercial truck needs a more thorough inspection if they spot a cold wheel.If more than 20 percent of the vehicle’s brakes need maintenance, the vehicle is put out of service by state inspectors, said Gary Marten, chief of the state’s commercial vehicle enforcement division.Behind faulty lighting, bad brakes are the most frequently cited inspection violation for motor carriers in Alaska, Marten said.Of the 6,265 commercial vehicle inspections last year in Alaska, 1,403 violations were written for faulty brakes, according to state department statistics."Inoperable or out-of-adjustment brakes make up 20 percent of the violations, but they are our No. 1 safety concern," Marten said.Commercial vehicle inspectors randomly inspect trucks, and the checks on brakes alone take about 20 to 30 minutes for each vehicle, Marten said.With the I.R.I.S. system, inspectors can be reasonably sure something may or may not be wrong with a vehicle before a physical inspection, which involves inspectors crawling under a tractor trailer, often in miserable weather, Marten said."We’ll be concentrating our efforts on the ones we know have a problem," Marten said. "We won’t have to spend time inspecting safe trucks."Marten said the heat-detecting equipment also can spot other problems with trucks like over-inflated tires, bad wheel bearings and gears, exhaust leaks, and other mechanical problems that show excessive heat.Paul Varady, commercial vehicle operations program manager for the department, said money from the Federal Highway Administration paid for 80 percent of the van and I.R.I.S. equipment, with the state matching the remainder, about $65,000.Its use is not limited to the Anchorage area. The van can and will be positioned around the state , Varady said.The state intends to send the special van to Juneau from time to time to check brake systems on tour buses that flood the Southeast city in the summer.Wilf Wedding, I.R.I.S. director of operations, said Alaska is the sixth state to purchase the system, the only such technology available in a mobile unit.Similar technologies are used in heat-seeking military missiles or by forward-looking infrared radar used in rescue or surveillance aircraft to detect a person’s body heat in water or on land.I.R.I.S. President George McKay founded the company in 1997. McKay, a former helicopter pilot, used forward-looking infrared radar on his aircraft and noticed that the heat-sensitive equipment could detect truck brakes that weren’t working properly. McKay, also a former truck driver, knew the application would be valuable for the trucking industry, as well, Wedding said.Frank Dillon, executive vice president of the Alaska Trucking Association Inc., said truckers support the use of the new equipment."We’re 100 percent behind it," Dillon said.Ed Luther, service manager of Kenworth Alaska Inc., said brake work represents about a quarter of his company’s repair business, which has shops in Anchorage and FairbanksBrakes can last up to 250,000 miles, depending on their quality, Luther said.Replacing brakes on a big rig costs about $250 per wheel, Luther said.Luther said the majority of the major trucking companies employ their own mechanics who do their own brake work.Luther said business will likely increase at his shop from smaller operators because of the new I.R.I.S. system."We will probably see a lot more of the independent people," Luther said.

Alaskans need knowledge of past

Alaska is grappling with a host of serious issues. They share a common characteristic: Successful resolution must be based on understanding the underlying circumstances. Whether it’s subsistence, the fiscal gap or revitalizing the Alaska salmon industry, solutions are best crafted from a firm understanding of the past.In September 2000 Commonwealth North completed a major study of urban-rural issues. One of the six study recommendations was to seek the meaningful teaching of Alaska history in all Alaska high schools. This recommendation was based on extensive testimony during the study that effective decisions about Alaska’s future must be based on a better understanding of our common past.A follow-up study by Commonwealth North researched the issues affecting such a course, reaching out to groups that included teachers, school administrators, school boards and historians. Wide support was heard for the concept.Much progress has been made since. The Anchorage School Board voted to incorporate this requirement and has started carefully assembling the appropriate curriculum materials. The Alaska House of Representatives showed it understood the importance of the topic by unanimously passing House Bill 171, which mandates the teaching of Alaska history in Alaska high schools. The bill now rests in the Senate.As the debate continues, issues have arisen. The Senate has the opportunity to improve the bill. Several areas must be addressed.A common curriculumOne common unifying Alaska history course is needed to impart a shared understanding of Alaska’s past. The current bill leaves each of the 53 state school districts to develop its own Alaska history course. There is no oversight body developing a curriculum or set of academic standards.The Department of Education and Early Development should develop a curriculum standard that can be used as a basis for adoption statewide. The good work started by the Anchorage School District can be melded into this effort.The course must be accurate and balanced, including the study of Alaska’s government, civics, geography and economy. The history and ways of life of Alaska’s many peoples, both indigenous and more recent arrivals should be covered along with topics like the campaign for statehood, mining, the pipeline, the Alaska Native Claims Settlement Act, the Permanent Fund, federal policies and major public policy issues of today.Alaska’s history is unlike any other. Much of our history is so recent that some who created it are still with us. We have a fantastic opportunity to pass our history on to young people directly from those who made it. We still have, for example, a handful of the people who wrote our state’s constitution, which is widely respected as one of the best in the United States.Unfunded mandatesThe Fairbanks North Star Borough School District and other districts reasonably bridle at the imposition of academic requirements without the accompanying implementation funds. Funding from the state will be hard to come by, perhaps for years to come. Yet, civic backers of the bill are putting their money where their mouths are.The Alaska Humanities Forum, the First Alaskans Institute, National Education Association - Alaska and others have pledged to provide money to develop the course, create materials and train teachers. Help from Washington, D.C., is also available.How to make room for Alaska history should be a local decision. Many ways exist to add Alaska history to a district’s curriculum. Specifics will depend on the priorities of each community.Districts may replace an elective course of lower priority. Some districts may choose to increase their students’ graduation credit requirement; a one-semester course adds one-half credit. Some may choose to integrate the content into existing courses, such as threading the study of the Permanent Fund into an economics course.What about Advanced Placement students? This course must challenge those students. A rigorous and engaging course will have tremendous benefits. Students without an appreciation of the special nature of their state are more likely to leave it. Alaska history should be offered as an honors-level course for those students who respond to challenging curriculum.Other questions and concerns will arise. It is important to remember that the long-term benefits of teaching a common Alaska history course far outweigh the short-term challenges. Our students need to learn their common history. They need to know they have one. Otherwise Alaskans will continue down the path we have been treading. We will not understand who we are, how we came to be, and, most importantly, we will have a hard -- perhaps impossible -- time agreeing on what we should become.We have an opportunity to impart a common Alaska history to the next generation of Alaskans. We have an obligation to tell an accurate and compelling story to our children so that we come together as Alaskans with a shared understanding of our past, a better understanding of our present and the prospect of a unified future. History will judge us poorly if we do not.Jon Kumin is president of Kumin Associates Inc. Architects and Planners. He can be reached at 907-272-8833.

Banking runs in the family: Brian Nerland takes reins at KeyBank

One hundred years ago, in the Gold Rush town of Dawson, it was traditional for a store owner like Andrew Nerland to extend credit to customers he thought were good for the money. In a way, he was acting like a banker.It’s a fitting past for his great-grandson, Brian Nerland, who in mid-January was appointed Alaska district president of KeyBank.Nerland, 41, succeeded Michael Burns, well-known in Anchorage for his service on numerous boards and commissions."There’s no doubt I had some big shoes to fill," Nerland said. What made the transition easy, he said, was that "a lot of times there’s change because of problems. Not here."In January Burns told the Journal he was taking some time off to consider his future plans.Nerland said he also has a seasoned staff upon which he can rely."The current management team is wonderful, both in their relationship with each other and with our clients," he said. "I’ve just slipped into the role."Of course, the fact that Nerland had been working at the bank for 17 years didn’t hurt. He joined what was then Alaska Pacific Bank in 1985 as a management trainee. He has since worked in virtually every department of the bank, most recently in charge of commercial banking for KeyBank statewide. He said he is continuing that role as president.Nerland received a bachelor’s degree in business from Seattle University in 1983. He decided to head home to Alaska, where he attended to the financial side of things for his family’s business, which by then consisted of multiple furniture stores in Fairbanks, Anchorage, Seattle and Hawaii.But the oil-price collapse of the mid-’80s resulted in the eventual closure of the Nerlands stores. Today, Brian’s brother Steve owns Sleep Comfort by Nerlands and brother Roger works there. The remaining member of the current generation, Rick, owns the Nerland Agency, an advertising firm in Anchorage.Brian Nerland said the family recently got together to mark what would have been the 100th birthday of their grandfather, Arthur "Les" Nerland, who it turns out, for a time was president of Alaska National Bank of the North in Fairbanks. While the position was largely ceremonial, it clearly counts with Brian Nerland as another link to banking in his past.But these days, Brian Nerland’s eyes are not on the past, but on the future. He takes over a bank that he believes is well-positioned in a market that ranges from large and small community banks to what he called a "super-bank" (Wells Fargo), with heavy retail competition from Alaska USA Federal Credit Union, the second-largest financial institution operating in Alaska.Nerland said KeyCorp, KeyBank’s parent company, is the 12th largest bank-based financial institution in the United States, which allows it to provide a wide variety of services the way Wells Fargo does. At the same time, KeyBank emphasizes local control by breaking its operations into 28 districts, of which Alaska is one."Our chairman (Henry L. Meyer III) believes it’s really important in the marketplace to have presidents who can really deliver for the clients," Nerland said. "We get lots of authority in terms of how we service our clients."That emphasis on local authority is enforced by the bank’s policy of supporting local charitable organizations and encouraging its employees to become members of such groups.Nerland himself serves on two University of Alaska advisory boards, is a member of the Anchorage Rotary Club, is on the board of the Alaska District Export Council, and is a member of several business-based groups.It’s all a part of what Nerland calls "a national product set delivered locally." He said one unique service he can offer is investment banking, thanks to the acquisition by KeyCorp of McDonald Investments, a large Midwest-based brokerage.Specifically, McDonald has expertise in selling businesses."A lot of our clients are reaching retirement age and need to decide what to do with their businesses when they retire," Nerland said. "They can sell it to an outsider such as a competitor; they can sell it to their family or employees; or they can shut it down. We can do each of these."Another KeyCorp subsidiary is Victory Capital Management, which offers a variety of investment services and even has its own mutual fund. Nerland said Victory’s computer systems have been integrated into the bank’s so customers can get both their banking and their investments listed on one statement every month.Internet customers can also track both their stocks and their bank accounts online via the KeyCorp Web site. "With people facing challenges with their time, it puts it all together for them and simplifies their life," Nerland said. "I check it every day."

Around the World March 24, 2002

STATEBill allows fishermen to reduce fleet sizeJUNEAU --The House passed legislation March 15 aimed at helping Alaska salmon fishermen make their financially troubled industry more efficient.House Bill 286 would let limited entry permit holders set up associations to reduce the number of fishermen chasing the salmon.Rep. Drew Scalzi, R-Homer, said while the measure hardly solves all the problems in the industry, it does give salmon fishermen one tool to try to improve their lot."We have too many permits, we have too many vessels out there," Scalzi said. "It’s time to look at new ways, innovative ways to make the industry more viable."Prices for Alaska’s wild salmon have plummeted in the last decade, largely because of a flood of farmed salmon entering the markets. Bristol Bay sockeye salmon, which brought well over $1 a pound 10 years ago, brought just 40 cents a pound last summer, Scalzi said.Scalzi’s bill is aimed at reducing the number of nets in the water, so the remaining fishermen stand a better chance of making money and of delivering a quality product to the market.Environmental groups settle missile lawsuitFAIRBANKS -- Environmental groups have settled a lawsuit they filed against the military claiming that the biological impacts of the latest missile defense testing plan need more study.Col. Rick Lehner, spokesman for the Missile Defense Agency, told the Fairbanks Daily News-Miner March 15 that the settlement with the Natural Resources Defense Council, which represents the groups, has resolved several issues. The NRDC accepted the military’s assessment that earlier environmental studies of a stalled plan to put 100 operational missiles in the ground at Fort Greely are good enough to allow the current plans for six testing silos to go forward. The military agreed to write a full environmental impact statement on its plans for the North Pacific "test bed," which includes upgrades at the state-owned launch facility on Kodiak Island. The military also promised to complete the appropriate environmental analysis "if a decision is made to launch interceptors out of Fort Greely," Lehner said. Finally, the military agreed to complete the necessary studies if a decision is made to build an X-band radar in the test bed.The agency has been considering whether to build such a radar on Shemya Island.State unemployment rate falls to 7.3 percentANCHORAGE -- Alaska’s unemployment rate fell to 7.3 percent in February, state labor officials said.That’s a decrease of about two-tenths of a percentage point from January. However, the number was still higher than the nationwide rate of 6.1 percent.The number of unemployed Alaskans decreased by 581 in February to 23,675 people. Not since 1990 has the state’s number of unemployed people been so low in February.Most areas of the state saw small decreases, but Anchorage’s rate edged up slightly.The Aleutians East Borough recorded the lowest rate in the state, just 3 percent. The Yukon-Koyukuk area had the highest at more than 18 percent.NATIONOptimistic Fed leaves interest rate unchangedWASHINGTON -- The Federal Reserve left a key interest rate unchanged March 19 and began preparing Americans for the possibility that short-term rates will go higher this year as the country bounces back from recession.After 11 consecutive rate reductions last year, Fed Chairman Alan Greenspan and his colleagues opted to continue to hold the federal funds rate -- the interest that banks charge each other on overnight loans -- at 1.75 percent, the lowest level in 40 years.In January, the Fed, citing signs of an economic rebound, ended a yearlong stretch of uninterrupted credit easing when it left the funds rate unchanged.On March 19, the Fed policy-makers were even more upbeat about the economy’s prospects."The economy, bolstered by a marked swing in inventory investment, is expanding at a significant pace," the Fed said in a statement explaining its decision.-- Compiled from business wire services.

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