Ketchikan plant finds stable veneer market

Despite start-up financial problems, Gateway Forest Products Inc., the Ketchikan-based company manufacturing wood veneer from low-grade timber, is finding good markets for its product in the Pacific Northwest.On Dec. 6, Alaska Industrial Development and Export Authority’s board approved participation by the state authority in a $10.6 million refinancing for the company, which will also involve Wells Fargo Bank, KeyBank Alaska and the U.S. Department of Agriculture.Meanwhile, the company is operating one shift, having cut back from two shifts earlier this fall when sales slowed for wood chips, a byproduct of the manufacturing process. When low-grade logs are used to make veneer, what’s left is made into chips.With slower sales, Gateway ran out of storage space for chips and was forced to cut back. The company hopes to return to two shifts this spring, according to Cliff Skillings, the company’s marketing director.Gateway, a local company formed in 1999, purchased land and industrial properties from Ketchikan Pulp Co. when it closed its pulp mill and built a plant to make wood veneer, a product used in making many manufactured wood products."We’re still in our start-up mode," Skillings said. "It takes 10 to 12 months to start a plant like this," to work through the inevitable kinks in operations, he said. The company has had to do some upgrades in its computerized plant process, and the softening of the chip market has also adversely affected Gateway.In the midst of its construction and start-up, the company ran into financial problems when construction costs came in higher than expected and the start-up of the plant was delayed.Just after beginning operations early this year, Gateway filed for bankruptcy protection and has been working on a reorganization and refinancing plan since.Meanwhile, the plant has continued to operate. Unlike lumber and wood chips, the markets for veneer, the company’s main product, are good and stable, Skillings said.Operating at one shift, Gateway ships a barge load of veneer product every three weeks from Ketchikan to the Port of Seattle’s Terminal 7.The company has a three-year contract to sell its veneer to Timber Products Inc., of Eugene, Ore., which then markets the product to a variety of other customers in the Northwest.Most of the veneer traditionally used in the Northwest has been made from Douglas fir, the most common softwood in the region. The veneer made in Ketchikan is mostly from Western hemlock, but it has compared well with Douglas fir in strength tests, Skillings said.Some veneer has also been made from spruce, which has a lighter color that has pleased some customers, he said.When Gateway returns to two shifts, it will put another 20 people back to work, Skillings said. With one shift and maintenance and administrative support staff, Gateway now employs about 70 people in Ketchikan, he said.Taking into account the softening of the chip market and the cutback to one shift, "Gateway is basically on its business plan," said Jim McMillan, deputy director of Alaska Industrial Development and Export Authority, a state development corporation that is involved in a refinancing plan for the company.KeyBank Alaska, Wells Fargo, AIDEA and the U.S. Department of Agriculture have agreed to a $10.6 million refinancing plan for the company.A recent foreclosure action by the Ketchikan Gateway Borough on some of Gateway’s assets involve another part of the company, not the mill itself, McMillan said.In its bankruptcy reorganization, Gateway essentially split into two companies. One operates and owns the veneer plant and property related to it. A second owns other industrial properties acquired from Ketchikan Pulp Co., including warehouses and dock facilities.Gateway’s reorganization plan, which is expected to be approved soon in U.S. Bankruptcy Court in Anchorage, has these properties held as collateral against $14 million in loans by the borough to Gateway, and remaining debt held by Ketchikan Pulp, a subsidiary of Louisiana Pacific Corp.The foreclosure action by the borough against that property, which doesn’t include the mill, is mainly an effort to position the municipality as a creditor in the bankruptcy proceeding, McMillan said.Meanwhile, the refinancing of the veneer mill venture itself should be concluded by the end of the year, he said.KeyBank and Wells Fargo have agreed to share the loan. KeyBank asked AIDEA to participate in a part of its share of the loan. The loans would be for 10 years.The U.S. Department of Agriculture would guarantee these loans under the federal agency’s rural development loan programs. In addition, KeyBank and Wells Fargo will also share a $1 million operating loan. KeyBank asked AIDEA for an 80 percent guarantee of its share of this loan under the authority’s business and export assistance program.KeyBank and Wells Fargo approved their share of loans and AIDEA’s board approved the deal Dec. 6, McMillan said.The entire refinancing, however, depends on a favorable decision on guarantees by the U.S. Department of Agriculture. This is expected in mid-December, McMillan said.

Movers & Shakers December 16, 2001

ValenoteMcMillan The architectural and planning firm of Bezek-Durst-Seiser has hired Victor Valenote. Valenote is a registered architect with nine years of experience. Valenote was awarded the American Institute of Architects’ Bronze Medal for All Around Excellence in Architecture in 1999. The firm has hired Carrie McMillan as receptionist. McMillan has three years office experience, including working on the state Legislature support staff. McMillan is planning to graduate from the University of Georgia with a business degree in June.In its first year of participation in the Alaska Universities Legislative Internship program, Alaska Pacific University is sending student Marleah LaBelle to Juneau for 17 weeks coinciding with the duration of the Alaska state legislative session. LaBelle is majoring in business administration at APU and will work in a legislator’s office as well as complete a senior-level internship seminar as part of the program.Two University of Alaska Anchorage students, Michael Dingman and Androniki Mei Lagos, represented the university at the 53rd annual Student Council on United States Affairs in West Point, New York in November. Dingman is UAA’s student body president and is majoring in both political science and journalism. Lagos recently returned from a two year studying abroad program in Taipei, Taiwan. Dingman and Lagos discussed and debated U.S. foreign policy concerns at the conference.Johnson The Alaska Region of the U.S. Forest Service has hired Linda Rae Johnson to serve as director of acquisition management. Johnson recently served as a contract specialist with the Department of Energy in Idaho Falls, Idaho. Previously Johnson held contracting positions with the U.S. Air Force in Albuquerque and Alamogordo, N.M., and Ogden, Utah.David Scherer and Christopher Davis have joined AMC Engineers. Scherer, a professional engineer, is registered as a professional mechanical engineer in New Mexico. Scherer specializes in heating, ventilating and air conditioning systems. Davis, a professional engineer, has specialized in many facets of electrical engineer and project design.OfficeTech Inc. has hired Chris Cook as account manager for South Anchorage. Cook has sales and customer service experience and previously worked for NYE Frontier Toyota and Johnson Nissan Jeep. Cook is responsible for sales of all Xerox products, including copiers, network printers and fax machines. Amy Jackman has joined OfficeTech as account manager for the Kenai Peninsula and will be working in the company’s Kenai office. Jackman was recently elected to the Kenai City Council and was previously employed at KSRM Radio as marketing consultant. Jackman is responsible for sales of all Xerox products on the Kenai Peninsula.The Alaska Hotel & Lodging Association recently announced its 2001-2002 directors. The executive committee includes: chairman, Terry Latham, Best Western Golden Lion Hotel; president, Jeff Butcher, Goldbelt Hotel; vice president, Frank Rose, Denali Bluffs & Grande Denali Lodge; and secretary/treasurer, Jack Reiss, Denali Park Resorts. Regional directors include: Chris von Imhof, Alyeska Prince Hotel; Brad Snowden, Best Western Hotel Seward; Gene Sheehan, Inlet Tower Suites; Jeannette Duenow, New Management Services, Hotel Division; Lloyd Huskey, formerly with Pikes Waterfront Lodge; Luanne Pelagio, Bristol Inn/ Quvaq Inc.; Bill Wasowicz, Land’s End Resort; and Vicki Parrish, Fairbanks Princess. Allied directors include: Walt Leffek, Hospitality Resources & Concepts; Randy Comer, GCI Cable Inc.; and Clayton Halverson, Bond, Stephens & Johnson.Carter Crawford has assumed the responsibilities of station manager for KATN-2 Fairbanks. Crawford also will retain the duties of general sales manager for the television station. Crawford was the recent recipient of the Alaska Broadcaster of the Year award.The Anchorage Chamber of Commerce has hired Liz Heisler as membership director. Heisler’s responsibilities will include increasing chamber membership and retaining current members. Heisler is the staff liaison for the Chamber Ambassadors Committee which is responsible for organizing the monthly Business After Hours mixers, assisting with citywide cleanup, and putting together a membership appreciation event. Heisler has 20 years experience as a small business owner and as a marketing manager for a computer firm.The Carnegie Foundation for the Advancement of Teaching and the Council for Advancement and Support of Education has chosen Ping-Tung Chang the 2001 Professor of the Year in Alaska. Chang teaches mathematics at the University of Alaska Anchorage’s Matanuska-Susitna College. Chang has taught at UAA since 1988. Chang was selected from among 384 entries nominated by colleges and universities throughout the country.

Southeast marine shuttle offers service in Puget Sound

HAINES -- A marine shuttle service that moves passengers between Haines, Skagway and Juneau during summer months is using its vessels this winter in Puget Sound.Chilkat Cruises last month began offering weekend shuttle service between Port Townsend, Wash., and Seattle.Chilkat Cruises is owned by Klukwan Inc., a Native village corporation.The Chilkat Express, a 63-passenger vessel, makes the 34-mile trip from downtown Port Townsend to Seattle’s Pier 69 in slightly less than an hour, according to a company press release.The boat will offer single Port Townsend-based round trips on Fridays and twice-daily trips on weekends through March.Klukwan President Ron Gelbrich told the Chilkat Valley News of Haines that the service will keep at least one of the company’s three-vessel fleet busy through the winter."If the demand is there, we’ll use more," he said.The company’s 150-passenger Fairweather Express and Fairweather Express II also are based in Port Townsend this winter.The Fairweather ships provide daily summer shuttle service between the three upper Lynn Canal cities. The Chilkat Express was custom-built for runs between Skagway, Haines and Glacier Point, where a Haines company provides excursions.If the Puget Sound runs are successful, Gelbrich said, the company may build an additional vessel to continue the service.All three ships are available for charters in the Puget Sound area through March.

Five-year, $27.5 million energy research to be run through UAF

Fairbanks -- University of Alaska Fairbanks will be administering a five-year energy technology research and development program, funded with a $27.5 million federal appropriation.Much of the money, received through the U.S. Department of Energy, will be dispersed in grants to firms working on new power generation projects for rural Alaska or to companies working on fossil fuel development, according to Dennis Witmer, director of the university’s new Arctic Energy Technology Development Center.Requests for proposals have just been published by the university, soliciting ideas for projects. About $1 million to $1.5 million will be available for grants this year, Witmer said.The university will form one of two advisory committees of people qualified to review and screen the proposals, he said. The review committee will make recommendations to the Arctic Energy Technology Development Center, which will forward them to the Department of Energy.A total of $3 million will be available during the program’s first two years, with $5 million for each of the following three years, Witmer said. The money is subject to annual appropriations by Congress, and some funds are being used to fund other Department of Energy projects in the state.Also, the DOE has established a temporary office at the University of Alaska Fairbanks to help coordinate this and other DOE programs, and some of the program money will be used to pay expenses for that office.Brent Sheets, from the Department of Energy, has been at UAF since September.The Arctic Energy Technology Development Center is an outgrowth of UAF’s small Energy Center, which has been up and running for three years now. Many universities elsewhere have energy centers, working mainly on applied energy research and development, not so much basic research, Witmer said.The goal in Alaska has been focused on taking new technologies developed in laboratories and doing demonstration-type testing, to see if there are commercial applications, he said.A project the center has had under way for three years now is evaluation of fuel cells fueled by diesel, Witmer said.A manufacturer of fuel cells had reported that diesel could be a fuel for one of its units, and the Alaska congressional delegation was interested in whether the system could be used in rural Alaska, where diesel is now used to power conventional power plants.Most fuel cells use hydrogen extracted from natural gas.Research at UAF focused on two types of reformers and a fuel cell, Witmer said. The reformers extract hydrogen from diesel, with the hydrogen then used to power the fuel cell.The results of the testing so far haven’t been encouraging, and the project is now winding down, Witmer said.It’s possible that continued technology improvements in fuel cells and in reformers will someday allow diesel to be economically used by fuel cells, he said.The testing showed that hydrogen can be extracted from diesel and used in fuel cells, but the process is not energy efficient and would be far more costly than generating electricity with diesel, Witmer said.The diesel fuel cell project involved three research engineers and UAF graduate students, with involvement of university faculty.

FCC allows rural villages to tap into school or library Internet

A recent ruling by the Federal Communications Commission aims to increase Internet services in some rural Alaska communities that lack local dial-up or toll-free connections.The FCC granted a waiver Dec. 3 to Alaska’s portion of a federal program that provides funds to eligible schools and libraries to reduce the cost of providing Internet services at those facilities.The state submitted its petition to the FCC last January, led by Lt. Gov. Fran Ulmer, who is a member of the FCC’s Local and State Government Advisory Committee.The move allows community members at home to use a broadband connection for schools and libraries, including noneducational use during hours when those facilities are closed.FCC concluded that approving the waiver was in the public interest."We find that good cause exists to allow members of rural remote communities in Alaska, where there is no local or toll-free dial-up Internet access, to use excess service obtained through the universal service mechanism for schools and libraries when not in use by the schools and libraries for educational purposes," FCC officials wrote in their findings.Regulators listed several conditions governing the waiver. They include no local or toll-free Internet access available in the community, the school or library has not requested more services than necessary for educational purposes and that no additional costs will be incurred as a result of the waiver.Other conditions are that any noneducational use will be limited to hours when the school or library is not open and the excess services are made available to all capable services providers in a neutral manner.Ulmer said equipment needed to manage this local and toll-free dial-up service will have to be acquired by one or more Internet service providers, which will supply the service. Local school districts select ISPs through a neutral selection process, she said in a statement.The ruling took effect immediately, said John Greely, special assistant to the lieutenant governor.Some communities will require more infrastructure changes than others to provide the service, he said.Connections between libraries and schools to homes will have to be worked out within each community, he said."This is a way in which the Internet can be available to everyone," Greely said.In its petition Alaska officials told the FCC that there are about 240 communities that lack local or toll-free dial-up access to the Internet.Access to information services is limited and expensive in these communities since they are remote and isolated by harsh climate, Alaskans said in the petition."Of the communities without local or toll-free dial-up access to the Internet, 135 have available, nonusage sensitive Internet access at local schools or libraries," the FCC said in its report.During a public comment period for the waiver request, the Alaska Telephone Association voiced concerns about such a change in the rules. However, Jim Rowe, executive director of the association, believes the waiver could provide some opportunities to members."Our concerns were based on the fact that if an area gets part-time Internet service there will be less of an incentive for entities to pursue full-time Internet service," he said.

Railroad aims to predict avalanches

The Alaska Railroad Corp. is experimenting with computer modeling and sensing equipment to help predict when and where avalanches may occur along the rail line.Artillery platforms also are being established to cause controlled slides in avalanche-prone regions; weather stations are being upgraded and built; and the railroad’s snow-clearing fleet of bulldozers is being beefed up.It’s all part of $2.5 million avalanche forecasting and slide removal program aimed at reducing risks to railroad workers and passengers and at running trains at higher speeds through known avalanche slide areas south of Anchorage."The idea is to get a better feel of when and where avalanches will occur and when to trigger small ones to keep a bigger ones from coming down,’’ said Patrick Flynn, the railroad’s public affairs officer.Prototype avalanche detection equipment was installed last summer high on a mountain at the Kern Creek avalanche path along Turnagain Arm. The equipment, known as Alpug, is made in Switzerland and initially developed for Swiss Rail. It is the only such detection equipment in North America and is state of the art, Flynn said.The system has three sensing stations that employ Doppler radar and geophones to detect movement.In the future, the system will expand to other avalanche paths in the area and also could provide mud-flow and rock-fall detection, according to information from the railroad.The system is being tested and should be operational this winter, according to railroad data.Over the past year, the railroad has upgraded one of its existing weather stations and built three more at Moose Pass and Whittier and on a ridge top at Mile 43 of the Seward Highway, south of Anchorage. The railroad also upgraded four weather stations at Alyeska Resort.Accurate avalanche and weather information reduces the risk of major slides, allowing for better decisions on when to close a portion of the track or to trigger a controlled slide, according to railroad data.The railroad built asphalt pads this summer for howitzer mounts at avalanche paths within a 10-mile stretch about 50 miles south of Anchorage. At Mile 43, two radio-controlled explosive launchers have been installed, and fixed howitzer mounts are placed at Mile 49 and Mile 53.Howitzer platforms also have been installed at three avalanche paths in the Portage and Girdwood sections of the rail line.A special gun truck also has been built to transport ammunition and howitzers along the track or by road.The railroad and the state Department of Transportation and Public Facilities will share the cost of a $862,000 storage and office facility in Girdwood. The facility, slated for construction next year, would act as an avalanche central coordination point for forecasting equipment and explosive storage.Clearing snow quickly after an avalanche reduces the risk to crews who often work under the threat of a repeat slide, according to railroad information.The railroad purchased a new bulldozer last year to add to its existing fleet. All of the bulldozers have been modified with reinforced cabs to help withstand the impact of an avalanche.In 1999, railroad employee Kerry Brookman was killed in an avalanche while working to clear the Seward Highway and adjacent rail after a severe winter storm. Brookman was clearing snow that had closed the area to transportation for nearly a week. Another avalanche came down, sweeping him and the bulldozer some 500 feet into Turnagain Arm. Two state DOT employees also were engulfed by the avalanche, but survived.

Chicken of the Sea's pinks in a pouch bode well for Alaska salmon

The new line of pinks in a pouch being launched by Chicken of the Sea is good news for Alaska’s struggling salmon industry, as virtually all of the fish will come from Alaska waters. The San Diego-based international corporation announced that it would begin shipping premium pink salmon in 7.1 ounce vacuum-packed, foil pouches to U.S. retailers starting in January. The product follows on the heels of Tuna Salad Kits, which Chicken of the Sea introduced earlier this year. And as with its tuna, the company will support the launch of its new pink salmon pouches with a multimillion dollar, all-media advertising and promotional campaign. Chicken of the Sea pioneered skinless/boneless pink salmon in cans in 1985, and 80 percent of that product is eaten in the United States, said marketing director Van Effner. He added that the company buys millions of pounds of frozen pinks from Alaska each year for the canned pack, and they’ve already increased purchases to accommodate the new pouched product, a trend Chicken of the Sea expects to continue. "From time to time we buy fish from Russia if we run short of product, but more than 95 percent of the pink salmon we purchase comes from Alaska. We prefer doing business in Alaska," Effner said in a phone interview. Effner, who has made many visits to Alaska’s remote fishing sites, had some hopeful words for the wild salmon industry. "Like you, we’re in it for the long haul. We want it to work out for everyone. We’re committed to new products and into seafood in a big way, and that’s what Alaska is all about," he said. Actually, Chicken of the Sea is stealing a bit of Alaska’s thunder with its pouched salmon product. Kodiak-based Alaska Pacific Seafoods has been producing Gourmet Pink Salmon in a Pouch for six years and selling it primarily to food distributors across the United States and overseas. Alien aquatic weed alert The Fish and Wildlife also reports that a rapidly growing, invasive aquatic weed new to the United States could harm fishing, hunting, hydropower production and other industries. Salvinia molesta is already causing havoc in 12 states from California to North Carolina, and could spread to coastal inland waters of Oregon and Washington. "The weed floats on the water surface and grows at phenomenal rates, doubling the area it covers in less than a week," the agency told the Fish Info service. "Mats of Salvinia molesta may reach three feet thick, blocking sunlight to waters below and killing plants, bugs and fish. Small lakes could be covered in a matter of days, water works clogged, and eradication is no easy matter." Fish and Wildlife added: "Mechanical removal is nearly impossible, given the dense mats weigh around 36 tons per acre; shredding plants is not effective either given the plant’s ability to continue to grow from the smallest living portion. Herbicides have some promise, but are costly and most effective on younger plants and require repeated treatments, which underscores the need for the first line of defense: prevention." Lobsters as stolen property Police in Maine got a lot more than they bargained for when they recently stopped a car for speeding. According to the Bangor News, "Around 11 p.m. Wednesday, police stopped Doreen Beerman of Rockland for speeding and discovered 136 unrestrained live lobsters inside her car." Beerman, who was celebrating her 44th birthday, was arrested for allegedly operating a car while intoxicated and driving without a license. The police believed the lobsters were part of 245 pounds stolen from Maine Coast Seafood. Beerman was also charged with receiving stolen property and possession of lobster without a license. After her arrest, the roughly 200 pounds of live lobsters were removed from the car and put into crates, awaiting their rightful owner. Kodiak-based free-lance writer Laine Welch can be reached via e-mail at ([email protected]).  

State, ACS finalize five year contract

The State of Alaska finalized a five-year, $92.5 million contract Dec. 10 with Alaska Communications Systems to provide telecommunications services for state government.Signing the contract could represent milestones for state government, officials believe."This is one of the largest nonconstruction procurements ever done by the state of Alaska," said Jim Duncan, commissioner of the state Department of Administration.The contract also may be the first such large telecommunications partnership between a state government and a private company, Duncan said. Georgia has issued a request for proposal for a similar contract, he noted.After a 110-day transition period, the contract takes affect in April, said Sharon White, who worked on the contract with the state Information Technology Group.The first major new component of the contract to begin running will be a new videoconference system, Duncan said. By mid-March the new system should be installed at the Atwood Building in Anchorage, the Governor’s conference room of the State Capitol in Juneau and at the Butrovich Building in Fairbanks.For ACS the contract is a means for the company to offer new technology, said ACS President Wes Carson. The state will be the anchor tenant for new services, he said."We also see this as an opportunity to bring this technology to businesses in the state," Carson said.The margins are thin in the early years of the contract, but Carson said his company expects to handle the contract profitably during the five-year term.Another bidder on the contract, General Communication Inc., did not file comments during the protest period, said GCI spokesman David Morris.AT&T Alascom also did not file comments, said spokeswoman Meg Sudduth.The new contract aims to streamline state telecommunications services. The state issued a request for proposals in August 2000, and bids were due that December.The Department of Administration issued a notice of intent to award the contract to Anchorage-based ACS Nov. 15.ACS plans to provide $29 million in capital investments as part of the contract.Key elements in the contract include improved broadband services to state offices in urban and rural Alaska and reduction of the state’s long-distance calling costs by allowing calls between state offices to be local calls. With final approval of the contract, ACS would provide improved cellular and satellite phone service. Video conferencing is another major element of the contract.

Budget to be $906 million short

JUNEAU -- Low oil prices will require Alaska to use $906 million in reserves to balance next year’s state budget, according to a revenue forecast released Dec. 7 by the state Department of Revenue.The department predicts oil prices will hover around $18 per barrel for the next two years following a similar period of higher-than-average prices.The dip is expected to cause the state’s Constitutional Budget Reserve, a fund used to make up the deficit in state spending, to be empty by July 2004 unless new revenue sources are found."It’s almost a year sooner than we said in our earlier forecast," said Larry Persily, deputy commissioner of the Department of Revenue.Oil prices are expected to average $20.55 for fiscal 2002 and then decline in each of the next two budget years. Prices are expected to average $18.81 a barrel in fiscal 2003 and $19.72 a barrel in fiscal 2004.Oil revenues make up about 82 percent of the state’s unrestricted funds and fuel its $2.5 billion general fund.North Slope production is expected to increase after falling to below 1 million barrels a day in fiscal 2001 for the first time in 24 years.The department predicts production will average 1.01 million barrels a day in fiscal 2002 and remain above that mark through 2008.But Revenue Commissioner Wilson Condon said the state’s budget gap will continue to grow despite oil prices because of declining tax revenues from newer fields. He said the state must find new revenue sources to make up the gap between revenues and spending."Our reliance on newer, more costly oil to replace the declining flow from our aging fields means less revenue for the state. Low oil prices only exacerbate the situation," Condon said in a statement.The Constitutional Budget Reserve is at $2.8 billion and is expected to drop to $2.3 billion by July.

Juneau escapes much of timber-related pain

JUNEAU -- Juneau’s economy has been doing fairly well in the past decade, unlike the rest of Southeast Alaska, according to an analysis by a Juneau research and consulting firm.From 1990 to 1999, Juneau’s employment rate rose 18 percent, while Sitka’s employment rate fell 2 percent; Wrangell-Petersburg’s fell 3 percent; Haines’ dropped 8 percent; Ketchikan’s employment rate slipped by 9 percent; and Skagway-Hoonah-Yakutat experienced a 17 percent drop, Jim Calvin of the McDowell Group told a Juneau Chamber of Commerce meeting Nov. 30.Overall, Southeast employment rose 4 percent and the state as a whole rose 16 percent, he said.Statistics show Southeast communities suffering major economic distress in the 1990s, but indicators illustrate that the worst is behind us, Calvin concluded.Payroll trends for 1990-99 showed Juneau up 6 percent; Sitka down 13 percent; Haines down 19 percent; Ketchikan down 21 percent; and Skagway-Hoonah-Yakutat down 35 percent. Southeast was off 9 percent overall while Alaska as a whole was up 5 percent."Juneau typically tracks Alaska, but the rest of the region is separate," Calvin said. "Primarily this is due to the timber industry."Downturns in Southeast’s timber industry began in 1990 with the shutdown of the Haines sawmill, the community’s single largest employer.In 1994 came the closure of the Wrangell sawmill, followed by the 1997 closure of the Ketchikan pulp mill.These closures meant the "loss of hundreds of year-round, high-paying jobs," Calvin said.Wage trends in real dollars, 1990-99, were minus 10 percent for Juneau; minus 12 percent for Sitka, Haines and Southeast; and minus 13 percent for Ketchikan. Alaska was minus 10 percent.As to personal income in real dollars including Alaska Permanent Fund dividends for the same period, Juneau was up 14 percent; Haines was minus 1 percent; Ketchikan was down 7 percent; Prince of Wales was off 11 percent; Skagway-Hoonah-Yakutat was minus 6 percent; and Southeast overall was plus 2 percent.Per capita income in Juneau in 1999 was $33,974, while Alaska was $28,629; "substantially above the U.S. average but the gap is shrinking," Calvin noted.Income in Juneau has been flat over the last decade "but it has escaped the down trends of the timber industry," he said.All over Southeast, the number of proprietors and self-employed people is increasing. Many of these jobs are in tourism, bed-and-breakfasts and cab driving, translating into lower incomes, he said.The exception was higher-paying jobs created by the building of a Southeast Alaska Regional Health Consortium hospital in Sitka, he said.Like Jon Carter of DIPAC who spoke to the Chamber two weeks earlier, Calvin noted the competition of Chilean seafood."Everyone knows that we have been battling farmed fish, which now accounts for about 60 percent of world salmon production," he said. He suggested Alaska "take measures to penalize the Chileans.""In the 1970s and 1980s, the world came to Alaska and knocked on our door for timber and seafood, and it’s not doing that any more," Calvin said. "We need to take Alaska to market."The numbers Calvin put forward "offer some pessimism, but we are optimistic at the bank," said Lloyd Johnson, vice president of First National Bank, who attended the talk. "We are lending money right and left and taking deposits right and left."Johnson agreed with Calvin that Southeast must get out and sell itself. "We need to do that with tourism and even in respect to keeping our Capitol at the corner of Fourth and Main," Johnson said.

Venture capital still fuels start-ups

U.S. venture capitalists have made investments of $31.6 billion so far this year, including $1.8 billion in November. A total of 454 companies have been funded in the past two months alone. The venture capital industry, despite reports of doom and gloom, is still fueling start-ups and fast growth all over the country.Let’s have a look at some of the deals that occurred on Dec. 3: American Capital Strategies pumped $31 million into Numatics, a provider of pneumatic valves, air filters and motion control devices in Highland, Mich. Advent VP and Warburg Pincus invested $15.1 million in Netik, a provider of end-to-end electronic business and straight through processing solutions for the financial services industry. Kennet Capital Ltd. led a second-round infusion of $8 million for CascadeWorks, a San Francisco provider of enabling services for e-procurement. These funds were for continued market penetration and fast growth. Three companies, Zero Stage Capital, Pennsylvania Early Stage Partners and Sodexho provided third-round funding of $3.25 million for the software firm Gazelle Systems of Newton Upper Falls, Mass.On Nov. 30, Genscape Inc., a provider of energy information services out of Louisville, Ky., received its first-round funding of $3.55 million. Chrysalis Ventures led the investment with other venture capital, Angel and industry partners.This one deal alone serves to dispel a few venture capital myths that have started this year: Myth 1: If you don’t live in Silicon Valley there is no venture capital money; Myth 2: Venture capitals don’t do deals with angels or industry partners; and Myth 3: No first-round funding is being done.So who are the major players? The top investors over the last 90 days have been New Enterprise Associates with $381.7 million; Oak Investment Partners, $338.5 million; Bessemer Venture Partners, $261.6 million; Centennial Ventures, $227.4 million; and Mayfield Fund, $216.8 million.Where is the money going? The top industries are still software companies and firms that provide Internet or networking services, but there is also a strong interest in biotech and telecommunications, especially broadband and wireless companies. You may be surprised to hear that venture capitals are still investing in e-commerce companies and the retail industry.Northwest Venture Associates in Spokane, Wash., is a great example of a venture capital firm succeeding in today’s market conditions. NWVA invests in solid companies with a lot of potential. They need not be the next venture capital home run. They don’t look for returns of 100 or 1,000 times their investment, as many venture capital firms have done over the past few years.The old rule of thumb of a five to 10 times return works well for them. This year they have invested in a chain of veterinary clinics, a high-end retail outlet for gourmet cooking utensils and a manufacturer of nostalgic children’s games.NWVA’s first fund had a net internal rate of return of more than 20 percent; its second fund had a net internal rate of return in excess of 50 percent and raised a third fund last year of $150 million. What’s their philosophy? They look for real businesses serving real customers with real needs.One of the other myths prevalent this year is that venture capitals can’t raise money. Yet Trivest Inc. of Miami has just announced the closure of its third fund with $316.1 million in committed capital. Trivest specializes in buy-outs of firms in the $30 million to $150 million range. This type of investment firm is crucial to the exit strategies of venture capitals who concentrate on seed and first-round funding.In a survey of venture capitalists conducted by Dee Power and Brian Hill, authors of the book "Inside Secrets to Venture Capital," they found that many venture capitalists view the current investment environment as one of the best times in recent years to raise money for entrepreneurs because it is a lot easier to get noticed. It seems the old adage that there is a lot of money chasing a few good deals still holds true.Venture capitals in the survey argue that since entrepreneurs have had to face more realistic valuations, there exist tremendous opportunities for investments in better companies at much lower costs. The survey found that 77 percent of the venture capitalists questioned said the quality of companies has improved over the last 12 months.The most common reason given for an improving investment environment was that there has been a tremendous amount of capital raised that needs be invested, and, as current portfolio demands lessen, more time will be devoted to new investments.So what advice do venture capitals give to companies searching for capital? Have a strong business model with a well-thought-out business plan and get a good management team. Build your company as if you were in a marathon, not a sprint. Show that you can attract paying customers, rather than demonstrating vague notions of customer existence, and then bootstrap your company to get as close to positive cash flow as possible.Now where have we heard this before?Bruce Borup is assistant professor of entrepreneurship at Alaska Pacific University. He can be reached via e-mail at ([email protected]).

Fresh seafood distributor faces challenges, report finds

A report from the McDowell Group, a Juneau-based economic consulting firm, has concluded that a fresh seafood distribution center in Anchorage is not feasible, mainly because a consistent, year-round volume of business can’t be generated by the highly seasonal fishing industry.Those in the fishing business who were interviewed for the report were split on the idea, although a majority, 14 of 25 interviewed, questioned the idea. Eleven of those interviewed favored it, McDowell Group reported.Most of those interviewed felt there is now sufficient capacity to meet transportation and storage needs, and that a new, centralized facility would add costs.However, those favoring the idea felt there was need for a centralized facility to store and transfer fresh fish, and that its benefits would outweigh any added costs.Reasons cited by supporters included "more refrigerated space, a central point for buying and selling fresh seafood, space for consolidation, and a central pickup point for truck backhaul," according to the report.The report was done for the World Trade Center Alaska, which is working on long-range plans to build up the fish handling and distribution business in Southcentral Alaska.The overall conclusion of the McDowell Group report states that, "the seasonal seafood industry does not lend itself to a consistent, year-round source of seafood."The seafood industry is also dependent on the ability of fishers to track and harvest wild fish. The unpredictability in harvesting wild fish often results in thousands of pounds of fresh seafood one day and little or nothing for the next three days," the report said."A central seafood distribution center would have a wide variability in volume of fresh seafood moving through the facility," the McDowell Group wrote.Fresh food distribution centers are common in other states, mainly in handling agricultural produce, and have substantial benefits."A primary benefit is the concentration of suppliers and buyers," the McDowell Group said. "By bringing together regional suppliers and buyers, commerce is enhanced," the report said.An example of a successful fresh food distribution center is Hellman Perishable Logistics in Miami, which moves fresh seafood, fruits, flowers and vegetables from South America to points across the United States.An additional challenge facing the idea of the distribution center, one that faces the entire fishing industry, is the logistics problems of moving fresh seafood into Anchorage from outlying areas."For those fortunate enough to be on the road system, it’s a simple matter of contracting with a local trucking company to move the product," the McDowell Group reported. "The shipping challenge can be daunting and expensive for seafood suppliers not on the road system."Despite the problems, 7 million to 8 million pounds of fresh seafood is shipped annually from rural communities into Anchorage, the McDowell Group found.There are also serious problems within the shipping industry. Seafood often gets bumped for passengers on passenger flights that also carry freight, which leaves the product sitting on the tarmac.Poor communication presents difficulties, the report found. Seafood processors often call freight forwarders at the last minute. Airline managers are often unable to coordinate flights with scheduled fishery openings.A number of recommendations were made in the McDowell Group report. One was to encourage consolidation of fresh seafood into full containers going out-of-state. A full load is 44,000 pounds. According to transportation people interviewed by the researchers, many trailer loads traveling south are only partly full. With full loads, shippers can enjoy reduced costs.Another recommendation is to help medium-size processors upgrade their freezing, icing and processing technology."This would allow significant value-added economic activity in Alaska rather than after the product is shipped Outside," the McDowell group said.

Travel industry to ask state for $12.5 million for ad boost

Alaska tourism officials have prepared new marketing tactics to attract travelers to the state in response to an expected downturn in the industry.The Alaska Travel Industry Association plans to ask the Legislature for $12.5 million designated to market the state to potential visitors. Television and print advertising would promote Alaska as a safe destination within the United States at a time when some travelers are more inclined toward domestic travel, said Mark Morones, ATIA’s communications director.Other U.S. destinations have also stepped up their marketing to compete for these visitors, he said. Typically, potential visitors perceive Alaska as a destination on par with major international locales.Looking ahead to 2002, the Travel Industry Association of America believes travel will be soft through the first half of the year and could return to 2001 figures later in the year for overall flat statistics.The Washington, D.C.-based organization also noted that corporate and convention travel had dropped before September’s terrorist attacks, which occurred during peak convention and business travel season. The group forecasted a slow recovery for this travel segment, but found that some canceled conventions were rebooking events.The association also cited a National Business Travel survey conducted in late September that showed that most corporations were not suspending travel but 58 percent expected their companies to reduce travel. The reduction could be a means to trim costs during economic downturns, the travel group said.The Anchorage Convention & Visitors Bureau developed its plan in November, geared to building its future meetings and convention business.Alaska is a safe destination at a time when some travelers hesitate to travel to international destinations, ACVB officials noted."We see that as a great opportunity for us," said Bruce Bustamante, president and chief executive of the ACVB.He believes the economic diversity that meetings and conventions bring to Anchorage is important to the community especially during fall, winter and spring seasons. ACVB has developed those months as prime time for national and state gatherings.Now ACVB aims to boost its promotion of Anchorage as a convention destination, especially as the upcoming summer season may bring fewer visitors than in 2001."We’re going to build on our strength," he said.This month ACVB is launching a new campaign to bring more meetings and conventions to town. The organization had already established some changes. In April ACVB reorganized its departments, moving three people to the convention sales department, Bustamante said.New strategies include working with members, businesses and organizations to obtain leads about possible meetings, especially national events, he said.The campaign took a month to develop, he said.ACVB expects most conventions already planned will still conduct events here although perhaps bringing fewer delegates.Plans also call for increasing direct marketing aimed at encouraging Alaskans, who like other Americans are expected to stay closer to home, to visit Anchorage.ACVB officials also increased its 2002 goal for meetings and conventions booked to $83 million, he said. Bustamante believes the target is achievable since this year sales are on track to hit $78 million.However, possible increased business from meetings and conventions probably won’t make up for a possible lackluster visitor season, he said."We’re optimistic about meetings and conventions business. We’re not optimistic about the tourism season," he said.State tourism promoters would be helped by $12.5 million from the state, a request the Alaska Travel Industry Association has proposed, he said.Last year September and October were usually some of the busiest months for convention business in Anchorage, ACVB statistics show.During that period this year 10 meetings canceled events and several others were affected by the Sept. 11 attacks, ACVB reported. Attendance at two large conventions was cut in half, and ACVB estimated total losses to Anchorage business at $3 million.

Remodeling project begins at landmark bar

JUNEAU -- After losing seven parking spaces, including handicapped parking, to construction of the Marine Way turnaround, Don Harris said he decided to let his Cookhouse Restaurant "die a natural death."The restaurant, next door to the Red Dog Saloon, closed for good after the end of the cruise ship season. Harris, president of Cookhouse Inc. and owner of the Red Dog, decided to use the downturn in restaurant business that came after the loss of parking as an opportunity to remodel and capitalize on his growing online souvenir business.The $1 million remodel job will expand the souvenir business, improve food service in the Red Dog and give Harris and his wife a new downtown residence."We have a big hole in the ground and are starting all over again," Harris said.The current Red Dog and what was the Cookhouse were built at 278 S. Franklin St. in 1987-88.The remodel won’t change its basic footprint, at historic Miners Square, but a second floor will be added to the current arrangement of main floor with mezzanine. The hole in the ground will accommodate a freight elevator. New plumbing will be installed and everything will be brought up to current city building codes.The full, 4,000-square-foot second story will become a residence for Harris and his wife, Rose, as well as a facility for the mail-order business, said their son Case, who is marketing director."The saloon itself is receiving several major upgrades, including a high-volume air system, and we’re in the process of renovating and upgrading the food service with a state-of-the-art kitchen," Case Harris said.Although the Cookhouse is no more, there will still be food service, and the popular 3-pound hamburgers, with or without cranberries, will remain, as will beer-batter onion rings and halibut.Although only about 70 years old, the Red Dog is designed to resemble a picturesque, Gold Rush-era saloon, the sort of place where balladeer Robert Service would have interviewed old-timers and author Jack London might have downed a few beers.Before the current Red Dog was built in 1988, "We were a landmark in reputation but didn’t have a facility to go along with that," said Don Harris. "I had this building designed to what the tourists’ perception was, right down to the shape and configuration of the bar."Harris estimates half a million visitors drop by the Red Dog every tourist season."We had no idea how things were going to grow," he said. "We didn’t have the money to put on the second floor back in ’87. So really we are just completing our long-term dream. With interest rates dropping, we made the decision that this was the year to make major changes."A smoking ordinance passed by the Juneau Assembly earlier this year requires that restaurants and bars be physically separated. That ordinance affected his decision to remodel, but was not the main motivation, Harris said."The smoking ordinance was just the straw that broke the camel’s back," he said. "We wanted to upscale our quality of operation."Under the new ordinance and state regulations, the saloon area is exempt, so smoking will be allowed there. A combination ventilation and heating system is being installed to keep air fresh throughout.For the past two years, Cookhouse Inc. has rented space "all over town" to accommodate its souvenir business: T-shirts, glassware, coasters, frilly garters and such, Harris said. Remodeling will create storage as well as space for filling and boxing mail orders."Now we will have everything under one roof," Harris said.Harris has lived in Juneau since 1968. He purchased the Red Dog in 1972, when it was next to the Alaskan Hotel.General Manager Bruce Legas said that, following renovation, the saloon’s new menu will include deli-style offerings, some produced by ovens capable of smoking meats. The menu will expand to embrace up-scale pizza and foccaccia sandwiches, Legas said. However, the children’s menu and "many of the old favorites" will still be available.The current remodel began Oct. 1, the day after the last cruise ship came to Juneau. Weather permitting, Harris would like it to be completed in late January.Triplette Construction is preparing the Red Dog’s new roof in sections, Harris said."We panelize all of our construction as we are doing at our own shop," said Robert Donovan, assistant projects manager for Triplette.The method is fairly new, but overlaps in some respects with prefabrication, he said. Large roof pieces for the Red Dog will be created at the Channel Drive plant, and then trucked downtown.The saloon roof, an arrangement of Victorian angles, is the result of a collaboration between Design North and Jim Triplette, Donovan said. The pieces are raised into place by large cranes.

Travel industry to fight downturn with marketing

The Alaska Travel Industry Association is preparing a plan to boost state marketing efforts after survey results showed a drop in 2002 bookings to date.The travel industry has been the hardest hit since the terrorist attacks on the East Coast, said ATIA President Tina Lindgren."There’s been an overall drop in travel across the country," she said. "The only thing we can do is marketing."A marketing plan would help recoup losses expected from the upcoming summer visitor season, she said.ATIA expects to ask the Legislature for $12.5 million for its marketing efforts. Also, Gov. Tony Knowles has created a task force to study affects on Alaska industries from the September attacks and develop recommendations, she said.An ATIA survey of 303 Alaska tourism businesses completed in early December showed an average decrease of 23 percent in bookings compared with the same time last year. The survey, conducted by GMA Research, covered 29 sectors of tourism businesses, from air taxis to cruise ships to recreational vehicle rentals. Inquiries from potential visitors were also down by 23 percent overall, the findings showed."We know that this is going to impact us," Lindgren said.A separate ATIA survey studied attitudes of people who requested travel information before Sept. 11.Survey results showed that 10 percent of potential visitors who had decided to visit Alaska no longer plan to come in 2002. One in 10 potential visitors who plan to travel to Alaska next year have made reservations and finalized their plans, ATIA cited from its survey. One-third of visitors who planned to visit Alaska before Sept. 11 say they are definitely planning to visit the state now.Results depict a 2002 season tallying declines in total visitors and direct spending to Alaska tourism businesses, she said."We’re facing a season with a between 10 and 20 percent decrease than in previous years," she said.According to Lindgren, a 10 percent decline in visitors would translate to a loss of $102 million in visitor spending and could cost the industry 1,500 jobs. Those figures are based on an estimated 1.4 million visitors annually who spend about $726 each with tourism businesses.A marketing plan would aim to reverse such an anticipated decline from last year, she said.Marketing efforts would endeavor to persuade people who had thoughts about an Alaska trip to fulfill those plans, she said. Also, since tourists are now reluctant to travel overseas, an Alaska campaign could encourage them to visit the state instead. Work with the travel agent sector and others would inspire them to promote Alaska to travelers, she said. Marketing would also encourage residents to pitch Alaska travel to their friends and relatives, she said.

Business Profile: DC Design Studio

Name of the company: DC Design StudioEstablished: 1997Location: 545 W. Fireweed Lane, AnchorageTelephone: 907-258-5411Web site: www.dcdesign.comMajor focus of services: DC Design Studio develops graphic design services including brochures, newsletters, posters, bus signs, specialty marketing items like personalized pens and company logos, letterhead and business cards. The company also handles Web site design and is working with a client to produce a CD-ROM for marketing efforts.History of the company: An Anchorage graphic designer, Cara Showers, founded the company with her husband David Showers who developed the Web design side of the business. In late 2000 they were looking to sell the business which attracted the attention of Wayne Saucier. The Showers moved to Florida for family reasons. Saucier, who had worked in Alaska off and on, acquired DC Design Studio this summer.The business showed promise, he said. "They demonstrated growth right from the get go," he said.Saucier handles Web design for the company, while Brian Dixon serves as creative director. DC Design Studio also employs a part-time employee. The company also works with several subcontractors.Now DC Design Studio is "poised for growth and picking up more clients," he said. "Our goals are really to grow along with our clients. When they grow we grow," he said.Top accomplishment of the company: Saucier cites the recent debut of an online commerce Web site the company developed for a client. He is also pleased by the continued loyalty of clients following the change of ownership. "We took some extra time to chat with our clients, to learn the history of their businesses and their goals," he said.Major player: Wayne Saucier, owner, DC Design Studio.After studying at several Alaska universities, Saucier earned a bachelor’s degree in French from the University of Maine. He worked in Alaska in various posts for the past five years, including work for nonprofit organizations and political campaigns. As assistant to the state government’s Web master, Saucier learned to develop Web pages and other Internet technology. He also worked for Gov. Tony Knowles and the Legislature. Before he bought DC Design Studio, he worked at a nonprofit organization in Seattle.-- Nancy Pounds

Democrat says GOP has been generous to rural Alaskans

NOME -- Republican politicians in Alaska have been unfairly accused of somehow working against the interests of rural Alaskans. But as a Democrat who’s served with majorities of both parties, I have to say that rural Alaska has done very well under Republicans, and that the Democrats never did any better. I’ve been honored to represent Nome and 29 Western Alaska villages in the Alaska House of Representatives; under Democratic majorities from 1989-92, and under Republican majorities ever since. My district is a rural area where capital expenditures on ports, airports, housing, schools, health and sanitation make a big difference in people’s lives. On almost every issue important to my district and rural Alaska, the Republicans have understood and provided for our needs. Power Cost Equalization The Republican-led Legislature created a $180 million Power Cost Equalization Endowment with proceeds from sale of the Four Dam Pool hydroelectric facilities. Instead of an annual fight to fund PCE, villages now enjoy a reliable source of funding for this critical service to rural Alaska. Housing Decent, affordable housing is a critical need in rural Alaska, and Republicans have been generous in appropriating the millions of dollars in state general funds necessary to bring matching federal funds. This money has built and renovated hundreds of homes in my district and in other rural areas, making a lasting contribution to the quality of life of elders and young families alike. Water and sewer While there’s been much talk about putting the honey bucket in the museum, the Republicans in Juneau and Washington are doing the heavy lifting to make this promise a reality. Republican state lawmakers have consistently voted to appropriate the 25 percent state match that brings 75 percent federal funds for Village Safe Water programs, bringing my district alone $150 million since I took office. Now our public health and sanitation in our villages rivals that of Anchorage, and more money is on the way. Schools In my first four years serving under Democratic leadership, my district received one new school, a $12 million facility in Gambell. But since Republicans took over in 1993, they have invested $160 million for new schools in my district, including new schools in Chevak, Kotlik, Koyuk, Elim and Golovin. Republican leadership is the best thing to happen to rural education since the Molly Hootchdecision mandated local schools in rural Alaska. Subsistence Even though a minority of Republican senators has stalled its progress, a bill to let Alaskans vote on a rural subsistence priority has already passed the Republican-led House. Those blaming Republicans for an urban-rural split should remember that Democrats also failed to pass a subsistence bill during four regular and two special sessions they controlled from 1989-1992, which I attended. All Alaskans should appreciate the challenge that lawmakers of any party face in crafting a subsistence solution that is as fair to urban Natives, and non-Natives, as it is to rural Alaskans. Denali Commission Sen. Ted Stevens, the senior member of Alaska’s all-Republican congressional delegation, helped create the Denali Commission, which brings economic development funds to my district and other parts of Bush Alaska. Primed with millions of cost-sharing state funds voted by Republicans, the commission has so far directed over $110 million into rural Alaska in the last three years. A minimum of an additional $65 million is scheduled for next year. This money not only improves the material well-being of village residents, it also creates critical construction and maintenance jobs that let residents earn the cash they need to get through the winter; hone their vocational skills; and expand the economy in village Alaska. My district is not alone in receiving generous capital funding from Republican legislators. Districts including Nome, Bethel, the Upper Yukon and other rural areas are consistently among those receiving the largest amount of capital funds. The most recent capital budget allocates $6,743 per voter in rural Alaska in Nome, Kotzebue, Bethel, Interior and Aleutians, compared to $1,157 per voter in Anchorage and $1,166 per voter in Fairbanks. Republicans have been quick to recognize the real needs of Bush Alaskans and have not hesitated to vote for such funding, year after year. I have long enjoyed working with my friends on both sides of the aisle, but have found I can best serve the needs of my rural constituents by working with a Republican leadership. Rep. Richard Foster, D-Nome, is serving his seventh term in the House of Representatives.

GCI applies for local service in 10 communities

Alaska Communications Systems officials said they will begin a negotiation process following a competitor’s request to provide local telephone service in 10 towns ACS already serves.General Communication Inc. filed a request Nov. 29 with ACS to offer local telephone service in Delta Junction, Fort Greely, Homer, Kenai, Kodiak, Nenana, Ninilchik, North Pole, Seldovia and Soldotna.GCI’s move followed Anchorage Superior Court John Reese’s decision Nov. 26 to uphold a ruling by state regulators that opened Fairbanks and Juneau markets to other local telecommunications providers.The next step is negotiations for an interconnection agreement between the companies, said Mary Ann Pease, ACS vice president of investor relations. That process could take 270 days in accordance with the Telecommunications Act, she said.However, ACS officials hope regulators will rule to allow a price increase for the rate ACS could charge GCI and others to use its facilities to provide local telephone service, she said."We’re talking about some high cost areas," Pease said.Service to the proposed communities might start in 2003, she said.GCI officials listed fall 2003 in their statement about the proposed service.GCI has been offering local service in Fairbanks since this summer, when the Regulatory Commission of Alaska ordered ACS to let GCI lease equipment and enter the Fairbanks and Juneau markets.The change follows several years of court proceedings.In 1997, GCI had applied to lease ACS infrastructure in Fairbanks and Juneau, arguing that the communities were not rural and could financially support more than one local telephone company.ACS disagreed. The Alaska Public Utilities Commission, forerunner of the current commission, ruled in 1998 that Fairbanks and Juneau were rural, saying GCI failed to meet the burden of proof.GCI appealed that decision to Superior Court, which then ordered the commission to re-examine its ruling, this time placing the burden of proof on ACS.The commission ruled in 1999 that Fairbanks and Juneau were not rural.Shortly after that, the Legislature replaced the commission with the RCA, which made the same ruling later that year.ACS appealed to the Superior Court, resulting in Reese’s decision.

What winter brings, airport maintenance crews remove

Crews that clear snow and ice at Ted Stevens Anchorage International Airport have the right stuff.The 90 or so men and women of the Field Maintenance, Operations and Safety Division can boast that the airport has never been closed because of snow or ice."We’ve had a couple of close calls, but no one can remember when the airport last closed because of snow,’’ said Corky Caldwell, the airport’s aviation operations manager.Caldwell, a former U.S. Navy jet pilot, likened the airport’s snow removal crews to the very best aviators in the service, the "Top Guns."Their attitudes and professionalism are interchangeable, Caldwell said."We have very highly qualified people and great equipment operators,’’ Caldwell said.Anchorage International in 1998 and 1999 won the Balchen/Post Award for excellence in snow and ice control, and once won runner-up in the large airport division.The award, named for famed aviators Col. Bernt Balchen and Wiley Post, is sort of the Pulitzer Prize 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 snowstorms."We felt sorry for them,’’ Caldwell said.Morale is high and turnover low for the snow crews, equipment mechanics and operations staff, all of whom are dedicated to keeping the airport open in the harshest winter weather. And they vow to keep the no-closure-from-snow record alive, said Dan Hartman, the airport’s manager of airfield maintenance.The Anchorage airport averages almost 70 inches of snow from October through April, with December having the highest snowfall of about 15 inches annually.But snow is just one of the factors crews must face, as freezing rain and frost from icy fog contribute to a slick tarmac. Then there are the freeze-thaw-freeze conditions amplified by the airport being surrounded on two sides by the relatively warm waters of Cook Inlet.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 even a few sidewalks."Basically, it’s anything not covered by a building,’’ Hartman said of the snow crew’s responsibility.The airport’s three runways, however, are the priority.Runway surfaces are monitored for moisture and slickness by computerized sensors. Snow crews also are in close contact with the weather service, Hartman said.When snow or ice first accumulate, an armada of equipment blitzes down a runway at nearly 30 mph. Four plow trucks with 19-foot-wide blades, towing high-speed brooms and snowblowers can clear a runway that’s more than 2 miles long and 150 feet wide in about 15 minutes, Hartman said.The plow trucks are usually followed by a fleet of graders, loaders, dump trucks and sanders.Each year, the airport uses about 5,000 tons of sand, 1,750 tons of a special snow-melting substance called urea, and 100,000 gallons of de-icer, Hartman said.Getting the right combination of sand and chemicals comes with much experience, Hartman said."The art is what to use and when to use it,’’ he added.Driving snow removal equipment isn’t easy, and crews are subjected to annual training and dry runs before the first snow fall. Familiarity with the tarmac is important when the airport encounters white-out conditions, Hartman said.Some employees have been pushing snow at the airport since the 1970s."It takes one to two years for them to be comfortable out there on the line and about seven years before someone can lead a pack of plows,’’ Hartman said.In the summer months, crews maintain equipment, patch cracks and potholes on the tarmac, paint centerlines, remove airplane tire rubber from runways and maintain 37 million square feet of grass, Hartman said.Sixteen mechanics keep the more than 300 pieces of snow removal equipment in shape and often modify equipment to meet the demands of Alaska weather, Hartman said.Recently, mechanics and machinists fabricated a special metal coupling to a snow-sweeping machine that had been suffering from severe vibration problems, Hartman said. The mechanics shared their solution with the machine’s manufacturer and now copies of the couplings are coming out on the machines as standard equipment."The mechanics play a major role in our ability to keep the airport open,’’ Hartman said.In addition to the mechanics, the snow-removal crew consists of 54 equipment operators, 10 electricians, three administration personnel and two people who order parts for the machines. There also are nine equipment operators who are on call.Personnel costs account for about $5 million of the department’s approximate $10 million annual budget, which is funded through landing and fuel fees from the airlines."We’re a state agency, but we’re customer oriented,’’ Hartman said. "The airlines are our customers and we do whatever we can to keep the airlines here and we go out of our way to keep them happy.’’Hartman has big plans for increased efficiency at the airport, including bigger snowplows to speed up removal time. The crews also hope to have a new 74,000-square-foot building in a few years to house offices, equipment and sand.Meanwhile, crews will continue to keep the airport open with what they’ve got, Hartman said."If anybody wants to come to Anchorage, they’ll have a place to land,’’ Hartman said.

This Week in Alaska Business History December 9, 2001

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 TimesDec. 9, 1981House clears way for new gas line financing packageBy Betty MillsTimes Washington BureauWashington -- The House voted 233-173 today to approve a package of waivers to federal law necessary to ease private financing for the Alaska Highway natural gas pipeline.The vote follows approval by the Senate last month, but final consideration of the waiver package was delayed by a technicality. Even though the resolutions are the same, the number on the resolution is different, prompting reconsideration by the Senate today.That action was expected to occur later today.The margin in the House was closer than expected, largely due to a spate of last-minute protests by consumer groups and negative national publicity.Anchorage TimesDec. 9, 1981Legislators affirm stand on railroadBy Betty MillsTimes Washington BureauWashington -- Members of the Alaska Legislature are heading for a confrontation with the congressional delegation over railroad transfer legislation.Twelve members of the state Senate, here for a legislative conference, voted unanimously today to press for provisions in the bill transferring the railroad to the state and allowing for expansion of the right of way.Last Friday, Alaska Sens. Ted Stevens and Frank Murkowski and Rep. Don Young issued a statement saying that no transfer legislation containing the right of way provisions can clear Congress this year.10 years ago this weekAlaska Journal of CommerceDec. 9, 1991Older, refurbished hotels cater to peninsula visitorsBy Tim MoffattFor the Alaska Journal of CommerceMost of the Kenai Peninsula’s million or so yearly visitors are from Anchorage. After that, trying to define the typical visitor gets tougher.A growing number of visitors of all kinds are choosing charm over modernity, looking for a taste of Old Alaska, if they can do it without giving up some conveniences. Catering to these visitors is the business of three of the Kenai Peninsula’s oldest establishments, given new life by the region’s burgeoning visitor industry.By far the oldest on the peninsula is the Van Gilder, originally put up as an office building in 1916 by Bostonian E.L. Van Gilder. Nestled between a bank and a movie theater in downtown Seward, the Van Gilder is a survivor of the days when Seward was the construction center of the Alaska Railroad, along a route announced a year earlier in 1915 by President Wilson.Although it stood through the disastrous 1964 Good Friday earthquake, the concrete-walled Van Gilder had fallen into decay until it was bought in 1987 by Don and Deane Nelson. They have since invested a sum they won’t reveal to bring the old building back to its original Edwardian charm.Alaska Journal of CommerceDec. 9, 1991NANA works to build jobs for shareholdersBy Margaret BaumanAlaska Journal of CommerceWith typical directness, board members of NANA Corp. dedicated their latest annual report to two very important groups of shareholders: the youths and the elders.The elders, board members said "have the responsibility to provide guidance and instruction to the youths in Inupiaq values, language and culture so that the Inupiaq people of NANA will continue to strive to preserve our way of life."The key to the Kotzebue-based regional corporation’s steady record of financial success may lie, in fact, in the way management has always looked intensely into the past while mapping the future."Our view of the claims act is to protect the land which protects the culture," said John Shively, senior vice president of NANA Development Corp.-- Compiled by Ed Bennett.

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