Hospitals face employee shortages, plans for expansion

Demand for skilled workers should continue to be a top issue for Alaska’s health care industry.Some organizations endeavor to help increase the number of workers needed for health services. One of them is the Juneau-based Alaska State Hospital and Nursing Home Association."Work force development is probably our No. 1 issue," said Laraine Derr, president of the association.The issue was emphasized this year when a lack of nursing staff led Providence Alaska Medical Center officials to divert ambulance traffic to other facilities, she said.Early in the year Alaska State Hospital and Nursing Home Association representatives plan to meet with University of Alaska Anchorage leaders to consider adding another nursing program, perhaps through distance education, Derr said.Alaska health care providers could see new rules in 2002 from the federal government as a result of the East Coast terrorist attacks, she said."With the Sept. 11 calamity there are new regulations coming from the federal government for bioterrorisim and emergency preparedness," Derr said.Expansion projects will be a major focus for health care facilities across the state.Topping the list will be construction start-up on a hospital to replace the 50-year-old Bassett Army Hospital in Fairbanks.A general contractor will be chosen in January for the $215 million project. Construction could begin in summer 2002, according to the U.S. Army Corps of Engineers Alaska District. Hospital completion is set for spring 2006.The 32-bed, 259,000-square-foot hospital would serve the military, their dependents and retirees of Fort Greely, Fort Wainwright and Eielson Air Force Base.The new facility will feature services including primary and urgent care, specialty clinics, pharmacy and laboratory services, Veterans Administration services, plus radiology, surgery, obstetrics, gynecology, pediatrics and family practice departments.Projects at the state’s two largest hospitals, 254-bed Alaska Regional Hospital estimated at $26 million in construction and 341-bed Providence Alaska Medical Center with about $30 million in renovations, should be complete in 2002.On the Alaska Native Medical Center campus, an expansion project should be complete by March at the Anchorage Native Primary Care Center, said Southcentral Foundation spokeswoman Annette Evans. The project more than doubles the size of the facility.Other facilities are planning for future projects. Officials from Central Peninsula General Hospital in Kenai are considering an expansion project that could double the size of its facility in coming years. Plans also call for opening a satellite facility in Kenai. The total project, which would be built in the next several years, could cost $60 million to $70 million.Long-range planning by Fairbanks Memorial Hospital officials helped develop a list of possible future projects. Officials are considering improvements that could nearly double the size of the facility in 15 to 20 years.Work on the master site plan was completed this fall, and hospital leaders were prioritizing a list of possible projects for construction. Some work could begin this summer, hospital officials said.

Around the World December 30, 2001

StateNew York shipbuilder is low bidder for ferriesJUNEAU -- A New York shipbuilder is the low bidder for a state contract to build two fast ferries at a cost of $67.9 million, state transportation officials said.Derecktor Shipyards of New York won the bid, offering to build the vessels for $2.6 million more than the state had advertised, state officials said Dec. 21.Transportation Commissioner Joe Perkins said the state will consider it anyway. The state failed to attract a successful bidder in April.Alaska transportation officials want to build two high-speed catamarans to run between Juneau and Sitka and Prince William Sound. Both ferries are expected to be in service by 2004.The contract would require two 250-passenger ferries that travel up to 32 knots and carry 35 large vehicles.Derecktor has experience building high-speed passenger ferries and other vessels including 270-foot Coast Guard cutters, said Gavin Higgins, general manager of the company.Extreme ice conditions make Inlet impassableANCHORAGE -- Upper Cook Inlet was closed to single-hulled tanker barges Dec. 21 after an Anchorage-bound vessel encountered impassable ice floes.The master of a Carl Anderson Towing tug reported having trouble maneuvering a powerless barge through heavy pack ice, the Coast Guard said. The barge was hauling aviation fuel and diesel.After two hours battling the ice, the tug managed to turn around and head south to open water. The 100-by-400-foot barge being towed was undamaged and no spill occurred, the Coast Guard said.The Coast Guard said the upper Inlet will remain closed to this type of barge until the risk of ice is reduced.The closure only applies to tanker barges, unpowered vessels used to haul petroleum products.All ships in the Inlet have been under heavy ice rules since Nov. 29. That means they must travel low enough in the water to prevent ice from clogging water-intake vents. And crews must have foul-weather gear and equipment such as docking winches must be operational in icy weather.Seward entrepreneur announces retirementANCHORAGE -- Dale R. Lindsey, a longtime Alaska entrepreneur, is retiring as president and chief executive of Harbor Enterprises Inc. in Seward.The retirement is effective Jan. 1, the company said. Lindsey will remain chairman and continue to own the company with his wife, Carol.Lindsey will be succeeded by R.J. "Skip" Reierson, senior vice president and chief financial officer.The Lindseys bought the company in 1959. Harbor is a major fuel distributor in Alaska and the Yukon through its subsidiaries Petro Marine Services, Alaska Oil Sales, Petro Express and North 60-Degrees Petro.Lindsey was named "Alaskan of the Year" by the state Chamber of Commerce in 1995, and he and his wife were inducted into the Alaska Business Hall of Fame two years later. He has been a director of the Alaska Sealife Center, Northrim Bank and the Alaska Railroad.Defense bill secures millions for AlaskaANCHORAGE -- Alaska made out "like a bandit" in the annual Defense appropriations bill that the U.S. House and Senate passed Dec. 20, said Sen. Ted Stevens, R-Alaska.The Defense spending bill includes $10.2 million to straighten Alaska Railroad tracks that run through Fort Richardson; $8.5 million for utility corridor repairs at Eielson Air Force Base and $8 million for the construction of a new radar system at Clear Air Force Station.In addition, 17 Athabascan Natives from the Interior who were given radioactive iodine by the Air Force in the 1950s will be compensated. They and the Fort Yukon-based Council of Athabascan Tribal Governments will share $1.5 million.Money for the national missile defense program was cut back, from $8.3 billion to $7.9 billion. However, that cut shouldn’t affect plans for Alaska, Stevens said. The cut was made after the Pentagon opted to scale back a satellite program and cancel a Navy missile program, he said.Stevens said he expects work on five missile silos to begin next summer at Fort Greely. Also, he said, enough money for a radar system at Shemya is in the bill, though it isn’t specifically directed there.NATIONConsumers temper their holiday spendingNEW YORK -- In what was supposed to be the biggest shopping weekend of the season, consumers remained frugal as they flocked to the nation’s stores Dec. 22 and Dec. 23, despite heavy discounting and advertising blitzes.The restrained spending in the final stretch before Christmas wasn’t the manic frenzy merchants had hoped for and cast a further pall on the shopping season, already expected to be the worst in at least a decade."This is supposed to be the ultimate peak Christmas shopping weekend and I think it was even softer than Thanksgiving weekend," said C. Britt Beemer, chairman of the Charleston, S.C.-based America’s Research Group.Instead of the typical surge on the final weekend before Christmas, traffic and sales were up only slightly from the previous weekend, analysts said, and down from the same time a year ago.As a result, holiday sales and profits for many merchants may come in below already modest expectations, said Jeff Feiner, managing director of Lehman Brothers."The profit picture looks a lot worse. Traffic was still off for the most important weekend before Christmas, even with the rampant discounts," Feiner said.Retailers’ profits may now be down as much as 5 percent to 10 percent, worse than the 3 percent to 5 percent declines Feiner had expected.The only bright spots have been in consumer electronics like game consoles and DVD players, kitchenware and certain toys like Harry Potter products.WORLDOfficial predicts OPEC production cut Jan.1DUBAI, United Arab Emirates -- Members of the Organization of Petroleum Exporting Countries will approve an agreement to cut production by 1.5 million barrels a day in response to plans by independent producers to curtail their daily output, a Gulf oil official said Dec. 24.The official, speaking on condition of anonymity, said the final decision would be taken during a meeting of OPEC ministers in the Egyptian capital on Dec. 28. The six-month agreement should take effect Jan. 1, he said.The official said that the meeting in Cairo would approve the decision after non-OPEC oil producing countries expressed readiness to cut production.Russia and Norway have each pledged cuts of 150,000 barrels a day. Mexico has said that it will cut 100,000 barrels, Oman 40,000 barrels and Angola 22,500 barrels, bringing the total non-OPEC cut in oil production to 462,500 barrels a day.-- Compiled from business wire services.

State trade officials optimistic in spite of economic troubles

A continued recession in Japan, Alaska’s No. 1 trading partner, coupled with U.S. economic troubles could affect the state’s exports in 2002, trade officials said.The state should tally total 2001 exports that are on par or up less than 1 percent from last year’s total of $2.5 billion, said officials from the state Division of International Trade and Market Development."We are relatively optimistic about 2002 exports maintaining a similar level as this year’s," said Greg Wolf, state director of international trade.In 2001, export figures did not include crude oil, which companies chose to ship to Lower 48 refineries instead, he said. However, a surge in seafood, mineral and fertilizer exports made up for the loss in oil export dollars, he said."Looking at the big picture, 2001 was a year that demonstrated resiliency and underlying strength," Wolf said.However, the Alaska exports in the new year face several challenges.More than 50 percent of total Alaska exports go to Japan, a country that is still in a recession that doesn’t show signs of a turnaround, Wolf said.Chuck Becker, director of the Alaska Export Assistance Center, believes Japan and other Asian markets are also struggling."Our markets in the Pacific Rim are not healthy at the moment," he said.The new year should bring activity for Alaska companies working in oil developments on Russia’s Sakhalin Island, he noted. Some Alaska firms have spent several years in that region, and now several oil projects are advancing, he said.Some seafood exports might not fare well in 2002, Becker said."The fishing industry has lost considerable market share due to competition from (fish) farmers. It appears the condition will not change but get worse in the future," he said.However, pollock and pollock roe exports climbed through third quarter 2001, and total seafood exports were up 21 percent to total $1 billion for the quarter, state trade officials said.Alaska exports through the third quarter tallied $2 billion, up $7 million from the same period last year, according to state statistics.Forecasts for 2002 Bristol Bay sockeye salmon returns are down and expected to total 16.8 million, compared with 22 million in 2001, said Rudy Tsukada, state trade office research section chief.Mineral exports could decline in 2002, influenced by worldwide price decreases, especially for zinc, he said.

Small airport subsidies funded through next year

WASHINGTON -- An anti-terrorism package awaiting final approval in Congress provides $50 million to maintain air service to 113 small cities through next year, despite a drop in airline passengers since the Sept. 11 terrorist attacks.Without the extra money, Transportation Department officials predict that the Essential Air Service program will run out of money next spring.The program subsidizes money-losing flights to certain airports to maintain scheduled commercial service. Air service to 33 Alaska communities, including Seward, Wrangell, Yakutat and Gulkana, is subsidized with $2.8 million annually under the program.With airline passenger revenue down since Sept. 11 and security expenses up, officials said the $63 million allocated for the fiscal year that began Oct. 1 is not enough to keep the program going for the entire year.The Transportation Department estimated that another $57 million is needed. House-Senate negotiators agreed to include $50 million in the final anti-terrorism bill, which both houses ratified.Congress created the Essential Air Service program in 1978 to make sure that communities that were receiving regularly scheduled air service before deregulation did not lose all commercial flights.For example, federal taxpayers are spending $1.1 million this year to connect Utica, N.Y., with the rest of the world, helping to pay for six roundtrips a day between Utica, N.Y., and LaGuardia Airport.The money allows Oneida County Airport, which recently lost its last unsubsidized airline, to keep commercial planes flying."The business community looks at air service as not only a convenience but a necessity," Oneida County Executive Ralph Eannace said. "There are some types of business that are only going to locate in a community that has air service. It establishes a part of the community identity to have that as well."

Pick life insurance for your needs

With the multitude of "financial experts" around these days, we are constantly bombarded with advice regarding life insurance. When it comes to buying the best life insurance, the experts usually break down into two camps: The people who believe that permanent life insurance, such as whole life and universal, is the only way to go, and other people who espouse the "buy term and invest the difference" philosophy. With newspaper columnists giving their view, magazine writers offering a different theory, life insurance professionals and financial consultants giving yet another recommendation, which one is best? The simple answer is: What’s best is what is best for you. Evaluate the true cost The chief reason people choose life insurance coverage is for protection, to provide financial security for dependents after the death of the insured. Both permanent, such as whole life, and term insurance can supply that safety net, but which one does it more efficiently? Term insurance is attractive because it has a lower premium, which often makes it the policy of choice for younger people with limited means and few financial responsibilities. Term insurance offers a fixed death benefit for a specific period, such as one year or five years. At the end of that time, the coverage is usually renewable at a higher premium. On the other hand, whole life insurance offers a fixed premium for an entire lifetime, a potentially increasing death benefit, and coverage that will not terminate, provided premiums are paid when due. With term insurance’s increase in premium at each renewal, over the course of several decades, the cumulative cost of term coverage may well surpass that of a comparable whole life policy. In addition, some term policies may require evidence of continued good health with each renewal. If you become unisurable in the future, you may not be able to renew the policy. Know the true value The well-known analogy of a term policy as renting and a permanent policy as owning life insurance is a good way to illustrate their true values. Unlike term insurance, whole life insurance is a value builder. It accumulates cash value that in the long term can be borrowed against to help fund children’s educations, supplement retirement income, or provide for other needs. In addition, as an owner of permanent insurance, your policy is also eligible to earn dividends, if and when they are declared by the insurer. Investing the difference If term insurance is chosen instead of a permanent policy, you’ll have to decide where to invest the leftover money. The success of "buy term and invest the difference" depends largely on where the leftover funds are invested. Stocks, bonds and mutual funds offer the potential of a high return, but one thing is certain: uncertainty. With these investments, your return will vary based on market conditions; and when you sell your investment you may receive more or less than you originally paid. This potential volatility may not be suitable for some individuals, particularly risk-averse people and mature individuals nearing retirement. In addition, capital gains, dividends and most interest are taxable when distributed. With permanent insurance, your policy accumulates guaranteed cash value on a tax-deferred basis. When weighing your options, consider whether you will have the discipline and the means to invest regularly. Often people are so burdened with everyday expenses that they neglect to put something aside for the future. If this occurs within a "buy term and invest the difference" framework, the whole strategy collapses. Without the invest component, you’re left with a term policy with no accumulation of funds for the future. Choosing the most effective way to secure your family’s financial future is a major decision that requires a good deal of thought. For some, "buy term and invest the difference" may be a legitimate option, while for others, permanent insurance is the way to go. Before jumping into the unknown, discuss your options with an insurance professional from a respected company. Study policy illustrations and ask questions when necessary. If you’re uncomfortable with a scenario presented to you, get a second opinion. There’s no cost or obligation. When you have all the facts, then you can make an intelligent decision on what’s best for you and your family’s financial future. Kristin Hilderbrand is an associate of The Wilson Agency LLC in Anchorage.   

Forest Service promises more cooperation with timber industry

Things have gotten so bad in the state’s beleagured timber industry that there’s no way to go but up. There may, in fact, be some small upward movements in store for 2002.First, there’s new management in the Tongass National Forest in Southeast Alaska. The U.S. Forest Service’s new regional forester will be in place early in the new year. Steve Brink, the deputy regional forester, has made a commitment to work more cooperatively with local communities and the timber industry.Timber harvests have declined sharply in the Tongass in the last 10 years. While part of the recent decline is because of poor market conditions in Japan, where much of Alaska’s timber is sold, a longer-term decline in harvesting is due to policies of the former Clinton administration to restrict logging in national forests.Brink said the Forest Service’s move, under the Bush administration, to rewrite the Clinton roadless regulations for national forests is an example of the new approach he plans to take.Second, Gateway Forest Products, a new wood products value-added manufacturer in Ketchikan, is operating and building its markets for wood veneer despite hardships imposed by financial problems at start-up and poor markets for lumber produced by a sawmill also owned by the company.Gateway’s success is important because it signals that the forest products industry in Alaska has a future. Confidence has lagged since timber harvests were cut back and pulp mills in Sitka and Ketchikan closed.The market for higher-end lumber from Southeast, and for logs harvested in Southcentral coastal forests, is down and may continue that way.John Sturgeon, former president of Koncor Forest Products and now a consultant, said Russian exports of low quality softwood logs are flooding Japanese markets where Alaska firms, harvesting timber near Kodiak and in Prince William Sound sold their wood.There have been structural changes in the overall Japanese market, too. The trend is away from traditional Japanese home-building that used post and beam wood structures and toward western-style homes built with softwood two-by-fours.High-quality spruce and hemlock cut beams from Southeast Alaska were highly sought-after for the traditional market in Japan, but for the new market built with two-by-fours, softwood tree farmers in New Zealand and Scandanavia can sell at lower costs, Sturgeon said.Rick Rogers, resources manager for Chugach Alaska Corp., a Native regional corporation with major timber holdings, believes the future for the Alaska industry may be in the path Gateway is creating.In addition to selling logs or producing conventional lumber, Alaska mills can manufacture products that have higher value, like Gateway is doing with wood veneer made essentially from waste timber products.Some small Southeast mills are already moving in this direction, making wood building components for sale in the Pacific Northwest markets, Brink said.

Gas line price tag now must include security, study group reports

ANCHORAGE -- Gas companies studying a proposed natural gas pipeline from the North Slope to the Lower 48 say the line could cost more than their initial estimates, in part because of security concerns after the Sept. 11 terrorist attacks.The line, which would tap North America’s largest undeveloped gas reserves, is estimated to cost $15 billion to $20 billion.Nailing down a precise cost is the target of a $100 million study expected to be completed by the end of the month.BP, ExxonMobil Production Co. and Phillips Alaska Inc., owners of most of the North Slope’s proven gas reserves of 35 trillion cubic feet, teamed up to look at what the project will cost. They are also looking at which route would be most economical; one that would follow the Alaska Highway or one that would run under the Beaufort Sea and across the Canadian Arctic.On Dec. 13, Curtis Thayer, spokesman for the joint study group, said security along the proposed line became a concern after Sept. 11, particularly for the more exposed highway route."Having a pipeline along a highway presents security issues,’’ Thayer said, "and that is going to cost a little more.’’Most of the line would be buried, but it would bridge some streams.This fall, the owners of the 800-mile trans-Alaska oil pipeline learned just how vulnerable their line was when a man shot it with a rifle. It took workers about 36 hours to stop the leak, which amounted to almost 300,000 gallons.Security is not as big a concern with a gas line across the isolated Beaufort Sea. But for other reasons, the cost of that route might be more expensive than first thought.Last August, the price was estimated at $15.1 billion, about $2 billion less than the highway route. Crews were still surveying the Beaufort route during the estimate.Surveying is now completed, and the companies have a better idea how much it would cost. Thayer declined to say whether the price will increase, but acknowledged that building a line underneath the sea has environmental challenges that could drive up costs.Preliminary analysis already shows that neither route would be as profitable as the companies want. The companies based their study on earning at least a 15 percent profit, but September estimates found the return would be in the range of 12 percent to 13 percent, he said.

Knowles budget calls for $179 million spending increase

JUNEAU -- In releasing his proposed state budget Dec. 14, Gov. Tony Knowles said he will ask the Legislature to pass a broad-based tax and other revenue-raising measures during the 2002 session.But a key Republican immediately took the governor to task for a budget proposal that would increase general purpose spending by at least $179 million in fiscal year 2003, thus accelerating the depletion of a reserve account that has been used to cover deficits.Knowles’ budget request is for $2.597 billion to cover basic state services, including education. That’s an increase of $179 million, or 7.4 percent.Most of the increased spending has been laid out in recent gubernatorial announcements, including $31 million for K-12 education and $17 million for the University of Alaska.Separately, the governor is asking for a $200 million school construction package that voters would have to approve next November, and $135 million in a debt-financing mechanism called "certificates of participation" to take care of deferred maintenance, particularly in correctional facilities and Pioneers’ Homes. That’s on top of the $425 million transportation package he unveiled in the 2001 session.For general operations, Republican staffers have noted additional spending that the administration isn’t counting in its bottom line, said Senate Finance Co-Chairman Dave Donley, R- Anchorage."What we kind of concluded at the end of it was, ballpark, $300 million more," Donley said. "There’s a bunch of money that appears in fiscal notes on their new legislation; that money they didn’t count toward their $179 million."At $179 million, the increased spending means a budget deficit of $1.2 billion in the next fiscal year, which begins July 1. The money would come out of the $2.8 billion Constitutional Budget Reserve, which already was forecast for depletion in 2004.Knowles acknowledged his obligation to provide revenue for the expenditures he wants."For my two terms, we have attempted to do that in a responsible way; it has not been addressed" by lawmakers, the governor said. "We no longer have any option. ... Safe landings are just about over."While oil prices previously have gone up when he has proposed new taxes or using permanent fund earnings to pay for government, that’s not likely to happen again, he suggested.Knowles applauded the work of the Fiscal Policy Caucus, a bipartisan, bicameral group of legislators that is encouraging the Republican leadership to move on a long-range plan for balancing the budget. He said he will provide his own recommendations in his annual State of the Budget address next month.Donley said the Senate Republican caucus still must meet to decide on budget priorities, but he said his advice to colleagues will be for an actual cut in the general fund, not an increase. He called it "very disappointing" that Knowles is seeking more."If the governor believes these are items that are new higher priorities than existing items, the governor should identify existing items in the budget we could reduce to make room for new spending," Donley said.Governors in other states typically have asked state agencies to identify potential spending cuts in their budgets, but the Knowles administration hasn’t done that, he said.As for a long-range plan, Donley remains adamant that constitutional amendments for spending restraints must be in place before major revenue-raising measures are enacted."They are absolutely the fundamental first step," he said. The amendments would lower the cap on general fund spending and require fewer votes to draw from the Constitutional Budget Reserve, thus averting what Donley calls blackmail by Democrats who drive up spending in exchange for those votes. The Senate passed the amendments this year.If the House moves quickly on those amendments and puts them on the general election ballot, then additional belt-tightening legislation also needs to advance before there’s talk of a broad-based tax, Donley said.After that, "I think we’d be willing to look at new revenue sources the public supports," he said. "They’re certainly not going to support it unless the government has done everything it can to reduce spending."

Downtown Seward gets speedy Internet access

TelAlaska has started offering a high-speed Internet service called digital subscriber line service in downtown Seward. Debut of the service follows successful beta testing by more than 20 customers, company officials said.The company plans to offer the service in other areas of Seward in 2002.TelAlaska owns Seward.Net and Interior Phone Co., which provides local telephone service. TelAlaska provides Internet service in about six Alaska communities: cable modem high-speed Internet service in Dutch Harbor and DSL high-speed Internet service in Anchorage, the Matanuska-Susitna area, Sand Point, Cold Bay and King Cove.TelAlaska’s DSL service is available for single and multiple user packages at download speeds of 1.5 megabytes per second and 384 kilobytes per second upload. The single user package is $75 per month and includes free dial-up service, which allows customers to check e-mail accounts when they are traveling.

Security, expansion impress FAA chief

The head of the Federal Aviation Administration said she is impressed with security at Ted Stevens Anchorage International Airport and with the multimillion upgrade and expansion being done there.Administrator Jane Garvey was in Anchorage Dec. 13 to attend a memorial service for two FAA employees killed on the job and to meet with agency employees and airport officials.Garvey toured the Anchorage airport and answered questions from the media about security measures put in place since the Sept. 11 terrorist attacks."All the right steps have been taken,’’ Garvey told reporters about new security rules at Anchorage International and elsewhere. "I’m pleased with what’s been done here. There are fewer security issues here than at airports in the Lower 48,’’ Garvey said.Garvey said airports across the nation are undergoing formal security audits. But no such review had been done yet at the airport, according to FAA and airport officials in attendance.FAA is working to switch airport security to the federal government from private contractors, as required recently by Congress, Garvey said.There are many challenges still ahead, both technically and with hiring new security personnel, Garvey said.Once the new security system and people are in place at the nation’s airports, Garvey said, "standards will be much higher.’’"Passengers have been very patient,’’ Garvey said of the increased security measures that have made for longer delays. "The American people recognize the importance of security and have been very patient."Garvey, who said she had been to Alaska several times, said new construction at Anchorage International is looking good.After her tour of the airport, Garvey attended a memorial service at Kincaid Park for Ronald Frizzell of Wasilla and Joyce Tucker of Anchorage, FAA employees killed in a helicopter crash in Cook Inlet Oct. 18.Era Aviation pilot Bob Larson also died in the crash. Two other FAA workers survived.

Business Profile: Polar Wire Products

Name of the company: Polar Wire ProductsEstablished: 1991Location: 4109 Old Seward Highway, Suite 100, AnchorageTelephone: 907-561-5955Major focus of services: Polar Wire Products is a wholesale distributor of wire, connectors and wiring management products. The company also manufactures its own brand of jumper cables, aircraft ground power cables, battery cables, welding leads and alternative energy system interconnections.History of the company: Founder Marvin Kuentzel started the company, then called Alaska Auto/Marine Supply Inc., in his garage, selling solderless connectors. Kuentzel developed the idea for the business during research for a project while earning a master’s of business administration degree from Alaska Pacific University.In 1992 Polar Wire Products moved to a facility on Dowling Road. The company later required more space and relocated to its current facility six years ago. The company now occupies 10,000 square feet.In 1994 Kuentzel introduced a line of wire products which feature a special wire coating designed to handle cold climates yet remain pliable and resist cracking. Polar Wire holds trademarks for wires made with this coating, Arctic Ultraflex Blue and Arctic Superflex Blue. Home Depot sells jumper cables manufactured by Polar Wire Products.Last year the company was chosen as a distributor for BP Solar, supplying components statewide and around the world. Polar Wire Products has shipped these supplies to Antarctica, Canada, Columbia, Nigeria and Russia.Polar Wire Products employs seven full-time workers and up to four seasonal employees.The company plans to launch an electronic commerce Web site for its products.Top accomplishment of the company: In the past four years Polar Wire Products has recorded annual sales growth. Kuentzel cites a key achievement has been managing growth of the company. "I am being very methodic and cautious," he said. One key is diversity of business, including supplying clients in telecommunications, auto and truck fleets, distributors, federal, state and local government agencies, oil field services, marine services, manufacturers and the alternative energy market.Major player: Marvin Kuentzel, president, Polar Wire Products.Kuentzel came to Alaska with his family in 1961. From 1979 to 1985 he worked for ARCO Solar in California manufacturing solar panels before returning to Alaska. He earned a bachelor’s degree in management from the University of Redlands in California.-- Nancy Pounds

CDQs expand their fishing investment

The Community Development Quota program was created by the North Pacific Fishery Management Council in 1992 to foster economic development in remote Western Alaska coastal communities.As a part of its annual allocation of allowable harvests of pollock, cod and other groundfish, the council allocates a percentage of harvest quotas to six regional Community Development Quota groups, formed as nonprofit corporations.They represent 65 communities within 50 miles of the Bering Sea coast.Initially, the CDQ groups sold their harvest quotas to fisheries companies, which did the actual fishing. Programs were created to train and employ Western Alaska residents in jobs on the larger catcher-processor ships.As revenues to the corporations increased, CDQ groups invested in the fishing, either through ownership of the fishing company or part ownership of the vessels. They initiated other fisheries business activities, mostly in their home regions.Initially, the CDQ program was to last five years, but in 1996 Congress made the program permanent in its reauthorization of the Magnusen Stevens Act, the federal law that guides management of offshore fisheries.Although the fishery council sets the overall allocation for CDQ groups yearly, the share each corporation receives is determined by the state of Alaska in consultation with the National Marine Fisheries Service.CDQ groups are required to submit information on their activities to the state quarterly and to get state approval for their investments.Although the program is modeled on the Alaska Native Claims Settlement Act, which created Native-owned regional and village business-development corporations in Alaska, CDQ groups must secure state approval for investments in projects. Also, all investments must be fisheries related.In contrast, Native corporations created under ANCSA are free to invest and do business without government oversight and can invest in any type of enterprise.The six CDQ groups include: Aleutian Pribilof Island Community Development Association, representing six communities; Bristol Bay Economic Development Corp., representing 17 communities; Central Bering Sea Fishermen’s Association, representing one community; Coastal Villages Regional Fund, representing 20 communities; and Yukon Delta Fisheries Development Assoc., representing six communities. Norton Sound Economic Development Corp., representing 15 communities.

Around the World December 23, 2001

STATESen. Murkowski calls for gas line meetingFAIRBANKS -- Sen. Frank Murkowski, R-Alaska, is calling for those interested in developing Alaska’s North Slope gas reserves to a meet in Washington D.C. early next year.Murkowski said he wants to get the gas producers and pipeline companies together sometime in late January or early February."If they don’t want to meet together then we’ll extend the invitation individually," Murkowski said.A study group organized by Alaska’s three major gas owners -- BP, ExxonMobil Production Co. and Phillips Alaska Inc. -- has concluded that a pipeline is not economically feasible at this time. Their final report hasn’t been issued, however.But pipeline companies have been more optimistic about the project than the producers. A consortium of American and Canadian companies that had first proposed the gasline in the 1970s has agreed to resolve financial issues associated with the project and will present a gasline proposal to producers early next year.Ketchikan cruise ship visitors up last summerKETCHIKAN -- Nearly 100,000 more cruise ship passengers visited Ketchikan last summer, but that trend could be changing due to the psychological impact of the September terrorist incidents.More than 665,000 cruise ship passengers stopped in the city, according to the Ketchikan Visitors Bureau, up 92,000 from the summer of 2000. Altogether, there were 690,000 cruise ship passengers who stopped at Alaska ports.But the terrorist attacks, a fear of flying and a slowdown in the U.S. economy could halt the industry’s rapid growth in Southeast Alaska and the rest of the state.About 39 percent of respondents who planned to visit Alaska next year have changed their minds, according to an initial Alaska Travel Industry Association survey."We are in the process of collecting data to see where we are on that trend," said Patti Mackey, executive director of the Ketchikan Visitors Bureau.Park service plans new Denali visitors centerFAIRBANKS -- Denali National Park and Preserve officials hope to build something the park has never had before, an information center to welcome park visitors."There is nothing in there that really communicates the history of the region, kind of the essence of the park," said superintendent Steve Martin.The park service plans to build a complex within 200 feet of the Alaska Railroad train depot. There would also be a theater, a modest food service area, an art gallery and a place to buy limited merchandise like a raincoat or hat. The complex would be constructed on the site of the old 100-room Denali National Park Hotel, which is now nearly torn down.The price tag for the plan is about $22 million, with about $8 million of that to come from the private sector as part of the concession opportunities. The remaining $14 million is to come from the federal government. Some $8.5 million has already been approved, and the remainder is expected in 2003.Construction is slated to begin this summer, with the bulk of the work to occur through the early summer of 2004.NATIONFord Motor Co. moves Web site in-houseDEARBORN, Mich. -- Ford Motor Co. is moving its corporate Web site in-house.The move, which takes out of the hands of Maryland-based Digex Inc., is designed to lower operating costs.The Web site will be maintained and developed by Ford’s information technology department, spokesman Chris Vinyard told The Detroit News.The site includes company news, vehicle owner information and details about Ford’s family of brands and car and truck offerings. Vinyard said the site attracts about 3 million users per month, which makes it one of the most popular automotive Internet sites.According to Jupiter Media Metrix, draws more unique visitors than any other car manufacturers’ Web site.Digex, a corporate Web site manager controlled by Clinton, Miss.-based WorldCom Inc., will continue to maintain about 300 Web sites for Ford. A Digex spokesman declined to comment on Ford’s decision.WORLDVivendi expands with USA Networks assetsPARIS -- Vivendi Universal is buying the entertainment assets of USA Networks Inc. in a $10.3 billion deal to improve distribution of the French media giant’s music and movies in the United States.The deal announced Dec. 17 is the latest chapter in Vivendi’s remarkable transformation in just a few years from a water utility into a global media and entertainment powerhouse.Under the deal, Vivendi will combine USA Networks’ assets such as the USA and Sci-Fi cable channels and the TV production operation responsible for "Law and Order" and "Jerry Springer," with its own Hollywood-based Universal Studios.Universal has a huge film catalogue and its Universal Studios last year produced hits like "How the Grinch Stole Christmas" and "Erin Brokovich."For $10.3 billion in cash and stock, Vivendi will get a 93 percent stake in a new company that will be called Vivendi Universal Entertainment.USA Networks’ Barry Diller, the entertainment industry veteran who ran the Paramount movie studio in the 1970s and oversaw the launch of the Fox television network in the 1980s, will be chairman and chief executive of Vivendi Universal Entertainment.World growth slower, Monetary Fund predictsWASHINGTON -- The Sept. 11 terrorist attacks dealt a major blow to a global economy that was already under severe strain and will result in the weakest economic performance in nearly a decade, the International Monetary Fund said on Dec. 18.The 183-nation lending agency projected global growth of 2.4 percent for this year and next, down sharply from the 4.7 percent pace recorded in 2000.The United States, which entered its first recession in a decade last March, will grow by just 1 percent this year and an even weaker 0.7 percent in 2002, the IMF forecast.The new projections were included in a special edition of its "World Economic Outlook."Because of the Sept. 11 attacks, "prospects for global recovery have been set back significantly," the IMF said in the new report.The IMF predicted that the world economy will see the most marked simultaneous slowdown in two decades, with all major economies from the United States and Europe to Japan struggling to emerge from a pronounced slowdown.-- Compiled from business wire services

Railroad says system will ease reservations

The Alaska Railroad Corp. has purchased and installed a new computer software system designed to improve telephone reservation service and allow customers to book seats and purchase train tickets via the Internet.The new railroad-specific reservation software, scheduled to be operational this month, was designed by United Kingdom-based FSS Travel & Leisure Systems, said Steve Silverstein, vice president of the railroad’s Markets, Sales and Services Division."Rail Res 2000" is used by railroads worldwide and also for ferry reservations to and from Seattle to Vancouver, British Columbia, Silverstein said.Cost for the computer software and hardware upgrades was $820,000. The Federal Transit Administration covered 80 percent of the cost of the new reservation system; the remainder came from railroad revenues, Silverstein said.The new system is compatible with the railroad’s existing computer equipment but faster processors needed to be installed, according to Silverstein.The new software replaces the railroad’s old reservation system purchased in 1993 from Vertical Marketing Systems. That system, according to Silverstein, was antiquated and was no longer supported or maintained by the computer company."When they stopped supporting the system, it made it very difficult for us,’’ Silverstein said.The old system also could not handle reservations online, a marketing component that is vital nowadays, Silverstein said.Managers and senior reservation agents were trained on the new system in early December, Silverstein said. The railroad will train its seasonal reservation agents in February and March."(Rail Res 2000) is much simpler than the old system and much more intuitive and connected than the old system was,’’ Silverstein said."It’s simpler for our reservation agents to use and simpler for the customers to use,’’ Silverstein said. "It’s a good, smooth system."Over the past two years, the state-owned railroad has hauled about 500,000 passengers annually and has had revenues of slightly more than $13 million each year.Railroad officials hope the new reservation system will increase ridership on the 525-mile rail line by providing instant access to railroad schedules, tour information and package deals, all with the option to purchase online. Internet reservations should improve telephone reservations by allowing agents more time to serve customers, Silverstein said.Eventually, Silverstein said, the new system could be expanded to computerized kiosks or ticket vending machines around the state, or on board a train.

North Pole flight marks 50th year

Fifty years ago this month, a commercial airliner crossed the North Pole for the first time, establishing a route across the top of the world connecting Alaska with Europe and Asia. Alaska Airlines is credited with the inaugural flight over the North Pole, calling the polar route the Panama Canal of world air travel. Today, scores of cargo jets come to and from Anchorage daily over the North Pole without fanfare. But in 1951, just reaching the northernmost point on the Earth was cause for much pomp and publicity. Robert E. Peary was the first to reach the North Pole on the ground in 1909. Russian and American military aircraft had reached the ice-covered point that lies roughly in the middle of the Arctic Ocean, but no commercial airliner had ever attempted the journey. The plan was to fly a Douglas DC-4 from Fairbanks, refuel at Point Barrow, then cruise over the northern point of the Earth’s axis of rotation. Once there, a barber pole and a bag of letters from Alaska children to Santa Claus would be dumped from the air and then the airplane would head home. "To make a long story short, there was a heck of a lot of ballyhoo just to drop off a pole at the North Pole,’’ co-pilot James Robert "Bob" Long said from his apartment at the Anchorage Pioneers’ Home Dec. 11, the 50th anniversary of the flight. On hand at the North Pole Express pre-launch gala in Fairbanks were media, Alaska Airlines officials and Carolina Cotton, movie star and world yodeling champion who gave each of the crew members a kiss for luck before the 2,800-mile flight. Long said the ski- and wheel-equipped DC-4 was topped off with about 3,600 gallons of fuel. For the lipstick-smudged crew, there was plenty of coffee and a big box of fried chicken, he said.

Local phone competition to begin in Juneau next month

JUNEAU -- Competition in local phone service will start in Juneau next month, says Ronald Duncan, president of Anchorage-based General Communication Inc.Duncan and other GCI officials were in Juneau in December courting businesses who have service through Alaska Communications Systems, which does business here as PTI Communications. By mid-January, some users can be switched over, he said.The long-delayed entry of competition into the market closely follows yet another court ruling in a seemingly interminable series of stops and starts over several years.Last month, an Anchorage Superior Court judge upheld a regulatory panel’s order allowing GCI to offer local phone service in Juneau and Fairbanks."The court decision is significant because it’s the first court decision on the full merits of the case," Duncan said.ACS officials haven’t decided whether to take the case to the Alaska Supreme Court, spokesman Tom Jensen said shortly after the ruling.GCI has been offering local service in Fairbanks since the summer, when the Regulatory Commission of Alaska ordered ACS to let GCI lease equipment and enter the two markets, said GCI spokesman David Morris.While there always will be connections between the two telecommunications networks, GCI will be rolling out its own infrastructure during the next two to three years, Duncan said.There are about 30,000 local phone lines in Juneau, Morris said. Within four years, GCI wants penetration in local phone service that mirrors its roughly 50 percent share of the market in Internet and long-distance, Duncan said. But there should be room in Juneau for two providers, he said.GCI is focusing on businesses now because ACS is trying to lock down long-term contracts to keep customers from switching, Duncan said. In the spring, GCI will target more marketing at residential consumers, he said."The head-on (price) comparison initially won’t be huge," with GCI underselling ACS by 5 percent to 10 percent, Duncan said. But services will be packaged so that additional features will be more attractive, he said.Duncan said there could be some switchover snafus. If there’s a problem with a line once a customer has changed providers, it’s still up to ACS to perform maintenance, he said."We can’t force them to get the truck out there." But state regulators would notice that, he said.

Movers & Shakers December 23, 2001

Helen Howarth and George Hieronymus recently were appointed the Rasmuson Foundation’s first program officers. Howarth will oversee grants relating to arts and culture. Howarth previously served as executive director of the Alaska State Council on the Arts and held executive positions with the Sitka Summer Music Festival, the Anchorage Symphony and the Anchorage Concert Association. Hieronymus will oversee grants relating to health and human services. Hieronymus most recently served as executive director at Bean’s Cafe. Nancy Miles was appointed executive assistant for the Rasmuson Foundation. Miles previously served as executive assistant for RM Huhndorf & Co. and for Diane Kaplan & Co. The foundation also appointed Marguerite Lambert as secretary/receptionist. Lambert previously worked as an administrative assistant with the University of Alaska Anchorage.Peggy Kelly, Anita Dalton, Chris Novak and Jed Weingarten recently attended the National Association of Realtors Conference in Chicago. The four conference attendees are sales associates with Dynamic Properties. About 23,000 real estate agents from around the world attended the conference. The conference provided leading-edge information on services and technology for the real estate industry.Dennis Sayer has joined DAT/EM Systems as director of marketing and international sales. Sayer previously worked as a graphic arts sales consultant and information technology manager for an Anchorage commercial printing company. Sayer has a background in graphic design, computer information technology and technical sales. Sayer has more than 12 years experience working on various marketing projects and campaigns. Sayer will be responsible for the company’s marketing materials, printing, trade journal and magazine advertising, trade show marketing, Web site development and software sales. Brian Barnes has joined DAT/EM Systems as a hardware engineer. Barnes formerly served as service manager and computer technician for an Anchorage-based computer firm. Barnes has more than six years experience in electronics and computer hardware and has assembled and tested electronics hardware for Honeywell and Packard Bell. Barnes will be responsible for manufacturing and assembling DAT/EM hardware products and services.Ginny Jacober has opened a residential interior design business, Blue Bear Design, that serves Anchorage, Eagle River and Wasilla. Jacober, an interior designer, has more than 30 years experience and education in the fine arts and design field. Jacober is an associate member of The Interior Design Society.John Hallinan and Terry Hilton have been recognized by Secretary of Transportation Norman Mineta for their efforts to improve aviation and support national security in transportation. Hallinan, Capstone program manager for the Federal Aviation Administration, and Hilton, FAA information resource specialist, were recently presented Meritorious Achievement awards in Washington, D.C. Hallinan spearheaded the Capstone project, a program to provide pilots with more weather and terrain information in the cockpit. Hilton was praised for his work in computer security during preparations for the Year 2000 transition and in meeting the DOT’s strategic goal for information technology. Both employees were nominated by the FAA’s Alaska Region and competed with employees across the nation.Landye Bennett Blumstein LLP has hired Cindy L. Thomas as an associate in its Anchorage office. Thomas has a background in engineering and focuses on federal American Indian, Alaska Native, municipal, environmental and natural resources law and policy. Thomas most recently was a National Association of Public Interest Law Fellow for the Rural Alaska Community Action Program and Alaska Legal Services Corporation and served as a law clerk for the Native American Rights Fund. Thomas previously worked as the statewide coordinator for the Rural Alaska Sanitation Coalition and was as an environmental engineer for Tanana Chiefs Conference Inc. Thomas is a member of the Alaska Bar Association and its Native Law section.

This Week in Alaska Business History December 23, 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. 23, 1981CAB refuses to speed up Wien saleBy Paul MonaghanTimes Washington BureauWASHINGTON -- The Civil Aeronautics Board ruled late today against the quick takeover of Wien Air Alaska by Neil G. Bergt, owner of Eagle International Corp. and recently named head of Western Airlines.Instead, the CAB found that Bergt must submit his planned acquisition of Wien to the board for a full antitrust review that could take up to six months."Mr. Bergt cannot acquire control of Wien without first getting the board’s approval," said Betsy Wolf, an attorney with the CAB’s Competitive Maintenance Division.Bergt had filed Monday for an exemption to the Section 40-approval process. Such exemptions are available to air cargo and commuter air service companies. Under the exemption provision, the applicant can merely notify the CAB of its proposed takeover and, unless the CAB objects within 45 days, the merger can go ahead. But the CAB in its brief order Wednesday said Bergt, because of his position with Western Airlines, cannot receive the exemption.Anchorage TimesDec. 23, 1981Alaska Railroad posts $3.3 million profitLine turns 1980 red into blackFrank Jones, manager, reported today that the Alaska Railroad earned a bottom-line profit of $3.3 million during the fiscal year ended last Sept. 20, the first earned surplus in five years.The profit reflected a turnaround in revenues and expenses that totaled $9.1 million from 1980, when the railroad reported a loss of $5.8 million.Jones, in his annual report to the U.S. Department of Transportation, said freight revenues increased 29 percent during 1981. The railroad moved a record 51,307 carloads of freight. That was 1,723 more than in 1977 when shipping for the trans-Alaska oil pipeline was at its peak.The manager noted that the movement of gravel from the Matanuska Valley to Anchorage accounted for the greatest percentage of the freight increase. The railroad operated two special gravel trains and moved 1,796,800 tons, exceeding the total of all freight tons hauled.10 years ago this weekAlaska Journal of CommerceDec. 23, 1991Hunt lots soldEquitable buys downtown Anchorage propertiesBy Ray TysonAlaska Journal of CommerceThe Equitable has paid an undisclosed sum for about half of Nelson Bunker Hunt’s remaining property in Anchorage, and the local real estate broker who handled the sale for the financially troubled Texas investor said it’s the biggest downtown land deal in years.Dale Jackson, president of TRF Brayton Co., said he expects to find a buyer for the rest of Hunt’s downtown property within a year to 16 months.Jackson said the Equitable, which repossessed Hunt’s 300,000-square-foot Enserch Tower in 1988, paid cash for 23 parcels. TRF Brayton listed the property at $10,921,690."We were delighted with the sale," Jackson said. "I’d say this is one of the largest real estate deals in raw land downtown in seven or eight years, maybe longer. I think they (Equitable) have a lot of confidence in Alaska."Alaska Journal of CommerceDec. 23, 1991’Tis the season to be jolly,’ for mostBy Margaret BaumanAlaska Journal of CommerceAlaska’s business owners seem to have their usual stock of holiday cheer this season, hosting enough gatherings to keep hotel and restaurants jumping.Despite cancellations by some of the usual major clients, reports from prominent gathering spots indicate the demand for catered holiday parties is up over a year ago.While some firms are cutting back entertainment budgets, those who had a good year are having more elaborate parties, caterers said.At the same time, there has been a decline in parties hosted by larger companies because budgets are being cut, said a representative of one prominent hotel. The missing notables from this year’s large party circuit include an airline, a telephone company, an oil company and a major automobile dealership, said the representative, who asked not to be identified.-- Compiled by Ed Bennett.

Family company not always smart

Clients often make gifts of interests in family-owned Limited Liability Companies and Limited Partnerships. A consequence of giving through a business entity is that the donees often will have a tax basis substantially less than the basis they would have had if the donor continued to own all assets outright until death.Consider a client, living in Alaska, with three adult children. The client has never made a taxable gift, and her only asset is a share of stock. Although she purchased the stock for $100,000, it is now worth $675,000. The client forms an LLC and contributes the $675,000 of stock to the LLC.Initially the client is the only member of the LLC, so she does not recognize gain when she contributes the stock to the LLC. Also, because the client is the sole member of the LLC, the LLC is ignored for federal income tax purposes. In other words, the LLC is disregarded as an entity separate from its owner. Later, when the client brings her children in as members, the LLC is then, absent an election, treated as a partnership for federal income tax purposes.The client, over the balance of her lifetime, gives her children interests in the LLC totaling 13.3 percent per child. At all points in time the LLC’s only asset is the stock, worth $675,000.At the time of the client’s death, her only asset is the remaining 60 percent interest in the LLC. Under her will or revocable living trust, the client gives this remaining property to her children in equal shares; so each child owns one-third of the LLC. The LLC’s only asset is the stock, which is still worth $675,000.If the client had not formed the LLC and instead had continued to own the stock until her death, under current law her children’s tax basis in the stock would have been stepped-up to $675,000. So the children could then have sold the stock for as much as $675,000 at absolutely no tax cost.A consequence of the client’s giving through the LLC is that the donees will have basis substantially less than $675,000. In other words, if the LLC sells the stock for $675,000, there will be taxable gain.Specifically, under current law the tax-basis analysis is as follows:First: The client’s basis in the stock is her cost of $100,000. When she contributes the stock to the LLC in return for 100 percent of the LLC interests, the LLC takes a carry-over basis of $100,000 in the stock. The client receives a basis of $100,000 in her LLC interests. Although the LLC is initially disregarded as an entity separate from its sole owner, the LLC becomes a partnership for federal income tax purposes on the day the LLC has two or more members.Second: At the time of her death, the client owns 60 percent of the LLC interests. Although the LLC owns stock worth $675,000, the value of 60 percent of the LLC interests is less than 60 percent of $675,000, or $405,000. The valuation expert assisting with the client’s estate believes the value of 60 percent of the LLC interests was roughly $364,500 on the date of the client’s death. Thus the children receive a stepped-up basis of $364,500 in the LLC interests they inherit from their mother.Third: The children now own 100 percent of the LLC and their basis in those interests is $404,500 (i.e., $40,000 carryover basis plus $364,500 stepped-up basis).Fourth: If the LLC sells the stock for $675,000, it will have taxable gain of $270,500 ($675,000 sale proceeds minus $404,500 basis equals $270,500). Assuming an applicable capital gain rate of 20 percent, the LLC members would owe $54,100 in tax.Again, if the client had not formed the LLC and had owned the stock until her death, under current law her children’s basis in the stock would have been stepped-up to $675,000. So the children could then have sold the stock for as much as $675,000 without incurring any tax, a savings of $54,100 under the facts of this case.The upshot is that LLCs or Limited Partnerships could increase taxes down the road. This consequence needs to be figured into the analysis of whether the advantages of a family business entity outweigh the disadvantages.Steven T. O’Hara is a shareholder in the Anchorage law firm of Bankston, Gronning, O’Hara, Sedor, Mills, Givens & Heaphey, P.C. This article is Copyright 2001 by Steven T. O’Hara and is used by permission.

CDQ groups grow into economic force worth $150 million

Community Development Quota groups in Western Alaska have become powerful regional economic development engines, investing millions of dollars in docks, ports, seafood plants and other infrastructure, as well as fisheries businesses.They may also be the fastest-growing business enterprises in the state, although the parent corporations are nonprofits. They started with nothing in 1992, but with a valuable "community share" allocation of valuable pollock and cod harvests of the Bering Sea.By 1999 the groups had combined net assets of $103.7 million, according to data compiled by the North Pacific Fishery Management Council. Between 1999 and 2000, net assets increased 24 percent, to $128.8 million, the council data showed.Larry Cotter, a fisheries consultant who helps manage one of the CDQ groups, predicted that combined assets of the groups could exceed $150 million by the end of this year.Most of growth is in the businesses in which the CDQ groups are investing. All six now own part of the fishing companies with which they share their allocations of groundfish -- this year approximately 300 to 400 million pounds of pollock, cod, sablefish, halibut and crab -- from the rich Bering Sea fisheries."What these groups are accomplishing is the Alaskanization of the offshore fishing industry," said Trevor McCabe, executive director of the At-Sea Processors, the association of large catcher-processor vessel operators.Large sectors of Alaska’s fishing industry have traditionally been owned by nonresidents, but the CDQ groups are changing those dynamics by buying into the catcher-processor fleet in a major way, McCabe said.All of the six CDQ groups have now invested in vessels with their fishery partners. Examples include Norton Sound Economic Development Corp., which now owns 50 percent of Seattle-based Glacier Fish Co., and Coastal Villages Region Fund’s ownership of 20 percent of American Seafoods, a major offshore vessel operator.Central Bering Sea Fishermen’s Association owns an additional 3.2 percent of American Seafoods.The groups have become particularly important as a new source of investment in regional infrastructure. In Nome, NSEDC contributed $3 million toward a required $5 million local match for a planned $36 million major port expansion. The project has now been approved by Congress and should be under construction next year.NSEDC earlier contributed over half a million dollars to improvements of Nome’s existing small boat harbor and is now building a $550,000 new seafood processing plant in Nome. The plant, operated by Norton Sound Seafood Products, a division of NSEDC, will include a retail seafood outlet, according to Eugene Asicksik, NSEDC’s president.The new port will allow fishing to continue later in the year, as late as Nov. 15, Asicksik said.Small processing plants have also been built in Unalakleet and Savoonga. The corporation is also fostering regional fisheries development and helping local fishermen, which is bringing new income into the area.A small halibut fishery has developed in Norton Sound and the northern Bering Sea following test fisheries promoted by NSEDC. About 50 local fishermen, from Savoonga, on Saint Lawrence Island, to Nome, Golovin and Elim on Norton Sound, now fish the quota of halibut allocated to the corporation, Asicksik said.Halibut fishing now brings more than $150,000 in seasonal income to Savoonga, a remote village where people formerly depended mostly on welfare and ivory sales for cash.Through loan programs, the corporation is helping fishermen upgrade their boats and buy gear. Halibut fishermen may also be able to fish an allocation of red king crab that NSEDC receives, for example.NSEDC has also been the only buyer of salmon in the region for six years now. In 1992, the corporation was able to pay fishermen the highest price for pink salmon in the state that year because of the efficiency of the high-volume processing ship Glacier Fish Co. brought to Norton Sound, Asicksik said.For the past two years NSEDC has purchased chum salmon from Kotzebue fishermen who had no other outlet. Half a million pounds of salmon were flown this year from Kotzebue to NSEDC’s processing plant in Unalakleet, where fillets were prepared for ultimate sale in Seattle.A similar success story is unfolding in the Aleutian Islands, where Aleutian Pribilof Island Development Corp. has developed Atka Pride Seafoods, a processing plant, in partnership with the community of Atka.The plant had several years of start-up losses but is now in its third consecutive year of profitability, according to Larry Cotter, executive director for APIDC.What’s important is that the plant and related investments in docks and other facilities has fostered the local small-boat fishery, creating jobs in the community, Cotter said.


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