Good buy-sell accord is essential

Business owners have long relied on buy-sell agreements to protect the financial future of their business and their family. Sometimes called a "business will," a buy-sell agreement is a legal contract among business owners that states what will happen should an owner leave the business because of death, disability or a lifetime sale.The agreement obligates the remaining owners to purchase the business interest of the owner who has left the business, and the departing owner (or heirs) is obligated to sell.However, the effectiveness of a buy-sell agreement depends largely on the specific terms set forth in the agreement. If a buy-sell agreement is not properly prepared, it may cause serious problems for heirs and remaining owners.The two biggest mistakes to avoidA buy-sell agreement can be effective only if it’s properly written. Too often, business owners overlook key areas, leaving survivors in a difficult situation. Let’s take a look at two common mistakes to avoid when drafting your buy-sell agreement: Addressing a one-sale contingency. A poorly conceived buy-sell agreement usually addresses only one event, such as the death of an owner. This is a limited view that may lead to problems later. What would happen if an owner became disabled? What if an owner wants to retire? When would the buyout be executed, and at what price and terms? A proper buy-sell agreement should address three situations: death, disability and lifetime sale by an owner. Setting the value of the business too low. Some owners value their business too low in their buy-sell agreement believing that this will reduce their estate tax liability. If certain criteria are not met, the IRS can reject the business’ value for estate tax purposes.Let’s look at a hypothetical example: A successful business owner makes $150,000 a year. The buy-sell agreement has a stated value of $100,000 for that owner’s share at death. When that owner dies, the heirs receive $100,000 from surviving owners, which is actually less than one year’s salary. Then the IRS values the business at a much higher figure, say $600,000 to $800,000. Not only are the heirs shortchanged, but they may end up owing the IRS more in estate taxes than they received from the sale.A valid buy-sell agreementIn order for a buy-sell agreement to be used to help determine the estate tax value, the IRS has set some guidelines. Internal Revenue Code Section 2703 gives these requirements for a valid buy-sell agreement: It must be a bona fide business arrangement. It must not be a device to transfer property to members of the decedent’s family for less than full and adequate consideration. It is similar to comparable arm’s length transactions.In addition, applicable case law has established several rules that must be followed: The estate must be obligated to sell at death. The agreement must have a fixed and determined sale price or a method for determining the price. An owner cannot sell during his or her lifetime without first offering it to the other owners. The price must be fair and adequate when the agreement is made.Buy-sell agreement benefitsWhen structured and funded properly, a buy-sell agreement can accomplish several goals, including: Creating a market for the stock; Setting a predetermined price or valuation method that the owners agree on to buy and sell their shares; and Providing money to fund the plan.A buy-sell agreement benefits both surviving owners and their heirs. Benefits to heirs include: Freedom from business worries; A guaranteed fair purchase price; and Possibly avoiding probate delays.Benefits to surviving owners include: Relieving concerns about new and possibly unwanted partners; Knowing the purchase price beforehand; and Retaining good relations with creditors and clients through a smooth transition of ownership.Doing it rightWhen it comes to business succession planning, it’s best to sit down with experienced professionals to plot your strategy. You should draft a comprehensive buy-sell agreement with the help of an attorney. It should be flexible enough to allow for future modifications with consent of all involved parties. You’ll also want to discuss funding options with your insurance agent. Insurance can be a cost-effective, tax-advantageous means of funding a buy-sell agreement.Don’t delay. Now’s the time to put together a well-thought-out plan that will help guarantee the smooth transition of your business. It can benefit both your family and your business partners.Lon G. Wilson is co-owner of The Wilson Agency LLC in Anchorage. He can be reached via e-mail at ([email protected]).

Juneau clinic earns its reaccreditation

JUNEAU -- The Juneau clinic of SouthEast Alaska Regional Health Consortium has been reaccredited with a score of 94 out of a possible 100 points."Everyone wants to score in the 90s -- it’s like getting an A," Administrator Brenda Sturm said.SEARHC is a nonprofit Native health consortium of 18 federally recognized tribes. It is funded by the Indian Health Service; collections from Medicare, Medicaid and private insurance carriers; and grants.The clinic has about 6,000 patients who make about 32,000 visits a year, Sturm said. It provides family practice, mental health, dental and health-promotion services.The clinic is accredited by the Joint Commission on Accreditation of Healthcare Organizations, a national group made up of representatives of organizations such as the American Medical Association and the American College of Physicians.The SEARHC clinic’s score at its previous accreditation, in 1998, was 93. On both occasions the clinic’s laboratories scored 100. The commission’s Web site says that 82 percent of outpatient clinics score between 90 and 100.Being accredited helps the clinic qualify for Medicare and Medicaid reimbursement and for higher payments by insurance companies, Sturm said. The commission sets standards of care and updates them monthly."They put it out as a gentle reminder, but you better do it," Sturm said.The commission this time made a number of minor recommendations mostly regarding paperwork, she said.It asked the clinic to put a statement on a hiring form that the medical director had verified that a doctor was fit to work. It asked the clinic to change the wording in policy and procedure manuals, and to change its maintenance records, Sturm said. And the commission asked the clinic to assess patients’ pain more frequently and consistently.Accreditation is a learning experience, according to Sturm."What we learn, No. 1, is different approaches on how to meet standards," she said. "Sometimes you work in your own bubble and don’t see the whole picture."The commission’s surveyor who visited the clinic was impressed with its care of patients, Sturm said."It just gave me a good feeling to know we were taking care of folks the way we needed to," she said.SEARHC also runs Mount Edgecumbe Hospital in Sitka and clinics in Haines and Klawock. It is building a new, 25,000-square-foot clinic in Juneau that will double its exam rooms.

Whittier selects prison promoter

The seeds of Alaska’s first private prison may have found fertile soil in the economically barren city of Whittier.On Dec. 21, a 6-0 vote by Whittier’s city council selected Cornell Cos., based in Houston to plan, promote, design, construct and operate a minimum 800-bed medium security correctional facility. Not selected was Corrections Corp. of America, which operates a facility in Florence, Ariz., where about 800 Alaska prisoners are incarcerated because of a shortage of bed space in Alaska prisons.Whittier’s interest in a private prison came after 73 percent of Kenai Peninsula Borough voters gave the Cornell-led project the cold shoulder Oct. 2."We thought that was about as strange as it could be," Whittier Mayor Ben Butler said. "So we thought Whittier should give it a try, and we started the process."He said Whittier views the prison as a way to save a "dying community.""We are not trying to debate the philosophical reasons between a private- and a state-operated prison," Butler said. "What we’re trying to do is get some economic development going in this town."Paul Doucette, Cornell’s public relations spokesperson in Houston, said Cornell stood ready to work with Whittier. He described the project as a 1,200-bed medium security prison, larger than the 800-bed facility approved by the Whittier council.Despite voting for the partnership with Cornell, Whittier city council member Arlen Arneson doesn’t support the project."The majority of (Whittier) people won’t ’fess up to it, but 60 to 70 percent of them are against the prison, too," he said. "The simple reason is that the ordinance was written to exclude a public vote. ... There’s no public vote. Not even an advisory vote."Arneson also voiced concern over lack of a feasibility study.However, Butler said, "We don’t have any problems with thinking the prison isn’t feasible. The contractor will do a site evaluation and that will be a feasibility study."In 1998, the Legislature authorized the creation of a private prison by the city of Delta Junction at abandoned U.S. Army facilities at Fort Greely. Corrections Group North, formed by Cornell and Weimar Investments, worked with Delta Junction on that project. Pete Hallgren, the executive director of Delta Junction’s department of economic development and the city administrator, said a $75,000 feasibility study "indicated that there wasn’t anywhere near enough money appropriated under the enabling legislation to make it financially feasible."Constructing the private prison was not pursued, lawsuits were filed, and Hallgren said, "We came out of the project defending against a lawsuit by the proposed prison operator. We ended up settling the case for $1.1 million."Delta Junction has paid $100,000. The remaining $1 million is due July 1."It’s more money than we’ve got," Hallgren said.Jeff Sinz, finance director of the Kenai Peninsula Borough, said the borough invested $75,000 in the project that was ultimately rejected by voters.Butler said Whittier had spent little on the proposed prison."And we have no intentions of really spending on this at all," he said.Nome, whose lobbyist, Joe Hayes, also lobbies for Cornell, recently gave brief consideration to constructing and operating a private prison."It was one of 20 different items that were covered at a legislative priority meeting, but there wasn’t an interest in following up on it," said Marguerite Lariviere, assistant to the city manager.Wrangell and the Ketchikan Gateway Borough are two other areas considering the project. Gary Paxton, interim manager for the Ketchikan Gateway Borough, said the Alaska Department of Corrections has been invited to meet with borough officials Jan. 21 to address the advantages and disadvantages of a prison in Ketchikan, project costs and the need for legislative approval."There are enough serious questions that need to be asked of the department that our assembly needs to have them come talk to us," Paxton said.According to Corrections Commissioner Margaret Pugh, the department has received no such contact from Whittier. Butler has, however, contacted people from Kenai "just to see how it went before and to know what to expect.""There’s no sense in reinventing the wheel," he said.On Jan. 4, Sen. Lyda Green, R-Wasilla, pre-filed legislation to authorize the Corrections Department to enter into agreements for new or expanded correctional facilities in the Fairbanks North Star Borough, Matanuska-Susitna Borough, the city and borough of Juneau, Bethel, Ketchikan Gateway Borough, Seward and the Kenai Peninsula Borough. The plan, according to Pugh, is similar to one proposed by Gov. Tony Knowles several years ago.Butler said the city is working with Anchorage legislators to prepare legislation needed to authorize the Corrections Department to work with Whittier."All Whittier is trying to do is keep from dying," Butler said. "It would be nice if the city of Whittier could direct its own future."

Around the World January 13, 2002

STATEMinimum wage initiative certified for November ballotJUNEAU -- An initiative to raise Alaska’s minimum wage by $1.50 was certified to appear on the ballot in November.Lawmakers who took up the issue last session will decide whether to renew debate on an increase after they return to work Jan. 14. But a labor union pushing the initiative said voters may have the last word.The initiative being sought by the Alaska AFL-CIO would raise the state’s minimum wage to $7.15 per hour, putting it $2 above the federal minimum wage.Mano Frey, executive president of the Alaska AFL-CIO, said the minimum wage in this state is below Washington, Oregon and California. Frey chided the Republican-controlled Legislature for not raising the wage in its last session."We have the lowest state minimum wage at $5.65 per hour of any of our Western states," Frey said. "Now, because the Legislature refused to act last year, the people of Alaska will have a chance to act themselves this November at the ballot box."The union was able to collect nearly 50,000 signatures in support of putting the measure on the ballot, Frey said. Lt. Gov. Fran Ulmer certified it for the ballot Jan. 3.State, Ketchikan shipyard agree on ferry repair billJUNEAU -- The State of Alaska and a Ketchikan shipyard have resolved their differences over delays in repairs to the ferry Columbia, with each side dropping its claims.The deal, months in the making, was announced Jan. 7 in Ketchikan at the Alaska Ship and Drydock facility.The Columbia’s main switchboard caught fire in June 2000 during a Juneau-to-Sitka run.The state Department of Transportation and Public Facilities contracted with Alaska Ship and Drydrock for a $10 million-plus overhaul, including upgrades to the ship’s staterooms and public spaces.The ship was due to be delivered to the state by May 26, 2001, but was not delivered until July 19, well into the peak of the tourism season. Under federal procurement rules, that delay was worth $4 million in damages, according to state officials.But Alaska Ship and Drydock said the state issued faulty specifications for the work and should pay an additional $2.8 million.The state and company participated in mediated talks from October to December in a successful effort to avoid litigation.As part of the settlement, Alaska Ship and Drydock will be paid $1.5 million to complete remaining work on the Columbia.NATIONSupreme Court imposes limits on disability law in workplaceWASHINGTON -- The Supreme Court narrowed the reach of a landmark disability rights law Jan. 8, ruling that an assembly line worker with carpal tunnel syndrome was not entitled to special treatment on the job.A unanimous court ruled that Ella Williams’ partial disability did not obligate her employer, car manufacturer Toyota, to tailor a job to suit her wrist, arm and shoulder problems.The 1990 Americans With Disabilities Act guarantees equal treatment on the job and elsewhere for people whose disabilities "substantially limit" their ability to perform what the law calls "major life activities," such as caring for oneself.Williams’ disability did not prevent her from doing many tasks at home and at work. But a federal appeals court found that she was disabled under the ADA because her physical problems substantially limited her ability to perform manual tasks at work."This was error," the Supreme Court noted in an opinion written by Justice Sandra Day O’Connor.Wendy’s founder Dave Thomas diesCOLUMBUS, Ohio -- Dave Thomas, the portly pitchman whose homespun ads built Wendy’s Old-Fashioned Hamburgers into one of the world’s most successful fast-food enterprises, died Jan. 8 of liver cancer. He was 69.Thomas died around midnight at his home in Fort Lauderdale, Fla., the company said.Thomas had been undergoing kidney dialysis since early 2001 and had quadruple heart bypass surgery in December 1996."He was the heart and soul of our company. He had a passion for great tasting hamburgers and devoted his life to serving customers great food and helping those less fortunate in his community," said Jack Schuessler, chairman and chief executive of Wendy’s, based in the Columbus suburb of Dublin.The founder and senior chairman of Wendy’s International became a household name when he began pitching his burgers and fries in television commercials in 1989.But burgers weren’t his first love. Thomas, who was adopted as an infant, became a national advocate for adoption.He once testified before a Congressional committee about the importance of creating incentives for adoption."I know firsthand how important it is for every child to have a home and loving family," he testified. "Without a family, I would not be where I am today."WORLDP&O Princess wins German approval for planned mergerLONDON -- P&O Princess Cruises PLC has won approval from German authorities for its planned merger with Royal Caribbean Cruises Ltd., sailing past the first of three regulatory obstacles to the deal, the British company said Jan. 8.Germany’s Federal Cartel Office approved the proposed merger Jan. 7, in what Princess called "a positive step on the way." The would-be partners still need permission from competition watchdogs in Britain and the United States to form a combined $6 billion business that would overtake rival Carnival Corp. as the world’s biggest cruise ship operator.Carnival itself has made a hostile takeover bid for Princess worth $4.4 billion. Princess continued to reject the bid and urged shareholders to do the same when they meet Feb. 14 to consider the proposed merger with Miami-based Royal Caribbean.Princess is the third-largest cruise operator by market share, and Royal Caribbean is No. 2. A union between them would create a fleet of 41 ships and 75,000 berths.Their planned merger triggered Carnival’s bid, as the three companies maneuver to cut costs to offset a plunge in passenger traffic after the Sept. 11 attacks in the United States.All three companies operate in Alaska waters.Argentine president asks firms to maintain stability of pricesBUENOS AIRES, Argentina -- President Eduardo Duhalde pleaded with businesses Jan. 7 to keep prices steady as Argentines fretted that a devaluation could unleash inflation and rapidly erode their purchasing power.Duhalde appealed to supermarket owners, shopkeepers and other businesses as he began abandoning a decade-old link between the peso and the U.S. dollar, hoping to reverse the continuing decline of South America’s second-biggest economy.Economy Minister Jorge Remes Lenicov also said the government would watch for any signs of resurgent inflation after the peso was freed from its one-to-one peg with the dollar."The success of this plan depends on keeping prices from shooting up," Remes said. "I’m asking (all Argentines) that they fight and push for stable prices."He set the peso’s official rate at 1.4 pesos to the dollar for exports and imports, and said a rate applying to most ordinary transactions by Argentines will be set by the marketplace.-- Compiled from business wire services.

Trend Setters putting hairstyling school under one roof

The longtime operators of an Anchorage hairstyling school are building a new, larger facility adjacent to its Midtown location.The new two-story, 12,700-square-foot building for Trend Setters School of Beauty will be a contrast for the employees, students and customers who now shuttle between four buildings including a Quonset hut, said company owner Dennis Millhouse."I never knew how bad we needed space until we started this project," he said.Dennis and Connie Millhouse have owned and operated Trend Setters at the same Anchorage location for 30 years. Last April they began preparations for the project and hired Anchorage architects at Kumin Architects Inc. to design it.Construction on the $2 million expansion began in early October, said Jeff Pfile, a partner with Sandvik Pfile Construction Inc., the project’s general contractor.Work should be completed by April and ready for Trend Setters staff to move in, Pfile said. Next, construction workers will demolish the old buildings and build a 5,000-square-foot building, he said.By mid-January workers were due to finish enclosing the structure, Pfile said.In the late 1980s the Millhouses tried to build a new facility but were thwarted by banking upheaval in the state.The current project is financed by KeyBank, said Dennis Millhouse, who has lived in Alaska since 1952.The new building will more than double space for Trend Setters. Currently, the company operates in three buildings, measuring 1,827-, 1,015- and 1,963-square-feet, and a 1,500-square-foot storage building which will be demolished later, he said.This spring Trend Setters staff, students and customers will move to the single location and not have to walk between buildings, he said.Granite will be a feature of the new building, he noted."It will have a different look than most salons," he said.Trend Setters runs a 10-month school teaching students about styling hair and makeup. During training students refine techniques on mannequins, nonpaying customers and then paying customers.Millhouse believes his company handles some of the state’s highest volume in beauty services."We probably do more than all the salons and barber shops combined," he said.Demand exists for the training, he said. Trend Setters also runs its own salons, one in Dimond Center and another in Eagle River, and sometimes has difficulty finding employees, he said.Millhouse estimated thousands of students have graduated from Trend Setters, he said.Graduates can carry skills learned at Trend Setters with them to other states, he noted. "We teach them how to make a living at what they went to school for," he said.

More seafood exports keeping Alaska's trade figures healthy

State trade officials got a pleasant surprise last month, thanks in large part to Alaska’s seafood industry.Economists and other number crunchers had anticipated a big dip in the value of Alaska’s exports this year because of a worldwide economic slowdown. But to the contrary, the value of Alaska exports is actually up slightly from last year, totaling $2 billion, an increase of $7 million from the third quarter of 2000.More than $1 billion of that came from exports of Alaska seafood, whose exports were up 21 percent through the third quarter. According to the state Division of International Trade and Market Development, most of the fish going to other countries was groundfish, especially pollock.The increase in the total value of Alaska’s exports is especially interesting for two reasons, said ITMD director Greg Wolf. One is the fact that beginning this year one of the state’s primary export products, crude oil, is no longer exported overseas but instead is sent to West Coast refineries."With crude oil no longer being exported, we prepared everyone for a dip in our export numbers," Wolf said. "However, seafood, minerals and fertilizer more than made up the difference."Another reason is that the economies of Alaska’s primary trading partners, especially Japan and Korea, have been mostly stagnant in 2001. Wolf said that while Alaska’s exports to Japan have borne out a projected decline, exports to Korea increased 4 percent, with seafood exports more than double last year.These are clear signs that more Alaska seafood is steadily making its way to more countries around the globe. Here’s another good example: The U.S. Department of Agriculture’s Foreign Agriculture Service reports that American exporters shipped nearly $105 million worth of seafood to Germany in the first nine months of 2001, more than double 2000 figures and setting a record for sales to that country."Record U.S. exports of pollock (92 percent of which was frozen Alaska pollock fillets, valued at more than $68.4 million for the nine-month period) spurred this tremendous growth," the FAS report said. "These record sales were more than five times the value of pollock exports for the entire 2000 calendar year. Reduced harvests by European fleets were a major factor in Germany’s increased imports of Alaska pollock."Other major U.S. exports to Germany were salmon, lobster and dogfish. The report added: "In 2000, the U.S. share of total salmon imports was a modest 4.5 percent, as farmed salmon from Norway and other countries dominated the market. However, U.S. exports of wild Alaska salmon to Germany have increased steadily in recent years, growing from $3.8 million in 1996 to nearly $13.9 million in 2000."The report concluded, "Product differentiation and consumers’ environmental awareness (such as recognition that Alaska salmon is harvested in a sustainable manner) may have played a role in the increased purchases of Alaska salmon."The report said Germans have clear preferences in seafood, and their favorites are Alaska salmon, herring and tuna, followed by Atlantic and Pacific salmon.While the numbers are encouraging, more opportunities for Alaska seafood exports clearly await in Germany. For example, Russia and China are the leading providers of groundfish fillets to Germany, supplying nearly 65 percent of that product last year. In all, 75 percent of Germany’s seafood is imported. Only about 2 percent originates from the United States.Testing may affect whalesU.S. Navy tests of a new SONAR system were the likely cause of the beachings of 16 whales in the Bahamas last year. Seafood.com reports that a study by the National Marine Fisheries Service determined that the whales came ashore March 15 and 16 as Navy ships were testing sonar in the area. Six of the whales died.The Navy was reportedly testing a new midrange frequency system for submarine detection.Joint NMFS-Navy tests found that the dead whales had suffered hemorrhages in the ear area. While not fatal, the injuries could have disoriented the whales and caused them to beach themselves.Investigations of similar incidents have been inconclusive because the whale corpses were too decomposed. However, this time many of the whales were beached in front of the island home of Ken Balcomb, research director of the Washington-based Center for Whale Research. He made sure the whales were properly preserved for further study. The U.S. Navy has committed to trying to avoid causing whale beachings within the constraints of its national security mission.Americans love jerkyJerky is now the fastest growing category within America’s snack food market, with sales soaring because of demand from outdoor enthusiasts and consumers on high-protein diets.WorldCatch reports that figures from the Snack Food Association show sales of jerky and beef sticks grew by almost 29 percent in 1999 and 32 percent last year. Sales of pork rinds grew 21 percent, and pumpkin and sunflower seeds sales grew 16 percent."Companies have responded to demand by launching new gourmet versions of the jerky snack: similar products made with the meat of elk, buffalo, salmon, ostrich and pheasant, for example," WorldCatch said.Kodiak-based free-lance writer Laine Welch can be reached via e-mail at ([email protected]).

This Week in Alaska Business History January 13, 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 TimesJan. 14, 1982New rules anger Cook Inlet set net fishermenBy Ronald ChappellFor The TimesSoldotna -- A regulation limiting the distance Cook Inlet set netters can fish from shore may be the opening salvo in a gear war between local drift fishermen and their counterparts on the beach.At a meeting Wednesday night, irate set netters represented by the Kenai Peninsula Fishermen’s Association asked the sponsors of the new regulation to ask the state Board of Fisheries to rescind it.Representatives of the United Cook Inlet drifters Association refused to do so until set netters agreed to support a compromise plan aimed at halting the continued expansion of the inlet’s set net fishery into areas traditionally used by drift fisherman.Another meeting between the two groups is scheduled early next week. A compromise plan could include a moratorium on new set net gear in the inlet. If the new regulation is contested, a petition must be filed with the Board of Fisheries by Jan. 22.Anchorage TimesJan. 14, 1982Wien plans suspension of Juneau flightsThe Associated PressWien Air Alaska announced Wednesday it is suspending its daily service to Juneau effective Jan. 29 because of a lack of passengers.Wien spokeswoman Carla Beam said the airline’s management analyzed the passenger traffic on the flight for several months before deciding to halt the service.Wien had offered weekday flights between Anchorage, Juneau and Seattle, and the decision to halt that service leaves only Alaska Airlines with regular stops in Juneau.Beam said the airline’s study indicated there were not enough passengers to and from Juneau to sustain service by two airlines.Household International Inc., Wien’s owner, has agreed to sell the airline to Eagle International Corp. for $50 million. That corporation is headed by Neil Bergt, who also owns Alaska International Industries Inc.10 years ago this weekAlaska Journal of CommerceJan. 14, 1992Big dropoff for oil production? Not yetBy Ray TysonAlaska Journal of CommerceYear-end statistics prove Alaska oil production hasn’t undergone a predicted radical decline since the giant Prudhoe Bay reservoir peaked four years ago.North Slope oil production in 1991, in fact, exceeded the previous year’s output for the first time since the Prudhoe Bay reservoir fell into decline, according to statistics furnished by the state Division of Oil & Gas Audit.Production from all North Slope fields has decreased 10.5 percent since 1988, for an annual slippage of just 3.5 percent. Prudhoe Bay, which produces three-fourths of total slope oil, has fallen 18.8 percent, for an annual decrease of 4.7 percent."Where’s this (annual) double-digit decline everybody predicted for the last decade?" said Dudley Platt, a petroleum economist for the oil and gas audit division.The division projects similarly modest production declines through 1995, a forecast that doesn’t jibe with recent comments made by James B. Hermiller, president of Alyeska Pipeline Service Co., to the Anchorage Chamber of Commerce.Alaska Journal of CommerceJan. 20, 1992Port MacKenzie promoters, railroad spar over spurBy Margaret BaumanAlaska Journal of CommerceA quiet battle is being waged in the case of the proposed Port MacKenzie over a critical missing link, a railroad spur, over which millions of tons of natural resources could be moved to the dock.On one side are port promoters who say they have all the economic facts and numbers needed, except those they need from Alaska Railroad Corp. to build that track.On the other side are railroad officials, who say they can’t decide whether to support such a link, which they don’t propose to finance until they get more facts on the economic feasibility of the port.In the middle are the developers of coal and timber, who say the link would lower costs of transporting the resources, giving them a competitive edge.Before lending support to about 30 miles of rail from Palmer to the proposed port on Upper Cook Inlet, the railroad needs to know what revenues would be generated by the port, said Loren Lounsbury, chairman of the railroad board.-- Compiled by Ed Bennett.

Murkowski sees ANWR goal slip away in 2001

ANCHORAGE -- Opening the Arctic National Wildlife Refuge never seemed closer than in 2001 for Alaska Republican Sen. Frank Murkowski.Republicans controlled the White House and both houses of Congress for the first time in 45 years, and energy policy was high on their agenda. Murkowski himself was chairman of the Senate Energy Committee.But Murkowski returned to Alaska at year’s end without the ANWR legislation he sought. What went wrong?Murkowski, the Senate’s prime champion of ANWR drilling, blames Jim Jeffords. When the Vermont senator left the Republican Party in June, declaring himself independent, the balance of power in the Senate shifted to the Democrats."And with that went the (committee) chairmanships," Murkowski said, looking back on the year. "Instead of setting the energy agenda for America, we kind of took the position of having it dictated to us by my good friend, Senator Jeff Bingaman."Bingaman, the New Mexico Democrat who now chairs the Energy Committee, sat on the energy bill for a few months, and then Senate Majority Leader Tom Daschle, D-S.D., pulled it from the committee and kept it off the Senate floor.Murkowski said those events kept him from passing an ANWR bill.Environmentalists say it isn’t that simple.It’s hard to say what would have happened if the Senate had stayed in Republican hands, said Elliott Negin, spokesman for the Natural Resources Defense Council."I think it’s true that Jeffords did definitely slow the Senate down on energy," Negin said.On the other hand, Jeffords was always against drilling in ANWR, and his defection didn’t change any yeas or nays, Negin said. It takes 60 votes to get most controversial measures through the Senate, and it’s pretty clear Murkowski doesn’t have them.At least, that how it looks."It’s hard really to know," Negin said. "We didn’t think we were going to get killed that badly on the House vote."In an August coup for Alaska Rep. Don Young, the House overwhelmingly approved an energy bill that would boost domestic production, in part by allowing drilling on the coastal plain of the refuge. A bid by opponents to strip ANWR drilling from the bill failed 223-206.The House energy bill will be alive until the current two-year Congress expires at the end of 2002, but Murkowski may meet more resistance as time goes on."In most Congresses, the heavy lifting gets done in the first 18 months or so,’’ said John Katz, head of Gov. Tony Knowles’ Washington, D.C., office."Conventional wisdom is controversial issues do not fare well in the waning months of an election year."President Bush supports drilling in ANWR, which was a central element of the energy plan he introduced, and his Cabinet secretaries have made repeated pitches for drilling. But there’s no evidence the president has been using his political muscle to persuade key senators to come to Murkowski’s side.Murkowski acknowledged he hasn’t had as much White House help as he would like, but he expects to get more in the new year."I’ve had some discussions with the vice president, and we (Vice President Dick Cheney, Murkowski and other Senate drilling supporters) are going to be meeting in January to work up kind of a task force approach," he said.

Business Profile: Porath Tatom Architects

Name of the company: Porath Tatom ArchitectsEstablished: 1982Location: 800 E. Dimond Blvd., Suite 3-670, AnchorageTelephone: 907-349-1425Major focus of services: Porath Tatom Architects provides design services including design-build work. The firm specializes in planning schools, retail facilities and churches.History of the company: Dale Porath and Art Kjos founded Porath Kjos in the early 1980s. Kjos left the firm nearly two years later. Porath added other partners later, including them in the firm’s name.Despite Alaska’s economic troubles in the late 1980s, Porath Architects was buoyed by work for military bases and designing a multipurpose room addition for Anchorage’s Muldoon Elementary in 1989.In 1999 Bill Tatom, who had worked at the firm from 1984 to 1996, bought Porath Architects. Although Porath has retired, he continues to serve the firm as a consultant, Tatom said.Major past projects include the early 1980s design of Mears Junior High School; remodeling University Center to add a theater; renovating Dimond Center to include a skating rink and office tower; designing Valley River Center in Eagle River and planning for Carrs stores construction. The firm also worked on plans of the downtown Anchorage FBI building and renovating four Kmart stores -- two in Anchorage plus one each in Fairbanks and Juneau -- to offer groceries.Current projects include design of some renovations at Carrs stores including Carrs Huffman in South Anchorage, Eagle River and Kenai and work on the Municipality of Anchorage permit center.Porath Tatom Architects employs 13 people including four architects.Top accomplishment of the company: Principal Bill Tatom is proud of the firm’s longevity. The secret of success: "I think it’s treating clients like they’re important, being a listener," he said. Tatom also cited the firm’s school design projects. In 1990 the Anchorage School District conducted a design competition to plan a prototype school for Bowman Elementary and for use in additional new school construction. Porath Architects’ design was chosen as the competition winner.Major player: Bill Tatom, principal, Porath Tatom Architects.Tatom earned a master’s degree in architecture from the University of Texas at Arlington. He operated his own firm in Dallas before moving to Alaska to work for Harold Wirum & Associates in 1982. Two years later he joined Porath Architects as a project architect. From 1996 to 1999 he ran Bill Tatom Associates before buying Porath Architects.-- Nancy Pounds

Around the World January 7, 2002

STATEHomer company wins contract to build centerHOMER -- A Homer construction company has won the federal contract to build a headquarters and visitor center for the Alaska Maritime National Wildlife Refuge in Homer.Jay-Brant Construction got the job with an $11.7 million construction bid, said Sheri Della Silva, a contracting officer with the U.S. Fish and Wildlife Service.The $16 million total budget includes construction money and about $3 million to design and build interpretive displays in the 38,000-square-foot facility.The visitor center will be located on a bluff above Beluga Slough in Homer. The 60-acre site was purchased in the early 1990s for $1.1 million.The facility will include space for the state and federal Kachemak Bay Research Reserve.Construction is to begin in May and should take two years to complete, Della Silva said.The Alaska Maritime Refuge, created in 1980, protects 3,000 islands, including most of the Aleutian Islands and the Pribilof Islands in the Bering Sea.State changes smoking policy for ferry travelersJUNEAU -- Smokers traveling the Alaska Marine Highway will find fewer places to light up under a newly clarified policy.After complaints, Alaska Marine Highway System General Manager George Capacci updated the ferry system’s smoking policy in December. Under the new policy, smoking is not allowed inside state ferries, except for one designated area in a bar on board the Columbia, where there is adequate ventilation. The goal is to make a consistent policy, Capacci said.Smoking will be allowed in designated areas on weather decks and designated open areas behind the solarium. Otherwise, smoking is off limits for passengers and crew in lounges, observation areas, passageways, dining areas, the car deck and inside the solarium, according to the policy.Charities show area economy still strongFAIRBANKS -- At almost year-end, charitable giving in Fairbanks seems to have transcended a lagging economy and the Sept. 11 terror attacks.It’s an indicator that the recession hasn’t hit Fairbanks as hard as it has cities in the Lower 48, according to a state labor economist, but next year could be another story."It depends on how soon consumer confidence is restored," said Brigitta Windisch-Cole, an economist with the state Department of Labor.Sept. 11 coincided with the normal seasonal decline in tourism, one of the main industries in Fairbanks, so the Sept. 11 economic impact on the tourism industry was arguably minimal. In fact, Fairbanks experienced growth, Windisch-Cole said. Employment has grown an average of 2 percent a month.But if people are afraid to fly next summer, as many believe may be the case, fewer tourism dollars could flow into Fairbanks. And that could translate into less charitable giving in the fall and winter of next year.This year, main Fairbanks charity organizations such as the Fairbanks Community Food Bank and the United Way, which are dependent on gifts from residents, report that things are fine.Some charities were concerned a few months ago when an initial lag in local giving occurred as tens of thousands of Fairbanks dollars went to the East Coast following the terror attacks.Haines residents form business organizationHAINES -- A group of Haines business people unhappy with the Haines Chamber of Commerce are forming a new business advocacy group.The group wants to fight taxes and government regulation more aggressively, said retailer Doug Olerud."We want to take a strong stand for business," he said. "There are lots of people in the chamber now who aren’t pro-business. They think new taxes, like the tour tax, are just fine. I don’t share that view."The tour tax and a proposal to ban motorized commercial tours from a section of the Alaska Chilkat Bald Eagle Preserve are two of the group’s main issues. As of Dec. 20, the group had held one meeting."We’re ready to form an alternative group to get rid of the tour tax," said tour operator and break-off group member Duck Hess. "Right now the future does not look good. That’s what’s down the line, another battle for Haines."NationChicagoans denounce expansion of O’HareBENSENVILLE, Ill. -- A Chicago suburb near O’Hare International Airport is raising taxes to finance its efforts to fight a proposed runway expansion.Bensenville officials said they expect the 5 percent amusement tax, affecting such things as golf courses and ice arenas, to bring in an extra $200,000 annually.Some of that money will be used for a Fourth of July celebration, and the rest will go into a legal fund used to fight the airport expansion, deputy village manager James Johnson said. The tax was approved Dec. 27.Community groups and leaders in Chicago’s western suburbs around O’Hare have fiercely opposed proposals to add runways or expand the number of flights, complaining of noise and air pollution and reduced property values.Gov. George Ryan and Chicago Mayor Richard Daley agreed earlier in December on a $6.6 billion deal to expand O’Hare that involves reconfiguring several runways, adding a new runway and providing western access to the huge airfield. Plan supporters say the new runway would require the destruction of about 500 homes.Newmont to acquire Australian mining firmDENVER -- Gold giant Newmont Mining Corp. said Dec. 30 its planned takeover of Australia’s Normandy Mining Ltd. and Toronto-based Franco-Nevada Mining is going according to schedule.Newmont chief executive Wayne W. Murdy said the takeover should be completed by mid-February as planned.The takeover would create the world’s largest gold-mining company, with 22 mines on five continents, interests in eight other gold operations and 12,500 employees.On Dec. 26, the Federal Trade Commission cleared Newmont’s plan to buy Normandy and Franco-Nevada, Normandy’s largest shareholder. Denver-based Newmont is competing with South Africa’s AngloGold Ltd. to acquire Normandy.Newmont’s offer for Normandy, Australia’s largest gold producer, topped an unsolicited September bid by rival AngloGold, currently the world’s biggest gold producer.WorldBush approves trade relations with ChinaWASHINGTON -- The ailing U.S. business sector hailed President Bush’s decision to grant normal trade status to China, saying it will take the gamble out of dealing with the communist nation and emerging economic powerhouse.The new trade status was to take effect Jan. 1.The United States has struggled over China’s trade status for almost a quarter-century, with factions of both political parties arguing that the Beijing needed to improve its human rights record before normal trade was considered. But supporters argued that China would be better influenced by an influx of American business brought on by normal trade relations.That, and the acknowledgment that China could soon have a production ability that rivals the United States, brought the issue to the fore.Congress in 2000 granted the permanent status to the Chinese contingent upon its entry into the World Trade Organization. China’s application was accepted formally at the WTO’s annual meeting in November in the United Arab Emirates.Some economists said the decision reflects a need to repair the country’s relationship with China, after the incident earlier this year when the crew of a crashed U.S. spy plane was held for a short time in China.Since 1980, China has enjoyed temporary normal trade relations with the United States under annual presidential waivers of the law.-- Compiled from business wire services.

Norwegian Cruise Lines to double Haines visits

HAINES -- Two of Norwegian Cruise Lines biggest ships will anchor Haines’ 2002 cruise ship schedule, doubling large-ship visits next season.The first of 22 dockings of the 2,000-passenger Norwegian Sky marks the beginning of the visitor season May 1. The ship will visit weekly every Wednesday through Sept. 25.A sister ship, the 1,754-passenger Norwegian Wind, will make the first of 20 stops May 2.The ships are the only large liners planning to stop in Haines next summer.The addition of a second big ship will have a big impact, said Haines tourism director Michelle Glass.Cruise ship passenger numbers tanked last year from 187,388 in 2000 to 40,150 in 2001 when Royal Caribbean International dropped Haines from its itinerary.The remainder of Haines’ summer cruise ship schedule is filled with ships with less than 200 passengers. Alaska Sightseeing-CruiseWest "Spirit" ships account for most of that traffic.Glass said seven planned visits of the 114-passenger Spirit of Oceanus should prove whether Haines could serve as an auxiliary port for Skagway."They’re going to be here all day, and they’re a higher-buck tour than the other smaller ships. They’ll be shuttling passengers back and forth to Skagway to ride the train."

Princess sees profit; bookings bouncing back

LONDON -- British cruise operator Princess Cruises said Dec. 27 that its full-year profit would be at the top end of earlier forecasts, and its proposed merger with Royal Caribbean Cruises would produce annual savings of $100 million.Princess, which offers cruises to Alaska destinations, said it had seen an improvement in bookings in the fourth quarter.The upturn in bookings led the company to increase its forecast of earnings per share for 2001 to at least 40 cents. In October, the company had predicted earnings per share of between 38 cents and 40 cents."Trading conditions have continued to improve from the difficult period in the immediate aftermath of the events of 11 September," chief executive officer Peter Ratcliffe said. "Of course, we are now entering the key January to March booking period, which will have a major influence on the 2002 results."Since the beginning of November, weekly net bookings in North America have consistently exceeded those of the same period 12 months earlier, although cumulative bookings for 2002 still remain behind last year’s levels at this time, Princess officials said.Princess’ board issued a circular to shareholders, urging them to approve the planned merger with Royal Caribbean."The Board of P&O Princess believes that the combination with Royal Caribbean is deliverable and will accelerate creation of significant value for shareholders," Ratcliffe said.Princess’ proposed merger with Royal Caribbean would create a combined business worth $6 billion and overtake Carnival in size. Miami-based Royal Caribbean is the second-largest cruise line operator, while Princess, which has its headquarters in London, is No. 3.Princess is also facing a $4.59 billion takeover bid from Miami-based Carnival, the world’s largest cruise operator.

Fairbanks Sam's Club looks at offering gas

Operators of warehouse retailer Sam’s Club are considering the addition of its first Alaska gas station at its Fairbanks location."We’re looking at the possibility of adding gas at the Fairbanks club," said Melissa Berryhill, spokeswoman for the Bentonville, Ark., retailer.The project is in the early planning stages, she said.Sam’s Club operates 136 gas stations at its more than 495 stores, she said. The company’s gas stations are in 26 states.A possible Alaska Sam’s Club gas station would mark the retailer’s first unit on the West Coast, Berryhill said. The only other Sam’s Club gas stations in the West are in Colorado and Nevada, she said.Typically, the gas stations have six dispensers for a total of 12 pumps. Most of the Sam’s Club gas stations are available to people who have a membership card for the warehouse retailer.Last year warehouse competitor Costco opened gas stations at its two Anchorage stores.In 2000 Fred Meyer and Carrs/Safeway added gas stations to several stores statewide.Fred Meyer built the pumping facilities at the west Fairbanks, East Anchorage and Soldotna stores. A new store at Abbott Road in Anchorage due to open early this year is scheduled to include a gas station.The Eagle River Carrs’ gas station opened in summer 2000.Anchorage Village Inn receives 2001 top sales franchise awardThe Village Inn franchise located at Northern Lights Boulevard in Anchorage has been honored as the company’s highest-volume unit. Franchisees Scott and Mark Anderson received Village Inn’s top sales award at the 2001 Village Inn franchise convention held in Las Vegas in November.Sales at the Anchorage franchise totaled $3.74 million in 2001, the highest volume in the 224 restaurant chain, company officials said.Village Inn operates three restaurants in Anchorage.Second-place Dow Sherwood Corp. of Tampa, Fla. recorded $3.15 million in sales last year.Village Inn is a division of Denver-based VICORP Restaurants Inc. The company currently has franchise development agreements in place for 27 new restaurants in Alaska, Arkansas, Colorado, Florida and Kansas.

Highly prized annual railroad painting debuts in January

The Alaska Railroad Corp. is slated to release its annual artist’s print in early January.This year’s print by Anchorage artist Debra Dubac depicts two locomotives pulling freight along Turnagain Arm from Whittier to Anchorage. The foreground of the painting includes a splash of wildflowers including arctic poppies, forget-me-nots, daisies, fireweed and squirrel grass.Since 1979, an official painting has been produced each year except in 1984. Initially, the paintings were reproduced to offset the costs of producing the railroad’s annual report, said Patrick Flynn, the railroad’s public affairs officer.The paintings have featured some of Alaska’s best-known artists and are prized by people from around the world, Flynn said."There are people who collect these religiously," Flynn said. "They are highly anticipated by collectors and employees.’’The railroad will produce 750 prints and 4,500 posters of Dubac’s painting. Lapel pins also are available.Prints cost $50; posters $25; and lapel pins are $5, Flynn said.A committee each year selects an artist from about two dozen entries, Flynn said. Winning artists are paid $4,000 and given two round-trip train tickets, Flynn said."The reason people do it is the high profile, not the money,’’ Flynn said. "The advantage to the artists is that they don’t have to pay for the production costs.’’Dubac, an illustrator for the former Anchorage Times, now owns Dubac Designs, specializing in fine and graphic art.Dubac said the painting for the railroad wasn’t easy."I do a lot of flowers, but this was my first attempt at a train and that was challenging,’’ Dubac said. "I learned the anatomy of a train.’’The painting took several months to complete, including research and the actual painting. The final product had to pass muster with railroad employees and train experts to make sure every detail was exact, Dubac said."It was very time-consuming,’’ Dubac said. "I was pleased it passed their inspection on the first attempt.’’The first official Alaska Railroad painting was done in 1979 by John Van Zyle. Susan Ogle has four winning prints and Richard Rodriquez has three.Other winning artists include Jarrett J. Jester, Deanna Brandon, Don Kolstad, Gary Mealor, Tom Stewart, Shane Lamb, Steve Gordon, Armond Kirschbaum, Dan Miller, Robert Silvers and James Havens.

Goldbelt ready to lease land, back dock for proposed mine

JUNEAU -- If the Kensington gold mine planned for 45 miles north of downtown Juneau becomes a reality, Goldbelt Inc. wants to be involved, officials said."We are very much in favor of the development of the mine and look forward to supporting it," said Gary Droubay, president and chief executive of Juneau’s urban Native corporation.Goldbelt has title to 1,700 acres on both sides of Echo Cove, property that could support a state ferry landing for access to northern Lynn Canal or a marine terminal of sufficient size to support a gold mine near Berners Bay, Droubay said."We would basically give Coeur Alaska Inc. a land lease and let them construct a terminal," he said, referring to the mining company that hopes to work the Kensington lode.Coeur recently announced a new plan to open the mine for gold and other ore. A plan that received its environmental permits by 1998 was shelved because the expense of development and operation was greater than anticipated gold prices allowed, the company has said.To reduce expenditures, Coeur plans not to build an on-site work camp for 250 but to bus and boat workers to the site daily."We have a memorandum of agreement with Coeur that when they proceed with the mine, we would support a marine facility for deployment (of construction materials, miners and supplies) from the end of the existing road to Cascade Point," Droubay said, "and we have a right of way approved for a road."The distance from the end of the existing highway to Cascade Point is about two miles. The road would be gravel if it were to support a deployment facility only, or could be paved if it were to support an Alaska Marine Highway System ferry operation.Coeur has suggested it could get environmental permits to proceed in 12 to 14 months.

Railroad to outline plans at Anchorage open house

The public can review and comment on the capital improvement projects planned by the Alaska Railroad Corp. at an open house Jan. 9 in Anchorage.People will have a chance to get a detailed look at several projects the railroad is planning in 2002 from Seward to Fairbanks, with an emphasis on Anchorage-area projects, said Patrick Flynn, railroad spokesman.Project managers will be on hand to explain projects that include repairing and improving the 525-mile mainline track and to discuss new facilities, equipment and services, Flynn said.Specific projects to be discussed will be the Anchorage rail yard expansion; Ship Creek master plan and pedestrian amenities; South Anchorage double track; Ted Stevens Anchorage International Airport rail depot; Anchorage-to-Wasilla track realignment; and a recently published commuter rail study for Southcentral Alaska, Flynn said."The open house is to let people know what we’re up to, and for them to offer some thoughts on what may make a project better from their point of view,’’ Flynn said.Many projects proposed in 2002 are funded all or in part by the Federal Transit Administration or the Federal Railroad Administration, which require the railroad to hold such a venue, Flynn said.The open house is scheduled from 4 p.m. to 7 p.m., at the Anchorage Depot, 411 W. First Ave.Those unable to attend the open house can visit (www.AlaskaRailroad.com) for project information. Written comments may be e-mailed to ([email protected]) or mailed to Alaska Railroad Capital Projects, P.O. Box 107500, Anchorage, AK 99510-7500.

State commercial fishing alive, well

"In 50 years, our grandchildren will still be making a living from the sea and feeding an increasingly hungry world."-- National Fisherman, December 2001KODIAK -- People are always proclaiming the demise of the fishing industry. For a state like Alaska, which provides more than half of all U.S. seafood and four times more than any other state, count on the industry having a solid, albeit bumpy, future.Alaska has 55 commercial fisheries of all kinds from Ketchikan to Kotzebue, occurring at different times throughout the year. Skates, snails, roe on kelp, flounders, rockfish, urchins and sea cucumbers plus more familiar species like salmon, cod, pollock and halibut combine to make up Alaska’s largest industry: commercial fishing.The fishing cycle begins each Jan. 1 when longliners and pot boats set out for groundfish species like cod and rockfish in the Gulf of Alaska and Bering Sea, followed by trawlers targeting pollock on Jan. 20. Simply put, except for the Gulf, where many fisheries continue to be strangled by closures to protect sea lions, Alaska’s groundfish industry is booming.In the Bering Sea, abundant supplies of cod and pollock, the "crown jewels" in world markets, continue to fuel confidence for the next few years. While other countries each year face reduced catch quotas, all eyes are on Alaska’s fisheries, which continue to thrive. This year, nearly 500 million pounds of cod will be harvested from Alaska waters, filling orders in the United States and throughout Europe and Asia.For pollock, Alaska’s largest fishery, stocks are at an all-time high, allowing for a catch quota this year of roughly 3.3 billion pounds. Bering Sea pollock has an estimated value of more than $700 million annually. Looking ahead, less pollock from Russia has opened more doors in Japan for Alaska. Alaska groundfish is also making inroads in Europe, especially Germany, and markets are expected to increase.The outlook for Alaska’s whitefish industry is good, as stocks remain strong overall. None of the groundfish stocks is overfished or approaching an overfished condition, according to assessments by the National Marine Fisheries Service.Commercial fishing caveat

This Week in Alaska Business History January 7, 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 TimesJanuary 7, 1982Oil firms seek summer drilling in Beaufort SeaBy Dave CarpenterTimes WriterCiting an outstanding safety record in Alaska, petroleum industry representatives made a united pitch to state officials today to allow year-round exploratory drilling in the Beaufort Sea.About a dozen executives from oil and gas companies and drilling firms told top Departments of Natural Resources officials that unrestricted drilling could occur safely and in an environmentally responsible manner. Over 100 people jammed into a conference room in the Federal Courthouse for the hearing.Exploring work in the Alaska portion of the Beaufort now is confined by the state and federal governments to a five-month "window" between Nov. 1 and March 31. There is no such seasonal restriction in the Canadian Beaufort.Katz will make a final decision on removing or amending the limits after two other hearings scheduled for next month.Anchorage TimesJanuary 7, 1982Farmer calls on judge to stop state timber saleA Matanuska Valley farmer has asked a Superior Court judge to stop the state from selling timber on state land scheduled for sale to Alaska farmers.George Lusting, a farmer and logger, wants to stop a timber sale set for 2 p.m. today at the Department of Natural Resource’s Big Lake office. At press time today, Judge Milton Souter had not decided whether to stop the sale.Lusting told Souter the state agreed last year in a settlement over the Point MacKenzie agricultural project that the farmers are entitled to the timber on the agricultural lands.But the state contends that the nothing in last year’s agreement stops it from selling timber before it puts the agricultural land up for sale. Lusting and 31 farmers who had also filed a lawsuit to stop the Point MacKenzie land sale did not sign the agreement."Whoever gets this land should be choosing whether to use the timber for house logs or firewood or whatever," Lusting said. "Some of them probably would need to sell some timber to help raise money for their farms, and if it’s gone, they don’t have that option, and only high-income people are going to be able to get the land."10 years ago this weekAlaska Journal of CommerceJanuary 13, 1992McClatchy, Allen dig into deep pocketsBy Ray TysonAlaska Journal of CommerceTwo years after he purchased the Anchorage Times and declared war on his longtime liberal foe, the Anchorage Daily News, oilman/publisher Bill Allen and his Alaska-bred umbrella company, VECO International, don’t seem any less determined to carry out their mission despite huge operating losses.The larger of the two morning papers, the Daily News, and its California based parent, McClatchy Newspapers, don’t appear any less determined than their cross-town rival.Who’s winning the war?It largely depends on who you talk to and how the person evaluates the numbers for circulation and advertising, the principal ingredients for a financially successful daily newspaper. Both the Times and Daily News accuse each other of playing the numbers game. But two things are certain: Neither paper could have made it as far as it has without the help of its parent company and its willingness to absorb hefty financial losses at one time or another.Alaska Journal of CommerceJanuary 13, 1992Federal highways program is boon for AlaskaBy Tim BradnerAlaska Journal of CommerceState transportation officials say they will accelerate some highway construction projects with the newly reauthorized federal highways program bringing Alaska some $30 million to $40 million per year more than under the previous program.Alaska will get about $180 million in federal highways money in the current federal fiscal year, up from an authorization of about $150 million under the previous formula.Next year, Alaska will be eligible for $200 million, with a total of $1.46 billion being made available over the six-year reauthorization period. The state must provide a 10 percent match to federal money under the program.-- Compiled by Ed Bennett.

Top pieces of advice for businesses to succeed in 2002

Yogi Berra once said, "If you don’t know where you are going, you could wind up someplace else." Business success in 2002 is not going to wait for those who are indecisive about what direction to take. For those businesses who would like some advice, I provide this Top 10 list.1. Conduct a vampire extermination expedition. The beginning of the year is the best time to analyze your organization’s work processes. Determine what is wasteful and what is productive. Eliminate what is causing people not to perform at their best. Exterminate the "vampires" sucking money and resources from the bottom line. You are better off bringing someone in from outside the organization to do this. Outsiders bring an unbiased approach and a different perspective to your business.2. Build a high-retention workplace. High retention begins the first day on the job. Put extra effort into your employee orientation programs and build a bond with new hires. A major factor causing workers to stay beyond 90 days in good part depends on how they were treated the first two days on the job. Managers should meet with new workers during the first week and conduct a new-hire survey about 30 days after they have been on board.3. Don’t work for a jerk. The fact is that good people will quit bad bosses. A survey we conducted showed 35 percent of the respondents had quit their last job because of their immediate supervisor. La Rosa’s Pizza Co. is a national chain of 53 outlets consisting of 3,000 employees. At La Rosa’s, employees get to evaluate their bosses using a bottom-up Customer Satisfaction Index twice a year. After the CSI is completed, the chief executive has the managers discuss and resolve issues affecting employees.4. Create an appreciation program. Reward and recognition programs are fine, but what people really want is appreciation. A survey I conducted for my book, "Here Today, Here Tomorrow," showed results supporting this idea. Participants were asked, "What causes you the greatest dissatisfaction at work?" The top answer was "lack of appreciation." Setting up a program to make people feel appreciated is not difficult. An well-administered program builds camaraderie, values and makes people feel good about themselves and their jobs.5. A good organization is one that creates a motivating work environment. Be careful not to assume what motivates your people. In one organization I worked with, management was absolutely certain employees would select cash as its preferred form of recognition. Turned out, money didn’t matter, but parking did. While executives and certain top employees could park in the lot next to the building, most employees had to park several blocks away. With this information in hand, we built a very effective reward program allowing select employees to use the executive parking lot.6. "I need to take a break to call my baby sitter." Most organizations don’t realize the impact family-friendly benefits have on productivity and retention. First Tennessee National Corp. started taking family issues seriously and made them top priority. They added many family friendly benefits and sent managers through 3-1/2 days of training. Employees stayed twice as long and the bank kept 7 percent more of its customers.7. Put a parachute on your back. Can you imagine parachuting out of an airplane with no training? Many times, the first expense eliminated during a bad economy is training and development. Organizations that invest in training will come out far ahead than those that don’t. In a study of more than 3,100 U.S. workplaces, the National Center on the Educational Quality of the Workforce found that on average, a 10 percent increase in work force education level led to an 8.6 percent gain in total productivity. On the other hand, a 10 percent increase in new equipment expenditures only increased productivity by 3.4 percent.8. Use bottom-up involvement for high performance. Studies show having workers involved at all levels has a major impact on improving productivity, morale and motivation. A good example is Guardian Industries, an 800-person glass plant in Indiana. They decided to start listening to their employees to find out their opinions on how to staff the plants’ 24-hour work shifts. The employees decided instead of working rotating day and evening shifts, they would rather work permanent, 12-hour shifts. The result: Turnover fell by 50 percent.9. Pursue innovation. Many organizations suffer from the "we’ve never done it that way before" syndrome. Rubbermaid is one of the most innovative companies in the world. It generates hundreds of new products a year. Products from the most recent years contribute to 33 percent of their sales. They keep ideas coming in by sending their workers to off-the-wall places, like museums to study the Egyptians to get new product ideas. All people, no matter their position, should be looking for new ideas to improve profits and productivity.10. "Don’t answer the phone it might be a customer." People in the United States have lowered their standards and accept lousy customer service as the norm. Many businesses have designed and blindly placed impenetrable voice mail and automated phone systems in the way of good customer service. The reason is because organizations ignorantly think it is less expensive than paying someone to answer the phone. They are wrong. Nothing beats a real, old-fashioned, friendly human being on the other end of a telephone.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]).

Entrepreneur looks to offer Cook Inlet boat tours

For nearly a decade, Jerry Norman has dreamed of offering boat tours in Cook Inlet. With permits and finances falling into place, he says the idea is getting close to reality."I’m very optimistic I’ll be driving pile by the first of April and we’ll be turning a prop by the end of July or the first of August,’’ said Norman, who along with sons Jon and Erik, own Cook Inlet Excursions Inc.The idea is to build a walkway and floating dock just south of the mouth of Ship Creek, and take folks for a two-hour trip through Knik Arm to Fire Island in a 60-foot, 150-passenger catamaran.The project would cost about $500,000, not including the lease of the catamaran, Norman said.Norman expects more than 50,000 people to take the trip in a peak year. The company would employ about a dozen people, including boat crews, bus drivers and tour guides, Norman said.Many tourists would rather take a scenic boat ride and do some whale watching than walk around downtown or shop, Norman said."It’s going to give them the opportunity to see country they had never been able to see before,’’ Norman said. "A big drawing card will be beluga whales.’’The walkway and floating dock near the Ship Creek public boat ramp, according to Norman, would consist of 35-by-120 foot barge anchored using special pilings that would allow the structure to ride up or down with the tide, so that folks would not have to climb ladders to get onboard a boat.An 850-foot long walkway would connect the dock with a staging area near the public boat ramp.Buses would take tourists from downtown to the site. Portable buildings and restrooms may be added at the staging area, according to the company’s permit application to the U.S. Army Corps of Engineers.The Corps’ public comment period for the proposed project ended Dec. 24. Norman said that to his knowledge, no negative comments were received by the Corps.Project managers for the Corps were on vacation over the Christmas holiday and could not be reached for comment at press time.Norman initially had proposed linking his dock directly to the public-owned dock at Ship Creek, but that idea drew much criticism, so he amended the plan to keep the two separate.Bill Sheffield, port of Anchorage director and a former governor, has long been a proponent of a day-boat operation in Cook Inlet.Sheffield said summertime tourists often get bored waiting around in Anchorage to take a cruise ship south or a train north."There are as many as 5,000 people a day hanging around in Anchorage wanting to do something,’’ Sheffield said.Matanuska-Susitna Borough officials have unofficially offered to pay for the design of a ferry landing on the Anchorage side of Knik Arm, at Ship Creek Point and have said they may fund the construction of the facility there in the future.Officials from the borough and the Port of Anchorage have been crafting a "memorandum of understanding" outlining each party’s responsibilities over the last several months.The agreement had not been signed by either party.Mat-Su borough officials say having a ferry landing on both sides of Knik Arm will encourage new business at Point MacKenzie.The Mat-Su borough has $11.8 million in federal money to build a ferry system across Knik Arm. The money would go toward design and engineering of the ferry landings, utilities and access roads, and toward construction of a ferry.Marc Van Dongen, port director at Port MacKenzie, said environmental and feasibility studies for a deep-draft dock will be done in 2002. He said a ferry could be negotiating the 2-mile gap in as little as two years.Sheffield sees the proposed ferry landing as a place where tour boat operators could moor and offer sightseeing trips in Cook Inlet."A day boat would draw a great amount of business," Sheffield said.The idea has been tried in the past. More than a decade ago, a converted World War II tug was transformed into a tour ship, offering dinner cruises in Cook Inlet. The venture failed.Norman said that operation failed because it depended on locals."They did not have the tourist base we have today,’’ Norman said. "Things are tremendously different now.’’

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