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FINANCE
Diverse Approaches to Economic Development
How regional organizations are stimulating growth
By Tracy Barbour
Alaska’s major regions— Southeast, Southcentral, Interior, Arctic, Northwest, and Southwest—all have their own economy. And where there is an economy, there is opportunity for economic development that can generate jobs and income for residents.
Each of the state’s regions have various entities that focus on spurring economic development. As a result, Alaska’s regional economic development projects run the gamut, from village projects to resource development to large-scale projects. “I think the big thing that a lot of the economic development organizations around the state are thinking about is infrastructure spending,” says Nolan Klouda, executive director of the University of Alaska Center for Economic Development (CED).
There’s considerable interest in how Alaska could best use money being proposed by the federal infrastructure spending bill. But there has not been a strong focus on infrastructure funding in recent years, so some Alaska businesses may not be ready to participate in this area, Klouda says. “A big focus for our center is what can we do to help get projects to a higher level of readiness, so they can get funding,” he says.
CED is a university-based partnership that promotes economic diversity through entrepreneurship, community building, and action-oriented strategy. It’s one of fifty-two University Centers designated by the US Economic Development Administration. CED leverages the resources of the university system to support economic growth statewide, from rural villages to urban cities.
Essentially, CED provides technical assistance in the form of information and data, and it implements programs that promote economic development across the state. For example, the center is currently helping fishermen in the Yukon–Kuskokwim Delta analyze the feasibility of a cold storage project.
Klouda identified a variety of initiatives underway or being examined across the state, including a project proposed by the Alaska Industrial Development and Export Authority for an all-season, industrial access road to the Ambler Mining District in the southern foothills of Alaska’s Brooks Range. The private road will provide access for mineral exploration, mine development, and mining operations by connecting the district with the Dalton Highway. The project, which is going through the permitting process, will involve millions of dollars of roadwork and thousands of jobs over several years, according to Klouda.
And there are other projects being explored around the state: · The Alaska-to-Alberta Railway, which would provide a proposed 1,500mile connection between the Alaska
Railroad and Canadian railroads that serve the Lower 48; · an Alaska Railroad project connecting the train drop off spot in
Seward to the dock; · building hydroelectric plants in
Southeast to provide a cheaper, cleaner alternative to diesel fuel; · the expansion of the Port of Nome to transform it into a deep-water port; · and the development of shellfish farming opportunities in Prince of
Wales Island. Here’s a regional look at some other economic development opportunities being explored around Alaska.
Southcentral Region
Anchorage Economic
Development Corporation
Economic development in Southcentral and other parts of Alaska have been grossly impacted by the loss of jobs. “After six years of recession, in which we lost 6,000 jobs, and one
year of COVID-19, where we lost 4,400, we’ve got a lot of ground to make up,” says Bill Popp, president and CEO of the Anchorage Economic Development Corporation (AEDC).
It will take years to recoup those jobs, but AEDC is working assiduously to address the problem. It’s focusing on recovering jobs in existing industries, from tourism and retail to healthcare, technology, and transportation. The Roadmap to a Vital and Safe Anchorage (RVSA) is part of these efforts. RVSA is working to plan a three-year strategy to get the Anchorage economy back on its feet. The volunteer initiative involving more than 100 businesses and community leaders has been meeting since last fall in an effort to “kick start” different aspects of the local economy. “It’s focusing on getting Anchorage to have as successful of a summer and fall that we can have,” Popp says.
In general, there are opportunities in the growth of remote workers, workers who can provide online job products anywhere in the world. The upside potential is that Anchorage could benefit from that by having a growing pool of remote employees generating work and depositing their paychecks in the local economy, Popp says.
More specifically, remote workers could support Anchorage-based enterprises in cybersecurity, which is a rapidly growing area. Many cybersecurity jobs are going unfilled worldwide—jobs that Alaskans could feasibly train for online to meet the global demand for this specialized area.
Air cargo is another upside opportunity for the area, with several facilities being proposed for the Ted Stevens Anchorage International Airport. FedEx is planning to construct a 100,000-square-foot building to enhance its in-state operations. UPS is also negotiating a project for the airport.
Locally grown food products in Anchorage represent yet another budding area of potential. “Anything we can do to provide locally produced food products is a small win,” Popp says. “But we have to have a substantially larger statewide population for a locally produced product that goes beyond a seasonal product.”
A major economic development project in the works for Anchorage is a new cement and petroleum terminal at the Port of Alaska. The terminal, expected to be completed later this year, would generate significant new jobs as other benefits for the city. Popp says: “We believe the Port of Alaska will be one of the top projects. It is critical to the Alaska economy.”
Nolan Klouda, Executive Director University of Alaska Center for Economic Development
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However, Popp says, Anchorage needs to address certain areas of deficiency to be in a better position to enhance economic development opportunities locally and in the region. For instance, there’s a dire need for housing in Anchorage, especially housing that meets the expectations of young professionals, working families, and seniors.
“We have not been reinvesting in ourselves as a city to keep up with expectations of new generations,” he says.
Popp says the housing shortage is impacting the city’s ability to hold onto retirees and attract much-needed workers. Investments in business are looking for a stable pool of labor; the issue goes beyond simply having a good workforce. Investing companies want to know that the labor force will be there in five or ten years, so Anchorage must be able to attract and retain skilled and semi-skilled workers. “A great magnet for workforce is communities that offer a great quality of life,” he says. “We have to start upping our game to address the issue of our very challenged downtown, our underdeveloped university district, and the issue with housing. We have to start looking ahead, instead of relying on whatever we know from that past.”
Chugach Alaska Corporation
Chugach Alaska Corporation is another entity that’s closely examining economic opportunities in Southcentral. Last year, Chugach reaffirmed its commitment to inregion economic development when it created the position of executive vice president of Alaska Native Claims Settlement Act and community affairs, according to Sheri Buretta, chairman of the board and interim CEO at Chugach Alaska Corporation. The goal of the position, held by Josie Hickel, is to continue advancing land development projects and lead economic development projects that can provide opportunities and jobs to Chugach shareholders. “Chugach is focused on identifying economically viable projects in our region and our communities that will create sustainable socio-economic benefits in the future to meet our commitment to intergenerational prosperity for our people,” Buretta says.
Chugach’s land entitlement spans nearly 1 million acres in southcentral Alaska, including 378,000 acres of full fee estate and 550,000 acres of subsurface estate. Currently, Chugach is exploring several land-related initiatives that have the potential to create meaningful value for shareholders. The Prince William Sound Granite Quarry is a prime example. Chugach is in the process of developing a commercial hard rock quarry in Port Gravina to provide more accessible materials for infrastructure, construction, and repair projects throughout Alaska and the Pacific Northwest. The dock construction will be completed in 2021, with initial granite sales expected shortly after.
“Once the quarry is up and running, we will be able to provide highquality, accessible, and affordable granite for projects in Alaska for many decades to come as well as job opportunities for shareholders and descendants in the area,” Buretta says. “Additionally, financial returns generated through granite sales will be used to fund shareholder benefits and opportunities provided by Chugach, from dividends and educational scholarships to professional development and business assistance programs.”
Chugach is also pursuing potential land exchange opportunities with the federal government—which would own the surface estate—to support the long-term lands management strategy called for in Chugach’s 100-year plan. Depending on the tracts of lands exchanged, this could provide benefits in the form of economic returns (development activity that creates financial returns for shareholders and/ or jobs, internships, or apprenticeships); cultural preservation (protecting cultural sites or historic burial sites); and/ or celebration of heritage (expansion of cultural activities/cultural camps in the region).
In addition, Chugach continues to work with the communities within its region to improve opportunities to advance economic development, training, jobs, safety, health, and housing needs. Plans for development of mixed-use facilities in Anchorage and its regional communities are underway.
Bill Popp, President/CEO Anchorage Economic Development Corporation Southwest Region
Kodiak Economic Development Corporation
Last year, Southwest Alaska saw the establishment of the nonprofit Kodiak Economic Development Corporation (KEDC). Economic development is gaining momentum in Kodiak, according to KEDC Executive Director Aimee Williams. “Working in conjunction with the City of Kodiak, KEDC is striving to create a diverse economy to help support the resiliency of the Kodiak Archipelago,” Williams says.
Some of the projects KEDC is working on involve the development of the mariculture industry, the creation of its website, grant writing, and property development. “Mariculture is very exciting in the Kodiak area,” Williams says. “Kelp farms are starting to pop up right along the road system, and several outlying villages have permits in to start more farms.”
In addition to kelp, oysters are now being harvested from Larsen Bay and being sold from Island Seafoods in Kodiak. “The reviews are impressive,” Williams says. “These new industries provide additional jobs and the crops can be harvested in between fishing seasons, which creates more work to be done on the processing side as well.” Kodiak is also seeing an innovative twist in the restaurant and food industry. Williams explains: “Several
new food trucks have popped up offering a variety of new food options from El Salvadorian food to doubledecker grilled cheese sandwiches. The variety of options and rotating menus have locals lined up to try something new.”
Food accessibility is also an area of focus for Kodiak, Williams says. The ability to locally source food has been a key goal of the Kodiak Food Harvest Co-op. There are also several hydroponic farms being developed across the archipelago. Kodiak is also pondering other methods to stimulate economic development in the area. The city of Kodiak is considering expanding Kodiak’s shipyard services and has applied for a grant that would fund the availability of a shelter for indoor services. Local rotary clubs are helping with an Area Sector Analysis Program that will match available resources with industry needs. And Kodiak, like other areas in the state, is doing a marketing push to entice independent travelers.
William says areas that need to be addressed in Kodiak currently include Bristol Bay Native Corporation
Bristol Bay Native Corporation (BBNC) is also committed to promoting economic development in the region. The BBNC board has launched an InRegion Government Contracting (IGC) program to foster innovative ways to invest in Bristol Bay enterprises. “It offers village corporation federal contracting mentorship training and joint venture opportunities to build a knowledge base line and business best practices,” says Polly Watson, a Small Business Administration (SBA) analyst with BBNC. “We’ve had a total of nine participants, but currently there are three companies in the program.”
The IGC program uses mentorship to leverage the benefits of BBNC’s subsidiaries, such as their experience, relationships, networks, geographical positioning, bonding capacity, and business sense. The mentoring process is structured in a way that is mutually profitable to BBNC and to the tribes and village corporations, enabling all participants to learn and earn. Most of the subsidiaries and contracts engaged in the program are located in the Lower 48, but the financial benefits ultimately flow back to communities in Alaska in the form of scholarship programs and other benefits, according to Romina Bentz, senior SBA program manager at BBNC. “Each village decides their investments into the community,” she says.
The corporations taking part in IGC vary in sophistication, business background, and maturity, although they must be in business at least two years to participate in the SBA 8(a) program. However, IGC provides a strong education piece on corporate governance to support the businesses. Bentz says, “We want to make sure they are strategically situated to be successful in the program.”
However, Bentz says, participants are expected to do more than just complete the IGC program; they have to develop policies that will help them support their shareholders and maintain their success. Dillinghambased Choggiung is the epitome of a successful participant in the BBNC’s IGC program. Several years ago,
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COMMUNITY BUILDING BLOCKS.
Mines in Alaska are an economic development director’s dream, especially for local communities. A mine is labor intensive, so it provides year-round, high-paying jobs. It’s a substantial source of property tax. Then there’s the local buy, charitable donations and energy purchases from the hometown utility, which subsidize everyone’s electricity rates. Mines, like Hecla Greens Creek, are critical infrastructure for Alaska communities.
Choggiung made the ground-breaking achievement of acquiring a majority ownership of the Bristol Alliance of Companies, a group of Anchoragebased construction, environmental, and professional services companies formed by BBNC in 1994. “They are growing very quickly,” Bentz says. “Since their inception, they have created three 8(a)s on their own and are doing very well.”
BBNC also supports economic development opportunities through its wholly owned subsidiary Bristol Bay Development Fund (BBDF). BBDF serves as a catalyst for the successful startup, launch, survival, success, and growth of businesses through the effective deployment of financial and non-financial capital. Recently, BBDF partnered with Path to Prosperity program creator Spruce Root to stimulate economic development. Path to Prosperity is a business plan competition that combines an intensive boot camp and business advising with a competition for seed money. Eligible program applicants must be able to demonstrate a forprofit business model, and they can include businesses that are based in or benefit Bristol Bay, tribal entities, start-ups, inventors, and existing businesses considering a growth initiative or social enterprise.
Path to Prosperity awards a total of $50,000 in grant capital to three winning business plans each cycle selected by a panel of judges. Two winning companies receive $20,000 each, and a third winning company receives $10,000.
The program is working well, according to BBDF Manager Cindy Mittlestadt. “In two years, we have had approximately sixty applicants who had business ideas in the region,” Mittlestadt says. “It tells me people are innovative and creative and there is a need for the business education or a framework that entrepreneurs are seeking to lift their businesses off the ground.”
In addition, BBNC’s land department is working on opportunities to address infrastructure and material needs in the region. BBNC is partnering with village corporations around the region to develop gravel material sites needed for infrastructure, according to Daniel Cheyette, vice president for lands and natural resources and associate general counsel for BBNC. “We are the owner of the material; we work with the management and sales, and we split the royalties,” Cheyette says. “It’s helped to provide capital to the village corporation as well as infrastructure.”
BBNC also just received a $100,000 Bureau of Indian Affairs grant that it will use to explore building a business model for a more collaborative approach to addressing energy needs. Cheyette explains, “The idea is how can we help the larger utilities best utilize the resources they have and help smaller utilities build better economies of scale for what they need.”
Cindy Mittlestadt, BBDF Manager, BBNC Doyon Limited
With more than 12.5 million acres of land and 22,000 shareholders, Doyon Limited is an important economic generator in the Interior. Today, the Alaska Native regional corporation has several active mineral exploration programs underway. Doyon’s Land and Natural Resource Department operates programs in various areas, including sand, gravel, rock, gold, precious and base metal materials, and oil and gas. “Doyon partners with community leadership and residents to facilitate an ongoing dialogue about projects, development, and plans, as well as training and employment opportunities,” says Vice President of Lands and Natural Resources Jamie Marunde.
Doyon is focusing on mineral exploration in the far eastern area of the Doyon region located in the Upper Tanana subregion, as well as an active oil and gas exploration project in the northeastern area of the Doyon region located in the Yukon Flats subregion. These projects are currently providing seasonal employment, contracting with local business owners and surface owners, and education partnerships with the youth of the regions such as programs with organizations like the Alaska Native Science and Engineering Program. “The exploration projects are focused on providing a positive impact on our shareholders through long-term employment and annual distributions,” Marunde says.
In addition, Doyon Limited announced its Carbon Offset Initiative in 2020. Doyon made an initial commitment of nearly 200,000 acres of its forested lands as part of this initiative to help balance global greenhouse emissions by sequestering carbon long-term.
As Doyon manages the exploration and development of resources, its shareholders receive short and longterm employment, local contracting opportunities, and education benefits. “Our local and traditional activities such as hunting, fishing, and trapping are protected from negative impacts because we are committed to employing environmentally sound and responsible practices,” Marunde says.
