Alaska Business Monthly-April 2015 by Alaska Business

Conventions & Corporate Travel | Construction | Leadership | Philanthropy

April 2015

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Corporate 100

A rare view of Alaskaâ&#x20AC;&#x2122;s top corporate citizens

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April 2015 TAB LE

CONTENTS ABOUT THE COVER

DEPARTMENTS

A rare view of Alaska. This NASA image was captured June 17, 2013 and shows a rare view from space of the entire state—not obscured by clouds. We chose this particular image for our cover and for the background of our Corporate 100 special section (begins on page 38) because we offer a rare view of Alaska’s top corporate citizens across the entire state.

From the Editor �� 7 Market Squares ��139 Right Moves �� 140 Inside Alaska Business ��142 Agenda ��145 Alaska This Month �� 146 Events Calendar ��149 Alaska Trends ��150 Ad Index ��154

Image Credit: NASA/Jeff Schmaltz, LANCE MODIS Rapid Response Team, NASA GSFC Cover Design: David Geiger

ARTICLES Calista’s new building has plenty of room for its extensive art collection.

112

Thom Leonard/Calista

92 | Alaska Universities Offer Executive Programs for Future Leaders Mentoring, business partnerships, and inspiration lead co-curricular activities By Tasha Anderson

Alaska Native Business

112 | Alaska Native Corporation Real Estate Development Companies continue trend of building prime office space By Tasha Anderson

8 | John MacKinnon A life spent in construction By Shehla Anjum

Energy

14 | Update on the Interior Energy Project By Mike Bradner

Business

18 | Mergers and Acquisitions Abound in Alaska Telecom, design, and transportation among largest deals brokered By Rindi White 24 | CH2M HILL Discontinues Divestiture Process Decides to keep oil and gas holdings for the long-run By Rindi White

Entrepreneurs

26 | The Boardroom’s Shared Space A place for entrepreneurs to grow, connect, and collaborate By Vanessa Orr

Construction

Financial Services

114 | Alaska’s New Season of Construction Big spending begins on projects statewide By Kirsten Swann

30 | Northrim: The Little Bank that Could—and Did Diversification results in wide array of financial services By Tracy Barbour

120 | Private Construction Starts Early in Anchorage Contractors at work on more than a dozen commercial projects By Russ Slaten

Leadership

90 | How to Hire and Promote Ethical Leaders By Dr. Kori Callison and Dr. Terry Nelson

Oil & Gas

120 Photo by Russ Slaten/Alaska Business Monthly

Iconic Alaskans

Remodeling 609 F Street in Anchorage.

124 | Upstream Downstream Ocean Going Vessels Marine transport for Alaska’s oil and gas industry By Kirsten Swann

128 | North Slope LNG Update Work continues on state’s future By Mike Bradner

Health & Medicine

134 | Occupational Safety and Health: United by Best Practices (and Lots of Acronyms) By Jonathan A. Jacobi

Alaska Business Monthly | April 2015 www.akbizmag.com

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April 2015 TAB LE

special section

Conventions & Corporate Travel

Corporate 100

CONTENTS

98 | 21st Century Conventions: What’s new? By Tom Anderson Photo by Heather Dunn–Ambience Photography/Courtesy of Mat-Su College

102

The Mat-Su Concert Band playing at the grand opening event and reception for the Glenn Massay Theater.

102 | Alaska Convention Center Performance Expanding venue opportunities build economic engines By Mike Bradner 108 | Traveling To Meetings Just Went Digital How some corporate travelers are telecommuting By Tom Anderson

Corrections

38 | Alaska Business Monthly’s Corporate 100 A rare view of Alaska’s top corporate citizens 60 | 2015 ABM Corporate 100 By Business Categorization and Employment Figures 62 | Alaska Communications Systems Focusing on broadband and managed IT services to keep customers connected By Vanessa Orr 66 | Ahtna, Incorporated Moving together—as one—for success By Julie Stricker 72 | The Alaska Club Helping people help others— and themselves By Rindi White 76 | Weathering Alaska’s Next Economy Responding effectively to challenges and change

78 | Emerging Leaders and United Way Reaching Millennials for philanthropy grooms them for corporate citizenship By Margaret Sharpe 81 | Corporate Citizenship Abounds Activities and actions make Alaska better 84 | Alaska Grantmaking by Community Foundations Reprinted from “Trends in Northwest Giving 2014.” Used with permission from Philanthropy Northwest. Download the full report: philanthropynw.org/trends14 86 | It’s Best to Give— and to Receive How Alaska businesses and nonprofits may collaborate to maximize outcomes Commentary by Natasha Von Imhoff

Emerging Leaders on stage at a United Way event.

An article in March about hazardous materials misstated Waste Management activities. Waste Management is not the same company that handles Alaskans’ curbside trash pick-up. In the same article, ASRC Energy Services was twice misstated as ARSC Energy Services. From the Editor in March misstated the NERC Arctic Office it is the Natural Environment Research Council of the British Antarctic Survey.

Santa at the Native Village of Kluti-Kaah Memorial Hall with AHTNA President Michelle Anderson and AHTNA Traditional Chief Fred Ewan.

Photo by Loren Holmes/ Courtesy of United Way Anchorage

Alaska Business Monthly | April 2015 www.akbizmag.com

FROM THE EDITOR

and

Volume 31, Number 4 Published by Alaska Business Publishing Co. Anchorage, Alaska Jim Martin, Publisher 1989~2014

EDITORIAL STAFF

Managing Editor Associate Editor Associate Editor Art Director Art Production Photo Consultant Photo Contributor

Susan Harrington Russ Slaten Tasha Anderson David Geiger Linda Shogren Chris Arend Judy Patrick

BUSINESS STAFF

President Billie Martin General Mgr. Jason Martin VP Sales & Mktg. Charles Bell Senior Account Mgr. Anne Campbell Senior Account Mgr. Bill Morris Accountant & Melinda Schwab Circulation 501 W. Northern Lights Boulevard, Suite 100 Anchorage, Alaska 99503-2577 (907) 276-4373 Outside Anchorage: 1-800-770-4373 Fax: (907) 279-2900 www.akbizmag.com Editorial email: editor@akbizmag.com ALASKA BUSINESS PUBLISHING CO., INC. ALASKA BUSINESS MONTHLY (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co., Inc., 501 W. Northern Lights Boulevard, Suite 100, Anchorage, Alaska 99503-2577; Telephone: (907) 276-4373; Fax: (907) 279-2900, ©2014, Alaska Business Publishing Co. All rights reserved. Subscription Rates: $39.95 a year. Single issues of the Power List are $15 each. Single issues of Alaska Business Monthly are $3.95 each; $4.95 for October, and back issues are $5 each. Send subscription orders and address changes to the Circulation Department, Alaska Business Monthly, PO Box 241288, Anchorage, AK 99524. Please supply both old and new addresses and allow six weeks for change, or update online at www.akbizmag.com. Manuscripts: Send query letter to the Editor. Alaska Business Monthly is not responsible for unsolicited materials. Photocopies: Where necessary, permission is granted by the copyright owner for libraries and others registered with Copyright Clearance Center to photocopy any article herein for $1.35 per copy. Send payments to CCC, 27 Congress Street, Salem, MA 01970. Copying done for other than personal or internal reference use without the expressed permission of Alaska Business Publishing Co., Inc. is prohibited. Address requests for specific permission to Managing Editor, Alaska Business Publishing. Online: Alaska Business Monthly is available at www.akbizmag.com/archives, www.thefreelibrary.com/Alaska+Business+Monthly-p2643 and from Thomson Gale. Microfilm: Alaska Business Monthly is available on microfilm from University Microfilms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.

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Don’t be April fooled by the State Department over the Arctic

efore this month is over this year’s session of the Alaska State Legislature will be over. Ten days into March I’m wondering how much our elected officials can possibly accomplish by April 19—so little has been done so far. All the bills are still “in committee,” and nobody is cutting $4 billion off the budget or finding a new way to generate $4 billion in revenues—not that anyone can figure that out. At ABM, we don’t generally cover crime, religion, or politics. At least we do not take sides in politics, so I am not going to endorse anything, rather just point out some things in this year’s state legislative session I noticed that seem likely to pass. Or at least seem like they could without too much trouble because they are short and to the point and appear to be nonpartisan. SENATE BILL NO. 16—sweet sixteen—pretty short and sweet as bills go and, at only five pages long, you wouldn’t think it would take too awfully long to get it on the floor for a vote. It is A BILL FOR AN ACT ENTITLED “An Act declaring the Arctic policy of the state.” Then there is HOUSE BILL NO. 1—It, too, is A BILL FOR AN ACT ENTITLED “An Act declaring the Arctic policy of the state.” I do declare: HB1 is SB16 all over again. Déjà vu. Also, I see SENATE JOINT RESOLUTION NO. 16, a companion piece, is shorter at four pages and could be more of a shoe-in because it’s a joint resolution and has a message for Congress. Take a look and decide for yourself: akleg.gov/basis/Home/BillsandLaws SJR16 is “A RESOLUTION Expressing support for the Arctic Economic Council; and requesting that the United States Congress express support for the Arctic Economic Council, for the chair of the Arctic Economic Council to be a resident of this state, and for the structure of the Arctic Economic Council leadership to mirror the rotation of the chair of the Arctic Council.” The Arctic Economic Council was created last year while Canada chaired the Arctic Council—with the intention of shaping development in the Arctic—and coincides with one of the Arctic Council’s working groups: The Sustainable Development Program. Which brings me to what this is all about anyway: the United States takes over chairmanship of the Arctic Council this month. Some say that Alaska, as the only Arctic state of the fifty, ought to have a role in it. But do we? Look at the State Department’s agenda for the United States’ twoyear chairmanship—decide for yourself. Before you do that though, look at the April issue. The team at Alaska Business Monthly has put together another really great magazine—enjoy! —Susan Harrington, Managing Editor April 2015 | Alaska Business Monthly

Arctic Council Chairmanship Passes to United States

ICONIC ALASKANS

Messy desk … creative genius.

John MacKinnon A life spent in construction By Shehla Anjum

mall models of bulldozers, excavators, backhoes, cement mixers, dump trucks, and other construction equipment line the windowsills of John MacKinnon’s office at Associated General Contractors (AGC) in Anchorage. Mistaking them for “toys” elicits a swift correction from him. “They are die-cast steel models and built to scale.” MacKinnon should know; those models are emblematic of a life spent in construction.

MacKinnon, sixty-two, has had a long and interesting career. He was a deputy commissioner of the Alaska Department of Transportation & Public Facilities (DOT&PF) and owner of a contracting business, RMC, Inc. in Juneau for twenty-four years. He served twelve years on the Juneau Assembly and five as deputy mayor and as interim city manager for one. He is one of the seven Denali Commissioners and sits on the boards of the Resource Development Council and Arctic Power. He is also on AGC’s Construction Education Foundation and the Alaska Emerging Energy Technology Fund Advisory Council. In 2008 MacKinnon became executive director of the Alaska chapter of the national Associated General Contractors of America. His working life has been mostly in construction, except for two government jobs. “Construction might have been in my genes. It is mentally rewarding and best of all you are not just sitting around, going to meetings, or shuffling papers. You see immediate

results of your work,” MacKinnon says. That love of construction started early. “John always liked building things. He spent a lot of time in our basement workshop and built forts in the trees in our yard,” his mother Jane MacKinnon says. A neighborhood girl even left notes for MacKinnon in one of his forts. “Every once in a while we’d see John tearing up those notes. He didn’t like it and she probably got tired of climbing up the tree and soon gave up,” his mother says.

Deep Alaska Roots Born and raised in Juneau, MacKinnon has an older brother and sister. He comes from an old family that has lived in Juneau since 1884. His father ran Alaska Laundry Cleaners, a family business incorporated in 1895, which is Alaska’s oldest business under the same ownership. His mother took care of the family. The late 1960s were times of antiwar protests and upheavals for young people in the Lower 48, but life in Juneau followed the same old routines.

Alaska Business Monthly | April 2015 www.akbizmag.com

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neau. The painting caper went well, the wine one did not. He bottled the wine before the juice was fully fermented. All the bottles exploded. He was left with only a big mess to clean up.

John MacKinnon is the voice of the construction industry in Alaska.

For MacKinnon it meant going duck hunting before school with his longtime friend Joe Smith. He would often store his shotgun and hunting gear in his school locker, something that would never happen today. He was a good student, known for his intelligence, wit, creativity, and love of adventure, according to Ken Koelsch, one of MacKinnon’s high school teachers. Koelsch credited MacKinnon’s resourcefulness and ability to carry out a task. “I was directing a school play and I needed to get the publicity out. So I bet John that if I gave him two hundred posters he couldn’t get more than fifty up.” Koelsch was wrong. All two hundred posters went up—plastered in the windows of downtown Juneau businesses. “I later drove downtown and, much to my chagrin, saw the posters in the windows of all the bars,” Koelsch says. The publicity paid off; the play was one of the best attended in years. There were lighter moments in MacKinnon’s younger years. Once he talked his friend Joe Smith into helping him make wine from a gallon of Welch’s grape juice. They celebrated the Class of 1970 by painting a big “70” on a rock outcropping on the mountain above Ju10

Finding Construction After graduating from high school in 1970, MacKinnon attended Western Washington University in Bellingham. Rather than engineering or a construction-related field, he chose a biology major. “I intended to go to medical school,” he says. He graduated with a BS in biology in 1976, but the idea of becoming a doctor had lost its appeal—MacKinnon had discovered scuba diving and became interested in marine biology. He returned to Juneau and got a job as a biologist at the Auke Bay Laboratories in Juneau. He lasted two years there. “I found the bureaucracy limiting. We need order and a certain amount of process and procedure that bureaucracy provides, but I found that bureaucrats were trained to say ‘No’ rather than working to find solutions.” In 1978 he and two other partners started RMC, Inc., a construction firm. The company handled mainly commercial jobs such as office buildings, parking garages, and building improvements. The construction company allowed MacKinnon to show his innovative or creative side, according to Joe Smith, his childhood friend and a Juneau contractor. “John has a mind like a steel trap and he came up with some amazing creative solutions for tackling a job.” One job at the Juneau municipal pool involved work on the building structure over the pool. The original plans called for draining the pool and scaffolding the entire area to do the work, Smith says. “John found another way. He used long trusses that spanned the width of the pool and put them on casters. He built a platform on the trusses so his workers traveled back and forth the length of the pool as they worked. It was a brilliant stroke and the job went fabulously for him,” Smith says. Local Politics In addition to running a successful contracting business, MacKinnon also

found time to give back to his community. A strong sense of civic duty led him to local politics. From 1983 until 2001 he served on various local boards and commissions, including the municipal Design Review Board, the Planning Commission, and the Juneau Assembly. In a small town like Juneau, politics often take a back seat to friendships such as the one MacKinnon, a Republican, formed with Senator Dennis Egan, a Democrat. Friends from an early age, they even have special sobriquets for each other: “John calls me ‘Dummy,’ and I call him ‘Stupid,’” Egan says. When the two friends ran for seats on the Juneau Assembly they campaigned together. “We both won and when I became mayor in 1995 I appointed John as my deputy,” Egan says. During those years, the mayor and deputy mayor “were ‘peas in a pod’ and worked together well,” according to Koelsch, who was elected to Juneau’s assembly in 1997. “John would make sure that when he and Dennis had a big issue they knew where the votes were. He was a good tactician but was happy to stay in the background.” When disagreements arose between the two they managed to find a resolution. The two men occasionally had different opinions about development. MacKinnon was, and is, pro-development and sometimes issues, such as the Juneau wetlands management plan, would separate them. “But we managed to reach a consensus and the issues got resolved,” Egan recalls. The years in local politics honed MacKinnon’s skills in dealing successfully with a variety of issues. Paulette Simpson, a longtime Juneau resident who follows the local political scene, observed MacKinnon on the assembly. “He was one of the most skillful and conscientious assembly members. He moved issues along to a successful conclusion and usually came very close to satisfying all sides,” she says. Simpson also noticed that MacKinnon “came across as a regular guy at the meetings who dressed in regular clothes, and that was kind of disarming because a lot of people thought, ‘Oh, he is just a builder,’ but he was wicked smart and articulate, and had a good knowledge about a lot of issues.”

Alaska Business Monthly | April 2015 www.akbizmag.com

MacKinnon faced a term limit after his fourth term on the Juneau Assembly, and he was also getting weary of his business and the copious paperwork he had to file. “The business stopped being fun, and in 2001 when I got off the assembly, I sold the business and retired.”

State Service His attempt to retire failed when he was asked to serve as Juneau’s Interim City Manager in 2002. He served ten months and then began his second government position in 2003, when former Governor Frank Murkowski asked him to serve as DOT&PF’s deputy commissioner for highways and public facilities. The political acumen acquired from his years on the Juneau Assembly made the transition to DOT&PF easy for MacKinnon. MacKinnon arrived at DOT&PF seasoned in politics and familiar with the workings of government. His experience in construction helped him “to get along well with the rank and file because he was basically a contractor and not a ‘suit,’” Simpson says. In his five years with DOT&PF

MacKinnon was involved in several significant projects including upgrades to the Dalton Highway, solutions to Anchorage’s road congestion, and the early phases of the Knik Arm Bridge. He was also responsible for all of DOT&PF’s administration and finances and, most importantly, getting legislative approval of the agency’s budget, which required building a good relationship with the Legislature. “I spent a lot of time in the Capitol, and I worked hard to build the trust to get our budget passed,” he says. Frank Richards, who was in-charge of maintenance operations at DOT&PF at the time and is now vice president for engineering and project management at the Alaska Gasline Development Corporation, says MacKinnon understood the political process well, had a lot of friends, and knew to how work through the political arena. Richards singled out the Knik Arm Bridge as a project that MacKinnon worked to keep viable. “He worked it through the AMATS process [a state, local, and municipal transportation coordination group] with the Municipality of Anchorage. The bridge was

politically charged and it had to work its way through the federal, state, and municipal processes. There were a lot of folks who didn’t necessarily agree with the project proceeding.” In fact, the opponents of the bridge pushed to have the project taken off the AMATS priority list, which would have signaled a lack of municipal support that would have been a death knell at that early stage. MacKinnon helped get that turned around so that the bridge remained among Anchorage’s priorities, Richards says.

Public Service with the Private Sector In December 2006 MacKinnon became DOT&PF acting commissioner in Sarah Palin’s administration but eventually left the agency, and his departure coincided with the Alaska General Contractors of Alaska’s search for a new executive director. The construction community knew about MacKinnon and his efforts to improve the relationship between the agency and contractors. MacKinnon remembers those DOT&PF days well. “I was still new at

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April 2015 | Alaska Business Monthly

DOT when I heard some in the department say, ‘To hell with the contractors.’ After hearing that a couple of times I said, ‘Time out,’ that’s not what our attitude needs to be. We need the contractors. We don’t have a construction program without them, and they don’t have a lot of work without us. “As a former contractor, I knew of problems between the department and the construction industry so I worked hard to smooth those out and things began to improve,” MacKinnon says. The construction background, skills as a successful negotiator, and knowledge of the Legislature and administration made MacKinnon an attractive candidate. AGC hired him in 2008. Since then MacKinnon has continued to improve the working relationship between DOT&PF and the construction industry. “At AGC we have a steering committee of a half dozen contractors that meet regularly with DOT[&PF] staff,” he says. AGC now receives information from DOT&PF for input, sends back its comments, and then the two groups meet to resolve differences. Compared with the often-rancorous relationships between DOT&PF and contractors in other states, the one in Alaska is very good. “The nice thing about our relationship is that we don’t always agree, but we work together. Sometimes we can present a convincing argument and DOT[&PF] agrees, and sometimes we can’t. But we are able to work together and discuss the issues,” says MacKinnon. One of MacKinnon’s main tasks is keeping track of issues and legislation that affect the economy and the construction industry. AGC’s members total about 650 businesses, half contractors and half associate members such as architects, engineers, building supply companies, and financial firms. “We advocate for the construction industry and, where necessary, get legislation introduced to resolve an issue.” One example is a recent change the AGC helped accomplish to solve a problem with the state mining license tax, an antiquated tax first enacted by Alaska’s Territorial Legislature in 1913. Tony Johansen, co-owner of the Fairbanks construction company Great Northwest, Inc. that also mines gravel, found the tax difficult to work with as it applied to gravel mining and asked MacKinnon for help. 12

Sand and gravel operators found the mining tax burdensome because it treated their operations as if they were mining more valuable commodities such as gold or silver, MacKinnon says. The Department of Revenue collected the tax but its audits became a very expensive process for all involved. Johansen contacted AGC in 2011 after discovering that his company had spent almost $20,000 in staff and accounting time for an audit on a $7,500 tax bill. “Once I got hold of John and expressed my concerns he contacted other gravel operators throughout the state. He discussed the problem with the revenue department and they looked into the tax,” Johansen says. The department figured out that in the last five years it had collected between $206,000 and $320,000 annually in revenue on sand and gravel but had spent about $150,000 each year to administer that tax, and those were just the state’s expenses. “John got a bill, HB298, introduced in the 2012 session to exempt sand and gravel from the tax and worked diligently throughout the legislative process. The bill passed and that was a big help to our industry,” Johansen says. Since the bill’s passage, sand and gravel operators and the construction industry have saved about $1 million a year, according to MacKinnon. AGC is not all about contractors; it also reaches out to the community to train Alaska’s future construction workers. AGC’s Construction Education Foundation has had training programs for the last ten years, using grants from the state and federal governments to operate the Alaska Construction Academies in Alaska. AGC works with training programs in over ten urban and rural communities from Kotzebue to Ketchikan. The construction academies also reach out to students from primary to secondary school. “With secondary and middle school students we try to build their interest in construction as a career. We introduce them to the basics and tell them about careers in plumbing, electrical, carpentry, road building, and heavy equipment operation,” MacKinnon says. Elementary school children learn about construction through AGC’s “Buildup” program, where tool kits are taken into class-

rooms for children to become familiar with tools. Beyond schools, AGC offers training programs to adults. Students receive credentials in those courses, using the nationally recognized NCCER (The National Center for Construction Education and Research) training curriculum. That provides participants credentials that are recognized all over. “If you have taken the basic core of NCCER you can get credit towards your apprenticeship hours, so it is a very helpful thing,” MacKinnon says. Outside AGC, MacKinnon lends his expertise to the Denali Commission, which was created by the late Senator Ted Stevens to build and upgrade power generation, communication systems, and water and sewer and other infrastructure in rural Alaska. MacKinnon lauds the commission’s work but also voices concern. “The Denali Commission has accomplished a tremendous good in rural Alaska with the services it has delivered. But as federal funding decreased, Commission costs became a much greater percentage of the program,” he says. That makes the commission less efficient than in past years.

Shining Optimism Even with declining oil prices and the looming state budget deficits, MacKinnon is optimistic about Alaska and the construction industry’s future. Compared to 1986, he believes that Alaska’s economy is mature and more diversified and will survive this latest downturn. Despite the current financial uncertainties, the construction industry spending has not decreased significantly. The AGC/ISER 2015 Alaska construction forecast showed total construction spending down by only 3 percent to $8.5 billion from the nearly $9.2 billion forecast in 2014. The annual forecasts started in 2004 and are prepared by UAA’s Institute of Social and Economic Research for AGC’s Construction Industry Progress Fund. Except for three years of no growth when the rest of the country was in a deep recession, every year has seen an increase in construction spending, which soared up to 18 percent in 2014. The construction industry will feel the downturn but not immediately

Alaska Business Monthly | April 2015 www.akbizmag.com

AGC of Alaska Executive Director John MacKinnon spreads the word.

because of the lag between when public money was appropriated and when contractors start the projects. Appropriations from previous bonds issued and capital budgets will help soften the blow, MacKinnon says.

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What concerns MacKinnon more is the possible cancellation of large, strategic projects such as Susitna-Watana hydroelectric dam, the Knik Arm Bridge, and the Juneau Access road. “They are an investment in Alaska’s future and

should not be cancelled,” he says. He personally supports a state income tax to help offset reduced oil revenues, MacKinnon says. “We need to pay more for what we are getting; we need more skin in the game to appreciate what we have,” he says. When questioned about what he does for fun, MacKinnon looks askance. “Fun? Work is fun.” Although he finds joy and fun in work, it isn’t all work. He enjoys spending time with and cooking for his new bride, state Senator Anna MacKinnon (formerly Anna Fairclough), visiting his three children and two grandchildren who live in the Lower 48, and taking on construction projects for his daughter in Portland. He tries to spend time at his cabin in Southeast Alaska, where he fishes in the summer and hunts deer in the fall. There are no immediate plans to retire again. MacKinnon finds pleasure in what he likes best—giving back to his industry and to his state. R Writer Shehla Anjum is based in Anchorage.

April 2015 | Alaska Business Monthly

ENERGY

Update on the Interior Energy Project By Mike Bradner

ome and business owners in Interior Alaska have gotten at least a temporary respite from the sky-high energy prices that have threatened the regional economy, thanks to the plunge in crude oil prices. The unexpected drop in oil prices, from $110 per barrel in mid-2014 to the mid-$40 per barrel in early 2015, has devastated the state budget, but it has been a boon for Interior residents’ checkbooks. The respite has also allowed the state and Interior community leaders to take a fresh look at an innovative plan to reduce energy costs by trucking liquefied natural gas, or LNG, from a new LNG plant that would be built on the North Slope. When the Interior Energy Project was launched two years ago by the Alaska Industrial Development and Export Authority (AIDEA), the state development

corporation, the goal was to have natural gas delivered to Fairbanks area consumers by late 2015 at a price of $15 per million British Thermal Units, or mmbtus. As that plan was developed the cost has come in higher than expected and with the first LNG deliveries delayed to 2017 or later. The relief in energy prices has allowed AIDEA to take a fresh look at the project, at the possibility of delivering LNG from Southcentral Alaska and at a possible investment by the state authority in owning, at least temporarily, part of an expanded Fairbanks gas distribution system. The North Slope LNG trucking plan is still on the table, but other options are now being considered.

High Energy Costs Until recently high energy costs have been a real drag on the Interior econ-

omy. Crude oil prices over $100 per barrel, which has been the norm in recent years, translated to heating oil costs of $4 a gallon or more, causing a real hardship since most homes and buildings in the region heat with oil. Anecdotes of monthly heating bills being more than a home mortgage were common, and there were stories—never verified—of people packing up and leaving Fairbanks. The economic problem was severe and was similar to hardships felt in rural villages, including the Yukon River valley of the Interior, where home energy costs soaked up much of a family’s disposable income. Relief from high oil prices will be delayed in rural Alaska, however, because fuel there is mostly delivered by barge in summer. Rural communities are still using fuel oil and

Alaska Business Monthly | April 2015 www.akbizmag.com

Ice fog hangs over the interior city of Fairbanks on a chilly minus forty degree Fahrenheit day in January, where most homes and businesses are currently heated with fuel oil or wood. ÂŠ Patrick Endres/AlaskaStock.com

gasoline delivered last year when prices were high. Price relief will come eventually when the 2015 barge deliveries are made. The Interior does have one source of low-cost energy. That is coal, and the coal reserves are considerable. Usibelli Coal Mine, Inc. has been operating its coal mine at Healy since the 1940s, supplying coal for power generation in the Interior. Its reserves of coal are sufficient to continue this supply for decades. However, the benefits of lower-cost coal are mainly felt in power generation. In years past coal was used for home and building heating in the Interior, and while Usibelli still has a handful of non-power generation customers, most home and business owners switched many years ago to fuel oil because of its ease of storage and hanwww.akbizmag.com

dling. Now that oil furnaces and fuel tanks are installed, switching back to coal would be a very expensive option. Depending on the type of furnace, switching to natural gas will be less expensive for most home and business owners, and most Interior residents are now focused on the possibility of using natural gas, either from the North Slope or Southcentral Alaska. Natural gas is hoped to be less expensive than fuel oil, but it could also help solve another even more urgent problem for the community: intense winter air pollution created in certain temperature conditions when it is concentrated at low levels in parts of the Fairbanks North Star Borough, particularly the North Pole area. The burning of fuel oil and wood releases fine particulates that become a health hazard when concentrated. Particulate

particles of less than 2.5 micrometers in diameter, known as PM2.5 in government regulatory jargon, can be a serious health risk because the particles can penetrate deeply into the lungs. The Fairbanks region has been classed as a â&#x20AC;&#x153;non-attainment areaâ&#x20AC;? by the US Environmental Protection Agency and the community must come up with a plan to alleviate the condition or face federal penalties that could include reductions of federal funds. Having access to natural gas, which is more clean-burning than fuel oil, would ease the problem. Part of the Fairbanks community is served by natural gas now, with LNG that is trucked from Southcentral Alaska, stored in tanks, and then regasified for local use. The distribution system is small, serving about 1,100 residential and commercial customers, although it is now being expanded. The local gas company, Fairbanks Natural Gas (FNG), a subsidiary of Texas-based Pentex, is privately-owned, and local consumers have been vexed that although the gas is more clean-burning than coal, its price is not that much lower, or is even on par, than the equivalent cost of fuel oil. FNG cites the expense of trucking the LNG, the small scale of its operation, and the price at which it must buy gas from Southcentral Alaska producers. However, because the Fairbanks gas system is unregulated by the Regulatory Commission of Alaska, local consumers have no way of verifying that the cost claims are valid.

An Interim Solution Despite that, the priority now for local business and community leaders is how to accelerate the expansion of natural gas service and to lower its cost. Someday a natural gas pipeline might be built from the North Slope, but whether that happens is still uncertain. Closer to home, Doyon Limited, the Alaska Native regional corporation for the Interior, has been exploring promising oil and gas prospects in the Nenana Basin about west of Fairbanks, but no discoveries have yet been made. These are both good possibilities but not ones that Interior Alaska leaders feel they can count on for now. People are looking for an interim solution, and the most viable on may be trucking LNG from the North Slope or expanding the delivery of LNG from Southcentral Alaska. April 2015 | Alaska Business Monthly

In cases like this, when energy prices become so high that the viability of the regional economy is threatened, political leaders come under intense pressure to “do something.” Thus, state government was asked to help get natural gas to Fairbanks, and affordable gas at that. And as often happens when government gets involved, things get complicated. The first idea of trucking of LNG from the North Slope was originally a privatesector initiative led by FNG. The company had already proven that trucking of LNG, although from Southcentral Alaska, could work for the community, but there were concerns over the long-term supply of natural gas in the Cook Inlet Basin and whether it would be enough to supply the Southcentral utilities, much less the Interior. FNG began investigating the option of building a small LNG plant at Prudhoe to take advantage of large gas reserves there and trucking LNG down the Dalton Highway. The company even secured a gas supply contract with Exxon Mobil Corporation, a major slope producer and gas owner. FNG was not able to advance its project, however. Golden Valley Electric Association and Flint Hills Resources, two large users of fuel oil in the Fairbanks area, stepped in with their own joint study of a North Slope LNG plant, did conceptual engineering and feasibility work, and concluded the idea was technically feasible. The two disagreed on how the project could be developed, however. Golden Valley wanted to pursue a large state grant, in the range of $200 million, to finance the LNG plant and lower overall costs (at the time the state was flush with money). However, Flint Hills’ parent, Koch Industries, disagreed with the idea involving government and the notion of a subsidy, and withdrew from the partnership. Golden Valley continued the effort, however. At that point Interior community leaders met with thenGovernor Sean Parnell during a visit he made to Fairbanks. They pressed the idea of a $200 million state capital grant for the LNG plant. Parnell refused the grant idea but offered an alternative to explore the possibility that AIDEA could do low-cost financing for the plant. But this would only be done, Parnell said, if a private investor could be part of the mix. 16

Thus, the “Interior Energy Project,” led by AIDEA, was born under terms of Senate Bill 23 (SB23), passed the Legislature in 2013, which authorized a mix of low-cost financing and grants entities that would build the LNG plant, set up the LNG trucking, and help build new gas distribution systems in the Fairbanks area. The total amount of financing available under SB23 was $332.5 million, consisting of a $57.5 million direct capital appropriation; $150 million to be made available under AIDEA’s bonds; and an additional $125 million in low-cost financing under a sustainable energy loan program administered by AIDEA.

Project Progress AIDEA also took the lead in soliciting a private sector partner for the LNG plant at Prudhoe Bay and received three proposals: from Pentex, the owner of Fairbanks Natural Gas; from Spectrum Energy, a small company that had worked with Pentex in developing the small LNG plant in Southcentral Alaska and also owned a small gas distribution system at Deadhorse, the North Slope contractor-support community; and finally from MWH Global, a major infrastructure engineering and development company with experience in large energy projects. Simultaneously, two initiatives were underway to expand the Fairbanksarea gas distribution system. In the core Fairbanks area FNG began an expansion of its system to reach more customers in its service area while the newly-formed Interior Gas Utility, a new public utility formed under the auspices of the Fairbanks North Star Borough, began planning for a gas distribution system in parts of Fairbanks outside FNG’s service area beginning in North Pole, where there was a population density and the winter air pollution was also worse. MWH Global was ultimately selected by AIDEA through a long negotiation process, mainly because the company had offered to put more equity investment into the LNG plant, which meant less debt financing would be used, than had either Pentex or Spectrum. That was attractive to AIDEA because it left more of the low-cost SB23 money avail-

able to help finance the distribution system in Fairbanks. Further negotiations led to a joint-venture between AIDEA and MWH, a concession-type agreement where AIDEA would finance and own the plant and MWH would operate it, handle LNG sales to the Fairbanks utilities, and, it was hoped, expand the LNG sales to other customers so that the plant could produce at higher volumes, which would add efficiency. By December, 2014, the project appeared to flounder, however, because the costs of the plant had come in higher than expected—$228 million instead of $175 million—although MWH said the project could still be economic. Meanwhile, Alaska’s new governor, Bill Walker, directed AIDEA to consider other options. More gas had been discovered in Southcentral Alaska and several companies there, including Hilcorp Energy, WesPac Midstream, and REI Alaska, a Japanese company, have expressed interest in including supplying LNG to Fairbanks. Meanwhile, the Alaska Railroad has developed a proposal for bulk shipments of LNG that it says could be more cost effective than trucking from the North Slope. The LNG project is now in a “reset mode,” with AIDEA considering the options both from Southcentral and the North Slope. Meanwhile, the Authority is considering a plan to purchase FNG from Pentex, its owner, at least as a temporary measure to facilitate the expansion of the FNG distribution system and the construction of more LNG storage using AIDEA’s own sources of lowcost capital. Meanwhile the Interior Gas Utility is due to begin construction this summer on its own distribution system beginning in the North Pole area, using low-cost financing made available through AIDEA. The plan to get new energy into the Interior has taken its twists and turns, but the initiative now has real momentum. It’s virtually certain that someday more LNG trucks will be rolling into the Fairbanks area. What isn’t yet certain is which direction the trucks will come from, the north or south. R Mike Bradner is publisher of the Alaska Legislative Digest and Alaska Economic Report.

Alaska Business Monthly | April 2015 www.akbizmag.com

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BUSINESS

Mergers and Acquisitions A bound in A laska Telecom, design, and transportation among largest deals brokered By Rindi White

A GCI infrastructure tower on Askinuk Mountain near Scammon Bay, a body of water on the Bering Sea and the Calista village of about five hundred located on its shores along the western coast of Alaska near Cape Romanzof.

he year 2014 was a year of shifting, merging, and occasional upheaval among Alaska businesses. One of the largest shifts, and one affecting perhaps the most direct consumers, was the decision in December by GCI to purchase the wireless subscriber base of Alaska Communications Systems. Global design firm Stantec purchased Alaska-based design firm USKH, giving Alaska companies and municipalities access to one of the top fifteen national design firms. Horizon Lines is in the process of selling its fifty-year Alaska cargo shipping business to longtime Hawaii-based cargo shipper, Matson. Amid the larger-profile changes, a number of other changes, mergers, and shifts happened, from New Yorkbased National Response Corporation buying environmental and emergency response company Emerald Alaska to

Arctic Slope Regional Corporation acquiring Little Red Services, Inc.

Building the Second-Largest Wireless Provider in the State The roughly $300 million deal, announced December 4, affected about 109,000 Alaska Communications wireless subscribers, nearly doubling GCI’s customer base and making it the second-largest cell provider in the state, GCI spokesman David Morris says. He estimated after the transition is complete, GCI will hold about a third of the Alaska cell customer base, with AT&T holding the largest share of any wireless company in the state. The remaining customer base is divided up among Matanuska Telephone Association, TelAlaska, Arctic Slope Telephone Association Cooperative, OTZ Telephone Cooperative, Bristol

Bay Cellular Partnership, Copper Valley Telecom, Cordova Telephone Cooperative, and a handful of national providers operating in Alaska. Morris says the purchase fits into the company’s long-term strategy of growing to better serve its market. “One thing that GCI excels at is adapting. If you look at GCI, we have adapted where the market led,” Morris says. “When I started at GCI, there were three hundred people here. Now it’s closer to two thousand. Everything that GCI has done has been market-driven.” The company is in the transition process, a stage Morris expects to last several months. But it should feel fairly seamless to Alaska Communications wireless customers, he says. “If you have a contract with Alaska Communications, that will be grandfathered in. Eventually, we’ll work with

Alaska Business Monthly | April 2015 www.akbizmag.com

the new customers that came over to see if we have something that will better suit their needs,” Morris says. “The challenge [with the transition] is that Alaska Communications has a very specific billing system. We have to, during this period, develop that system so it works with our back-office systems and, of course, we have to train our representatives not only on the new system, but on the new plans Alaska Communications has. We’re contracted with Alaska Communications to provide one-onone coaching to our staff,” he says.

Alaska Communications to Focus on Core Business With the purchase, Alaska Communications plans to focus on the largest part of its existing business, broadband and IT solutions. Wireless service made up about a third of the company’s business profile. “As many Alaskans know, there has never been more choice for wireless service. We are choosing to focus on the areas where we can uniquely serve Alaska—broadband and managed IT solutions. We have an incredible opportunity

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to grow in providing broadband and IT solutions to businesses. We have grown our broadband revenues every quarter for almost three years,” says Heather Cavanaugh, director of corporate communications for Alaska Communications. Cavanaugh says the sale of its wireless assets and subscribers will allow Alaska Communications to better serve some of the largest organizations in the state. The company provides reliable connections between schools, banks, local and state governments, oil and gas companies, and hospitals via increased bandwidth and secure, high-speed Internet access. “As we build our network to serve Alaska businesses, we will also be able to provide home Internet customers with reliable, unlimited, and faster speeds in more places,” Cavanaugh says. The company invests about $40 million in building its business each year. The sale “will make Alaska Communications one of the strongest companies in our sector, enabling us to invest in Alaska in our broadband network to serve Alaska businesses and home Internet customers,” she says.

As to how the deal directly affects Alaska Communications, Cavanaugh says between 150 and 200 Alaska Communications employees impacted by the purchase are being offered the choice of voluntary separation packages or a different position within the company. Some stores may close—it was too early to say which stores or when, she said in late December. “We may keep some locations for other uses. We are committed to giving our customers information when we have it,” she says. The company will use about $250 million of the $300 million deal to pay down debt, Cavanaugh says.

GCI to Wholly Own Alaska Wireless Network In 2013, Alaska Communications and GCI partnered to form the Alaska Wireless Network, or AWN, by combining the two companies’ wireless networks and provide a broader coverage area. According to the two companies, the move was designed to make them better able to compete against national wireless carriers.

April 2015 | Alaska Business Monthly

More Acquisitions and Sales of Note Chugach Alaska Corporation Acquires All American Oilfield Associates, LLC In January, Chugach Alaska Corporation announced plans to acquire Kenai-based All American Oilfield Associates LLC and All American Oilfield Equipment LLC, its wholly owned subsidiary. According to Chugach, All American will continue to operate as it has in the past, but Chugach hopes to help “accelerate All American’s growth and success by helping the company refine their services, develop their brand, and grow their customer base,” says Chugach CEO Gabriel Kompkoff. All American will continue operating out of its Kenai headquarters and under the company’s leadership team, Pete and Tanya Dickinson. Cruz Construction, Inc. Buys Alaska Interstate Construction Alaska Interstate Construction (AIC), a company jointly held by CIRI and Nabors Industries, was sold to Palmerbased Cruz Construction, Inc. in December. CIRI and Nabors each owned 50 percent of AIC, according to information from CIRI. While CIRI no longer has an ownership interest in AIC, the company is a partner of Dave Cruz through Cruz Energy Services, based Alaska Communications held a minority interest, 33 percent, of the network. The sale of its portion of AWN was part of the $300 million sale. Morris says having complete control of AWN will allow GCI to more effectively use it. The partnership was challenging at times, he says, because the two companies had different visions for its use. “The amount of negotiation that took place was distracting,” Morris says. By consolidating, GCI will be better able to expand the network and can get rid of the accounting overhead inherent in the shared network.

A Major Investor Helps GCI At the same time as GCI and Alaska Communications announced the sale, 20

in North Dakota, and Alaska-based tug and barge company, Cruz Marine.

AECOM Technology Corporation Buys URS Corporation In October, Los Angeles-based engineering design firm AECOM announced it had acquired San Francisco-based URS Corporation, a corporation providing engineering, construction, and technical services for public agencies and private-sector companies around the world. AECOM officials say the purchase “diversifies and broadens AECOM’s market presence, as URS brings strong sector expertise in important end markets, including oil and gas, power, and government services.” Following the purchase, AECOM boasts nearly 100,000 employees working in 150 countries around the world, with revenue of $19.2 billion during fiscal year 2014, ending June 30. At the end of 2013 URS Alaska reported employing about 175 engineers, scientists, planners, and support staff. ASRC Acquires Little Red Services, Inc. Arctic Slope Regional Corporation (ASRC) announced in May it acquired Little Red Services, Inc. (LRS), a company that provides “hot oil” and other well services on the North Slope, GCI announced a new addition to its board, Eric Zinterhofer, co-founder and partner of global private investment firm Searchlight Capital Partners. Zinterhofer made a $75 million investment in GCI, in the form of an unsecured note. He will join the GCI board as a Class II director and, according to the company, will stand for election at the next shareholder meeting. Morris says the investment from Zinterhofer helped make the Alaska Communications purchase feasible, but backed away from saying whether the deal could have occurred without Zinterhofer’s investment. The company hopes Zinterhofer’s influence on the board will be the most valuable part of the transaction.

where it has been working for more than thirty years. LRS President and CEO Doug Smith says the financial support from ASRC, coupled with oil tax reform, puts LRS in a position of improvement and expansion. LRS will operate separately from ASRC Energy Services, Inc., or AES, in an effort to preserve the LRS brand and allow each company’s brand and management teams to focus on what they do best.

National Response Corporation Acquires Emerald Alaska LLC NRC (National Response Corporation), a portfolio company of J.F. Lehman & Company, announced in November it completed the acquisition of Emerald Alaska LLC from Emerald Services, Inc. NRC has more than one thousand employees globally and is the leading commercial provider of US Oil Pollution Act of 1990 regulatory compliance services, along with global provision of specialized environmental and emergency response solutions. The company is based in Great River, New York. Emerald, with more than one hundred employees, is a leading provider of environmental and emergency response solutions to the oil and gas industry. It operates seven permitted facilities throughout the state. R

Prior to co-founding Searchlight, Zinterhofer worked at Apollo Management LP, as the co-head of the media and telecommunications investment platform, according to information from GCI. The company says in the last fifteen years, Zinterhofer has been an active cable investor in such companies as Charter Communications, Liberty Cablevision Puerto Rico, Unity Media, Cablecom, and Primacom. He’s also an active investor in fiber, wireless, and satellite sectors, with investments in Integra Telecom, IPCS, Spectrasite, and Dish TV India. “He’s very gifted,” Morris says. “The main goal of a board of directors is to look down the road; if they can see something emerging a month before others do, they’ve done their job. What

Alaska Business Monthly | April 2015 www.akbizmag.com

Eric is going to bring is a lot of vision in the industry.” “Eric brings a tremendous amount of experience and expertise in our industry,” Ron Duncan, GCI’s president and CEO stated in a press release about the investment. “We look forward to leveraging that experience in GCI’s mission.”

Stantec Acquires USKH In June, Canada-based global design firm Stantec closed the deal to purchase Alaska-based design company USKH. The purchase forwards Stantec’s strategy of building a strong presence in the United States, while augmenting the services USKH was already providing here, company officials say. “We have, for the last ten to twelve years, used an acquisition strategy to build a strong presence in the United States. Where Stantec had primarily been a Canadian firm, our goal was really to become a global firm,” says Eric Nielsen, executive vice-president of infrastructure for Stantec. “We want to be—and remain—a top-ten global design firm. Alaska is a great state for the kind of work that we do,” Nielsen says. “USKH is a well-run firm with a good leadership team and a good reputation. The leaders of USKH and the leaders of Stantec liked each other, which was an important first step. Between the services they offered and their location—USKH was a great partner for us.” Stantec’s goal is to augment the services USKH was already providing. The move “pretty dramatically expanded” USKH’s capabilities in offering environmental services, Nielsen says. The combined company will likely be able to perform more pipeline work and more engineering in Alaska than USKH was doing before. Outwardly, the changes won’t be striking. Stantec employs more than fifteen thousand people in more than 250 locations. The offices tend to be midsized, often not much larger than the USKH Anchorage office where about one hundred employees worked. “We’re very strong believers in a community approach to doing things,” Nielsen says. Attrition was almost nonexistent, he says. The USKH leadership team stayed in place. www.akbizmag.com

Tim Vig, former CEO and president of USKH for seven years and current senior principal at Stantec, says he met Bob Gomes, president of Stantec, at a conference four years ago. They found a lot of similarities between the two businesses and pledged to partner together if it made sense to do so. “We were always interested in looking for ways to grow our business by partnering with strategic firms that had similar values—in a teaming fashion,” Vig says. But as the companies learned more about each other, selling USKH seemed

a logical choice. Already, the decision is paying off, in terms of allowing the office to compete for projects that might previously have been out of its reach. One, he says, is a project studying the Anchorage International Airport’s ground transportation lobby. “It involves some aspects of airport terminal design and how people flow through the terminal when they’re going from one point to another. That’s not an expertise we had in our local office,” Vig says. “We’ve done work with the airport terminal in the past, but not on that regard.”

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April 2015 | Alaska Business Monthly

A Matson container ship near Oahu, Hawaii.

But Stantec had people with that expertise, he says, and with an expanded team, Stantec was the successful bidder on the project. Stantec also won the bid to perform the Marine Arctic Ecosystem Study, or MARES, a long-term scientific study of the Arctic marine ecosystem along the Beaufort Sea between Barrow and the Mackenzie River delta in Canadian waters. “Our clients were, in many cases, government agencies and some private work,” Vig says. USKH work included institutional projects like roads and schools and airports, not art museums, he explains. But with Stantec’s expertise, the scope of possibilities is broader. “We have the opportunity to pursue or be a part of projects that are in different business lines altogether,” he says. Oil and gas projects, power projects, and specialized architectural projects such as hospitals or healthcare facilities are all possible now, he says. “In Alaska it’s hard to have that concentration of specialized expertise in the market we have,” he says. “The longterm projects of those types don’t come around frequently enough to keep that expertise within the four walls of an office every day.”

Matson Purchase Allows Horizon to Dig Out of Debt Two years ago, Horizon Lines terminat22

ed vessel charter obligations and shut down trans-Pacific service, two major efforts at helping the company reduce its debt from nearly $600 million to just over $400 million. But in its October 2014 thirdquarter earnings profile, the company listed $523 million Cox in outstanding funded debt. In November, the company announced three significant decisions that would finally leave the company debt-free—and also effectively close its operations. The company announced agreements with Matson, Inc. and the Pasha Group, through which Horizon will sell its Hawaii trade lane business to Pasha for $141.5 million in cash and then, after the Pasha transaction is used to reduce Horizon’s debt, sell the remaining shares of Horizon Lines to Matson. In addition to gaining Horizon’s shares at 72 cents per share, Matson agreed to repay all of Horizon’s outstanding debt at closing. Horizon also decided to shut down its operations in Puerto Rico by the end of 2014. Under its previous heading of Sea-Land Service, Inc., the company pioneered container shipping in Puerto Rico in 1958. But in recent years, several factors, including aging ships, a faltering economy, and ongoing losses for the company, made shipping there unprofitable.

“These transactions will place our company in the hands of strong stewards with reputations for outstanding customer service,” said Horizon Lines, Inc. board chairman David N. Weinstein in a November press release about the transactions. “Matson has over 130 years of shipping experience and is guided by a rich history of integrity and innovation. Pasha is a third-generation, family-owned business with a proud heritage of excellence and deep ties to the Hawaiian community.” Horizon President and CEO Steve Rubin stated the transactions leave his company in good hands. “Our board and management team have been working diligently to improve Horizon Lines’ financial and operational performance while continuing to provide superior service across all our trade lanes. These transactions are a direct reflection of those efforts, and will enable the proud heritage of Horizon Lines to be passed on to Matson and Pasha.”

Matson Looking For Short- and Long-Term Cash Flow from Deal Matson, Inc. leaders said in a report to shareholders that its and Horizon’s boards of directors both unanimously

Alaska Business Monthly | April 2015 www.akbizmag.com

approved the deal, which is expected to close sometime this year. “We are very encouraged by the steady long-term prospects of the Alaska trade, particularly given Horizon’s position as a leading container shipping operator currently serving the Alaska market, a position it has held for over fifty years,” says Matthew Cox, president and CEO of Matson. Cox says the company estimates the acquisition will allow Matson to grow its annual revenue by $330 million and contribute $70 million in EBITDA, or earnings before interest, taxes, depreciation, and amortization. “The cornerstone of this franchise is a valuable operating platform that is focused on the same principals as Matson: customer service and on-time arrivals,” Cox says. Cox says the deal includes a strong terminal operations business that contributes to Horizon’s overall profitability. Horizon provides exclusive stevedoring and charter services in Kodiak and Dutch Harbor to international cargo shippers Maersk and APL. Matson will continue those services. The deal includes Horizon’s fleet, which includes three diesel-powered vessels and a steamer. Joel Wine, senior vice president and chief financial officer for Matson, told shareholders that Matson would install main engine scrubbers beginning in the second half of 2015 to help the engines comply with increased emissions requirements soon to go into effect. The work is expected to cost between $6 million and $8 million per vessel, or up to $20 million in total. While each vessel is out for repair, Wine says Horizon’s steamship, which costs slightly more to operate, will be pressed into service. The project will likely spell a slightly lower pre-EBITDA return in 2015 and 2016, he says. In the long term, Wine says Matson sees several opportunities for growing its business and improving profitability in Alaska, particularly if energy investment increases. “Alaska is more sensitive [than Hawaii] to energy investment,” Wine says. “Another driver that’s very similar is the military.” R

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Freelance journalist Rindi White writes from Palmer. www.akbizmag.com

April 2015 | Alaska Business Monthly

BUSINESS

CH2M HILL Discontinues Divestiture Process Decides to keep oil and gas holdings for the long-run By Rindi White

CH2MHILL will keep its oil and gas holdings that service the industry in Alaska and Sakhalin, Russia, including infrastructure seen in this aerial of Prudhoe Bay and Deadhorse on the North Coast of Alaska with the Beaufort Sea in the background.

Oilfield Services a Relatively New Direction CH2M HILL is primarily a company focused on engineering water, transportation, and environmental projects. That changed in 2007 when Alaska oil-

field service company VECO Corporation was mired in a controversial federal lawsuit in which company leaders pled guilty to charges of extortion and bribery, among other charges. VECO leaders resigned in May 2007 and talks of selling the company to CH2M HILL began the same month. The sale wrapped up in September 2007. At the time the VECO purchase was made final, CH2M HILL employed between forty and sixty people in Alaska. The company has been operating here since 1964, says John Corsi, head of public affairs and media for CH2M HILL. Adding VECO increased the company’s size by more than 25 percent, Corsi says, although the VECO legacy holdings (roughly 2,600 oil and gas employees in Alaska and another 1,000 in the Russian Sakhalin Island oil fields) now represent about 10 percent of CH2M HILL’s workforce. The decision to acquire VECO and move in a new direction was not undertaken lightly. “We acquire for business fit and culture fit,” says Patrick O’Keefe, US re-

all it the seven-year itch, perhaps. Colorado-based engineering firm CH2M HILL last year went through a transformative experience, first deciding to explore a sale of a portion of the company’s oilfield services business it had purchased in 2007, then to keep them and make them stronger than ever. The abrupt decline in oil prices between November 2014 and this January definitely informed the company’s decision to keep the oilfield side of its business in place, says Matt McGowan, head of corporate development at CH2M HILL. At the same time, the company’s perception of that facet of its business only got stronger. “Over the course of a not-very-long process, the change in oil prices was dramatic,” McGowan says. “The perception was [at CH2M HILL], we didn’t think the value of our business had changed. We got very comfortable with the business … very comfortable with the opportunities around us. We got bullish about the business we were in.”

gional managing director for CH2M HILL. “The VECO legacy acquisition, not just in Alaska but elsewhere, has become part of CH2M HILL’s culture. They have completely diversified our business.” McGowan says the company had a strong desire at the time to gain more of a foothold in the oil and gas industry. While some of the services provided on the North Slope and elsewhere, such as pipeline maintenance, are unique to CH2M HILL, many of the other services, such as operations and maintenance at North Slope airports, for example, are the same types of services the company provides around the world. “This has provided wonderful crosssector opportunities,” O’Keefe says. While Sakhalin Island and Alaska are the only places where CH2M HILL workers provide on-site oilfield support, the company does provide oilfield-related engineering services in Houston, Denver, and the Southeastern United States; Calgary, Alberta, Canada; Abu Dhabi, and Mexico City; and South America.

Alaska Business Monthly | April 2015 www.akbizmag.com

“We’re quite diversified compared to others in our industry,” O’Keefe says. “We provide whole life-cycle environmental from the front end to the back end.” The company’s environmental group provides life-cycle support, its permitting group and water group help provide water for the industrial oil and gas industry, and the company works to provide wastewater treatment, he says. CH2M HILL recently added a business that provides permitting services to the oil and gas sector in Calgary, a move that is linked to the company’s strength in that sector as a result of its VECO holdings.

Divesting, a Public Discussion The company’s decision first to divest, then not to divest, the VECO legacy holdings worked itself out on a pretty public stage, a move that has afforded business watchers a somewhat rare glimpse into the reasons behind the company’s decisions. “We did decide to take a pretty transparent approach to this,” McGowan says. “We didn’t want [clients] to hear it from others, we wanted them to hear from us.” McGowan says the company didn’t approach the divestiture effort on a whim. It happened after a solid analysis of the strengths of its oil and gas group. And, counter to rumors that cropped up after the company announced its interest in divesting, CH2M HILL never planned to leave Alaska. “This is a component of our Alaska business,” O’Keefe says of the oil and gas group. “We have a robust operation in Alaska focused on water, transportation, and infrastructure serving federal and other clients. We’ve been here for fifty years and we fully intended to still be here, had a deal gone through.” But, as McGowan says, oil prices declined sharply not long after CH2M HILL began taking offers on the oilfield services sector of the company. It was unlikely the company would get what it wanted for that sector of its business. “At the same time, in discussions with other parties, all our feelings [about the oilfield services sector] were validated,” McGowan says. There was market interest in the deal, but McGowan says the interest didn’t represent what the company thought was a fair outcome for everyone involved. www.akbizmag.com

Staying Put and Investing in the Future So, with a fresh perspective on the business, CH2M HILL decided to pull the plug on the divestiture effort, keep its oilfield services assets, and work to make them better. “I think we understood better the company’s position, its marketing and its clients, and the ability to move forward; how to grow,” McGowan says. Now, the company is focused on plotting its course for 2016–2017, he says, and developing its capital investment plans. “We’re back to business as usual. It’s a significant exercise to go through, certainly on management’s behalf, but having gone through it, I think we’re comfortable with where we sit on the path forward,” McGowan says. The process has been a difficult one for employees to go through, says Terry Bailey, CH2M HILL’s regional manager for Alaska and the Sakhalin Islands. “It’s been quite a roller coaster over the last three months. I think there was an awful lot of uncertainty over who was going to be the buyer,” he says. Now, he says he thinks morale is on the upswing. CH2M HILL leadership made it a point to visit Alaska CH2M HILL offices to demonstrate to employees that they are part of a larger network of employees, working on a broader stage. “People feel like they’re part of a large enterprise. What CH2M HILL brought to VECO was opportunities they would have never had before,” Bailey says. Employees have been able to return to the states where they grew up, he explained, while others have had the opportunity to work in locations around the world. O’Keefe says a future rise in oil prices will not motivate CH2M HILL to put the VECO holdings back on the market. The decision to drop the divestiture was made with the company’s future in mind, he says. “We understand that this is a longterm business. It requires long-term investment in equipment, facilities, and people,” O’Keefe says. “The cyclical nature of energy prices is important to keep an eye on, but our investments are made with an eye on the long term.” R Freelance journalist Rindi White writes from Palmer. April 2015 | Alaska Business Monthly

ENTREPRENEURS

The Boardroom’s Shared Space Photo by Brian Adams/Courtesy of The Boardroom

The Boardroom founders Katherine Jernstrom and Brit Szymoniak.

A place for entrepreneurs to grow, connect, and collaborate By Vanessa Orr

hen Katherine Jernstrom and Brit Szymoniak first met each other while taking a tenmonth long leadership course in 2011, they realized that not only were they both dreamers and entrepreneurs at heart, but that they worked very well together. So when they decided to start a business, it was no surprise that they chose to create a company that focused on collaboration, enabling small business owners to cowork with others in a shared space. The Boardroom, an eight thousandsquare-foot office located on Fifth Avenue in Anchorage, provides individuals with the opportunity to run their businesses from a location where they are not only in the center of the Downtown community but are centered among a group of like-minded entrepreneurs.

“Prior to joining The Boardroom, I had a traditional office, but participated in some of the entrepreneurial events that were held here,” says Stephen Trimble, president of Trimble Strategies LLC. “But the community that they were building here was so interesting that I wanted to be a part of it. I originally saw a vibrant place with a bunch of different companies working together in shared space, but once I got here and got to know people, I realized that coworking is a really powerful thing. Everyone here is developing their own business, but they’re all going through the same process. It’s like having a cohort of people who understand what you’re going through, and it’s a great resource, whether you want to ask what accounting software someone is using or collaborate on projects with other members.”

The Coworking Model Before opening The Boardroom, Jernstrom spent ten years working in the nonprofit sector, including serving as the community outreach director for Bean’s Café. Szymoniak was the director of public affairs and business development for the Port of Anchorage. “Even though we were working at different jobs, Katherine and I were both interested in entrepreneurship and had been looking at different business models,” says Szymoniak. “We both felt that it was important to give back to the community, and we also wanted to find a way to keep people here; we were tired of seeing the bright people we knew moving out of Anchorage.” The women looked to New York, San Francisco, and Seattle for innovative ideas and were attracted to the model of coworking, which enables people to

Alaska Business Monthly | April 2015 www.akbizmag.com

www.akbizmag.com

head low, I’m able to keep my rates lower and thus serve a broader body of clients. “I personally like the environment; I like the diversity of businesses,” he adds. “My ‘coworkers’ always have something interesting going that is very different from what I’m working on, and being able to discuss other things keeps me aware of the bigger picture a lot of times.”

Low Rent High Return One of the keys to The Boardroom’s success is that it’s flexible; it is run on a membership model that allows users to rent month-to-month and choose how frequently they use the space. “Some of our members are here two times a week, some come in once a month, and some are here five days a week working really long hours,” says Jernstrom. “Regardless of their membership level, they have access to all of the shared amenities.” Among the perks offered are very fast Internet and WiFi, a printer, copier and scanner, a shared kitchen with free coffee, a ping pong table, Happy Hour Wednesdays, discounts at local gyms, and working relationships with dentists, opticians, and masseurs.

Photo by Brian Adams/Courtesy of The Boardroom

share workspace while pursuing independent activities. They started The Boardroom in 2013 as a way to allow small businesses to grow, collaborate, and connect with each other. “We decided to locate on Fifth Avenue because both Brit and I were very attracted to the type of living that a robust Downtown area offers,” explains Jernstrom. “Everything is in walking distance, including arts and culture, good restaurants, and entertainment, and it helps to be in a bustling area to be successful. Being Downtown also enables us to be near the courthouse, which helps a lot of our members who are attorneys, as well as puts our members closer to their larger clients.” “Every small business wants a Downtown Fifth Avenue address but doesn’t want the price tag attached,” adds Szymoniak. The location was a prime draw for attorney Adam Gulkis, who joined The Boardroom in October of 2014. “The biggest impact for me was the cost of office space; I have a shared space for a tenth of what a space at more traditional office shares would cost,” he says. “By keeping my over-

One of the many member benefits that The Boardroom offers are walking and biking workstations.

While some people might hesitate about working in a shared office space, privacy and distractions do not seem to be an issue. Conference and meeting rooms are available when members

April 2015 | Alaska Business Monthly

Photo by Brian Adams/Courtesy of The Boardroom

The Boardroom provides members with an open and creative work environment.

need to meet with clients, and there are numerous areas where members can go when they want to be alone. Private offices with doors are also available at a higher membership level.

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“The coworking aspect can actually help members get their work done more efficiently; our members tell us that being surrounded by people working helps to fuel their creativity and makes them more productive,” says Jernstrom. “There also aren’t as many distractions as there are when working from home; it’s not like you can stop and put in a load of laundry.” “It’s nice to be at The Boardroom and see and interact with people,” says Tim Paszalek, owner of Axe & Antlers, a branding and creative group. “Privacy is rarely an issue; even for those who use the communal space and not the offices, there seems to be plenty of nooks and crannies to duck into if they need a little privacy for a call or meeting. “I’m in this business to interact with and help people; not to be isolated on a screen in an office,” he adds. “I could do that anywhere, so I love that there’s activity all around me. There’s a really fun group of people here; I can be as productive or unproductive as the day calls for.”

Bonus Business Venue In addition to providing a space where entrepreneurs can work together, The Boardroom also provides event and meeting space that can be rented out by individuals, nonprofits, and corporations for anything from conferences and board retreats to fundraisers and cocktail hours. Jernstrom and Szymo-

niak also promote the space, and the concept of entrepreneurship, through weekly, monthly, and special events that encourage collaboration among peers. “Every Wednesday morning, we hold a pitch event that is open to the public, in which individuals have six minutes to pitch an idea, and the community gives feedback,” says Jernstrom, “In February, we also held a Startup Weekend, which was a fifty-four-hour boot camp for entrepreneurs where they pitched ideas for prizes or recognition; it’s a way that we try to bolster new business growth.” “Our goal is to grow an entrepreneurial ecosystem here,” adds Szymoniak. “The weekly pitch meetings don’t bring revenue into The Boardroom, but they do grow talent. We also offer discounted rates for nonprofits to use our event space because we want to give back to the community and support an area that we love.” Natalie Osborne, a web designer and owner of wonderbuild.com, has found that being a member of The Boardroom has given back to her business as well. “I’ve been here since it opened and in that time have gotten a lot of referrals; I’d say that 30 percent of my new business is the result of being in this space,” she says. “I think it’s a combination of the physical location downtown and word-of-mouth from people who work here. People are more aware of my business.

Alaska Business Monthly | April 2015 www.akbizmag.com

“I had a home office for over a decade, and that worked fine while I was working for a company where we often chatted online and I traveled every three to four months,” she adds. “I felt like I was part of a team. But when I quit that job to start my own company, I got lonely really quickly. When you’re not interacting with peers, you lose out on that team atmosphere. I enjoy seeing someone else get excited about the work that they’re doing—that type of energy is contagious.”

Branching Out The Boardroom has been such a success in Anchorage that Jernstrom and Szymoniak are in the process of opening a second space in Juneau this spring. “We’re starting at two thousand square feet with the option to grow to eight thousand square feet,” says Szymoniak, adding that a number of Anchorage members travel to Juneau for business during the legislative session. “Juneau is similar to Anchorage in that there are a lot of freelancers there, as well as a lack of commercial office space.” To date, there are about one hundred companies that are members of

www.akbizmag.com

Photo by Brian Adams/Courtesy of The Boardroom

The Boardroom members at work.

The Boardroom, and about one hundred more companies take advantage of the space through meetings, events, and the use of conference space. “At the beginning, because this was a new concept for Anchorage, we spent a lot of time with boots on the ground, meeting people and giving tours,” says Jern-

strom. “But once people realized what we were trying to do and saw how beautiful the space was, we got a lot of interest. And we’ve been busy ever since.” R Vanessa Orr is the former editor of the Capitol City Weekly in Juneau.

April 2015 | Alaska Business Monthly

FINANCIAL SERVICES

Northrim: The Little Bank that Could—and Did

Marc Langland, chairman of Northrim BanCorp, Inc. and Joe Beedle, president and CEO of Northrim BanCorp, Inc. and Northrim Bank in one of the branches in Anchorage.

Diversification results in wide array of financial services

By Tracy Barbour

his year, Northrim Bank is celebrating one of the most significant milestones in its remarkable history: a twenty-five-year anniversary. The community bank opened for business on December 4, 1990, in a small trailer off Anchorage’s C Street with twenty-one employees and $13,225,000 in assets. Since those humble beginnings, Northrim has experienced a steady pattern of growth, evolving into an entity that provides a wide array of financial services. In addition to banking, it offers annuities,

residential mortgage, employee health benefits, wealth management, and investment advisory services. Today, Northrim Bank has 294 employees, fourteen branches that serve 75 percent of Alaska’s population, and an asset lending division in Washington state. The bank’s holding company, Northrim BanCorp, Inc., has five affiliate companies under its corporate umbrella: Residential Mortgage LLC, Elliot Cove Capital Management, Elliott Cove Insurance Agency LLC, Northrim Benefits Group, and Pacific Portfolio

Consulting (held by Pacific Wealth Advisors LLC). As of December 31, 2014, Northrim BanCorp had assets of $1.45 billion, portfolio loans of $924.5 million, and deposits of $1.18 billion. So to what does Northrim attribute its success? In large part, it’s due to the bank’s employees and customer relations. Or as Northrim BanCorp Chairman Marc Langland puts it: It’s being able to address the market in a way that the market responds to your service, your products, and the way you handle yourself with customers. “If customers are comfortable

Alaska Business Monthly | April 2015 www.akbizmag.com

with you, they’ll bank with you,” he says. “You have to be sure the market feels you care about their needs.” This concept is embodied in Northrim’s “Customer First Service” philosophy, and it constantly drives the bank’s successful approach to doing business.

Transition in Leadership As another significant development for 2015, Northrim installed Joe Beedle as president and CEO of Northrim BanCorp on January 1. Beedle continues to serve in these positions with the bank, while Langland remains chairman of the board of directors for the holding company and bank. Assuming the top leadership role at Northrim feels extraordinary, Beedle says. “It’s darn special, especially if you consider Alaska only has three publicallytraded companies that are headquartered in the state. It’s that one in one hundred thousandth opportunity,” he says. The transition in leadership also feels comfortable and seamless, says Beedle, who has worked for Northrim for nine years and known Langland for more than forty years. Beedle started as a management trainee in 1974, hired by Langland right after he graduated from the University of Alaska Fairbanks. From there, he continued to work with Langland in various capacities, culminating with his most recent promotion. “It certainly creates heightened focus for me,” Beedle says. “This will be my last official kind of job before I retire. It’s a fulfillment of a lifetime opportunity.” Regarding Northrim’s anniversary, Beedle says: “I am so proud to be here at this time, celebrating twenty-five years.” The future is uncertain, but based on this last twenty-five years, we will continue to be successful in Alaska.” Beedle’s elevated role at Northrim is part of the execution of the company’s strategic plan for management succession. Actually, the bank’s succession planning efforts began a number of years ago. In June 2012, Langland began working part-time “to give other management time to grow and move into position with the company,” he says. This leaves him more time to enjoy his grandkids and spend warmer winters at his second home in Tucson, Arizona. However, Langland will continue to spend much of his time in Alaska. “I’ll alwww.akbizmag.com

ways be an Alaskan,” he says. “It’s where my roots are.”

Difficult Beginnings Starting Northrim Bank was a unique challenge for Langland and his business partner, Arne Espe. They didn’t have enough capital—from either personal or private means—to launch the startup, so they made Northrim a public company to raise the needed funds. Northrim needed to raise more than eight million dollars to be publicly traded on the stock market. Their

success put Northrim on the NASDAQ with ticker symbol NRIM. Some people thought they were crazy for starting a bank at such a difficult time in history, Langland says. The country was entrenched in the Gulf War and a recession, and Northrim desperately needed to find good people to run the bank. It also needed a lot of luck and timing. But fortune favored Northrim. “We were lucky in the sense the economy turned around, we had a good business plan, and people liked and wanted to do business with us,” Langland says.

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Consequently, Northrim flourished. For Langland, one of the best aspects about his twenty-five years with Northrim has been witnessing the development of its people. People like charter employee Joe Schierhorn, who started as vice president/commercial loan officer and regulatory compliance manager. He now serves as executive vice president/chief operating officer. Schierhorn was intrigued by Langland’s vision to build a customer-focused bank with a diversity of financial offerings. “You want to try and create something special,” he says. “The opportunity to get in on the ground floor of a business to achieve this vision was very inspiring to me.” Implementing that vision, however, has been a challenge that has sustained Schierhorn’s longevity with Northrim. Schierhorn still vividly remembers his first official day at work, carrying furniture from the basement in his best business suit. Later that day, he sat around a small table in a borrowed office and made cold calls to drum up new customers. “From the beginning, it has been a challenge to help the bank grow, to develop

the strong customer base that we have, to develop the people, processes and policies-to form the core of the bank,” he says. “All of those opportunities have made it an exciting place to work.” Schierhorn says he is grateful for being able to work with a great group of people at Northrim. “I am also proud to work with a quality organization that has grown significantly, helped many people establish long-term careers, and helped many businesses with their financing,” he adds. Another charter employee who was instrumental in building Northrim was the late Chris Knudson, who served initially as chief financial officer and later as chief operating officer. In his honor, the bank and its affiliate, Residential Mortgage, established the Chris Knudson Northrim Accounting Scholarship at the University of Alaska.

Pattern of Growth and Diversification Northrim may have begun as a little bank, but in Langland’s mind, it always operated with grand aspirations. “We were the little guy, but we were doing things the bigger guys did,” he says.

“And we thought we were doing things better than the bigger guys.” As a publically-owned financial institution, Northrim was destined for growth. And grow it did. For a while, the bank grew about 20 percent every six years, Langland says. “We started with the idea that we had to have a very strong balance sheet, we had to have strong capital,” he says. “Those principles are still with us, and that has allowed us to take advantage of different opportunities.” One of the earliest opportunities Northrim seized was the purchase of Bank of America’s operation in Alaska in 1999. Northrim had to raise $19.6 million for the acquisition, making the deal a major stretch for the relatively new bank. But, in one fell swoop, the transaction enabled Northrim to add eight branches in Anchorage, Eagle River, and Wasilla and grow from 142 to 235 employees. After that, Northrim’s transformation into a diversified financial services company progressed rapidly. It added a number of new services in 2000, along with multiple off-site ATMs throughout the state. In 2001, the bank created Northrim BanCorp, Inc. to hold its growing port-

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Diversified Financial Services Firms Operating in Alaska By Tracy Barbour

iversified financial services companies offer a wide variety of solutions from to banking to investment advisory to insurance. The following listing includes some of the entities that offer a diversity of financial services in Alaska: Alaska USA Federal Credit Union owns the following subsidiaries:  Alaska USA Mortgage Company  Alaska USA Trust Company  Alaska USA Title Company  Alaska USA Insurance Brokers Denali Alaskan Federal Credit Union has the following companies:  Denali Alaskan Insurance  Deep Future Analytics  Denali Analytics KeyCorp holds nearly 170 entities, with its principal subsidiary being KeyBank National Association.

USI Holdings Corporation, dba USI Insurance Services, encompasses a number of wholly-owned subsidiaries, including:  Kibble & Prentice, a USI Company  USI Consulting Group  USI Affinity  Univers Workplace Solutions  Emerson Reid Wells Fargo & Company has numerous subsidiaries, including:  Wells Fargo Bank, N.A.  Wells Capital Management  Wells Fargo Advisors LLC  Wells Fargo Capital Finance LLC  Wells Fargo Equipment Finance, Inc.  Wells Fargo Home Mortgage  Wells Fargo Insurance, Inc.  Wells Fargo Merchant Services LLC  Wells Fargo Securities LLC

folio of diversified financial services, including the bank as a wholly owned subsidiary. Acquisitions continued with the purchase of Alaska First Bank and Trust in 2007. In 2014, Northrim completed the acquisition of Alaska Pacific Bank’s five branches in a stock and cash transaction valued at approximately $14.3 million. The pivotal merger enabled the bank to expand its presence to Southeast Alaska and offered economic diversification of its loan portfolio. Northrim’s aggressive growth strategy has also been fueled by investments in complementary businesses, which has helped the bank increase its noninterest income and the value that it brings to customers. “We’ve always had this idea of adding value to customers,” Langland says. “Fortunately, we were able to find those institutions that fit our style of management and find people we felt good about working with.” One of the bank’s first investments was in Residential Mortgage LLC in 1998, resulting in a 30 percent ownership interest. When Residential Mortgage first opened at its Anchorage Northern Lights Boulevard location, the company had

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thirty-five to forty employees. Within a month, it had additional offices in Eagle River, Kodiak, and Juneau. A Fairbanks location soon followed. Today, Residential Mortgage is a full-service mortgage lender that underwrites, closes, and funds its loans locally. The company—which currently has nine branches in Alaska—funded approximately $650 million in loans in 2014 and $792 million in 2013. Northrim’s long-term support of Residential Mortgage has been invaluable over the years, says Roger Aldrich, comanaging member. “Northrim was always there when we needed assistance, especially during times of rapid loan growth when additional funding capacity was needed,” he says. “We could not have asked for a better partner.” Aldrich says he felt good about partnering with Northrim from the beginning. That’s why he and co-managing member George Porter had few reservations when Northrim completed the purchase of Residential Mortgage in 2014. Prior to the transaction, Aldrich and Porter had been concerned about how the closely-held company would fare if one

of them suffered an untimely death or became incapacitated. “About 120 of our friends work here, and we did not want to put any of those jobs at risk,” Aldrich says. Porter was also concerned about protecting their employees, about 25 percent of whom have been with the company from its genesis. Residential Mortgage had a number of potential buyers, he says, but Northrim presented the best opportunity for the business. “We felt that this was the best option that would protect the operation,” Porter says. “The purchase price wasn’t the only consideration.”

Excited about the Future Northrim’s penchant for diversification through investments like Residential Mortgage is intrinsic to the nature of its ownership. As a publically-traded company, Northrim has been focused on growth since its inception. The intention was never to be satisfied remaining at a certain level, Beedle says. He explains: “How do you grow? Organically and through merger and acquisition. Then it’s a combination of opportunity and strategy.” The bank’s diversification strategy has also been partially based on what

the market presents, as well as what customers need and want. “It’s really about what we felt customers would appreciate,” Beedle says. And many customers today want banking solutions to be more electronic, according to Beedle. Consequently, Northrim will be expanding its use of technology to create “smart” branches, more empowered employees in the branches, and more automated services. With banks of the future, there will be more clicks and fewer bricks. “We’re trying to make the bank more virtual, more seamless, and easier to navigate,” Beedle says. Northrim is a strong institution that is well equipped for change and the future, Beedle says. It’s also prepared for and excited about the next twenty-five years. Beedle adds: “We believe the celebration is not about the past twenty-five years, but about how twenty-five years has set us up for the next twenty-five years and beyond. Our destination is to be more than double in real terms of where we are today.” R Tracy Barbour is a former Alaskan.

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special section

Corporate 100 100—2015 Directory

ALASKA BUSINESS MONTHLY’S

CORPORATE 100

Background Image Credit: NASA/Jeff Schmaltz, LANCE MODIS Rapid Response Team, NASA GSFC

38 Alaska Business Monthly | April 2015 www.akbizmag.com

A rare view of Alaska’s top corporate citizens

laska Business Monthly is proud to present this year’s Corporate 100—one hundred companies doing business in Alaska and practicing good corporate citizenship across the entire state. This wide cross-section of businesses exemplifies corporate citizenship. Some of the things that make a good corporate citizen include supporting the economy, providing jobs, and taking care of employees as well as environmental stewardship, community involvement, and philanthropy. First published in 1993, Alaska Business Monthly’s Corporate 100 has changed a little bit over the last twenty-some years. The first year, all the information was collected by the staff of the magazine through various ways and means. Later, we came to rely on individual companies to report information to us and we collected that information via a survey that was sent out and returned by fax and US mail. With the acquisition of proprietary survey software Alaska Business Monthly began sending a hyperlink to an online survey a few years ago, supplementing that with a few mailed and faxed surveys.

These days we rely on self-reporting through the survey links we send out via email, the same as with the other surveys we use information from to populate our monthly directories and the annual Power List. Through the years a committee of Alaska Business Monthly management has selected the Corporate 100 based on a generally accepted models of corporate citizenship. We’ve learned to fine tune our survey software and starting next year there will be a few more mandatory questions to help us in the selection process of the Corporate 100. We’re kicking around the idea of hosting an event for the Corporate 100, similar to our annual Top 49ers luncheon, but different—maybe a fundraiser, maybe a Corporate Citizenship Awards presentation. We’re still working on the idea and welcome input from readers. Let us know your ideas: send a note to editor@akbizmag.com with Corporate 100 Events in the subject line. In the meantime, here’s a rare view of this year’s Corporate 100—Alaska’s Top Corporate Citizens. —Susan Harrington, Managing Editor

ACE Air Cargo 5901 Lockheed Ave. Anchorage, AK 99502 907-334-5100 Mike Bergt, President TRANSPORTATION

Ahtna, Inc. PO Box 649 Glennallen, AK 99588 907-822-3476 Michelle Anderson, President NATIVE ORGANIZATION

Alaska Airlines 4750 Old Int’l Airport Rd. Anchorage, AK 99502 907-266-7200 Marilyn Romano, Reg. VP Alaska TRANSPORTATION

Alaska Commercial Co. 550 W. 64th Ave. Anchorage, AK 99518 907-273-4600 Rex Wilhelm, Vice Chairman RETAIL & WHOLESALE TRADE

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April 2015 | Alaska Business Monthly

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

Alaska Communications 600 Telephone Ave. Anchorage, AK 99503 907-297-3000 Anand Vadapalli, President/CEO TELECOMMUNICATIONS

Alaska Interstate Construction LLC 301 W. Northern Lights Blvd., Suite 600 Anchorage, AK 99503 907-562-2792 Dave Cruz, President CONSTRUCTION

Alaska Native Medical Center 4315 Diplomacy Dr. Anchorage, AK 99508 907-563-2662 Roald Helgesen, CEO/Hospital Admin. HEALTH & WELLNESS

Alaska Regional Hospital 2801 DeBarr Rd. Anchorage, AK 99508 907-276-1131 Julie Taylor, CEO HEALTH & WELLNESS

Alaska Sales and Service 1300 E. Fifth Ave. Anchorage, AK 99501 907-265-7535 Diana Pfeiffer, President RETAIL & WHOLESALE TRADE

Alaska USA Federal Credit Union PO Box 196613 Anchorage, AK 99519-6613 907-563-4567 William Eckhardt, President FINANCE & INSURANCE

Alaska Village Electric Cooperative, Inc. 4831 Eagle St. Anchorage, AK 99503 907-561-1818 Meera Kohler, President/CEO UTILITY Alyeska Pipeline Service Co. PO Box 196660, MS 542 Anchorage, AK 99519-6660 907-787-8700 Thomas Barrett, President OIL & GAS

Alaska Business Monthly | April 2015 www.akbizmag.com

BusinessPROFILE

Dianne’s WILD FORK CATERING

Dianne’s WILD FORK CATERING Feel good food!

ianne and Dave Tydings, along with their talented team, have re-energized and re-branded their catering business. After operating Dianne’s Restaurant in the Atwood Building for the past 25 years, Dianne’s WILD FORK CATERING will now be their exclusive focus into the future. They will continue to deliver their yummy soups and sandwiches! For many of you, Dianne’s name brings to mind great food, great service, and a warm heart that supports the community by sharing nourishing soup with Bean’s Cafe, Covenant House, and Alaska Youth and Family Network. To others the name Dianne’s evokes the delicious taste of her well known brownies, comforting 100 percent whole wheat and honey bread, and other feel good food. All of this and more of your favorites are still available to you on our Catering Menus. Our team of professionals have been serving our wonderful food to clients at business meetings, open houses, and life celebrations in and around Anchorage for many years. The experience we have gained allows us to confidently and efficiently manage your event at your location of choice. We welcome the opportunity to partner with you to create a memorable experience for your guests. For

all your catering needs, we offer a diverse selection of services, including gourmet trays to go, fully catered functions, and customized menus. Dianne’s is the Corporate Catering Specialist for the Anchorage Business Community. Our Menus are designed to complement your needs and satisfy your guests. We have made it convenient for you to order from us, with the goal of providing you with a complete solution, timely service, and delicious food. Our specialties are breakfast and lunch meetings, business after hours, open houses, grand openings, employee celebrations or achievements, and holiday gatherings. We will even deliver a memorable “Thank You Treat” from you to those that have helped you achieve your success. You will feast on our “feel good food” and be delighted with our stylish presentation. Our food enhances any celebration. When planning for a wedding, family reunion, birthday, anniversary, or gathering of friends, let us complement your event with our fabulous fresh food. Our food will also serve as comfort to you at a memorial or celebration of life. Call and allow us to develop an extraordinary menu of our approachable food for you. Our menus are varied enough to accommodate a casual gathering as –

P A I D

A D V E R T I S E M E N T

–

well as a more elaborate, fully coordinated and staffed event. We offer our delicious food and professional support to help you plan for whatever you desire. Our goal is to be your Caterer of Choice. We will earn that with our professionalism and reliability. * BUY LOCAL, BUY ALASKAN ~ to support our community* Call Dianne’s WILD FORK CATERING and let us WOW you!

Dianne’s WILD FORK CATERING Anchorage, Alaska Tel: 907-279-7243 Fax: 907-279-7429 diannesrestaurant@gmail.com wildforkak.com

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

Alyeska Resort PO Box 249 Girdwood, AK 99587 907-754-1111 Mark Weakland, VP/Hotel GM TRAVEL & TOURISM

American Fast Freight, Inc. 5025 Van Buren St. Anchorage, AK 99517 907-248-5548 Ron Moore, Alaska Sales Manager TRANSPORTATION

American Marine International 6000 A St. Anchorage, AK 99518 907-562-5420 Tom Ulrich, VP/Alaska Region Manager INDUSTRIAL SERVICES

Arctic Slope Regional Corporation PO Box 129 Barrow, AK 99723 907-852-8633 Rex A. Rock Sr., President/CEO NATIVE ORGANIZATION

ASRC Energy Services, Inc. 3900 C St., Suite 701 Anchorage, AK 99503 907-339-6200 Jeff Kinneeveauk, President/CEO INDUSTRIAL SERVICES

AT&T 505 E. Bluff Dr. Anchorage, AK 99501 800-478-9000 Bob Bass, President-Alaska TELECOMMUNICATIONS

BDO USA, LLP 3601 C St., Suite 600 Anchorage, AK 99503 907-278-8878 James Hasle, Office Managing Partner FINANCE & INSURANCE

Bering Straits Native Corporation 4600 DeBarr Rd., Suite 200 Anchorage, AK 99508 907-563-3788 Gail R. Schubert, President/CEO NATIVE ORGANIZATION

Alaska Business Monthly | April 2015 www.akbizmag.com

Our companies work hard here ...

so that our way of life can thrive here

The Ahtna Region

Remote camp on Mt. Akwe, near Yakutat, AK

Copper River, AK

As the business holding company of Ahtna, Inc., an Alaska Native Regional Corporation based in Glennallen, Alaska, Ahtna Netiye’ is strongly committed to ensuring the prosperity of our Ahtna shareholders through the revenues and profits we acquire from our business operations. Not only are we working hard to help our clients achieve success in their business ventures, no matter how far or remote those ventures may be, we are also bringing benefits and economic opportunities back home to our people and region.

That’s just how we do business. Ahtna Traditional Chief Fred Ewan

Netiye’, Inc.

Our Values Unite Us; Our Customers Sustain Us; Our Companies are Prosperous.

110 W 38th Street, Suite 100B | Anchorage, AK 99503 PH: (907) 868-8250 | FAX: (907) 868-8285

Learn more about doing business with Ahtna at www.ahtna-inc.com

Ahtna Heritage Dancers

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

BP Exploration (Alaska), Inc. PO Box 196612 Anchorage, AK 99515-6612 907-561-5111 Janet Weiss, Regional President OIL & GAS

Bristol Bay Native Corporation 111 W. 16th Ave., Suite 400 Anchorage, AK 99501 907-278-3602 Jason Metrokin, President/CEO NATIVE ORGANIZATION

Carlile Transportation 1800 E. First Ave. Anchorage, AK 99501-1833 907-276-7797 Ron Kieswether, President TRANSPORTATION

CCI Industrial Services, LLC 5015 Business Park Blvd., Suite 4000 Anchorage, AK 99503 907-258-5755 A. Ben Schoffmann, President/CEO INDUSTRIAL SERVICES

CH2M HILL 949 E. 36th Ave., Suite 500 Anchorage, AK 99508 907-762-1500 Terry Bailey, Sr. VP/ AK Regional Manager INDUSTRIAL SERVICES Chenega Corporation 3000 C St., Suite 301 Anchorage, AK 99503-3975 907-277-5706 Charles W. Totemoff, President/CEO NATIVE ORGANIZATION

Chugach Alaska Corporation 3800 Centerpoint Dr., Suite 1200 Anchorage, AK 99503-4396 907-563-8866 Gabriel Kompkoff, CEO NATIVE ORGANIZATION

Chugach Electric Association, Inc. 5601 Electron Dr. Anchorage, AK 99518 907-563-7494 Bradley Evans, CEO UTILITY

Alaska Business Monthly | April 2015 www.akbizmag.com

Only pay for the speed you need... Dynamic Routing! SM

At Lynden, we understand that plans change but deadlines don’t. That’s why we proudly offer our exclusive Dynamic Routing system. Designed to work around your unique requirements, Dynamic Routing allows you to choose the mode of transportation — air, sea or land — to control the speed of your deliveries so they arrive just as they are needed. With Lynden, you only pay for the speed you need!

www.lynden.com 1-888-596-3361

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

Coeur Alaska, Inc. 3031 Clinton Dr., Suite 202 Juneau, AK 99801 907-523-3300 Wayne Zigarlick, VP/General Manager MINING

ConocoPhillips Alaska, Inc. PO Box 100360 Anchorage, AK 99510 907-276-1215 Joe Marushack, President ConocoPhillips Alaska OIL & GAS Cook Inlet Region, Inc. PO Box 93330 Anchorage, AK 99509-3330 907-274-8638 Sophie Minich, President/CEO NATIVE ORGANIZATION

Credit Union 1 1941 Abbott Rd. Anchorage, AK 99507 907-339-9485 Tom Newins, President/CEO FINANCE & INSURANCE

Crowley Solutions, Inc. 201 Arctic Slope Ave. Anchorage, AK 99518 907-777-5505 Bruce Harland, VP TRANSPORTATION

Cruz Companies 7000 E. Palmer Wasilla Hwy. Palmer , AK 99645 907-746-3144 Dave Cruz, President INDUSTRIAL SERVICES

Davis Constructors & Engineers, Inc. 6591 A St., Suite 300 Anchorage, AK 99518 907-562-2336 Josh Pepperd, President CONSTRUCTION

Delta Western-Inlet Petroleum 420 L St., Suite 101 Anchorage, AK 99501 800-478-2688 Kirk Payne, President TRANSPORTATION

Alaska Business Monthly | April 2015 www.akbizmag.com

HELPING ALASKA BUSINESSES GROW FOR OVER 100 YEARS FOR THE KENAI SCHOOL DISTRICT, THAT MEANT CONNECTING 43 SCHOOLS SPREAD ACROSS 26,000 SQUARE MILES. We’ve worked hard for over 100 years to earn the trust of businesses in Alaska. Like the Kenai Peninsula School District, where we connected 11,000 students to one another. It’s one more way that we’re Alaska’s trusted broadband and IT solutions provider. See how we’re helping businesses grow at alaskacommunications.com/readyforalaska.

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

Denali Alaskan Federal Credit Union 440 E. 36th Ave. Anchorage, AK 99503 907-257-7200 Robert Teachworth, President/CEO FINANCE & INSURANCE

Donlin Gold LLC 4720 Business Park Blvd., Suite G-25 Anchorage, AK 99503 907-273-0200 Stan Foo, General Manager MINING

Doyon, Limited 1 Doyon Pl., Suite 300 Fairbanks, AK 99701-2941 907-459-2000 Aaron Schutt, President/CEO NATIVE ORGANIZATION

ENSTAR Natural Gas Co. PO Box 190288 Anchorage, AK 99519 907-277-5551 Jared Green, President UTILITY

Era Helicopters LLC 6160 Carl Brady Dr., Hangar 2 Anchorage, AK 99502 907-550-8600 Elliott Neal, Vice President - Alaska TRANSPORTATION

ExxonMobil PO Box 196601 Anchorage, AK 99519 907-561-5331 Karen Hagedorn, AK Production Manager OIL & GAS Fairbanks Memorial Hospital 1650 Cowles St. Fairbanks, AK 99701 907-452-8181 Mike Powers, CEO HEALTH & WELLNESS

Fairweather LLC 301 Calista Ct. Anchorage, AK 99518 907-346-3247 Lori Davey, General Manager INDUSTRIAL SERVICES

Alaska Business Monthly | April 2015 www.akbizmag.com

ACHIEVE MORE

Even with 14 branches statewide, we’ll never forget where we came from. It was a humble beginning — one built on dedication and strong values. From the start Northrim has aimed to provide superior customer first service while giving back to the communities we serve — helping our friends and neighbors achieve more. As we celebrate 25 years, we pledge to continue striving for a better Alaska. In the meantime, we wish only to say, “thank you” — we couldn’t have done it without you. Same values since the beginning: 100% 907 for 25 years.

Northrim’s first location. Anchorage. 1990. northrim.com

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

First National Bank Alaska PO Box 100720 Anchorage, AK 99510-0720 907-777-4362 Betsy Lawer, President/Vice Chair FINANCE & INSURANCE

Foss Maritime Company 188 W. Northern Lights Blvd., Suite 1020 Anchorage, AK 99503 907-782-4950 Gary Faber, President Global Services TRANSPORTATION

Franz Bakery 2248 Spenard Rd. Anchorage, AK 99503 907-375-8800 Larry Brandt, GM Alaska Division MANUFACTURING

GCI 2550 Denali St., Suite 1000 Anchorage, AK 99503 907-265-5600 Ron Duncan, CEO TELECOMMUNICATIONS

Goldbelt, Incorporated 3075 Vintage Blvd., Suite 200 Juneau, AK 99801 907-790-4990 Richard Irwin, President/CEO NATIVE ORGANIZATION

Granite Construction Company 11471 Lang St. Anchorage, AK 99515 907-344-2593 Derek Betts, VP/Region Manager CONSTRUCTION

Great Northwest, Inc. PO Box 74646 Fairbanks, AK 99707 907-452-5617 John Minder, CEO CONSTRUCTION

Hilcorp Alaska LLC PO Box 244027 Anchorage, AK 99524 907-777-8300 John Barnes, Sr. VP of Exploration & Production OIL & GAS 50

Alaska Business Monthly | April 2015 www.akbizmag.com

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

Holland America Line 455 Ocean Dock Rd. Anchorage, AK 99501 1-877-932-4259 Stein Kruse, President/CEO TRAVEL & TOURISM

Homer Electric Association, Inc. 3977 Lake St. Homer, AK 99603 907-235-8551 Bradley Janorschke, General Manager UTILITY

Horizon Lines LLC 1717 Tidewater Rd. Anchorage, AK 99501-1036 907-274-2671 Marion Davis, SVP & GM AK Division TRANSPORTATION

Icicle Seafoods, Inc. PO Box 242163 Anchorage, AK 99524 907-338-8923 Amy Humphreys, CEO SEAFOOD

www.akbizmag.com

April 2015 | Alaska Business Monthly

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

Jacobs 4300 B St., Suite 600 Anchorage, AK 99503 907-563-3322 Terry Heikkila, Director AK Operations INDUSTRIAL SERVICES

Kakivik Asset Management, LLC 5015 Business Park Blvd., Suite 4000 Anchorage, AK 99503 907-770-9400 A. Ben Schoffmann, President/CEO INDUSTRIAL SERVICES

KeyBank 101 W. Benson Blvd., Suite 400 Anchorage, AK 99503 907-562-6100 Brian Nerland, Market President FINANCE & INSURANCE

Kinross Fort Knox PO Box 73726 Fairbanks, AK 99707 907-490-2218 Eric Hill, General Manager MINING

Koniag, Inc. 194 Alimaq Dr. Kodiak, AK 99615 907-486-2530 Elizabeth Perry, Ph D, CEO NATIVE ORGANIZATION

Lounsbury & Associates 5300 A St. Anchorage, AK 99518 907-272-5451 Jim Sawhill, President INDUSTRIAL SERVICES

Lynden, Inc. 6641 S. Airpark Pl. Anchorage, AK 99502 907-245-1544 Jim Jansen, Chairman TRANSPORTATION

Mat-Su Regional Medical Center PO Box 1687 Palmer, AK 99645 907-861-6000 John Lee, CEO HEALTH & WELLNESS

Alaska Business Monthly | April 2015 www.akbizmag.com

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

Matanuska Electric Association, Inc. 163 E. Industrial Way Palmer, AK 99645 907-761-9200 Joe Griffith, General Manager UTILITY

Matanuska Valley Federal Credit Union 1020 S. Bailey St. Palmer, AK 99645-6924 907-745-4891 Al Strawn, CEO FINANCE & INSURANCE MTA, Inc. 1740 S. Chugach St. Palmer, AK 99645 907-745-3211 Greg Berberich, CEO TELECOMMUNICATIONS

N C Machinery 6450 Arctic Blvd. Anchorage, AK 99518 907-786-7500 John Harnish, President/CEO INDUSTRIAL SERVICES

www.akbizmag.com

April 2015 | Alaska Business Monthly

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

NANA WorleyParsons PO Box 111100 Anchorage, AK 99511 907-273-3900 Rock Hengen, President/ General Manager INDUSTRIAL SERVICES NORCON, Inc. 949 E. 36th Ave., Suite 143 Anchorage, AK 99508 907-349-0821 Curt Dodd, Business Mgr./Interim VP INDUSTRIAL SERVICES

North Star Behavioral Health 2530 Debarr Rd. Anchorage, AK 99508 907-258-7575 Andrew Mayo , CEO HEALTH & WELLNESS

Northern Air Cargo 3900 Old International Airport Rd. Anchorage, AK 99502 907-243-3331 David Karp, President/CEO TRANSPORTATION

Northrim Bank PO Box 241489 Anchorage, AK 99524 907-562-0062 Joseph Beedle, President/CEO FINANCE & INSURANCE

Offshore Systems, Inc. 2410 E. 88th Ave. Anchorage , AK 99507 800-733-6434 Jared Davis, Director AK Ops INDUSTRIAL SERVICES

Olgoonik Corporation 3201 C St., Suite 700 Anchorage, AK 99503 907-562-8728 Hugh Patkotak, Sr. , CEO Native ORGANIZATION

Parker, Smith & Feek, Inc. 3800 Centerpoint Dr. Suite 601 Anchorage, AK 99503 907-562-2225 Dave Eckroth, Principal/AK Manager FINANCE & INSURANCEâ&#x20AC;?

Alaska Business Monthly | April 2015 www.akbizmag.com

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

Peak Oilfield Service Co. LLC 2525 C St., Suite 201 Anchorage, AK 99503 907-263-7000 Patrick Walsh, President/CEO INDUSTRIAL SERVICES

Princess Alaska Lodges Mile 238.5 George Parks Hwy. Denali National Park, AK 99755 800-426-0500 Charlie Ball, President TRAVEL & TOURISM

Providence Health & Services Alaska 3760 Piper St., Suite 2021 Anchorage, AK 99508 907-212-3145 Bruce Lamoureux, Chief Executive HEALTH & WELLNESS

Pruhs Construction 2193 Viking Dr. Anchorage, AK 99501 907-279-1020 Dana Pruhs, CEO CONSTRUCTION

Get what your business needs with local equipment financing.

alaskausa.org/biz Better for business. www.akbizmag.com

April 2015 | Alaska Business Monthly

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

Ravn Alaska 4700 Old International Airport Rd. Anchorage, AK 99502 907-266-8394 Bob Hajdukovich, CEO TRANSPORTATION

Roger Hickel Contracting, Inc. 11001 Calaska Cir. Anchorage, AK 99515 907-279-1400 Mike Shaw, President CONSTRUCTION

Ryan Air, Inc. 6400 Carl Brady Dr. Anchorage, AK 99502 907-562-2227 Wilfred “Boyuck” Ryan, President TRANSPORTATION

Schlumberger Oilfield Services 6411 A St. Anchorage, AK 99518 907-273-1700 Christine Resler, GeoMarket Manager INDUSTRIAL SERVICES

Seekins Ford Lincoln, Inc. 1625 Seekins Ford Dr. Fairbanks, AK 99701 907-459-4000 Ralph Seekins, President RETAIL & WHOLESALE TRADE

Shell Exploration & Production Co. 3601 C St., Suite 1000 Anchorage, AK 99503 907-770-3700 Laurie Schmidt, VP, Shell Alaska OIL & GAS

SouthEast Alaska Regional Health Consortium (SEARHC) 3100 Channel Dr., Suite 300 Juneau, AK 99801 907-463-4000 Charles Clement, President/CEO HEALTH & WELLNESS Stantec 2515 A St. Anchorage, AK 99503 907-276-4245 Bob Gomes, CEO INDUSTRIAL SERVICES

Alaska Business Monthly | April 2015 www.akbizmag.com

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

Teck Alaska-Red Dog Mine 3105 Lakeshore Dr., Bldg. A, Suite 101 Anchorage, AK 99517 907-754-5116 Henri Letient, General Manager MINING

Tesoro Alaska Co. 1601 Tidewater Anchorage, AK 99501 907-261-7221 Cameron Hunt, Vice President OIL & GAS

The Alaska Club 1400 W. Northern Lights Blvd. Anchorage, AK 99503 907-337-9550 Robert Brewster , President HEALTH & WELLNESS

The Odom Corporation 240 W. First Ave. Anchorage, AK 99501 907-272-8511 John Odom, President/CEO RETAIL & WHOLESALE TRADE

Protect what your business has with business insurance solutions.

alaskausa.org/biz Better for business. www.akbizmag.com

April 2015 | Alaska Business Monthly

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

Totem Ocean Trailer Express 2511 Tidewater Rd. Anchorage, AK 99501-1044 907-276-5868 Grace Greene, Alaska General Manager TRANSPORTATION

Udelhoven Oilfield System Services 184 E. 53rd Ave. Anchorage, AK 99518-1222 907-344-1577 Jim Udelhoven, CEO INDUSTRIAL SERVICES

Unisea, Inc. PO Box 92008 Dutch Harbor, AK 99692-0008 907-581-1258 Tom Enlow, President/CEO SEAFOOD

Usibelli Coal Mine, Inc. PO Box 1000 Healy, AK 99743 907-452-2625 Joseph E. Usibelli Jr., President MINING

Alaska Business Monthly | April 2015 www.akbizmag.com

ALASKA BUSINESS MONTHLY | 2015 CORPORATE 100

Vigor Alaska 3801 Tongass Ave. Ketchikan, AK 99901 907-228-5302 Adam Beck, President INDUSTRIAL SERVICES

Watterson Construction Co. 6500 Interstate Cir. Anchorage, AK 99518 907-563-7441 Bill Watterson, President CONSTRUCTION

Wells Fargo Bank N.A. 301 W. Northern Lights Blvd. Anchorage, AK 99503 907-265-2730 Joe Everhart, Alaska Region President FINANCE & INSURANCE

Westmark Hotels 800 5th Ave. Suite 2600; 720 West 5th Ave. Anchorage, AK 99501 800-544-0970 Charlie Ball, President TRAVEL & TOURISM

Strong as an Ox POWERFUL … ROBUST … PASSIONATE

Our dedicated team of experts and dependable transportation network make Span Alaska a reliable partner to trust with your shipping to and across Alaska. SHIPPING TO ALASKA? CALL SPAN ALASKA.

1.800.257.7726

www.akbizmag.com

•

w w w. s pa n a l a s k a . c o m

April 2015 | Alaska Business Monthly

special section

Corporate 100

2015 ABM Corporate 100 by Business Categorization and Employment Figures Worldwide Employees

Alaska Employees

(including Alaska)

60,476

1,289,595

Construction Worldwide Employees

Alaska Employees

(including Alaska)

Alaska Interstate Construction LLC

160

175

Davis Constructors & Engineers, Inc.

118

Granite Construction Company

4,200

Great Northwest, Inc.

230

Pruhs Construction

150

Roger Hickel Contracting, Inc.

Watterson Construction Co.

100

Construction Total

866

5,022

Corporate 100 Company

Finance & Insurance Corporate 100 Company Alaska USA Federal Credit Union

Worldwide Employees

Alaska Employees

(including Alaska)

1,335

1,740

BDO USA, LLP

103

59,428

Credit Union 1

350

356

Denali Alaskan Federal Credit Union

334

341

First National Bank Alaska

707

KeyBank

113

13,590

Matanuska Valley Federal Credit Union

129

135

Northrim Bank

296

304

Parker, Smith & Feek, Inc.

190

Wells Fargo Bank N.A.

820

265,000

4,217

341,791

Finance & Insurance Total

Health & Wellness Corporate 100 Company Alaska Native Medical Center Alaska Regional Hospital 60

1,300

Mat-Su Regional Medical Center

600

North Star Behavioral Health

408

4,300

73,000

SouthEast Alaska Regional Health Consortium (SEARHC)

700

The Alaska Club

950

11,558

80,258

Providence Health & Services Alaska

Total Corporate 100 Employment

All Business Categories

Fairbanks Memorial Hospital

Worldwide Employees

Alaska Employees

(including Alaska)

2,500

800

Health & Wellness Total

Industrial Services Worldwide Employees

Alaska Employees

(including Alaska)

300

ASRC Energy Services, Inc.

3,368

3,833

CCI Industrial Services LLC

300

Corporate 100 Company American Marine International

CH2M HILL

2,403

25,380

Cruz Companies

188

357

Fairweather LLC

115

66,000

250

Jacobs Kakivik Asset Management LLC Lounsbury & Associates

N C Machinery

263

1,172

NANA WorleyParsons

400

NORCON, Inc.

138

174

Offshore Systems, Inc.

150

160

Peak Oilfield Service Co. LLC

910

1,000

115,000

Stantec

15,000

Udelhoven Oilfield System Services

655

690

Schlumberger Oilfield Services

Vigor Alaska Industrial Services Total

200

2,400

10,628

232,521

Manufacturing Worldwide Employees

Alaska Employees

(including Alaska)

Franz Bakery

100

3,500

Manufacturing Total

100

3,500

Corporate 100 Company

Mining Corporate 100 Company Coeur Alaska, Inc. Donlin Gold LLC

Worldwide Employees

Alaska Employees

(including Alaska)

320

2,000

Kinross Fort Knox

650

9,000

Teck Alaska-Red Dog Mine

450

11,000

Alaska Business Monthly | April 2015 www.akbizmag.com

Usibelli Coal Mine, Inc. Mining Total

160

195

1,604

22,219

Native Organizations Worldwide Employees

Alaska Employees

(including Alaska)

Ahtna, Inc.

285

1,209

Arctic Slope Regional Corporation

902

6,529

Bering Straits Native Corporation

358

1,100

1,249

3,958

Corporate 100 Company

Bristol Bay Native Corporation

Telecommunications Worldwide Employees

Corporate 100 Company

Alaska Employees

Alaska Communications

803

830

AT&T

531

247,700

2,094

2,255

271

3,699

251,056

GCI MTA, Inc. Telecommunications Total

(including Alaska)

Transportation Worldwide Employees

Alaska Employees

(including Alaska)

1,750

13,800

Chenega Corporation

440

5,200

Corporate 100 Company

Chugach Alaska Corporation

570

5,000

Alaska Airlines

Cook Inlet Region, Inc.

1,319

1,909

American Fast Freight, Inc.

300

Doyon, Limited

1,722

2,787

Carlile Transportation

500

700

129

1,000

Crowley Solutions, Inc.

450

5,300

649

Delta Western-Inlet Petroleum

130

160

125

1,010

7,158

30,351

Era Helicopters LLC

150

1,000

Goldbelt, Incorporated Koniag, Inc. Olgoonik Corporation Native Organizations Total

Foss Maritime Company Horizon Lines LLC

Oil & Gas Worldwide Employees

1,537

260

1,780

Lynden, Inc.

763

2,644

Northern Air Cargo

280

300

Alaska Employees

(including Alaska)

Ravn Alaska

900

Alyeska Pipeline Service Co.

2,000

Ryan Air, Inc.

100

BP Exploration (Alaska), Inc.

2,000

83,900

ConocoPhillips Alaska, Inc.

Corporate 100 Company

1,300

19,000

ExxonMobil

140

80000

Hilcorp Alaska LLC

500

1,500

Shell Exploration & Production Co.

200

90,000

Tesoro Alaska Co.

550

7,013

6,690

283,413

Oil & Gas Total

Retail & Wholesale Trade Corporate 100 Company

Worldwide Employees

Alaska Employees

(including Alaska)

927

1,950

Alaska Commercial Co. Alaska Sales and Service

214

Seekins Ford Lincoln, Inc.

105

The Odom Corporation Retail & Wholesale Trade Total

419

1,067

1,665

3,336

Seafood Worldwide Employees

Alaska Employees

(including Alaska)

900

1,000

Unisea

1,200

1,405

Seafood Total

2,100

2,405

Corporate 100 Company Icicle Seafoods, Inc.

www.akbizmag.com

Totem Ocean Trailer Express

140

ACE Air Cargo

104

5,498

28,765

Transportation Total

Travel & Tourism Worldwide Employees

Alaska Employees

(including Alaska)

Holland America Line

1310

1,575

Princess Alaska Lodges

1,130

616

Corporate 100 Company

Westmark Hotels Alyeska Resort Travel & Tourism Total

700

3,756

4,021

Utilities Worldwide Employees

Alaska Employees

(including Alaska)

Alaska Village Electric Cooperative, Inc.

Chugach Electric Association, Inc.

298

ENSTAR Natural Gas Co.

200

Homer Electric Association, Inc.

155

Matanuska Electric Association, Inc.

194

Utilities Total

937

Corporate 100 Company

April 2015 | Alaska Business Monthly

special section

Corporate 100

Photo courtesy of Alaska Communications

Alaska Communications’ annual Summer of Heroes program, in partnership with Boys & Girls Clubs Alaska, promotes awareness and support for youth development programs throughout the state. The program recognizes six outstanding youth for their contributions to their local communities in a special ceremony at the Alaska State Fair where they are presented with $1,500 scholarships courtesy of Alaska Communications. The 2014 Summer of Heroes honorees pictured, from left to right, are Dakota Jones, 17, Anchorage; Sarah Dykman, 13, Anchorage; Gabrielle Thompson, 14, Anchorage; Sharhan Sylva, 19, Anchorage; Zoe Ballard-Huffman, 13, Huslia; and Jenna Hansen, 17, Nikiski.

Alaska Communications Systems Focusing on broadband and managed IT services to keep customers connected By Vanessa Orr

t’s strange to think that a communications company that is on the cutting-edge of technology has actually been serving the needs of Alaskans for more than 120 years, but that’s exactly the case with Alaska Communications Systems.

Historic Telecom One of only three publicly traded companies headquartered in Alaska, Alaska Communications can trace its origins back to the Juneau-Douglas Telephone Company, which was established in 1893. And while the company does have 62

an operations center in Oregon that employs about thirty people, almost all of its business is in the 49th state, as are its eight hundred-plus employees. “We serve large portions of the state, including all of the larger population centers like Anchorage, Fairbanks, Juneau, and the Kenai Peninsula, as well as provide service for fifty bush communities,” explains Alaska Communications President and CEO Anand Vadapalli. “We also serve several healthcare and education organizations in a number of rural communities in partnership with Alaska Native corpo-

rations. We have one of the largest footprints in Alaska in urban, rural, and bush communities.” The communications provider serves both residential and business customers, generating more than $200 million in annual revenue with approximately 55 percent coming from business customers.

More Choices Alaska Communications provides four product lines which include voice communications and Internet connectivity for both residential and business cus-

Alaska Business Monthly | April 2015 www.akbizmag.com

Photo courtesy of Alaska Communications

Anand Vadapalli, President and CEO, Alaska Communications.

tomers. Business customers can also take advantage of data networking, which enables securely connecting two or more locations, and IT and managed services solutions. “As we look forward over the next several years, we believe that we will see the most growth from the business sector in Alaska, from small businesses to large enterprises,” says Vadapalli. “We expect to grow rapidly in the broadband and managed IT service areas; these provide a lot of value to our customers, so that’s where our focus will be.” To this end, Alaska Communications will be investing between $35 million and $40 million in broadband and IT services this year and plans to offer new products, including high-speed broadband and voice over Internet. In December 2014, the company announced it was selling its wireless customer base and wireless assets to GCI for $300 million in order to better concentrate on these areas of growth. “There are more choices for wireless customers in Alaska than ever before,” says Vadapalli. “The sale not only positioned us to focus on becoming the market leader in broadband and IT solutions, but enabled us to pay down a lot of debt. Alaska Communications now has one of the best balance sheets in the industry, making us extremely financially strong as a result.” Since January 2013, Alaska Communications has paid down $375 million in debt, with about www.akbizmag.com

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Jake Herman, an Alaska Communications field technician in Fairbanks. Photo courtesy of Alaska Communications

$50 million in cash on its balance sheet (as of February 2015).

Expanding Infrastructure According to Vadapalli, by focusing on broadband and IT services, Alaska Communications can provide solutions for larger customers, which will in turn benefit the communities in which they are located. “As an example, last year we signed a contract with the Anchorage School District, providing ninety-plus schools with fiber connectivity and access to the highest-speed broadband,” he explains. “We made a significant investment to provide this capability, which will support the more than fifty thousand students and teachers in the school district. Because the infrastructure is now there, we can go back later and improve the broadband speeds of the neighborhoods surrounding these schools.” A prime example of this type of expansion is occurring in the Chugach region, where Alaska Communications leveraged existing networks that were initially built to serve the Kenai Peninsula Borough School District to provide the tribal consortium of Chugachmiut with Wide Area Network services and faster Internet at its clinics in Port Graham, Nanwalek, Seward, Chenega Bay, and Tatitlek. The new service is 64

expected to increase access to quality healthcare for the 2,200 residents of the region, as well as enable Alaska Communications to provide broadband to homes and businesses in Port Graham and Nanwalek.

Professional Talent While there are many reasons for Alaska Communications’ success, Vadapalli says that one factor far outweighs the rest. “It’s our people—they are far and above the reason why people choose to do business with us,” he explains. “When I talk to our customers, the first thing that they tell me is that our people—and their professionalism and integrity—make the difference.” Another factor is the reliability and security of its network; Alaska Communications is the only Alaska-based carrier that is Ethernet 2.0 Certified. This certification means that the company meets international standards for its business Ethernet services. “We do not compete on price; we compete on quality, reliability, and the overall value of our solutions,” says Vadapalli of the network that serves more than forty-six thousand business locations. “Businesses are also increasingly seeing the value of our managed IT services through TekMate, which provides us

a lot of differentiation in the market,” he adds. “Small and medium-sized businesses find it hard to get IT talent, and we can provide that service on a part-time basis. We’ve been offering this for about three years now, but in the last two years, have seen a lot more momentum in the marketplace.” Businesses of all sizes, as well as nonprofits and government agencies, have learned that they can rely on Alaska Communications to provide the services they need. Clients range from oil and gas giants such as ConocoPhillips and ExxonMobil to health and education providers, including Providence Health & Services and the University of Alaska. In November 2014, Alaska Communications signed a five-year contract for broadband services with the State of Alaska to provide more than twenty-two thousand state employees with increased network bandwidth and faster Internet. The state is one of the largest purchasers of telecom and IT services in Alaska.

Technical Expertise While the company continues to grow and attract new customers, it does face some challenges, which it is working to meet head-on. “A big challenge is in finding the right technical expertise,” says Vadapalli. “But for us as a compa-

Alaska Business Monthly | April 2015 www.akbizmag.com

ny, building, managing, and investing in our ‘people funnel’ is as important as how we manage our ‘customer funnel.’ We are a service business first and a technology business second, and good people are our lifeblood.” To this end, Alaska Communications invests heavily in helping their people advance. “We have invested several hundreds of thousands of dollars into employee training and development, which our people use to earn professional certifications or receive job-specific training,” says Vadapalli. “We have also partnered with the University of Alaska Anchorage to provide a leadership program for emerging managers; to date more than one hundred of our people have taken it. We’ve also recently increased our investment with the IBEW [International Brotherhood of Electrical Workers] to train interested people in our apprenticeship program.”

Corporate Citizenship On the philanthropic side, the company also chooses to invest in education, with a special emphasis on youth development, including initiatives that provide youth with opportunities for education and leadership, positive environments to learn and grow, and access to technology. Alaska Communications is involved extensively with United Way, the University of Alaska, and the Summer of Heroes program through the Boys & Girls Club Alaska and also sponsors a virtual classroom to teach financial literacy to kids through Junior Achievement. “Inside the company, we have an Employee Volunteer Grant Program in which we contribute money to nonprofits where our employees volunteer their time,” says Vadapalli. “We want to support the causes that are important to them. “We are proud to serve Alaska, and are delighted to have the opportunity to do so,” he adds of the company’s commitment to the community and to its customers. “We’ve been here a long time, and we plan to continue to be here for a long time. I am confident that we’ll be around for the next one hundred years.” R

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Vanessa Orr is the former editor of the Capitol City Weekly in Juneau. www.akbizmag.com

April 2015 | Alaska Business Monthly

special section

Corporate 100

Ahtna, Incorporated Moving together— as one—for success By Julie Stricker “A very long time ago, there was a group of Ahtna people who were trying to decide the best way to cross over a swift moving river. The people knew that sending one at a time or worse, separating and everyone doing their own thing, could mean losing one or all of the group. As they were taught, they picked up a long stick that each of them held onto and they moved together, as one, to successfully and safely cross the river.” ABOVE: Rene’ Rock-Albert, part of the dance group that consists primarily of Ahtna children, youth, and young adults from the Native Village of Kluti-Kaah and is run by local village volunteers, at the AFN Convention. RIGHT: Ryan Rock-Albert of the Kluti-Kaah (Copper Center) Dancers at Quyana Night II October 24, 2014, during the Alaska Federation of Natives Convention at the Dena’ina Civic & Convention Center in Anchorage. © Ahtna, Incorporated

his story, passed down to Ahtna, Inc. Chairman Nick Jackson by his father-in-law, recently passed Traditional Chief Ben Neeley, is at the heart of the corporate culture of Ahtna, Inc. Ahtna, one of the top Alaska-owned corporations in the state with total revenues of $201 million in fiscal year 2013, has about 1,900 shareholders of Ahtna Athabascan descent, many of whom still live in the scenic Copper River Valley where the corporation is headquartered.

Steady Growth Over the years, Ahtna, Inc. has grown steadily, strengthening its bottom line and expanding its family of subsidiaries, which have operations across the nation, primarily in government services and construction. As an Alaska Native corporation created under the 1971 Alaska Native Claims Settlement Act, Ahtna has dual mandates: one is to create a profitable business model to support shareholders financially; the other is to help meet shareholders’ cultural, economic, and social needs. At Ahtna, the two mandates are closely aligned. The corporation sponsors job training, scholarships and internships

Alaska Business Monthly | April 2015 www.akbizmag.com

for shareholders and descendants, cultural camps; and actively backs measures designed to increase local decision-making in hunting and fishing issues. The corporation is making de- Anderson cisions with an eye on the future, President Michelle Anderson tells shareholders in Ahtna’s most recent annual report. “The Ahtna Board is making business decisions looking generations out. This forward thinking shows in the investments that have been made across the companies including the protection of customary and traditional hunting and fishing, education of shareholders and descendants, and the establishment of a monetary trust that is intended to provide cash distributions for generations to come. “These board actions also call to mind a ‘corporate behavior’ that Ahtna people have been practicing since time immemorial. That is the practice of taking care of our people, our villages, and the environment in which we live.” The Ahtna Board and management understand the importance of community outreach, Anderson says in an email, striving to be a good neighbor and to support villages and churches. “We also believe in collaboration, sharing information, and finding new and innovative ways to achieve efficiencies,” Anderson says. “Ahtna people have proven time and time again that we are resourceful and practical.” A separate entity, called The Ahtna People’s Trust, was created to oversee funds intended to fund dividends to future generations of shareholders.

Culture Camps Since the 1980s, Ahtna has sponsored a variety of culture camps for leaders, children, young adults, and families to learn about and share Ahtna culture. Usually held in the summer and early fall during hunting and fishing seasons, the camps vary from a few days to a few weeks in length. Elders teach traditional skills such as hunting, fishing, food preservation, and survival skills. They also pass along traditional values, spirituality, songs and dances, history, and language. Some camps may have a specific purwww.akbizmag.com

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Get your copy of Alaska’s most read Business tool! Available at: Barnes & Noble or the publisher at Alaska Business Publishing, 501 W. Northern Lights Blvd., Suite #100 Anchorage, Alaska 99503 (907) 276-4373 Also available from our website, zip file will include all directories in Microsoft Excel format. Download at akbizmag.com April 2015 | Alaska Business Monthly

Photo by Suzanne McCarthy, ALTS

pose, such as learning to build a traditional fish trap or preparing a moose; others are more general, Anderson says. They cover a variety of topics, such as language and storytelling to the importance of the clan structure and following the laws of “Eng’ii.” Eng’ii refers to Ahtna laws and customs, a set of rules that the Ahtna live by that are often taboo and cannot be broken. “Camps are extremely important because it’s one of the ways the Ahtna people are battling culture loss,” Anderson says in the email. “As more and more Ahtna people moved from the region to urban areas, the opportunity to learn and teach the traditional Ahtna way of life is significantly decreased. Camps essentially provide an opportunity, albeit brief, for adults and children to actually learn and practice the traditional Ahtna way of life under the direction of our elders.”

Education and Job Skills Fostering education and job skills through scholarships, internships and a

Ahtna shareholders (some are trainers, others trainees) at the Alaska Laborers Training School in Anchorage. From left: Gabe Hardy (ALTS Training Coordinator), Suzanne McCarthy (ALTS Training Director), Chris Cummins, Roy Eskilida, Clinton Brittain, Roy Tansy Jr. (Ahtna Netiye’ Executive VP), and Jason Ashenfelter.

lively job board is another Ahtna priority. Its twelve subsidiaries under for-profit arm Ahtna Netiye’ have job sites located in diverse areas such as Anchorage, Sacramento, Honolulu, Orlando, and some locations around the country and globe, as well as its Glennallen headquarters. It

employs more than two thousand workers at more than one hundred job sites. “Ahtna takes shareholder education and employment very seriously,” Anderson says. “We have a dedicated shareholder development department whose primary task is to benefit shareholders

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by connecting training with jobs. The Shareholder Development department works closely with Ahtna subsidiaries and management to provide opportunities for shareholders who wish to work for Ahtna as well as programs to advance current shareholder employees in their respective careers.” The department also networks with other organizations and agencies and is active in reaching out to shareholders and descendants via social media. Recent posts on Ahtna’s Facebook page include notices of summer job opportunities for youth, internship applications, apprenticeships, and openings at a variety of Ahtna subsidiaries. It maintains a talent bank and offers career counseling and provides or identifies potential funding sources for education and training that connects shareholders with jobs. That part is key—the board is adamant about return on investment, so training must result in successful job placement, Anderson says. “Seeing how quickly their traditional lifestyles were changing in the late 1960s, our elders understood the path to corporate and personal success would be dependent on our descendants having the necessary educational qualifications and skills required to survive in a changing world,” Anderson says. “Ahtna funds The Ahtna Heritage Foundation’s primary scholarship named after beloved Ahtna leader Walter Charley. The Walter Charley Memorial Scholarship has three cycles through the course of the year.”

Ahtna Lands Keeping the financial portion of the corporation healthy is key, of course. In early 2015, the majority of Ahtna Netiye’s subsidiaries were involved with government service contracting, a field that is subject to ups and downs. Construction is its other major arm. The corporation is looking for ways to diversify, looking to invest in Alaska-based large-scale energy projects and resource development in its region, which encompasses the 1.77 million acres it received under the Alaska Native Claims Settlement Act agreement. It has signed agreements with Raven Gold, which is exploring an area south of Mentasta. Other potential investors are exploring in an area east of Chitina and at the headwaters of Elliott Creek. www.akbizmag.com

April 2015 | Alaska Business Monthly

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Ahtna is exploring the potential of gas and oil on lands west of Glennallen. In 2014, the corporation signed a partner agreement with an Australian company to explore and drill a natural gas well on state lands within its region. The Ahtna region is the size of Ohio and is bounded by two major national parks, Denali National Park and Preserve and Wrangell-St. Elias National Park, and multiple mountain ranges. It includes eight Native villages, all of which are federally recognized tribes. Seven of the villages have merged with Ahtna, Inc. That land is at the heart of the Ahtna culture and therefore its business. Landuse permits are required for the public on Ahtna lands, and the corporation is a strong partner with shareholders on pro70

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tecting traditional hunting and fishing rights. The current state management of hunting doesn’t protect the Ahtna people’s traditional hunting practices and is subject to political shifts, Ahtna’s board says. In her message to shareholders, Anderson notes that hunting and fishing “is a partnership between our tribal and corporate leadership.” The corporation backs the creation of a co-management structure comprised of people at the tribal, state, and federal levels. “The current system means our people are rapidly losing our traditional hunting practices and way of life,” Anderson says. “It puts local game management decisions strictly under the control of federal and state bureaucrats, with little meaningful influence from locals, even

on the land owned by our tribes. That’s wrong and Alaskans deserve better.” Anderson says the current management system applies across the state of Alaska, but unlike most of rural Alaska, Ahtna’s traditional hunting areas straddle roads that are only a few hours drive from the state’s major population centers. “This creates fierce competition from urban sportsmen and means state regulators are extremely susceptible to the constant pressure applied by urban hunting groups,” she says, adding, “this is why leaders like US Representative Don Young have been so steadfast in their commitment to address this problem specifically in our region.” Last year, Young introduced the “Alaska Native Subsistence Co-Man-

Alaska Business Monthly | April 2015 www.akbizmag.com

MAP: naturalresources.house.gov/uploadedfiles/ahtna_traditional_territory_map.pdf

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agement Demonstration Act of 2014” that would amend the Alaska National Interest Lands Conservation Act by adding to the end Section 817 relating to co-management of wildlife on lands that comprise traditional Alaska Native hunting territory. “The bottom line is that the current system is ineffective, expensive, and ignores the voice of a culture that has effectively managed fish and game resources in the region for thousands of years. We can fix this with the passage of this bill.” R

Julie Stricker is a journalist living near Fairbanks. www.akbizmag.com

April 2015 | Alaska Business Monthly

Corporate 100

special section

The Alaska Club Wasilla pool has a popular water slide.

The Alaska Club Helping people help others— and themselves By Rindi White

nnovate. Motivate. Celebrate. Those three things are key to making the Alaska Club a success, and it’s a combination that has earned the company respect among those in its field. The Alaska Club is the state’s largest fitness center conglomerate, with sixteen clubs operating in the state, about 950 full and part-time employees, and “tens of thousands” of members, according to Alaska Club President Robert Brewster. The fitness club was Alaska-owned as a limited partnership for twenty-one years. It sold in 2007 to Lincolnshire Management, which operated the club 72

for seven years. The club last Eker and former Alaska Payear sold to San Franciscocific Bank president Tom Bebased PCG (Partnership Capihan, leading a group of fifty tal Growth), a private equity investors, bought the Alaska firm that focuses on healthy Teamsters’ former recreation foods and healthy lifestyles. center in east Anchorage. PCG is part of investment “Literally two days after banking and asset managethey closed the sale, the price ment firm, Piper Jaffray. of oil plunged,” says Brewster. Brewster Brewster is chairman of the But Eker and Behan solBoard of Directors for the 2014-2015 diered on, a fact that Brewster attributes International Health, Racquets, and to the two founders’ strong business Sportsclub Association, a trade associa- acumen. They also placed an emphation serving the global health club and sis on membership, especially family fitness industry. The group states that it memberships, and made it a point to has more than ten thousand members hire people who were passionate about in seventy-six countries. Its board is fitness. elected from and by its membership. It’s “They were able to shepherd it through the second time in fifteen years a repre- some very difficult early years,” Brewster sentative of the Alaska Club has chaired says. the International Health, Racquets, and Brewster, who had previously run the Sportsclub Association board, Brewster Hotel Captain Cook private fitness club, says. joined the Alaska Club team in 1988 as assistant general manager. A Courageous Start “There was no general manager,” he The Alaska Club got its start in 1986 says, laughing. when, at the beginning of Alaska’s first The club was still at just one locabig post-pipeline oil price decline, An- tion, he says. But in the mid-1990s it chorage real estate professional Andrew launched a rapid expansion effort. “In

Alaska Business Monthly | April 2015 www.akbizmag.com

one year, we added five clubs,” he says. Most of those were acquisitions: the Anchorage Racquet and Fitness Club, three Alaska Athletic Clubs, two World Gyms. The clubs the company now operates are scattered around the state in Anchorage, Eagle River, Fairbanks, Juneau, and the Mat-Su Valley. Ten of those sixteen locations are in Anchorage and Eagle River, including two express locations designed for fast workouts, a women-only club, and the newest addition, The Summit, an “ultra-high-end” facility attached to Alaska Club South that is part fitness facility, part Alaska-style country club with spa amenities. Brewster says he was surprised to learn that having multiple clubs in one town or community would be so popular. “We’re seeing a certain amount of people who use multiple locations,” he says. Perhaps a member visits a different club to use a pool, he says, or maybe he or she generally visits a club closest to home but occasionally grabs a quick workout at the location closest to his or her work. Catering to the varied and individual needs of members is part of what has made the company a success, he says. “We are looking to continually add amenities that make the clubs not only a fitness destination but also a lifestyle destination,” he says. “We’re working on adding amenities that aren’t just fitnessrelated, but are life-improvement. We’re working on adding more of a weightmanagement component. We’re trying to meet the needs of our members and respond to the trends in society.”

Keep What Works Amid the growth, and the more recent changes of ownership, the senior management team has stayed pretty much intact. “The management team has been here for most of twenty years,” Brewster says. Working with a private equity firm might be different than other business models, but Brewster says the Alaska Club has benefitted from having a good track record. “A big part of why [PCG] bought this particular company was, it was successful and they wanted to continue that process. We really have been using them more as a resource,” he says. PCG is tech-savvy, he says, and is helping expand Alaska Club into more offerwww.akbizmag.com

The Summit is The Alaska Club’s upscale facility attached to Alaska Club South in Anchorage. © The Alaska Club

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April 2015 | Alaska Business Monthly

The Club for Women is in a popular Anchorage Midtown location. © The Alaska Club

ings related to weight loss programs and other aspects of the fitness industry. “Fortunately for the management team here, they are largely relying on us to drive the management forward. We’ve been able to elevate our game by using their knowledge of the industry,” he says. On the “knowledge of industry” front, Alaska Club has a few tools it has learned are successful in fitness club management. One: help people give back; two: help people help themselves. “One of our strong values is community,” says Alaska Club Marketing and Sales Vice President Debbie Cedeno. A large part of Cedeno’s job is working on community events, from Yoga in the Park programs to hosting fundraisers for local groups. “We feel strongly that, because we are a membership-based organization and we want to give back to our community, we have three to five different community events that we participate in every month,” Cedeno says. In February, Alaska Club Fairbanks hosted a workout with Ali Vincent, a former Biggest Loser winner as part of its sponsorship of the Go Red for Women event. The event is a fundraiser aimed at fighting cardiovascular diseases. The organization also sponsored a fundraiser for Augie’s Quest, an organization aimed at raising money to find a cure for ALS, more commonly known as Lou Gehrig’s disease. 74

“It’s important to us … that people who are members of our club feel good about the club and about giving back,” she says.

Partnering with Businesses If having more workout locations and options for members has helped the company gain and retain members, having an array of options for businesses interested in partnering with Alaska Club to provide an additional benefit to its employees has helped Alaska Club successfully increase the number of corporate partners. “What we see ourselves being is a resource for all things health and fitness related,” Cedeno says. That might mean holding fitness fairs at the company’s office, where Alaska Club employees might offer nutritional guidance or specific core training. Or it might mean hosting a fitness party at an Alaska Club location, where employees can visit for a “fitness sampler,” which generally includes cardio, strength exercises, and some mind-body training like yoga. Cedeno says some businesses offer Alaska Club memberships as employee perks, but many are turning to attendance-based reimbursements instead. “We’re finding that more and more businesses are seeing the benefit to having healthy, happy, active employees,” she says. “We’re seeing them more frequently say, if you are working out ‘x’ number of days, we’ll subsidize all or part of your membership.”

Happy Employees, Healthy Business Karen King, president of Anchorage advertising agency Spawn Ideas, says her company has partnered with Alaska Club for twenty-one years, providing memberships for as many of its now forty Anchorage-based employees who want one. Spawn produces broadcast advertising for Alaska Club; the memberships are offered as trade for services. Because the agency pays for the membership benefit through trade, it requires employees to visit the club at least twelve times in a year to get the membership at no cost to them. “This year, 70 percent of our people will use it,” King says of the “gold” level membership the company offers. Spawn might not reflect the average business considering employee benefits. It’s a regular on Outside Magazine’s “Best Place to Work” list, this year ranking fifth on the list of one hundred in America. Formerly Nerland Agency, King says its employees are mostly young and outdoor-focused. She says the company doesn’t always pay the top wages in the industry, but it offsets that with great benefits and nice perks. “We also offer up to $250 a year for individuals to use against race fees, or a Chugach State Parks pass,” King says. The company also holds ski passes to Alyeska that employees can sign up to

Alaska Business Monthly | April 2015 www.akbizmag.com

The Alaska Club Wasilla members enjoy climbing challenges.

use. For employees who might not have a lot of flexible income, the benefits are a draw because they appeal to their desire to get out and enjoy Alaska. “In our industry, to some extent, it’s pretty common to offer a benefit like fitness memberships. There are a lot of deadlines, it’s very fast-paced; to be able to give your people a break from the deadlines and the stress they can feel from the day, I feel that it’s a really important outlet for our people. Finding ways to achieve work/life balance—and have fun—are part of Spawn’s culture.” King says.

Helping People The second tool in The Alaska Club’s toolkit—helping people help themselves—is a little more difficult than throwing a fundraising party or hosting a fitness challenge. It’s what can make or break a fitness center, Brewster says, and it’s what sets his line of work apart from other service-oriented businesses. “If someone goes to a restaurant or a store, the product is available for them. In our case, not only do we provide the venue, but the consumer has to participate here,” he says. “I think it’s more difficult than it might seem to help people be successful,” Brewster says. “It’s not just about having the right facilities or being in the right place, but also about providing an environment where people are willing to take part in fitness.” R Freelance journalist Rindi White writes from Palmer. www.akbizmag.com

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special section

Corporate 100

Weathering Alaska’s Next Economy Responding effectively to challenges and change Editor’s Note: In light of anticipated changes to the Alaska economy due to the new world price for oil, we asked the Corporate 100: “What changes will your company make to weather the changing economy?” Not everyone offered comments, but for those who did, here’s what they had to say: Ahtna, Inc.: Ahtna will remain dedicated to its mission and vision statements, with a goal of providing economic, cultural, and social benefits to our shareholders, regardless of any change in the economy. Alaska Commercial Company: Continue to streamline costs while focusing on providing greater value to our customers in products and services. Alaska Communications: We’ve served Alaska for more than 120 years and have changed and evolved over this time. Our company has a great opportunity to serve Alaskans and grow in the broadband and managed IT solutions market. We are focused on creating value for customers by working with organizations to design, custom build, and manage reliable network and IT solutions. We have invested more than $500 million in Alaska since 2001 to drive this growth. We look forward to serving Alaska for the next 120 years. Alaska Regional Hospital: The Senior Health Clinic and new Mountain View outpatient clinic will enable our community to seek care in a more appropriate and cost-effective manner than being treated in the emergency room for minor injuries or illnesses. This will help reduce the cost of healthcare for everyone, which is especially important now, given Alaska’s changing economy. Alaska Village Electric Cooperative, Inc.: We are upgrading our generation and 76

distribution facilities to improve reliability and increase operating efficiencies, which helps reduce the cost of generating electricity. We are also building new tielines and installing wind turbines where feasible. Alyeska Pipeline Service Company: Since startup, Alyeska’s workforce has a proven reputation for overcoming challenges and will apply this same ingenuity, innovation, and problem-solving mentality to remain sustainable for years to come. Alyeska is committed to safe and reliable operations for the benefit of Alaska and the nation’s energy infrastructure. Arctic Slope Regional Corporation: ASRC will continue to face the economic challenges both inside and outside of Alaska head on, with a focus toward sustainable growth and benefits to our shareholders. AT&T: AT&T is the largest wireless service provider in Alaska, and investment in our local wireless network will continue to be a priority. We’ve been a member of the Alaska community for more than twenty years and invested millions of dollars to deliver a finely-tuned network throughout the state, must-have devices, and great customer experience. This is how we will continue to do business in Alaska. Bering Straits Native Corporation: BSNC enjoys a sterling business reputation because our work is based on the foundation of teamwork and the expectation that our employees operate with integrity, honor, and the ability to respond to change and challenges. Carlile Transportation: Carlile will continue our community support but we hope to reduce travel expenses by 20 percent and keep a close watch on nonessential budgetary expenses.

CCI Industrial Services LLC: We will intensify our focus on our core values of safety, integrity, and trust; and we will listen carefully to the expressed requirements of our clients as we continue to bring value through precise management of deployed resources. CH2M HILL: Our firm will be implementing many of the same types of fiscal conservation that our clients and friends here in Alaska will also be doing. Chugach Alaska Corporation: ANCs have thrived for four decades and we continue to look ahead towards an even brighter future. Chugach will adapt in response to economic changes and plans to be a diverse holder of businesses in order to maintain our financial health. We will be responsive to industry trends but always uphold our uncompromising values and remain true to our core purpose: To provide opportunities to shareholders through responsible management of our lands, businesses, and assets. Cook Inlet Region, Inc.: A diverse portfolio allows CIRI to achieve strong results despite unforeseen challenges that impact individual investments. CIRI’s portfolio includes a broad spectrum of investments in Alaska and across the nation. While some investments carry greater risk motivated by higher returns, other investments are contractbased to provide durable returns regardless of economic conditions. This approach allows CIRI to deliver benefits to shareholders even in times of changing economic conditions. Credit Union 1: Credit Union 1 is a proud contributor to the health of Alaska’s economy and is well positioned to weather our changing economy. Not

Alaska Business Monthly | April 2015 www.akbizmag.com

only do we employ over 350 Alaskans, but we work hard to promote positive financial habits statewide. Through our Discover Financial Fitness program, we provide free education on how to save money, manage debt, and more. Denali Alaskan Federal Credit Union: We have opened a new branch in the Lower 48 and have established two Credit Union Service Organizations with the goal of providing financial services to financial institutions in Alaska and the Lower 48. Fairweather LLC: Fairweather is a dynamic company that finds opportunities where they exist. We are able to take advantage of changing markets with a diverse and skilled workforce. Fairweather has skills and assets on the North Slope that are valuable to the natural resource industry, including other clients, military, universities, and government. Fairweather weathered the storm of the ‘80s and will use our same tenacity to do what it takes to continue to meet the market demands and create new jobs for Alaskans. Foss Maritime Company: Foss has been operating in Alaska for nearly a century. During that time, the economy has taken dramatic turns, and we’ve learned to expertly navigate both Alaska’s extreme environment, and the economy’s fluctuations. We take a long-term view when we make investments and allocate resources, keeping our focus “as we pursue new opportunities or retrench during tough economic times” on providing the highest quality service, never compromising safety or environmental stewardship. Granite Construction Company: Granite is “right-sized” to move with the economy, whether up or down. Horizon Lines LLC: Horizon Lines will continue to focus on operating efficiencies to provide significant advantages for our customers with emphasis on overhead cost controls. National companies continue to bring new business to Alaska and we remain optimistic of Alaska’s future. Jacobs: As a professional services firm, our workload is tied directly to our clients’ expenditures. In good economic times and bad, we hold fast to our relationship-based business model that www.akbizmag.com

focuses on delighting our clients. More than 90 percent of our work is repeat business from loyal customers. We understand the increasing pressure on our clients to find the most cost effective ways to complete their projects, and our focus continues to be delivering high quality services at a competitive price. Kakivik Asset Management LLC: We will intensify our focus on our core values of safety, integrity, and trust; and we will listen carefully to the expressed requirements of our clients as we continue to bring value through precise management of deployed resources. Matanuska Electric Association, Inc.: MEA is working with other utilities on economic dispatch of power to save fuel and money for members across the region. MEA focused capital expenditures only where essential, prioritizing projects that result in direct savings to our members. We support efforts to encourage development of Cook Inlet gas since that impacts all utility costs and resulting price of goods and services for the entire state. We opened new channels for members to communicate concerns. Exploring new markets for power. MTA, Inc.: MTA continues to be a major player in advocating for certainty in the federal revenue model so we can continue investing in our network and supporting our members into the future. We have prioritized and contained costs in order to maintain a positive cash flow. MTA has taken its debt from $70 million to $30 million. We’ve reduced our operating expenses and continue to look at new products and opportunities to augment the USF and Access revenues lost by our changing regulatory environment. Providence Health & Services Alaska: Providence Health & Services Alaska expects economic challenges in Alaska along with the high costs of healthcare nationally to precipitate more need for patient financial assistance. The organization will continue its pursuit of enhanced care quality and safety as one principal tactic in service to communities. Additionally, we plan to emphasize education and encourage healthy lifestyle behaviors to diminish the need for healthcare and the burden of disease related to lifestyle choices.

Roger Hickel Contracting, Inc.: Our company has adapted well and persevered through many changing economic cycles. We have found that an important element of our success is the ability to maintain a core group of key employees. We continually analyze our methods of doing business, looking for improved efficiencies and ways to keep our overhead low. When we see a system or program that can help our company be more productive, we choose to outweigh the initial costs with a focus instead on the potential for long-term gains. The Odom Corporation: Odom is constantly reviewing industry best-practices to become more efficient. In 2014 we made a number of investments in our business and our employees: Purchased thirty-seven acres of land in Anchorage to build a new warehouse which will improve our efficiency and provide customers a wider selection of products; Invested in routing software to efficiently route sales, delivery, and merchandising vehicles; Purchased fleet monitoring technology to improve fuel efficiency and safety. Unisea: We will continue to look for ways to improve our processes to become as efficient as possible in our dayto-day operations. Usibelli Coal Mine, Inc.: UCM continually evaluates both the local and world markets to maintain our position as a leader in the energy market of Alaska. With local management, including many life-long Alaskans, we anticipate and have the flexibility to respond to changing economic conditions in a prompt, efficient manner. Vigor Alaska: Increase productivity through training and focused development of production planning and scheduling methods. Watterson Construction Company: Our next fiscal year is expected to be similar to the past year. Wells Fargo Bank N.A.: Wells Fargo’s commitment to Alaskans and Alaska businesses is as strong today as ever. Through all economic conditions, we help small and large businesses access the capital needed to succeed. We’re here for Alaskans now and in the future. R April 2015 | Alaska Business Monthly

special section

Corporate 100

Emerging Leaders and United Way Reaching Millennials for philanthropy grooms them for corporate citizenship

Photo by Jenna Hooley/Courtesy of United Way Anchorage

By Margaret Sharpe

A United Way Power Coffee gathering of young professionals in Anchorage.

“

illennials” is a term loosely defined as those born between 1980 and the early 2000s. Not since the Baby Boomers— born between 1946 and 1964—has there been a demographic as large and with the potential to truly effect change in their community. The Council of Economic Advisers stated in their October 2014 report that Millennials are the largest generation in the United States and represent one-third of the US population. Mei Cobb, director of Volunteer and Employee Engagement at United Way Worldwide, says they will make up 50 percent of the workforce by 2020. Those are powerful numbers. So how does one inspire a group this large to become the next generation of philanthropic and business leaders in Anchorage? United Way of Anchorage has introduced a program aimed at guiding Millennials (also known as Generation Y) in a direction toward investment in 78

“Basically the Emerging Leaders program is our lead to reach out to Millennials and includes a lot of programming for activities like professional development, networking events, access to senior community leaders, our board of directors, and volunteering and social events.”

—Laura Brown Senior Director of Communications, United Way of Anchorage

their community by offering career enhancement as incentive. United Way of Anchorage’s Laura Brown, senior director of communications, describes how they are engaging Millennials through a program called Emerging Leaders. “Basically the Emerging Leaders program is our lead to reach out to Millennials and includes a lot of programming for activities like professional development, network-

ing events, access to senior community leaders, our board of directors, and volunteering and social events.” One of the challenges United Way corporate partners have expressed is that young professionals sometimes struggle when they move here from the Lower 48. Often transfers don’t stay because they don’t feel part of the community. “We believe that their voice and their participation in philanthropy are really

Alaska Business Monthly | April 2015 www.akbizmag.com

Photo by Will Cameron, Full Curl Photography/ Courtesy of United Way Anchorage

and things that they care about. So it is about the engagement and, honestly, what people are getting out of this Emerging Leaders program. If we’re trying to get their donations, we need to give back to them with some kind of educational experience or rewarding volunteer opportunity. The overall objective is to provide events for engagement with a lot of the different United Way partners to open up people’s eyes to what those organizations do and the issues in our community, to really make these young people aware of the issues in Anchorage and provide them inspiration and ways they can make a difference and change it.” United Way Anchorage President and CEO Michele Brown (center) with four Emerging Leaders, from left, Misty Ott, Katherine Jernstrom, Aimee Chauvot, and Amanda Mosley.

important. And we want to engage them in the community, engage them in our work, and bring them into the fold so that they can start out as philanthropic givers and participants in community projects right away, at the beginning of their careers, and become life-long philanthropists,” Brown says.

Social Issue Education “It’s really a matter of educating them and getting them aware of the complex social issues that we have up here in Anchorage and how it is the community’s responsibility. The Emerging Leaders program aims to make them more involved citizens,” Brown adds. “In theory, when you are integrated in your community, that will spill into other parts of your life. The goal is to encourage them to build a life up here and become a part of Anchorage. As a result, the employers benefit because they are also grooming these people, and hopefully they will stay.” Jenna Hooley, an account manager at Spawn Ideas, Inc., is a volunteer and co-chairs Emerging Leaders’ Advisory Council with Ann Penniston. She learned of the program through a friend. “I have a philanthropic sense to me and was interested in my way to give back and be more rooted in the community. That was really just volunteering from time to time, and then I got involved with the council,” she says. “So I’ve grown in this role and now I’m cochair. It has helped me personally and www.akbizmag.com

professionally and has improved my confidence in speaking in front of people, conducting interviews, and so on.” “We’ve had Emerging Leaders in place for a couple years,” Brown says. “The design of the program changed this year, and we’ve launched a new way of reaching out and engaging people.” From the perspective of the United Way, Millennials have a different approach to philanthropy and donating. “They are much more tied in to technology than Baby Boomers and more likely to make a donation online or on a cell phone.” Therefore the need to target the group from a new angle and create a dynamic program presented itself. Brown points out that Millennials donate to things that they care about, causes that are very specific in nature. “Their donations tend to change quite often to different and varying philanthropies. Boomers tend to engage with an organization and donate continuously throughout their lives, giving to a similar group of philanthropies. For Millennials, it isn’t quite a loyalty issue, just a different way of approaching philanthropy. It takes more investment from our side to get that group [Millennials] to engage with us in a long-term way. That’s why we’re devoting time and energy to the Emerging Leaders program. We need to build that relationship and provide a connection so it stays long term.” Hooley agrees. “I think Millennials have a variety of different interests

Different World of Giving “In the past, when we talk about Boomers and their philanthropic giving, a lot of giving was to organizations that worked on specific problems—such as the YWCA helping young girls, or Boys & Girls Clubs getting kids mentored and having a place to go after school. Donators would give to specific places because that is where they saw the most good happening,” Brown says. “We’ve reached a point in our society, not just in Anchorage, but across the United States and probably across the world, where the problems that we try to address from a philanthropic level are really complex social problems. In order to address those, what needs to happen is all these philanthropists and non-profit organizations need to come together to form solutions as a partnership where we can really effect lasting change in a much broader and bigger way than anybody can do on their own, leveraging everybody’s resources and talents and specific focus so that we can get the most done with the least amount of resources.” Brown attributes this different world of giving to the shrinking resources available for non-profits, such as the lack of federal grants. Challenging young people and educating them on what it takes to solve these problems and the work needed gets them to see the value of the proposition United Way brings to the forefront. “We serve as the backbone to a lot of these partnerships, and there is a fair amount of work in Anchorage that wouldn’t get done if not for United Way,” Brown says. “Even though we might not be personally doing the April 2015 | Alaska Business Monthly

work, we are driving those partnerships and bringing people to the table to get those discussions happening and get the programs moving forward so that we can facilitate the work. So it’s more complex to get somebody to understand what philanthropy looks like today.” To cultivate donors, United Way starts with sharing the message, gaining awareness, and getting people’s attention—whether through newsletters or social media—and helping them to understand the service they provide. “From there, we move them into handson volunteer work,” Brown says. “After all of that, we reach the point where people will donate, write a check, and give their resources to the work that we are doing. Emerging Leaders allows us to flow through that process as well because, in some cases, the participants in the program might not yet be at a level in their career where they are in a position to give money, but they are in a position to give time. So as they build their relationship with us, and they grow as Emerging Leaders, we hope that will translate over time into financial donations at some point in the future.”

Hands-On Group Work Preferred Since Millennials are more interested in hands-on volunteering and prefer to work as a group in their approach to philanthropy, the program sets a path for them to network while contributing. “For example, one of the best and most favored volunteer opportunities we had was doing the AK Kids and Family Day, where we were all out in the garden and helping,” Hooley says. “I think that is huge for Millennials. Because we are young and still in the early stages of our careers, maybe writing a check isn’t as easy as getting your hands out there and making a difference that way.” To entice Millennials with appealing volunteer efforts, the Emerging Leaders program is varied. “The whole point is we are trying to get people on board with United Way work. We want to provide experiences that are fun and rewarding for people so that they are learning from the experience,” Hooley says. “Our volunteer opportunities fall within the partner organizations that are United Way organizations. It may not necessarily be a hot issue right now, 80

The Generations Defined n The Millennial Generation Born: 1981-1997 Age of adults in 2015: 18-34* n Generation X Born: 1965-1980 Age in 2015: 35-50 n The Baby Boom Generation Born: 1946-1964 Age in 2015: 51-69 n The Silent Generation Born: 1928-1945 Age in 2015: 70-87 n The Greatest Generation Born: Before 1928 Age in 2015: 88-100 *No chronological end point has been set for this group. For the purpose of following a cleanly defined group, Millennials are defined as those ages 18-34 in 2015. Source: PEW Research Center

but it’s something that may be fun or interesting to volunteer for.” “Really, Millennials prefer volunteering through activities with their friends and with other Emerging Leaders. So it is social and volunteerism,” Brown says. “Events like our Walk for Warmth, which took place in February, had Emerging Leaders participate as a team. That is something they can all do together and help raise money: be at the walk, participate, help with registration, whatever the needs are at the event. It tends to be more about an opportunity for them to work together on something in particular and feel good at end of the day that they made a contribution.” “In the fall, Emerging Leaders usually do the Chalk the Walk event as a group,” Hooley says. “We do a lot of things that are focused on United Way impact areas. We also do volunteer work outside of the United Way focus, such as doing a trail restoration or adopt a dog rescue for the day; things that will bring new people into our group.”

Network Benefits One particular benefit for the Emerging Leaders is the “Power Coffee” with local VIPs, where participants can network and sharpen their professional skills. “This new part of the program is available to our gold level Emerging Leaders

and connects them with a CEO of a company or somebody willing to mentor our Emerging Leaders and give career advice or share their story on how they are involved in philanthropy,” Hooley says. According to the Council of Economic Advisers, “no generation has been better equipped to overcome [challenges] than Millennials. They are skilled with technology, determined, diverse, and more educated than any previous generation.” Based on that, the United Way markets to Millennials in a slightly different way than the Baby Boomers. “We have quite a few social media accounts that are specifically for the Emerging Leaders,” Brown says. “Ultimately it’s about their interaction and comfort level with technology. It just provides us a simpler way to engage them using social media and newsletters.” United Way designed a brand new website (liveunitedanc.org) to be a responsive website that is easily viewed on a mobile phone. “We did that because of the large number of people out there using mobile devices. The biggest market that interacts this way with technology is the Millennial market. So we were looking at moving into mobile texting marketing campaigns and all kinds of other things that are specifically targeted to this group,” Brown says. Millennials are indeed hugely into social media and sharing. Boomers are too, but Millennials are more willing to “share” issues they care about, such as posting to their online accounts or messaging. “That’s just more eyeballs on what’s going on with Emerging Leaders,” Hooley says. “We have a Facebook page, Twitter, and Instagram, so we’re just sharing a lot more of what we are doing.” The ease of using technology and sharing with their peers are skills Millennials have mastered. “Millennials are very connections-based, probably because of the technology available to them,” Hooley says. “I think the group we have is very much a bunch of doers that have connections in the community. That’s what it’s all about: really wanting to make a difference with those connections.” R Margaret Sharpe freelances from Palmer.

Alaska Business Monthly | April 2015 www.akbizmag.com

Corporate 100

special section

Corporate Citizenship Abounds Activities and actions make Alaska better Editor’s Note: We asked the Corporate 100 to share some of their activities and actions from the last year that exemplify corporate citizenship. This year it was an optional field, next year it will be mandatory. Here are the responses. Ahtna, Inc.: In 2014, Ahtna continued its commitment to sponsor and promote community events and functions held within the Ahtna region, specifically those that directly benefited our shareholders. These include culture camps, conferences, job fairs and trainings, tribal and village council meetings, and many others. Alaska Airlines: Alaska Airlines and Horizon Air support more than three hundred different nonprofits and agencies in Alaska. With a sharp focus on youth and education, Alaska Airlines provides in-kind and monetary support to organizations that are making a difference in the communities we serve. Employees volunteer their time and energy, backed by Alaska Airlines, to those causes which matter most to them. Alaska Commercial Company: Actively work with charitable organizations including ASAA, the American Diabetes Association, Boy and Girl Scouting, Muscular Dystrophy, and hundreds of community based organizations in rural Alaska. Alaska Communications: We’re committed to the local communities where we live and work. Our corporate giving focuses on youth and education, though we support several causes across Alaska. We believe in investing in our youth by supporting programs such as Boys & Girls Clubs Alaska, United Way, and Junior Achievement. We also support our employees who support our communities. Through our Employee Volunteer Grant Program, we contribute up to $250 to nonprofits at which employees volunteer. Alaska Regional Hospital: Alaska Regional Hospital’s 2014 acquisition of the Senior Health Clinic will increase seniors’ access to comprehensive, patient-centered care and to help them to maintain the highest level of health and wellness. In addition, Alaska Regional is making plans to open an outpatient clinic in the Mountain View area by the end of 2015. The clinic will provide primary care services that are accessible for the people who live and work in the area. www.akbizmag.com

Alyeska Pipeline Service Company: Alyeska’s longstanding philanthropy program supports healthy communities, underserved populations, safety and environment, education and the arts in pipeline communities and across Alaska. Employees give generously of their time and resources through the company’s annual United Way campaign and through various board positions and other volunteer efforts, year-round. American Fast Freight, Inc.: We open up our warehouse to be used for the AK General Contractors Family Fun night. Arctic Slope Regional Corporation: ASRC contributed more than $4 million to various local charitable organizations and nonprofits in 2014. These organizations included ASNA, Challenge Life, Bean’s Café, and Special Olympics Alaska. ASRC Energy Services, Inc.: Served lunch at Bean’s Café once a month last year. Partnered with Big Wild Life Runs to coordinate a health and safety fair that was open to the public after the Kid’s 2K Fun Run last August. Sponsored and chaired the 2014 Anchorage Heart Walk and were I would say was one of the top fifteen fundraising companies in the American Heart Association’s Western States Affiliate. Implemented seventeen social investment and economic development projects in North Slope communities. AT&T: Last year, AT&T and its employees contributed more than $302,000 through corporate, employee, and AT&T Foundation giving programs in Alaska. AT&T is also a school-business partner with Government Hill Elementary School and participates in Junior Achievement.

Native communities by proudly providing substantial support to the Bering Straits Foundation (BSF). BSF helps BSNC shareholders and their direct lineal descendants attain their educational and vocational goals by offering scholarship opportunities. In 2014, BSNC distributed more than $2.3 million in direct economic benefits to shareholders and descendants. BP Exploration (Alaska), Inc.: BP Alaska and its employees donate $5 million and thousands of hours a year to more than eight hundred community and education organizations across Alaska. Carlile Transportation: Carlile supports many organizations across Alaska, too many to call out. Two of the programs we are particularly proud of are our association and partnership with Mountain View Elementary and the in-kind support we provide for the Alaska Wildlife Conservation Center’s bison project in Alaska. CCI Industrial Services LLC: We have continued to grow the business and provide an ever increasing dividend to our parent corporation, which is committed to being a good corporate citizen and to providing opportunities for shareholder employment and development. CH2M HILL: Our social responsibility to enhance standards of living and quality of life in Anchorage and the communities in which we operate revolve around charitable efforts that support education, military veterans, youth, and job creation, in addition to our legacy of contributing to the United Way, Water for People, CANstruction, Bean’s Café/Children’s Lunchbox, and the American Red Cross.

BDO USA, LLP: BDO Counts is a firm wide initiative that creates a framework around the local and regional philanthropy efforts that so many BDO professionals take up causes for. BDO Anchorage donates time and/or money to the following: Bean’s Café, Downtown Soup Kitchen, Habitat for Humanity, Adopta-Highway, and our Friday Dress Down for Charity (which sends employee and company matched donations to various local charities).

Chenega Corporation: Chenega Corporation co-sponsored three golf-tournaments across the United States, including AUSA Last Frontier Chapter at JBER, collectively raising $97,000 for soldiers, military families, and the Wounded Warrior Program. Chenega earned the prestigious Military Friendly Employer designation by Victory Media, publisher of G.I. Jobs and Military Spouse. Chenega Corporation donated $80,000 to various Russian Orthodox churches throughout Southcentral Alaska and $100,000 to the Chugach School District.

Bering Straits Native Corporation: BSNC is investing in building strong and stable Alaska

Chugach Alaska Corporation: Chugach exists to serve Alaska Native shareholders April 2015 | Alaska Business Monthly

through educational and business development opportunities. Our diverse subsidiaries also follow our core principle of supporting our communities. From Heide & Cook’s annual Hawaii Food Bank fundraiser to Chugach Industries’ donations to St. Peter’s Orphanage in New Jersey, or our corporate office employees participating in the Alaska Run for Women fundraiser, Chugach companies are dedicated to serving the communities in which we live and work. ConocoPhillips Alaska, Inc.: ConocoPhillips is focused on improving the quality of life in the communities where we live and work. ConocoPhillips and our employees donate millions of dollars and thousands of hours annually in Alaska. We donated nearly $6 million to four hundred nonprofit groups in 2014, while our employees donated more than six thousand hours helping their neighbors throughout Alaska. Since 2000, we’ve contributed nearly $120 million to social services, education, arts, environmental, and health and safety initiatives. Cook Inlet Region, Inc.: CIRI supports a variety of programs that benefit the community. This year, CIRI continued sponsoring the Alaska Native Executive Leadership Program, which prepares tomorrow’s leaders for management positions in Alaska Native corporations. CIRI employees deliver meals to Anchorage’s homeless population at Bean’s Café. The 2014 CIRI Golf Classic raised more than $115,000 for Cook Inlet Native Head Start, The Children’s Place, and Girl Scouts of America. CIRI is Muldoon Elementary’s business partner.

Denali Alaskan Federal Credit Union: Denali Alaskan contributed to more than forty Alaska organizations in 2014, and staff members assisted dozens of others with volunteer efforts. We have four School Business Partners in Anchorage. Donlin Gold LLC: Iditarod Sponsor; Iron Dog Sponsor. Fairweather LLC: Fairweather conducts business with more than 185 Alaskan contractors and businesses with a local presence, accounting for over 75 percent of our vendor relationships and over 60 percent of dollars spent. We pride ourselves on supporting Alaskan businesses, looking for availability of products at home before reaching out to external vendors. Fairweather is a strong community citizen that frequently sponsors events that are beneficial to the industry as well as local nonprofit charities. First National Bank Alaska: First National Bank Alaska gave $1,033,106 to Alaska communities in 2014, benefiting a wide variety of health, youth, educational, civic, and arts organizations in the state. In addition to these donations, bank employees volunteered hundreds of hours to assist organizations and the people they serve. For nearly a century, First National’s commitment to be a good corporate citizen has shown in our support of those communities where our employees work and live all across the Great Land.

Credit Union 1: Credit Union 1 is a uniquely philanthropic financial institution. Each year, we teach, fundraise, and volunteer in our Alaskan communities. Our wide-ranging social activities and financial services represent the heart of the credit union movement—a movement for people helping people. 2014 was a banner year for our community engagement efforts. Employees spending a record number of volunteer hours helping our nonprofit partners and fundraised and donated almost $200,000 to statewide causes.

Foss Maritime Company: Foss Maritime Company has a long-standing commitment to giving back to the communities in which we work. Over the past year, Foss and its parent company, Saltchuk, have together allocated $336,015 to twenty-five organizations serving the community. Recipients include community groups like Challenge Alaska; environmental groups like Alaska Fisheries Development Foundation; education groups like the APU Scholarship and the Performing Arts Center; and youth organizations like Young Life and UAA Women’s Summit.

Davis Constructors & Engineers, Inc.: Davis sponsors organizations such as Bean’s Café, Downtown Soup Kitchen, Providence Alaska Foundation, UAA, AWAIC, NAWIC, Covenant House, Boys & Girls Club, Anchorage Senior Center, Catholic Social Services, Eva Foundation, Fairbanks Counseling & Adoption, Healthy Alaska Natives Foundation, Safe Harbor, and YMCA just to name a few. Additionally, Davis participates in the American Cancer Society’s Relay for Life and is a national award-winning fundraising team.

Goldbelt, Incorporated: Goldbelt, Inc. is committed to making a significant and positive difference in the lives of its shareholders. It is also dedicated to supporting the cultural preservation of our Alaska Native heritage. Since 2007, Goldbelt has provided significant funding to the Goldbelt Heritage Foundation, a nonprofit organization committed to preserving the Tlingit language and heritage and also administering the corporate sponsored scholarship program for shareholders and descendants.

Granite Construction Company: In Alaska, Granite provides monetary and in-kind support for local youth sports groups and charitable organizations, such as Children’s Lunchbox and Special Olympics. Homer Electric Association, Inc.: As a member-owned electric cooperative, Homer Electric is committed to providing safe, reliable electric service to its members. Above and beyond that mission, Homer Electric is committed to providing opportunities to our youth. We offer several community outreach programs including academic scholarships, Youth Rally, Electrical Safety Poster contest, and an Energy and Conservation Youth contest. In addition, we host Energy and Conservation Fairs each year. Horizon Lines LLC: Community involvement in a variety of charities (i.e., Iditarod, Special Olympics, Covenant House Alaska, March of Dimes, Food Bank of Alaska, ALPAR, Alaska-Wide and High School Sports, National MS Society, Boys & Girls Clubs). We are members in Anchorage Chamber and AEDC and a supporter of KEEP Alaska Competitive. Jacobs: We encourage our employees to champion efforts that our entire office can contribute to. Last year we donated more than 450 cans of food to the Food Bank of Alaska for Thanksgiving, participated in the Salvation Army’s Angel Tree program, the Special Olympics’ Polar Plunge, the annual Ski for Women, and donated to the Society of American Military Engineers Benjamin B. Talley College Scholarship Fund. Kakivik Asset Management LLC: We have continued to grow the business and provide an ever-increasing dividend to our parent corporation that is committed to being a good corporate citizen and to providing opportunities for shareholder employment and development. Matanuska Electric Association, Inc.: To produce power more efficiently, MEA constructed the new gas-fired EGS power plant, promising local energy and fiscal responsibility for our members. As CEO of ARCTEC, the organization focused on utility coordination on the Railbelt, General Manager Joe Griffith has volunteered countless hours to advance Railbelt collaboration. MEA’s Charitable Foundation has provided more than $250,000 in grants to help in our service area. MEA supports local causes with volunteer time, sponsorships, and donations. Matanuska Valley Federal Credit Union: Founded the Financial Reality Foundation to

Alaska Business Monthly | April 2015 www.akbizmag.com

guide consumers of all ages to develop skills and acquire knowledge that helps them achieve their financial goals. MTA, Inc.: MTA has more than 270 employees that donate their money and volunteer their time to hundreds of nonprofit organizations throughout the Mat-Su and Eagle River communities. MTA alone donated to 175 charitable organizations, groups, and events in 2014. Northrim Bank: At Northrim, we know a strong community means a strong community bank. That’s why we are constantly focused on how to help our customers and community achieve more. We do that by investing in projects that provide long-term community benefits, such as affordable housing and critical infrastructure development. Our employees are be actively engaged in the community, giving their time to NeighborWorks Paint the Town, Salvation Army McKinnell House, basic financial literacy training, and more! Providence Health & Services Alaska: As a not-for-profit healthcare organization, Providence Health & Services Alaska embraces its responsibility to provide for the needs of the communities we serve, especially for those who are poor and vulnerable. Each year, Providence provides millions of dollars in community benefit, through free and discounted care for patients, clinical and social services provided despite financial loss, funds for education and research programs, and provides donations and grants for free community health. Roger Hickel Contracting, Inc.: The management team at Roger Hickel Contracting came together over the last year to review the overall culture of the company and its role as a corporate citizen. We firmly believe that cultivating a company culture where employees are the priority does much more than boost morale, it boosts company productivity and profits. The company as a whole also gives back to our community by donating to nonprofits, supporting universities, and minimizing the environmental impacts of construction. Stantec: One example is Stantec in the Community Day, which united more than five thousand Stantec employees around the world in an effort to give back in their office locations. In Alaska, Stantec’s four offices participated by clearing brush along Anchorage’s Coastal Trail, organizing a canned food drive and helping at the Fairbanks Community Food Bank, enhancing a rain garden at a Wasilla park, and cleaning trash along the Mendenhall River in Juneau. www.akbizmag.com

The Alaska Club: The Alaska Club takes seriously its responsibility to give back to the communities in which we do business. We participate and encourage our members and employees to do so as well, with the goal of making these communities a better place to live. We support more than ninety nonprofit fundraisers annually throughout Southcentral, Fairbanks, and Juneau. One of our leading fundraisers is Augie’s Quest which supports ALS research. To learn more go to thealaskaclub.com/community-involvement. The Odom Corporation: Promotes recycling through its membership in and support of ALPAR; works with its employees, customers, and suppliers to spread the message of responsible drinking; sponsors a variety of community events including Fur Rendezvous, Summer Solstice, Iditarod, Arctic Man, and Iron Dog; supports community organizations including Boys & Girls Clubs of Alaska, Special Olympics, and CMN; invested in routing software to make our delivery fleet more efficient while reducing our carbon footprint. Unisea: Unisea continues to support charitable organizations including United Way and Seashare as well as providing scholarship funds for local Unalaska high school graduates. Usibelli Coal Mine, Inc.: UCM annually provides scholarships to children of employees towards post-secondary education; contributes in excess of $100,000 annually to charitable groups; supports employee involvement on advisory boards of educational, civic, and professional organizations; and maintains a safety-first environment all day, every day. Vigor Alaska: We have an active Vigor Cares committee that receives requests and determines awards to humanitarian organizations. We have a Women’s Forum of incumbent employees and we are operating a Marine Industrial Pre-Apprentice program to develop an all-Alaska marine industrial workforce. Watterson Construction Company: Special Olympics; March of Dimes; SAME Scholarships; UAF Hockey; Alaska Zoo; Pee Wee Hockey; ABC of Alaska Apprenticeship program. Wells Fargo Bank N.A.: Wells Fargo invested $5.3 million in more than two hundred nonprofits and schools in Alaska in 2014, including a forty-three-acre land donation to the Native Village of Eklutna. Alaska team members volunteered 9,500 hours and personally donated $411,000 to nonprofits, schools, and churches in Alaska, the highest Community Support Campaign total ever in Alaska. R April 2015 | Alaska Business Monthly

special section

Corporate 100—Philanthropy

ALASKA

Grantmaking by community foundations more than doubled, up 111% to over $6 million. However, overall giving to the state was down by $15 million. This decline is slightly skewed by reporting methods, which capture the total amount of multi-year gifts in the year of their award. Additionally, nine funders located outside of Alaska significantly decreased their giving to the state. Public benefit organizations received more than $40 million in grants in 2012. The largest grant in the category was also the largest overall grant to the state—$11.9 million to the Alaska Village Electric Cooperative, a nonprofit utility, by The Denali Commission. In total, the Alaska Village Electric Cooperative received 28% ($15.8 million) of all funds to the public benefit category. Grants allocated to renewable and clean energy, energy assistance and energy education or advocacy efforts composed 20% (nearly $25 million) of all grantmaking to the state.

 Total giving by 44 organizations:

$122,218,002

 Median grant:

$6,824

 Number of grants:

1,737

 Change in giving from 2010:1

-20%

Changes in funding are based on data from 35 funders who gave in 2010 and 2012.

Alaska Business Monthly | April 2015 www.akbizmag.com

Top 10 Grantmakers to Alaska, 20122 1. The Denali Commission (AK)

6. Gordon and Betty Moore Foundation (CA)

2. Alaska Mental Health Trust Authority (AK)

7. ConocoPhillips (AK)

3. Rasmuson Foundation (AK)

8. The Alaska Community Foundation (AK)

4. Tanana Chiefs Conference (AK)

9. Arctic Native Slope Association LTD (AK)

5. Campion Foundation (WA)

10. Alaska Conservation Foundation (AK)

Giving by Alaska Native Regional Corporations is not within the scope of this report; we want to acknowledge that the list of top 10 funders and the overall contributions to the state would differ considerably if this data were included.

very two years, Philanthropy Northwest collects, codes and analyzes data on foundation and corporate giving to nonprofits located in Alaska, Idaho, Montana, Oregon, Washington and Wyoming. Because Form 990 schedules and funder reporting cycles are often not in sync with the calendar year, we analyze data from two years prior to the report year; for example, this 2014 report includes grant data from 2012, while our 2012 report includes grant data from 2010, and so on. Trends in Northwest Giving uses grant data from several sources: Philanthropy Northwest members, national foundations who give to the Northwest, IRS Form 990s, foundation websites and the Foundation Center. Our findings represent a sample of the more than 3,000 foundations in our region. How do we collect and code the data?  We actively reach out to nearly one thousand Northwest-based foundations and corporations, regardless of Philanthropy Northwest membership status.  We partner with the Foundation Center to collect data from the top funders to our region, regardless of their location.  We prioritize collecting data from the same foundations year over year so we can offer a robust analysis of trends over time.  We code our data according to national standards set by National Center for Charitable Statistics. These standards are used by the IRS and are the basis for Foundation Center coding methods.

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What’s included in our dataset?  Grants of $1,000 or more  Community foundations: discretionary grants, unrestricted, donor advised funds, scholarships  Corporates: cash, cash matching, dollars for doers, sponsorships  Grants approved for future distribution (e.g. multi-year grants in award year)  Grants from public charities other than community foundations (except United Ways)

What’s not included?  In-kind donations  Mission investments  Grants or scholarships less than $1,000  Direct employee cash contributions  Program-related expenses and other non-grant related expenses that count towards foundation payout rates Reprinted from “Trends in Northwest Giving 2014.” Used with permission from Philanthropy Northwest. Download the full report: philanthropynw.org/trends14

AN ALASKA MINING PROJECT COMMITTED TO: LOCAL HIRE RESPONSIBLE DEVELOPMENT ENVIRONMENTAL INTEGRITY

April 2015 | Alaska Business Monthly

special section

Corporate 100—Philanthropy

It’s Best to Give—and to Receive How Alaska businesses and nonprofits may collaborate to maximize outcomes Commentary by Natasha Von Imhoff

The opinions expressed herein are those of the author.

have a twelve-year-old son who, the moment he earns his allowance, asks to go to the store to buy candy or some cheap plastic toy. I am teaching him—with varying degrees of success—about saving for big ticket items versus spending on quick consumable junk. This past Christmas, we were walking into a store and saw the Salvation Army kettle bell ringers. I put some cash into the red kettle and encouraged my son to do the same. He looked at me and said, “Why would I want to do that?” I explained that we live in a community and it takes all of us pitching in to make it work. He eyed the bucket with suspicion. “Where does the money go once I put it in that red thing?” I replied, “Ah, Grasshopper. Now that is a question worth exploring.”

Nonprofit Landscape According to the December 2014 report titled, “Alaska’s Nonprofit Sector: Generating Economic Impact,” produced by the Foraker Group, there are 4,800 charitable nonprofit organizations in Alaska, generating $4.4 billion in direct expenditures and employing more than thirty thousand people. (See pie chart at above right.) These organizations run the gamut and include healthcare, arts and culture, conservation, human services, and animal welfare, among others. The Sweet Spot in the Middle So I asked several people in my community, “Why do we have nonprofits?” Sammye Pokryfki, vice president of Programs at the Rasmuson Foundation, answered, “Because a healthy society needs particular goods and services that don’t yield a profit margin.” 86

Source: Alaska’s Nonprofit Sector Generating Economic Impact December 2014 Report | theforakergroup.org

Dennis McMillian, president of the Foraker Group, described it like this: “Nonprofits fill the sweet spot in the middle, between the for-profit sector that looks for a return on investment and the government sector which provides funding for items that simply have to get done like transportation and public safety.” With that in mind, what does an Alaskan family need to survive or thrive? Expand on that concept to a community level and think about who can deliver it. Profit seeking businesses can fill some needs; the government will take responsibility on several other things; but for everything else, the nonprofit business model fills that niche. Without nonprofits, our society would be incomplete. Many Alaskan families would not survive, let alone thrive.

Most People Can’t Resist Adorable Puppies Alaska has about twice the number of

nonprofits per capita when compared nationally. Why so many? Rural states tend to have a higher per capita ratio than more urban states because of dispersed populations and high travel costs. In Alaska, in particular, there are less government entities, defined in this case as cities and counties. As a result, the service gaps that normally would be covered by the government are instead offered by nonprofits. With 4,800 charitable nonprofits to choose from, how should a business or individual go about assessing their choices? McMillian breaks down the nonprofit landscape like this, “About 10 percent [of donors] give based on a pull on their heartstrings. This means they give only to the downtrodden—or to a cute puppy.” I confirmed the puppy theory with Heather Beaty, program manager of Pick.Click.Give. (PCG), the Permanent Fund Dividend charitable contributions program. In 2014, the PCG cat-

Alaska Business Monthly | April 2015 www.akbizmag.com

egory “animal protection and welfare” received the most money donated through the program. Puppies apparently do pull heartstrings—why else would Budweiser feature a yellow lab puppy when spending millions of dollars on its Super Bowl ad?

2014 Top 20* Pick.Click.Give. Organizations by Total Amount Pledged Category Animal Protection & Welfare Food Banks & Pantries Homeless Shelters Media & Communications Family Violence Shelters Human Services Organizations Family Planning Salvation Army American Red Cross Hospices Universities Patient & Family Support Zoos & Aquariums Totals

2014 Pledges

Total Amount Pledged

1,190

$190,525

1,240 2,238 1,538

$148,300 $143,225 $125,525

1,368

$93,525

907

$78,075

823 475 556 357 112 421

$57,875 $33,725 $33,575 $24,950 $22,050 $21,100

467 11,692

$20,925 $993,375

*Organizations with similar missions were consolidated into categories The other end of the spectrum is the Ebenezer Scrooge with a “Do it on your own” mentality. Then there are the rest of us. Most of us give money to help improve the community we live in or to organizations we feel connected to. Sometimes it’s a personal connection, such as being impacted by a particular disease or experience; sometimes people want to make systemic change so they may give to something like United Way’s “90% by 2020” campaign, which seeks to increase high school student graduation rates. Others may not know exactly what organizations they want to give to but they generally like a particular sector so they donate to a field of interest fund at the Alaska Community Foundation. One example of people donating because of a personal connection is Pat and Christalyn Simpson. By day, they run Alaska Marine Nutrition, a company that harvests salmon oil for Omega-3 www.akbizmag.com

fatty acids. Outside of business hours, the Simpsons are co-directors of the Lost Lake Breath of Life run, a fundraiser for the Cystic Fibrosis Foundation. After losing their eldest son Zac to the disease in 2006, the couple decided to get involved with the race. Pat Simpson recently commented, “We are not chemists, rocket scientists, biologists, researchers, doctors, geneticists, or even runners. But we can raise money.” And they have. Under the Simpsons’ leadership, they have helped raise $950,000 for the Cystic Fibrosis Foundation. Some businesses choose to give where their employees live or where their employees also give. Dana Rogers, community affairs manager for Wells Fargo Alaska, says, “We feel it’s important to engage in the community. When communities do well, we do well.” Rogers continued that, while large grants, like in the $25,000 to $50,000 range might receive a lot of attention, it’s the $1,000 grants in small communities that can make the most impact. Sometimes it’s a marketing campaign that motivates people to give. The Salvation Army’s Red Kettle Campaign started in 1861 and occurs annually in cities across America between Thanksgiving and Christmas. It is extraordinarily effective. I feel sheepish if I ignore the bell ringer and walk out of the store with a cart full of groceries but won’t spare some change to put into the bucket. The bell/bucket combo helped the Salvation Army Alaska Division raise over $600,000 in 2013. And what about the recent ALS Ice Bucket Challenge? During the summer of 2014, the ALS Association (ALS stands for amyotrophic lateral sclerosis, a disease that affects the nervous system) utilized social media to challenge people to pour a bucket of ice water over their heads to promote awareness of the disease and raise money for research. The challenge went viral. In 2013, the nation-wide ALS Association raised $19.4 million in donations. In 2014, after the Ice Bucket Challenge went into effect, the ALS Association exceeded $100 million in donations. Let’s not forget the tax benefits. The Alaska Education Tax Credit allows for donations of up to $100,000 to receive a 50 percent tax credit towards state corpo-

rate tax and a 100 percent credit for donations between $100,000 and $300,000. Many businesses take advantage of this opportunity, preferring to give locally to education-related organizations rather than to the state general fund.

Vetting Options If a business wants to donate money, what are the vetting options to find out more about a particular charitable organization? Just like making a capital investment or launching a new product, business leaders should consider a charitable donation as an investment in a business. The framework for analyzing a nonprofit company is similar to that of a forprofit investment. The Foraker Group’s four factors that predict nonprofit sustainability, according to its “Focus on Sustainability” model, include: Focus: Is their mission easily articulated and adhered to? The Right People: Does the organization have the right people in the right roles? Partnerships: Does the organization effectively collaborate with other organizations? Unrestricted Funds: Is there cash on hand to weather emergencies and take advantage of opportunities? If a business leader doesn’t have the time to fully research a nonprofit organization’s potential long-term sustainability, there are websites available that publish the results of their nonprofit due diligence. Pokryfki with the Rasmuson Foundation maintains Rasmuson has an extensive grant application and analysis process for all their grantees. If a grantee is awarded funding, that grantee is then listed on the Foundation website by name, region, or sector. The public is able to then browse the Rasmuson Foundation website to see if a potential charitable organization is listed. If so, the donor can be confident that the organization has passed a rigorous analysis for sustainability and stability. Another option is to check the PCG website. Here, all participating organizations are listed alphabetically. While the qualifications for a nonprofit to participate in PCG is relatively basic (PCG only accepts organizations that are two or more years old and in good standing April 2015 | Alaska Business Monthly

with the IRS), organizations whose annual revenues exceed $500,000 require a financial audit, which adds another layer of comfort for donors. A third option is to check the website of the Alaska Community Foundation (ACF). A community foundation is a collection of funds where local residents and organizations can pool their resources to take advantage of economies of scale. Candace Winkler, president and CEO of ACF, explains that grant requests are evaluated by diverse community panels comprised of local experts and members of the ACF Board of Directors, with the highest qualified organization ultimately receiving funding. Again, grantees are listed on the ACF website for the public to review.

Volunteer Sometimes volunteering one’s time is as good—or better—than donating money. Alison Kear, executive director of Covenant House, makes a conscience effort to develop the volunteer side of their donors because volunteer hours may translate directly to outcomes. In addition, volunteering may help donors make an emotional and meaningful connection to the charitable organization. Kear adds, “One volunteer said that time spent at Covenant House was ‘feeding their soul.’” Don Gomes, executive director of the Anchorage Community Theatre, states that “Volunteer effort is a huge part of the business cycle. The return is a successful event, not necessarily cash in the general fund.” Gomes points out that Anchorage Community Theatre never says to a potential volunteer, “Come on down and we’ll find something for you to do.” Volunteers are similar to employees in that you recruit, introduce, train, supervise, and match interests and skills. Sometimes you even have to “fire” them. Those who race the Lost Lake Run to raise funds for cystic fibrosis are the “volunteers” for the trail race. In addition to paying the race entry fee, many runners also volunteer to organize corporate teams and fundraise for additional dollars. To cultivate the volunteer connection, the Lost Lake race committee places signs at each mile that feature photos of people who are either currently living with cystic fibrosis 88

or who have succumbed to the disease. This creates a very powerful reminder to each runner about the purpose of the race and the motivation behind it. Wells Fargo Bank pays each employee sixteen hours per year to volunteer in the community. The company tracks hours and holds recognition events to award outstanding volunteers. Wells Fargo estimates that, in 2014, employees recorded 10,000 volunteer hours, equal to $265,000 at the rate of $26.50 per volunteer hour.

Outcomes In the business world, decisions are made based on expected or actual return on investment. I spoke with Ira Perman, executive director of the Atwood Foundation. Perman’s observations regarding the nonprofit sector are, “Some outcomes are easy. Are the trails finished or not? How many dogs did you rescue? Tracking outcomes in the social service industry is much more difficult.” It’s one thing to count the number of kids who stay at a particular youth facility, but what about tracking their success after they leave? It requires the cooperation of the kids to engage in follow-up interviews. Sometimes those kids are not always easy to track down and, if found, they may or may not agree to an interview. It’s important that a donor is happy with the outcomes and feels that their charitable contribution is worth the effort. I tried to explain to my son that his donation to the Salvation Army would be put to good use. Later, we looked at the Salvation Army Alaska website. We learned that, in 2013, in seventeen communities across Alaska, the Salvation Army shared 150,000 meals with families in need, their shelter and treatment facilities offered 65,576 nights of housing for families and individuals in crisis, and needy children received more than 29,000 Christmas gifts. Volunteer opportunities may provide assurances beyond the financial statements, so that the donor may experience the impacts firsthand and understand the nuances of change that are often difficult to quantify through data. What about the collective impact? What if a person or organization wants to go beyond being charitable on a oneoff basis and actually wants to make

systemic change? The United Way “90% by 2020” campaign is doing just that. This effort is using targeted data around student academic achievement and linking it to the economic and social challenges many students face. The ultimate goal is to align advocacy and resources around what improves student success and, ultimately, increases high school graduation rates.

It’s Easy to Donate Donating is easier now than ever before. There are many resources to help veterans’ organizations. Technology has improved the flow of charitable funds through email, blogposts, Twitter, Facebook, and websites with big “DONATE HERE” buttons. Gone are the bulky and expensive printed envelopes and newsletters. Unfortunately, the downside of this impersonal payment method is that nonprofits may lose some relationship building with donors. But then it will be up to the charitable organizations to follow up with a “thank you” letter and invite the donor for a tour. And it’s up to individual donors or businesses to accept the invitation and take the time to visit a nonprofit organization, to understand the programs offered, and possibly volunteer a time or two. My son has a warm bed to sleep in each night and has never missed a meal in his life. He doesn’t understand the fear and hopelessness that comes with being hungry or homeless. By teaching him empathy and encouraging him to join me when I volunteer, he, too, may learn firsthand the complexity of human life. We are a community of individuals. Our collective goal is to develop a productive and peaceful society, but that only happens if we make a conscience effort to connect with one another. It is connections and relationships that bring meaning to our lives and help us grow into our potential as individuals. Capitalism may feed our bodies, but nonprofits feed our souls. R

Natasha Von Imhof is a board member of the Rasmuson Foundation, Atwood Foundation, and the Anchorage School Board. She is a life-long Alaskan.

Alaska Business Monthly | April 2015 www.akbizmag.com

THANK YOU for keeping Alaskans on the road to a better life. 2014 MILLION DOLLAR CHAMPIONS

($1,000,000+ in employee and/or corporate gifts or grants)

2014 KEY CORPORATE SPONSORS

($100,000+ in employee and/or corporate gifts or grants)

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Caelus Energy Alaska, LLC Doyon Drilling ExxonMobil First National Bank Alaska GCI Lynden NANA Family of Companies: NANA Development Corporation NANA Management Services NANA Regional Corporation NANA WorleyParsons Pegasus Aviation Services, LLC WHPacific Inc.

Northrim Bank Providence Health & Services Alaska State of Alaska, Department of Health & Social Services State of Alaska SHARE Campaign UPS US Department of Health and Human Services, Centers for Medicare and Medicaid Services Wells Fargo *Dramatic Increase: 10% or more over the previous year

To learn how you can join these and hundreds of other local companies who are driving positive lasting change in our community, visit liveunitedanc.org.

LEADERSHIP

How to Hire and Promote Ethical Leaders By Dr. Kori Callison and Dr. Terry Nelson

or many years organizations have assumed that leaders who are proficient at their jobs would also display a strong ethical compass; however, following high profile scandals at organizations, such as Enron and Penn State, this does not necessarily seem to be the case. Ethics has been elevated from a desirable feature a leader should possess to a necessary attribute. This has led both researchers and practitioners to ask some very fundamental questions about the nature of ethics, what behaviors an ethical leader displays, antecedents and outcomes related to ethical leadership, and how we can hire and promote these leaders.

Components of Ethical Leadership Research published in 2006 by Michael E. Brown at the Sam and Irene Black School of Business, Pennsylvania State University-Erie and Linda K. Trevino at the Smeal College of Business, Pennsylvania State University-University Park indicates that there seems to be two components of ethical leadership: the moral person (leaders who are honest, trustworthy, and fair) and the moral manager (leaders who actively use ethics as a core component of their leadership style). Moral managers utilize the reward system to reinforce ethical behavior and punish unethical behavior, serve as a role model for what ethical behavior is expected to look like within the organization, and actively engage their subordinates in discussions about ethically ambiguous situations or scenarios. Research indicates that ethical leadership is related to employee satisfaction, perceptions of leader effectiveness, and motivation to work hard. 90

Research indicates that ethical leadership is related to employee satisfaction, perceptions of leader effectiveness, and motivation to work hard. Considerations for New Employees Organizations that are concerned with finding, developing, and nurturing ethical leaders have several considerations. One way to hire ethical leaders is to incorporate ethics into the selection process. This could be accomplished in several different ways. First, job descriptions should list ethics as an important part of the selection criteria. Ethical leaders prefer to work in an organization that values and rewards such behavior. Additionally, this may allow unethical leaders to self-select out of the hiring process. Second, as part of a structured interview, interviewers can ask both behavioral description questions (e.g., “Tell me about a time that you were involved in an unethical situation.”) and situational questions (e.g., “A subordinate comes to you and reports that another coworker seems to be changing company documents to cover unethical behavior. What would you do?”) that allow an organization to assess the likelihood a potential employee will engage in ethical leadership. Third, certain personality characteristics seem to be related to ethical leadership. If an organization is unable, or unwilling, to test for ethical leadership

directly, selecting employees who are conscientious, agreeable, and emotionally stable by utilizing personality tests may be another option. Finally, unethical employees may be screened out by utilizing honesty/integrity tests and background checks.

Hope for Existing Employees If selecting new employees is not feasible, there is still hope. Existing employees can be nurtured, developed, and groomed to be ethical leaders. There appears to be several formative experiences that ethical leaders encounter. When interviewed, ethical leaders often credit their behavior to ethical role modeling they had witnessed during their career. Companies can utilize existing ethical leaders to mentor employees who have just been promoted to leadership positions or who are being groomed to do so. Second, more ethical leadership occurs in organizations that support such behavior. Organizations that have a strong ethical climate that supports and encourages this behavior across the organization have more ethical leaders and more ethical behavior overall. To facilitate an overall culture of ethical behavior, an organization can have cues or signals that provide information regarding the importance of ethics, such as a code of ethics, ethics training, and rewards (e.g., higher pay, promotion, recognition) for ethical leaders. Third, in research published in 2005 in the journal Organizational Behavior and Human Decision Processes “Ethical leadership: A social learning perspective for construct development and testing,” Brown, Trevino, and David A. Harrison at Smeal College of Business, Pennsylvania State University-Univer-

Alaska Business Monthly | April 2015 www.akbizmag.com

sity Park developed a ten-item instrument, the Ethical Leadership Scale, to measure perceptions of ethical leadership. This could be used to identify leaders who are behaving ethically (a good way to identify potential mentors). Leaders who do not score very high may be good candidates for training.

A Clear Trend There is a clear trend that ethical leadership will continue to be an important factor as organizations traverse ethical grey areas. Oftentimes a clear ethical path is not readily apparent, highlighting the need to be proactive, as opposed to reactive, to staffing and promoting ethical leaders. An organization must choose to make ethics a strategic initiative, and, once done, hiring and promoting ethical leaders is one step in building a strong foundation toward a company’s vision of supporting ethical behaviors and decisions. R

Ethical Leadership Scale

1 2 3 4 5 6 7 8

Listens to what employees have to say. Disciplines employees who violate ethical standards.

Conducts his/her personal life in an ethical manner. Has the best interests of employees in mind.

Makes fair and balanced decisions. Can be trusted.

Discusses business ethics or values with employees.

SOURCE: M.E. Brown et al.

Sets an example of how to do things the right way in terms of ethics.

Dr. Kori Callison was born and raised in Anchorage, Alaska. Callison completed her PhD from the University of Houston where she gained experience both in research and consulting in the field of Industrial/Organizational Psychology. Callison conducts research in the fields of leadership, stress and well-being, personality, work-life balance, ethics, and diversity. Recently, she was published in The Leadership Quarterly and Applied Psychology: An International Review. Additionally, Callison’s work has been accepted at top national conferences, such as the Academy of Management, the Society for Industrial and Organizational Psychology, and NIOSH’s conference on work, stress, and health. Lastly, Callison has worked in the realm of consulting, working with such fortune 500 companies as Shell, BP, and Microsoft. Dr. Terry A. Nelson earned her BBA and MBA from the University of Arkansas at Little Rock and completed her PhD at the University of Memphis. Nelson’s scholarly background is enhanced with more than seventeen years in leadership roles with

Kroger, Coca-Cola Enterprises, and First Tennessee Bank where she was Senior Vice President of Consumer Loan Processing. Nelson joined the University of Alaska Anchorage College Of Business and Public Policy faculty staff fall 2013 as an Assistant Professor of Leadership. She conducts research in cross-cultural issues, leadership, diversity, and work stress and coping. She has published in Cross Cultural Management: An International Journal, IEEE Engineering Management Review, and Journal of Business & Entrepreneurship. She recently co-authored a book entitled Work Stress and Coping in the Era of Globalization. In addition, she has presented her research at top-tiered conferences such as the Academy of Management, Southern Management Association, Organizational Behavior Teaching Society, and Society for Industrial and Organizational Psychology. Nelson currently teaches leadership and organizational behavior courses and is the Faculty Program Director for the Leadership Fellows Mentoring Program. She was recently nominated for the College of Business and Public Policy Teacher of the Year award.

Be Part of alaska’s future leadershiP Get an MBA focused on leadership at the only AACSB accredited business college in Southcentral Alaska. • Take courses to develop your capacity to lead organizations and teams • Be mentored one-on-one by a local top executive (Leadership Fellows Program) • Network with Alaska’s business leaders in an intimate classroom setting

The best educational value in Alaska. Apply now!

Defines success not just by results but also the way that they are obtained.

When making decisions, asks “What is the right thing to do?”

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Dr. Terry Nelson

Leadership programs director

907-786-1947 | terry.nelson@uaa.alaska.edu uaa.alaska.edu/cbpp UAA is an EO/AA employer and educational institution.

College of Business and Public Policy

LEADERSHIP F E L L O W S

April 2015 | Alaska Business Monthly

LEADERSHIP

Photo courtesy of UAA

Participants and supporters in the Clark Middle School and University of Alaska Anchorage College of Business and Public Policy kickoff of the Leadership Fellows Juniors program, January 24. Pictured from left: front row: Yackeline Gavarrette, Samuel Thor, Emily Saeturn, Chai Xiong, Nuulau Alaela, Tiawna Lechato, Alizah Rogers; second row: BJ Molina, Jennifer Tollefsen, Sydney Brown, Pa Ying Thao, Shaniya Sakurada; third row: Julian Rivera-Brown, Dwayne Nichols, Nakira Ross, Amari Brown; fourth row: Dr. Kori Callison, Leo Medal, Mande Mlcek, Chantae Kochuten, Dr. Terry Nelson, Chancellor Tom Case, Dr. Frank Jeffries; fifth row: Interim CBPP Associate Dean Lynn Koshiyama, Clark Middle School Principal Cessilye Williams, CBPP Dean Rashmi Prasad, UAA Fellow Laura Cameron, UAA Fellow Xavier Mason, Dr. Landry Signe.

Alaska Universities Offer Executive Programs for Future Leaders Mentoring, business partnerships, and inspiration lead co-curricular activities By Tasha Anderson

peaking of the Alaska business community, Terry Nelson says, “This is a remarkable place … It’s amazing how close-knit the community is and the networking here … you’re only about a phone call and a half away from connecting to a CEO.” Nelson is an assistant

professor at the University of Alaska Anchorage (UAA) College of Business and Public Policy (CBPP) and is the program director of the CBPP Leadership Fellows program. The mission of the program is “Preparing UAA College of Business and Public Policy students to be future lead-

ers who meet the needs of Alaska organizations through leadership, professional development programs, and mentoring.” It only makes sense, considering Alaska’s unique business environment, that Alaska colleges should be training Alaska’s up-and-coming business leaders.

Alaska Business Monthly | April 2015 www.akbizmag.com

The Leadership Fellows Program The UAA CBPP Leadership Fellows is a mentoring program that currently consists of fifteen students, five of whom are “exceptional senior undergrad students,” as Nelson puts it, and ten are Nelson students in the MBA or MPA program. “When I came on board, they had already started a small program with only four students for one semester. After I did my research, I found a semester isn’t enough.” Nelson expanded the program to be a full year, and she also implemented a system of structure. “Before the students were told, ‘Here are your mentors, go be mentored,’ and that was it,” Nelson says. Students must apply to the program and are interviewed, Nelson says, both to screen for exceptional students and to give them real-world experience with an interview process. Accepted students are required to meet with their mentors at least once a month during the academic year, but Nelson says that most of the mentors meet with the students twice a month. “It’s amazing the effort these mentors are putting into this, free of charge,” she says. The titles of participating mentors run the gamut: CEOs, CIOs, COOs, and directors. She explains that the Leadership Fellows is co-curricular and students meet with their mentors and complete additional work outside of their degree-focused classes. When to meet is “a mutual agreement between the student and mentor,” Nelson says. “We tell the protégés, ‘You’ve got to be flexible, you’re talking about top executives.’ So some students are meeting for breakfast, some have met on the weekends and in the evenings, or for lunch … I have to say it, I’m a little jealous. I didn’t get this [opportunity] when I was working on my MBA,” Nelson laughs. But the program doesn’t end with a mentoring session. Students are required, after every meeting, to make an entry in an online journal. Nelson says, “The documentation gives me evidence that they are still meeting, but more importantly requires students to reflect, and it’s going to stick with them.” Speaking with Nelson gives one the impression that the Leadership Fellows www.akbizmag.com

is a long-established program, but really, the first iteration, with four students, took place in the spring of 2013. The program, as it is currently structured, Nelson kicked-off in the fall of 2014, having arrived herself in Alaska and at UAA only a year before. The first cohort of fifteen students is, at publication, wrapping up their first year. Included in that cohort are Bridgette Coleman, an undergraduate student double majoring in Business Management and Marketing, and Nick Morrill, an MBA student with an emphasis in General Management. At press time, neither student had finished the program in its entirety, but their feedback was already positive. Morrill says: “The Leadership Fellows program has been an amazing asset in both my education and career. Having the opportunity to meet with a leader in my preferred field (nonprofit) has brought the MBA curriculum to life for me. We spend time in the classroom learning about leadership and management, but it can seem very theoretical until you get the opportunity to sit down and hear about someone who does it day in and day out and actually puts those theories to practical use.” Coleman adds: “The Leadership Fellows program provides a deeper connection to the business community in Anchorage. The ability to learn how the concepts we study at UAA are applied in a work setting is vital; the insights our mentors provide about how our perception relates to what business is really like is invaluable. Not only do we learn from our mentors, the fellowship provides an opportunity to share and learn from each other.”

Far-Reaching Benefits The benefits of a this sort of mentorship program, which take students (many of whom, Nelson mentions, have already begun careers in Alaska) and introduces them to the realities of high levels of leadership, goes beyond merely benefiting the students. It benefits the Alaska business community as a whole, a value that is understood by the business community and has been demonstrated through the willingness of the mentors to volunteer and, in Northrim Bank’s

case, through a $25,000 donation. “I just love Northrim Bank,” Nelson says. “Joe Beedle is the CEO there and on behalf of Northrim he awarded us our first contribution of $25,000 to kick off the program. He [also] comes in as part of our executive leadership class [a course in the MBA program]… this is the third plus year he’s come in for that.” Beedle explains his support: “From the perspective of a practiced executive, I observe that we all are students of leadership and that we learn best by interactive leadership experiences through melding best studied practices with personalities and circumstances that constantly change and require creativity and some experimentation to be effective. I believe that UAA’s leadership classes and Fellows program truly accelerates leadership competencies by leveraging all the tools, including exposure to real world challenges of practicing leaders and immersion of students into leadership role playing and effectiveness interpretation. Looking back on my own career these teachings at UAA on leadership could have made me a much better leader.” In keeping with being a leader, Beedle has inspired others at Northrim to participate in the program as well. Jay Blury, Northrim’s marketing director, is a mentor in the program this year. Blury says, “Many successful business people will tell you they have had a great mentor at some point in their career. Success takes dedication and hard work, but passion with some help along the way can change a career path to one of leadership. And, fostering future leaders is what this program is all about. I believe this program presents tremendous value for an individual who is looking for some clarity of the future they are trying to achieve, and for someone who wants to grow professionally. As a mentor, I have found that I can provide more than tips on career growth and overall advisement, but also to push them out of their comfort zone and encourage constant improvement.” Nelson says that, initially, she used the resources of the college to track down mentors, but already she’s seen a turnaround in that potential mentors are approaching her wanting to participate in the program. “That these people, of that stature, are taking interest in wanting to be a part of our students’ academic career … I think that’s truly amazing.” April 2015 | Alaska Business Monthly

The University of Alaska Anchorage College of Business and Public Policy Leadership Fellows program participants, April 18, 2014. From left, front row: Alexandra Marsolais, Amy Miller, Chantae Kochuten, Taylor Mitchell, Sarah Henry, Misha Sajjad, Bridgette Coleman, Laura Cameron; second row: Kevin Mihm, Heather Karwowski, Marvin Anunciacion, Nick Morrill, Xavier Mason, Peter Arlein, Lauren Riley. Photo courtesy of UAA

Leadership Fellows Junior, Clark Middle School Nelson, after hitting the ground running with the Leadership Fellows at UAA, turned her focus to giving back to the community, and she found a happy partner in Cessilye Williams, the principal of Clark Middle School. Williams suggested that the Leadership Fellows program be modified for the middle school. “I brought it back to the chancellor and dean and everybody quickly embraced the idea,” Nelson says. The program shaped up to be a twohour weekend session on every other Saturday throughout the semester with sixteen Clark Middle School students in attendance, which Nelson and other UAA staff teach. “Initially it was supposed to be twelve [students],” Nelson says. Williams sent her a list of fourteen with two alternates. “Well, that’s more than twelve,” Nelson laughs. “But if that many students are enthused about it, I’m not going to stop it.” And the students are enthused, Williams says. “We have straight A students, and they are vigilant about wanting to be selected. It was incredible.” Especially considering the fact that even at the middle school level, Williams insisted on an application and screening process. She created an application packet the students had to complete that included information about grades, extracurricular activities, disciplinary infractions, and an “intense” essay based on one of four prompt options. 94

“They were difficult prompts because they were university prompts,” Williams says. One student requested an additional prompt and was quickly informed, Williams says, that there were four options, and he could choose any one of the four provided that he’d like—a prime example of Williams’ desire to have her students experience real-world realities as soon as possible. “[The students] are very eager to learn how to navigate this world. You can only accomplish that through exposure and time,” Williams says. As part of their program, the Clark students are planning their own project in support of the Bean’s Café Empty Bowl project, raising their own funds and donating a portion of them to Bean’s Café. Nelson says that she’s not the only instructor that the Junior Fellows have the benefit of learning from on the weekends. Subjects taught include negotiation, interpersonal conflict resolution, and college preparation by other UAA professors, all educating to their strengths. “The time commitment behind this is really masterful,” Williams says. “Everybody only gives up two hours of time on a Saturday, so it’s manageable.” The Leadership Fellows Junior also provides an opportunity for the University level fellows to give a little of what they’ve received. During a fall community outreach event, the University Fellows act as mentors to the Clark students, giving them pointers on public

speaking and debate in preparation for a live presentation taking place the same day. Nelson wanted that to be a specific part of the community outreach component. “Maybe if I had had more opportunity at that age, I wouldn’t have [a] fear of public speaking,” she says.

Interior and Southeast Leadership Programs The University of Alaska has programs in place at UAA sister schools University of Alaska Fairbanks (UAF) and University of Alaska Southeast (UAS) for emerging executives. COLD (Co-curricular Opportunities for Leadership Development) is part of the UAF LIVE Program, “which is committed to developing excellent and effective leaders who will have a statewide, national, and global impact,” according to the UAF website. The program, like the Leadership Fellows at UAA, is cocurricular; COLD certificates are earned through participating in and attending community and university events. There are three levels of certificates: Level I-Leading Yourself, Level II-Leading Groups, and Level-III-Leading Change. Students are not required to be working toward a COLD certificate in order to attend any of the approximately forty workshops/events offered by UAF LIFE and its partners. Students who do receive certificates for Levels I and II will be eligible to earn Graduation with Leadership Honors; those who com-

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plete all three levels will be eligible to earn Graduation with Leadership Distinction. “The COLD certificates provide tangible ways for students to be recognized for their leadership development within the UAF community and beyond … Students will develop life-long leadership skills necessary to be successful in an every-changing workplace and global environment,” according to the UAF website. In Southeast, UAS provides a convenient opportunity for those who are going back to school to pursue a Master of Public Administration (MPA). The program at UAS, which is offered online through Adobe Connect, a platform that includes video, audio, and chat options, is “tailored for busy public and nonprofit managers who seek to enhance their credentials and broaden their horizons.” Classes are streamed over the internet. Students participate in a “live, dynamic” classroom and still have the benefit of interacting with instructors and peers. Classes are scheduled in the evening, a further convenience for working students. “The program combines the relationships and structure of the traditional classroom with the accessibility of a distance delivered program to create a stable, supportive, and high quality education,” according to the website. Students can concentrate in Natural Resource Policy or Rural Development.

ANELP, APU ANELP is the Alaska Native Executive Leadership Program, one of Alaska Pacific University’s (APU) Corporate Programs. It is a program designed by APU and several Alaska Native corporations to provide future executives with foundational business knowledge. Carole Lund, an associate professor of business administration who teaches Tools for Success, one of the early classes in the ANELP program, says the certificate program actually began in a roundabout way through Alyeska Pipeline Service Company. “Alyeska came to us and said, ‘We want a program specifically designed for some of our leaders,’… and the word got out on that program. Pretty soon we had a group of representatives come to us from the Native Corporations saying, ‘We want a similar program.’” Carol Howarth, director of MBA & 96

Corporate Programs at APU, says that the original five corporations were Afognak, Aleut Corporation, Cook Inlet Regional, Inc., Chugach Alaska, and Bristol Bay Native Corporation. From those five, the program has expanded to include participants from eleven native organizations. The program includes nine “modules,” each of which addresses targeted information, such as federal government contracting, Alaska Native Claims Settlement Act history and context, or working effectively with a board of directors, to aid the performance of up-and-coming executives in Alaska Native organizations. Each module is two days, taking place on a Friday and Saturday once a month for an academic year, from September through May.

Two-Dimensional Value Howarth says the value of the ANELP courses is really two dimensional. “One of them is the interaction with other people and one of them is what you’re actually learning,” she says. She explains it’s natural for many employees to be focused on their own work and their own solutions. “Oftentimes there becomes a conflict, not a conflict in the strongest sense, but that you don’t understand necessarily why people are pushing so hard on different topics from another functional area.” A finance person, focused on addressing a specific issue, may butt heads with a human resources director or an engineer. “So, we’re giving a base line through nine modules so that someone who’s in a specific role ends up understanding what these fundamental things are and why they have to respond or how to prioritize in a better way because they’ve got that grounding them, now.” Additionally, students in the modules benefit simply from being in the room with their peers from other Alaska Native corporations. “By working on issues together in a classroom environment, an educational environment … you’re learning actively from your student colleagues.” Lund adds, “That’s one thing that I’ve heard the participants and students talking about; it is the opportunity to network across native corporations and organizations … What I see in the classroom happening is they begin to under-

stand how different corporations operate and how the competencies that we’re teaching are realized differently within different organizations.” Further, Lund explains, this networking obviously doesn’t end with receiving a certificate. Peers in these courses have made longterm connections that they can use to improve their actions as leaders as well as company best practices. “I always say that in education we’re beginning the discussion and they [the students] are carrying it forward,” Lund says. The other aspect of the ANELP program that is extremely valuable is the mentoring which takes place. In the ANELP program, mentors come from within the organization where the student is currently employed, a huge boon. Mentors can use the foundational knowledge that students are learning in the ANELP program and use it for company-specific training and information. Therefore, the student isn’t just learning about employment law and talent management strategies, but can be further educated on company policies regarding shareholder hire, diversity conflict, specific human resource concerns that arise from operation in remote locations, etc. “We ask the mentors and the students to go through these elements that we’re covering in our coursework… and have dialogues with the chief financial officer or the president or the CEO of the corporation. And maybe their mentor is in fact one of those individuals, and if not, the mentor is certainly encouraging, and if necessary, creating an environment for the student to be able to have that conversation,” Howarth says. Lund says that the program, now in its second year, will most likely continue for some time. She says that APU conducted a survey of the first cohort. “Over 90 percent strongly agreed that they would recommend this to other Alaska Native organizations, and the other 10 percent agreed. So, strongly agree or agree was 100 percent. The people who are going through the program believe strongly in the value of it. That includes the mentors and the coursework.” R

Tasha Anderson is an Associate Editor at Alaska Business Monthly.

Alaska Business Monthly | April 2015 www.akbizmag.com

special section

Conventions & Corporate Travel

21st Century Conventions: What’s new? By Tom Anderson

The Dena’ina Civic and Convention Center in Anchorage.

hen contemplating what comprises a convention in 2015, one would likely envision a large ballroom or mosaic of smaller meeting rooms, hustling attendees draped with lanyards, decorative tables and booths, myriad events, thoughtful presentations, scattered work sessions, and a large dining room where meals are hastily distributed from lunch to dinner. The paradigm for Alaska conventions, from multi-thousand participant events to smaller triple digit venues, has certainly evolved with the growth of technology, architectural dimensions, and event amenities. The age of lightning speed Internet and culinary advancement equates to better connected and more efficient convention functionality. Jack Bonney, public relations manager for Visit Anchorage, has been in the industry for five years and has researched and understands the historical perspective of conventions in the city.

“Technologically speaking, it’s a given that when people come to Alaska for a convention they expect modern audio/ visual and WiFi technology,” he says. He adds that in 2014 at the Dena’ina Center the Scoliosis Research Society set a record for the single largest number of attendees accessing the wireless Internet simultaneously—more than nine hundred people. “If you were to have asked me fifteen years ago what people expect when they look for a convention in Alaska, I would have said ‘green’ meetings were the new hype,” Bonney notes. “Today however, green and ecological-minded events are the norm. Many of the upgrades in the centers, especially the Egan Center, aren’t necessarily things people would consciously notice but are still important, such as touchless faucets and low-flow toilets which save on the amount of water used. Automatic lights and touch-controls conserve electricity and save money on operating costs in the long run.”

He added that recycling, using less paper, and more digital communications; “healthy” meetings that include nutritious food, breaks for hiking on trails, or a yoga class; and even therapeutic massage sections are all facets of a modern Alaska convention.

Convention Science One unique facet of convention science is the “personality” and trending outside of technology. Bonney explains that when comparing the demands of conventions in 2015 to 1995, attendees now pursue a deeper connection to the community. In Anchorage, for example, a conference room with windows facing the Chugach Mountains may be a preference. Alaskathemed meals are common. Twenty years ago a local entertainer may not have been sought to perform at an event, but today Hobo Jim or Dallas Seavy performing Alaska ballads is common. Helen Renfrew, director of meetings and conventions for Explore Fairbanks, con-

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curs. She has been in the meetings industry in Fairbanks for more than fifteen years. Renfrew agrees that technology is important to a convention and that modern audio/visual access, teleconferencing, and wireless Internet capability are standard in 2015. She recalled that for many years extra temporary phone and Internet lines were necessary, as well as visual equipment for presentations, because the infrastructure wasn’t compatible and equipment was cost prohibitive for convention facilities. “As new technology becomes available, and accepted, it also becomes expected,” says Renfrew. Along with Anchorage, Fairbanks has consistently been on the convention rotation for in-state organizations. The Carlson Center and several hotels afford significant square footage for meeting places. Fairbanks offers 175,000 square feet in meeting space and 2,750 hotel rooms that attract events like the 2014 International Arctic Winter Games and the 2016 Alaska Federation of Natives Convention. “As we get more technologically advanced, planners and attendees have a greater need for personal interconnectivity like team building opportunities,” Renfrew says, adding that that experiential off-site

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excursions are the norm, where attendees can savor the community in which they’re participating in their convention. There is also a new desire for attendees to gather and have discussions in separate places between sessions and during breaks. Interpersonal synergy is a new phenomenon. Renfrew says that based on where we live, and Alaska being remote from the Lower 48, the conference mindset is to accept technology quickly and accommodate trends, which translates to professional, thoughtful conventions.

Then and Now Juxtaposing today’s conventions with conventions held before the new millenium, would there be a stark difference found? Actually, even going back in time thirty years, or at least prior to the turn of the twenty-first century, Alaska tourism associations and facility management companies made it a priority to be current and modernized in the convention industry. “I distinctly remember the excitement in Anchorage when we opened the Egan Center in February of 1984. It was a new day for Anchorage with hotels and visitor-related businesses hungry for new business,” says Tom R. Anderson, who was Ogden Facility

Management Company’s general manager for Alaska from 1984 into mid-1998, managing the Egan Center, Sullivan Arena, and the Carlson Center in Fairbanks. Anderson recalls that his marketing and management teams made modernization in technology and decorum a top priority. “We started out at the Egan Center with conventional ‘rubber chicken’ meals, but, with the largest commercial kitchen in Alaska, decided to hire our own executive chef and culinary staff who began serving high-end gourmet food that generated accolades,” adds Anderson. In the 1980s and 1990s Anderson says, the challenge was first to fill the spring and shoulder seasons with conventions. Thereafter, securing robust winter conventions was the goal. Telecommunications was also high on the amenities list to attract conventioneers, with the Egan Center initially opening its doors with a stateof-the-art teleconference center including embedded microphones in the conference table and camera outlets and screens in the wall of the conference room. “Ironically, unlike today where there is an expectation by conventioneers for advanced technology and resources, thirty years ago most attendees and event

April 2015 | Alaska Business Monthly

managers didn’t understand the utility of such technology and seldom used our teleconference room,” notes Anderson. “Yet the fact we offered modern technology and culinary options at the time was likely a catalyst to Anchorage becoming a popular convention destination.” Silvia Villamides, executive director of the Alaska Hospitality Retailers, oversees a membership of restaurants, brew pubs, bars, coffee shops, and other culinary and accommodation businesses statewide. Villamides’ members have also taken notice of the new convention spirit when it comes to local experience.

“Many of our members, particularly in the urban centers of Anchorage, Juneau, Fairbanks, Mat-Su, Ketchikan, and the Kenai Peninsula, are benefitting from the fact convention attendees are drawn to local fare, from food and drink to entertainment,” Villamides says. “In 2015, an Alaska brewpub or coffee shop may be the center of attraction in conjunction with a convention center or hotel. It’s the same with our members’ restaurants that offer signature halibut or salmon dishes or a bar with a nostalgic Alaska history. This wasn’t the case twenty-five years ago when attendees primarily met, ate, and social-

ized exclusively at the convention facility.”

All that Swag Stellar Designs has been in the promotions industry in Alaska since 1981. When an Alaska client attends a convention in-state or abroad, Stellar is often the first call made, even before the airline ticket or hotel reservation is booked. Owner Tim Ellis says conventions have a pattern and practice in which businesses represent themselves through swag and promotional items. For many years the standard giveaway has been a pen, envelope opener, water bottle, or coffee mug. “Things have definitely changed in the twenty-first century,” says Ellis. “We still sell pens and coffee cups for distribution at conventions, but the latest promotional items include USB drives, cell phone cases, electronic tablet cleaners, and stylus pens.” Ellis alluded to the proliferation of social media and online connection at conventions as an efficiency that enhances an event. “You can upload onto your smartphone a convention or trade show app that allows you to register, make reservations for events, review an agenda, or schedule and even coordinate with excursions and hotel reservations,” says Ellis. “This wasn’t even possible ten years ago.” Stellar Designs continually updates its inventory to stay responsive to the consumer. Ellis notes that Alaska is on the edge of technology, so vendors in the convention industry must be cognizant of trending, from the latest power banks to charge a device to adding QR codes so recipients of a product can scan and connect to a website online. Innovative from the Start Conventions in Alaska are definitely here to stay. From technology to cuisine, the state and its urban centers are affording businesses and nonprofits the benefits of professional services that entice meetings in the Last Frontier. It’s good for the attendee, the community, and the economy. Attribution can be given to both the wisdom and innovation of twentieth century facility managers and convention bureaus, as well as to today’s visitor’s organizations and management teams that value updated and relevant technology, ambiance, and facilities. R Freelancer Tom Anderson writes from across Alaska. In the spirit of disclosure, the Tom R. Anderson in the story is the author’s father.

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special section

Conventions & Corporate Travel

The Glenn Massay Theater on the campus of Mat-Su College, an extension of the University of Alaska Anchorage, is the newest venue in the state. It was completed by Roger Hickel Contracting in January.

Alaska Convention Center Performance Expanding venue opportunities build economic engines By Mike Bradner

onvention centers cost a lot to build and they cost a lot, over time, to maintain. Their advocates usually sell these projects to their communities based on the visitors they will attract and new economic activity, particularly in the soft fall and spring “shoulder” seasons and winter when summer tourists are long gone. But there’s always a risk that these facilities will underperform and turn out to be big money-losers that local taxpayers will have to maintain.

Facilities for Venues There can be mixed feelings over convention centers, too, because they can change the pattern of life in their communities. For example, when Anchorage built the William A. Egan Civic and Con102

vention Center in the early 1980s, its first convention facility, it displaced the city’s long-established Loussac Library from its downtown location, which caused angst among library supporters. Loussac was relocated to a new, larger building on 36th Avenue with more parking space, so this story had a happy outcome. It was the desire for new business that drove Anchorage’s push for a convention center because the city was limited in the size of conventions and meetings it could attract. The Egan Center was a success, however, and it was quickly outgrown. In just a few years plans were being laid for an even larger facility, what was to become the Dena’ina Civic and Convention Center. Dena’ina seemed to be a really big risk when it was being promoted. At the time it was hard to imagine that Anchorage

could really attract enough large conventions to justify its $106 million cost. There were worries about cost overruns (a reasonable concern) and worry that the Dena’ina and the Egan Center, which was being retained, would compete against each other for the pool of potential business meetings. The concern was that both would become big financial drains. That hasn’t happened, though. Dena’ina did cost a lot, but it was completed on time and on budget. It has also performed better than expected, both in the meetings it has attracted and financially. Other Alaska communities have built large facilities as well, though not on a scale of Dena’ina, and have had successful experiences. Juneau built its Centennial Hall Convention Center in 1982, and Fairbanks built the Carlson Center in 1990.

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Expanded Conventions and Meetings That these facilities can become economic engines is being shown in the numbers. The Dena’ina and Egan together host about 700 events a year. Those events attracted an average of 331,000 people annually over the last three years and over 350,000 people in 2015. Julie Saupe, president and CEO of Visit Anchorage, says the city’s meetings overall, including events held in large hotels like the Sheraton Anchorage Hotel & Spa, Hotel Captain Cook, and Anchorage Marriott Downtown, brought $104.8 million in new spending to the city in 2012; $86.2 million in 2013; and $91 million in 2014. Fairbanks has had a similar experience, according data provided by Helen Renfrew, conventions director for Explore Fairbanks. The number of business meetings has remained stable between 2011 and 2014, but the money spent, about $5.5 million per year in 2011 and 2012, jumped sharply over $8 million per year in 2013 and 2014. That was mainly because the community hosted two very large events in those years, the

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Alaska Federation of Natives convention and the Arctic Winter Games. A largely unexpected development, although it shouldn’t be in hindsight, is how the development of these facilities allowed Alaska organizations to expand their gatherings because larger spaces are available. For example, two of Alaska’s premier business events, the annual Resource Development Conference held in November and the Alaska Support Industry Alliance’s “Meet Alaska” conference of oil and gas contractors held in January, now attract one thousand people or more annually and have been able to grow their money-making trade shows because the Dena’ina Center has space. Similarly, the Alaska Miners Association moved its annual meeting, usually held in October, to the Dena’ina Center because it needed room to grow. Gatherings like the Alaska Federation of Natives, which brings four thousand to five thousand Alaskans to Anchorage and Fairbanks (the convention rotates between the two cities) would be very challenging if the Dena’ina and the Carlson Center were not available.

Bringing Communities Together Another important function of these facilities, however, is to draw their communities together for civic and cultural events. That is often underappreciated, although it is fully understood by people who manage the centers. “When Dena’ina was built we wanted to increase our convention business but we also saw it as a major civic center for the community,” says Saupe. In Fairbanks, Kristin Baysinger, manager of the Carlson Center, which is owned by the Fairbanks North Star Borough, says the center has always served as a multipurpose community and civic center, with its ice rink for skating and hockey games and, with the ice rink covered, large community events such as Fairbanks’ annual spring outdoor sports show. Juneau’s Centennial Hall, owned by the City and Borough of Juneau, opened in the summer of 1983 and has also become a focal point for community activities. Juneau’s popular spring folk festival, which attracts amateur musicians from around the state and thousands of visitors, is an example, says Steve Psister, who manages Centennial Hall. The folk festival, forty

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years old, is now a tradition, and Centennial Hall creates a spacious, comfortable venue for the gathering. Juneau is also Alaska’s capital city, and important events for the community like the governor’s inauguration, held after elections every four years, are held in Centennial Hall. A big event for Juneau was Sealaska’s heritage celebration, which is held every two years, most recently in 2014. It brought about seven thousand visitors to Juneau. The event was spread throughout Juneau with events at several locations, but Centennial Hall was a focal point, Psister says. Centennial Hall typically hosts about three hundred large and small events a year, which generate about $400,000 in annual revenues. The facility costs about $1 million a year to operate, however. The $600,000 gap between event revenues and costs is covered by a combination of local hotel tax revenues and contributions from the city, Psister says. The municipal contributions are getting smaller, however, as event and local bed tax revenues grow. This year the city is contributing $150,000 toward operating expenses, but next year Psister hopes that operating costs can completely be covered by event fees and bed taxes, eliminating the need for city contributions.

The Mega-Center Dena’ina Building and financing the Dena’ina Civic and Convention Center was a big undertaking for Anchorage, involving a strategy of using bonds backed by local municipal “bed,” or hotel, taxes, Saupe says. Anchorage voters approved an increase in the tax from 8 percent to 12 percent, with the added 4 percent dedicated to the support of bonds sold to fund construction. Financially, the Dena’ina has performed better than expected. In the beginning it was thought that the facility would suffer operating losses of about $1.4 million a year, a burden that would be compensated for by new economic activity, in conventions, that the center would bring. The actual operating loss has been far less, however. “Last year we were very close to breaking even. The growth in revenues is well ahead of schedule,” says Bill Dougdale, who works with Saupe at Visit Anchorage. As in Juneau, Anchorage’s bed tax revenue helps cover the gap between 104

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Dena’ina’s event revenues and costs, and Anchorage’s bed tax revenues are growing faster than expected, providing a nice financial cushion for the Dena’ina. The estimate was conservative, but Anchorage’s bed tax revenues were projected to grow at 1 percent yearly; growth has actually averaged 5.5 percent a year, and that includes the sharp dip in tourism, and bed tax income, in 2008 and 2009 when the national recession hit. Not only are the Dena’ina’s operating costs covered, but an $8.2 million reserve fund for bond payments, a $5 million operating reserve, and a $2 million capital reserve are fully funded, Dugdale says. In a typical year the Dena’ina hosts about seven hundred events. Dena’ina is big, with two hundred thousand square feet of event space. The largest space, on the ground floor, is fifty thousand square feet, enough to accommodate three thousand people, but that can also be divided into three separate spaces. The main ballroom, on the third floor, is twenty-five thousand square feet. Smaller meeting rooms are on the second floor. The nearby Egan Center is smaller at eighty-five thousand square feet, but it

has fans among many local organizations who use it for smaller community events. The Egan is well suited for many kinds of business meetings because it has twenty smaller rooms for “breakout” sessions, as well as its larger spaces.

Fairbanks Meeting Ambassadors The Carlson Center in Fairbanks is an eighty thousand-square-foot facility, big enough to provide a venue for large gatherings like the Alaska Federation of Natives, which rotates its meetings between Anchorage and Fairbanks. Fairbanks hosted the Alaska Federation of Natives in 2013 and the convention will return there in 2016. There are other facilities for meetings and trade shows in Fairbanks, too, such as the Westmark Fairbanks Hotel and Conference Center with seventeen thousand square feet of space for meetings. The Carlson Center is the largest, however, with thirty-four thousand square feet in its main area, which has its two hundred-foot by one hundredfoot ice rink, as well as twelve smaller meeting rooms that total thirteen thou-

sand square feet. The rink is a center for hockey including games involving the University of Alaska Fairbanks’ Nanooks team. It’s not unusual for 4,500 people to attend a Nanooks game. The rink can also be covered, which allows large meetings, concerts, and banquets to be held. The Carlson Center also has a full-size kitchen and catering can be provided, Baysinger says. Two big events held annually at the Carlson Center include the Fairbanks Outdoor Show held in the spring and the annual Holiday Market typically held in November, she says. These events are big and mainly local, but also draw in large numbers of vendors from other parts of Alaska and out of state. During these events, 7,500 to 9,500 people, mostly from the local community, come through the doors. It happens periodically, but Fairbanks hosted the Arctic Winter Games in 2014, with the Carlson Center as the venue for the opening and closing ceremonies with about five thousand people in the building for those events, Baysinger says. The Winter Games’ figure and speed-skating events were held at the center’s ice rink, too.

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The Carlson Center’s large space can accommodate big events like Alaska Federation of Natives, major concerts, and the annual sports and holiday events, but its space may be less flexible for many types of business meetings and smaller conventions, which often need small “breakout” rooms for concurrent sessions or gatherings, says Renfrew. For these the Westmark Hotel is one of Fairbanks alternatives because it has the flexibility to create thirteen smaller breakout rooms in addition to larger spaces, she says. The Westmark can accommodate five hundred at a banquet.

An Emerging Fairbanks Niche An interesting development for Fairbanks, Renfrew says, is the increasing number of meetings and conferences related to Arctic science and climate change, many of these international groups with an interest in circumpolar regions. “It’s logical that people interested in the Arctic would want to have their meeting in an Arctic region, and Fairbanks fits that,” Renfrew says. Many of these stem from the expanding role of the University of Alaska Fairbanks in scientific research related

to the Arctic. It’s an emerging niche for the Interior city, she says. Conventions and business meetings spur other visitor activity and tourism, too, because when people come long distances to Alaska, no matter which community, it’s not unusual for the visit to be extended to see the local sights, Renfrew says. It’s also typical that when people attend a business meeting or convention in Alaska, their curiosity is whetted so that they later return as a tourist. Explore Fairbanks conducts marketing for conventions and meetings through a database of 1,500 meeting planners, but Renfrew says the most effective technique is to market through a local person who is affiliated professionally with a national association. These are Fairbanks’ “Golden Heart Meeting Ambassadors,” she says, and last year twenty-four of the volunteer ambassadors brought eighteen meetings to the Interior city, resulting in $4.6 million being spent locally.

Mat-Su’s New Glenn Massay Theater Meanwhile, the Matanuska Susitna Borough now has its own new facil-

ity, the Glenn Massay Theater, which opened in February. It is on the University of Alaska Anchorage’s Mat-Su College campus, located on Trunk Road between Palmer and Wasilla, which has easy access off the Parks Highway. Operated by the college, the facility has already become a focal point for the Mat-Su community, hosting local theatre performances, lectures, and other events. The Massay Theater at Mat-Su College was funded as part of the 2010 stage general obligation bond issue for education facilities around the state, according to Talis Colberg, campus director of the Mat-Su College. The building covers thirty thousand square feet with seating in its theater for 520 people. The building was designed with special features to support theatrical events with a costume shop and mens’ and womens’ dressing rooms, and the stage was built large enough to support a full seventy-piece orchestra. In the first weeks of its opening the facility hosted six presentations of a musical by Colony High School as well as several charity fundraisers, Colberg says.

“In every job that must be done

there is an element of fun.” Mary Poppins

Find big mountains and big ideas when you meet in the Mat-Su Valley. Just 35 miles north of Anchorage. www.alaskavisit.com 106

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“Our goal is that it will become a public square for the community,” drawing people together, Colberg says, adding: “It will be a venue of education

and entertainment that can help engage, provoke dialogue, and empower our community.” R

Mike Bradner is publisher of the Alaska Legislative Digest and Alaska Economic Report.

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special section

Conventions & Corporate Travel

lin e v a r T

tings Just e e We oM T nt g

Dig ita l

How some corporate travelers are telecommuting By Tom Anderson

here was a time when air travel was the cat’s meow for business and professional connection. Envision flying commercially to the board of directors meeting in New York City to assess Alaska profits or sealing the deal in Seattle via private jet over a glass of pinot noir and filet in a company acquisition. There’s the job interview in Fairbanks to meet with a prospective boss and the quick flight to the Kenai Peninsula for a sales pitch. Well things have changed. Enter a new kind of business meeting and a different breed of cat. “What you’re seeing is a renaissance in meeting and interactive technology,” says Scott McMurren, the author of the popular Alaska Travelgram eNewsletter and an Alaska corporate travel consultant for over three decades. “The tools entrepreneurs and business professionals have at their fingertips for meetings today, as simple as Apple’s FaceTime and smartphone apps and as complex as multi-million dollar meetingmanagement technology, have certainly made the world flat,” adds McMurren. McMurren delineates that “corporate” travel varies, and now—so does the less 108

A commercial airline parked under an open ended hangar at Ted Stevens Anchorage International Airport could indicate the growth of telecommuting by corporate travelers who are increasingly attending digital meetings via teleconference.

expensive manner of online and telephonic communication. The most obvious kind of travel in the business world appropriately relates to sales, marketing, and executive responsibilities such as contract and accounting functions. However, in Alaska, it’s not just about face-to-face negotiations and contract memorializing. The size and geographic constraints of the state, while often forcing an email or phone conference to suffice for communication, don’t always trump physicality. “There’s still absolutely no substitute for in-person connections and interaction that can only be achieved by air, water, and road when it comes to travel in Alaska,” McMurren adds. Take for example low to high-end repair service in the resource development industry from the North Slope to the Aleutians. Air and marine travel are literally the lifelines to performance. McMurren references replacements, renovations, repairs, and upgrades. Health examinations and medical procedures also fit in the need-to-be-there category, aside from radiologic imaging assessments and diagnoses based on emailed images. Physicians and medical practitioners are hesitant, both legally and ethically, to examine patients and

make medical conclusions from written or purely visual observations on a computer screen. To avoid liability, medical providers often have to fly to rural parts of Alaska and remote locations to extract a tooth, capture an X-ray image, or perform a physical exam. “Pregnant mothers in Dutch Harbor have to fly to a medical center, likely in Anchorage, for comprehensive obstetric services,” says McMurren. As McMurren alludes, “Nothing beats being there, in-person, and engaged in your business.” He highlights the sales and marketing industry where the initial bond of interaction, whether in pharmaceuticals, equipment, telephony, or other commercial products handled by representatives, is imparted eye to eye. “But telecommunications have definitely changed the landscape for Alaskan commerce,” he adds.

Travel or Telecommunicate “A telephone or video conference is no substitute for a face-to-face business meeting,” admits David Morris, vice president of Corporate Communications with GCI. “Video conferencing augments the consistency of communications for Alaska businesses and nonprofit organizations, but it doesn’t substitute for traveling to a location to meet with

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clients and customers,” adds Morris. GCI offers telephone and conferencing options statewide to help offset the cost of travel and transportation for businesses. Morris explains that national telephony providers haven’t entered the video conferencing market in rural Alaska, while for GCI it’s a niche service. Education, healthcare, and public safety are all government-related services that require partnership with the private sector in rural parts of the state. GCI has connected more than one hundred rural schools to instructors through video conferencing to the benefit of students and faculty. Similarly in telemedicine, for college and academic purposes in the Pacific Northwest, GCI connects Alaska villages to providers and professors. This level of access online enhances the information stream but reduces travel and airline usage. GCI also offers high-end video conferencing via desktop and laptop computers for worldwide connectivity. Morris recalls a GCI meeting with twelve different boardrooms and offices connected across the nation and in Alaska that were centralized into one telecon-

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ference. Exchange of budget and spreadsheet information, presentations, and data was achieved by email. The event saved in travel costs, which ultimately trickles down to savings for customers and the company’s bottom line. “Particularly in rural locations in Alaska, you simply can’t drive, so double and triple hops by plane, weatherdependent, could crimp plans. Often telecommunications is a lot more reliable in this scenario,” says Morris. In terms of social media and what seems a weekly launch at the national level of new smartphone and electronic tablet apps, connectivity between businesses and clients is growing while actual travel time and costs may be reducing. GCI facilitates all data streams within its customer base so revenue is generated. Telecommunication services are steadily expanding throughout Alaska and that’s good for the company. Nonetheless, echoing McMurren’s sentiment of in-person contact being critical to business dealings, Morris admits that GCI still uses commercial and private jet service as needed. “With increased bandwidth and app development in the communications

industry, the cost unit continues to go down,” adds Morris. “Will this equate to less travel? That’s difficult to quantify. Particularly with small and mid-sized companies, eliminating physical travel and meetings likely wouldn’t be as successful in client and customer relations, and ultimately that’s what business is about.”

All Those Apps and Not Enough Time The digital world of meetings in Alaska is unquestionably having an effect on companies’ bottom lines, even if by simply reducing travel expenses so allocations can be re-directed to other line items in a budget. The math is fairly straightforward: Subtract the cost of transportation, be it by plane, vehicle, or marine highway, and replace with much less expensive online and telephonic communications, and a sizable savings appears. The amount of app and web-based meeting programs, scheduling and calendaring systems, and online access portals is staggering in 2015. An app may not even be necessary. Most Apple iPhones typically allow for up to five phones to be merged into a conference

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call. One can actually talk privately to another of the conference callers during the meeting or open another app while still “attending” the meeting to review documents, all on a smartphone. In terms of apps that facilitate a conference call via cell phone, tablet, or desktop computer, most are free (beyond cellular service fees). Schedule reminders are available through apps, as well as programs to digitally record a meeting. From reminder of the start time to an automated call-in to the meeting, to agenda transfer on screen, to meeting close and audio recording, suddenly the in-person conference or interaction is less necessary in a state where air travel alone could reach over $750 per person within Alaska. Video conferencing is also a growing market. Microsoft’s Project HoloLens and Facebook’s Oculus Rift, both gamerelated applications, may morph into 3D hologram meeting capabilities. Wear the headset and sign into the meeting and it can feel like attendees are actually there in the board room. Suddenly planes, trains, and automobiles become secondary for meetings and corporate connection. The virtual office and optic cognition nearly compares to the real thing.

Capital Access—To Fly or Not To Fly (To Juneau) Commercial airlines and the state’s Marine Highway system may not appreciate the upgrades undergone by the Alaska State Legislature’s Legislative Affairs Agency (LAA) over the last decade, but businesses and industries trying to reduce travel costs are celebrating the modernization. LAA oversees all state legislative committee hearings and manages the rooms in which these daily meetings are held during the annual January to April ninety-day session. There are twentythree Legislative Information Offices dispersed throughout the state in targeted urban and rural centers, most accommodating to public access. Within these Legislative Information Offices are conference rooms and telephone centers that afford communication between people testifying and policymakers. Sue Cotter is the manager of the Legislative Information and Teleconference Network. “When it comes to connectivity and access to Alaska’s legislative process, LAA’s technological infrastructure has leveled the business play110

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ing field for smaller businesses and entrepreneurs to give input and opinions,” says Cotter. “Now corporate executives and management can just as easily monitor and participate in a committee meeting via a teleconference or streaming on the Internet as flying to Juneau.” For commerce in Alaska, no different than in any other state, regulatory and legislative deliberations can make or break a business. Taxes, burdensome regulations, cuts, and crimps can adversely affect a company’s product and process. Testifying, providing documentation and written materials, and conveying sentiment and feelings are all integral means to change laws and benefit commerce. To those ends, it’s becoming much easier via state-of-the-art telephonic and conferencing equipment to alleviate the need for travel to a city that regularly suffers airline delays because of Southeast Alaska’s temperamental weather. Tim Powers, media services specialist for the Alaska Legislature, highlighted the upgraded teleconference system in the State Capitol. The current setup has all nine committee rooms equipped with audio teleconference technology using

seeks efficiencies over excess. Technology’s advancements providing access to online and telephonic meetings shouldn’t be taken for granted. These mediums of communications can certainly lessen travel within Alaska and across the globe, thereby reducing the associated costs of tickets and hotels. As for monitoring bureaucracy and legislative deliberations, getting one’s message to the right policymakers seems more imperative than actual presence at a hearing. In fiscal year 2014, the LAA teleconferenced more than one thousand committee meetings. That meant less travel and more engagement in the process of rules and regulations for business owners and managers. Will airline travel for business purposes become a thing of the past? Doubtful. Will the growth and low cost of holding meetings over a phone or computer be a welcomed alternative for businesses trying to cut expenses in 2015 and years to come? Guaranteed. R

Cisco MeetingPlace technology. The committee room sound systems that are used to create the official recordings of the proceeding are also capable of taking testimony via teleconference and for the video streaming which was installed for the 2011 legislative session. “Our streams are available at akleg.gov, and this year we launched a new website that is mobile responsive and allows people with tablets or smartphones to stream the videos straight from our website,” notes Powers. “We also offer iPhone and Android apps for access to our streams and two-way video conferencing from Juneau, Fairbanks, and Anchorage, utilizing specialty equipment that’s permanently located in non-committee rooms.”

Balance Remains As McMurren and Morris remind, when it comes to business interaction and corporate dealings—nothing trumps the intimacy and trust-building of meeting in person. Talking, gestures, and emotions are part and parcel to the art of negotiation and customer service. However money matters too, particularly in a for-profit organization that

Freelancer Tom Anderson writes from across Alaska.

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ALASKA NATIVE BUSINESS

Alaska Native Corporation Real Estate Development Companies continue trend of building prime office space By Tasha Anderson

Cook Inlet Region, Inc. Cook Inlet Region, Inc. (CIRI) is in the final stages of completing the Fireweed Business Center, located at the Corner of Fireweed Lane and the New Seward Highway in Anchorage. According to CIRI Corporate Communications Director Jason Moore, the building should be finished and ready for tenants in late May or early June. Finishing touches such as painting and moving furniture will take place in May. The Fireweed Business Center is eight stories and 110,000 square feet. Accompanying views of Cook Inlet and the Chugach Mountains are a large lobby with fireplace, café, and conference center; a third floor deck and employee dining lounge; abundant parking; and heated walkways. The building was designed with input from CIRI shareholders to ensure the building reflects cultural values of sustainability, diversity, and respect for the land. It will be the new headquarters location for CIRI with room for other tenants. According to Moore, as of press 112

Photo by Thom Leonard/Courtesy of Calsita Corporation

any Alaska Native Regional and Village Corporations are involved in real estate development, directly or through subsidiaries, helping to literally build Alaska through new construction, remodeling or managing current structures, or through their involvement in the construction of various public projects including roads, playgrounds, bridges, healthcare facilities, and community centers. It is always exciting, then, when one of those companies is in a position to construct their own building to specifically suit their own needs—essentially building a home for the business that takes care of their home.

Interior of Calista Corporation’s new headquarters in Anchorage.

time, some potential tenants were “in discussions, but nothing is firm.” The Fireweed Business Center includes many sustainable technologies and Moore anticipates it will meet LEED (Leadership in Energy and Environmental Design) Silver requirements through innovative features such as automated intelligent windows that transition to control light and heat; insulated glass that disburses natural light glare-free; vacuum insulated panel spandrels that increase thermal performance; tripleglazed low-E windows (or low-emissivity windows) made by View, Inc.; a VRF (Variable Refrigerant Flow) system that provides cooling and/or heating to individual areas on-demand; and daylightsensing direct/indirect volumetric LED office lighting. The vacuum insulated spandrels, manufactured by Dow Corning, have an R-value in the fifties, Moore says, which may be double the R-value of the walls of a typical residential home.

As an additional feature, Moore says, much of necessary infrastructure for the office space is in the center of the building—elevator shafts, stairwells, etc.—so workers will not have a view blocked by expanses of drywall. “The floor plan is a very open feeling,” Moore says. “You can get the full benefit of the extraordinary views from all sides of the building.” The project was led by CIRI Land Development Company, a wholly owned subsidiary of CIRI, with contractor Davis Constructors & Engineers, Inc. and RIM Architects.

Calista Corporation Calista Corporation has already moved its headquarters into the four-story office building at C Street and International Airport Road in Anchorage. Communications Manager Thom Leonard says that a “phased move” was completed last October, fifteen years after moving into their previous location in

Alaska Business Monthly | April 2015 www.akbizmag.com

south Anchorage in 1999, a period that showed great growth for the company. “We thought it would be best as a phased process, especially with the IT infrastructure we had in place. We wanted to make sure things went as smoothly as possible.” Leonard says, “I’m on the east side of the building, so I’m able to see the sunrises in the morning, and I love it.” The building is partially owned by Calista, making the move an investment for the company. The total space of the new building is just under one hundred thousand square feet; Calista occupies the entire third floor, which is a 30 percent upgrade from Calista’s previous location, allowing room for additional staff as the corporation grows. Also, to meet Calista’s needs, custom art displays and sealed cases were created for Calista’s extensive Alaska Native art collection, Leonard says. Calista Corporation has also been buying up other real estate through its subsidiary Calista Real Estate LLC, which acquires “distressed and foreclosed properties” in the western United States, “where a lot of good opportunities can be found,” Leonard

says. “Our focus initially was on both residential and commercial [properties], but we have shifted to focus on commercial.” The subsidiary currently owns fifty properties while Tunista, a separate subsidiary of Calista, owns ten. To date, six properties which were acquired have been resold, five of which were single family/condo units.

Kuukpik Corporation Kuukpik Corporation broke ground for a new six story, sixty thousand-squarefoot office building in Midtown Anchorage last October. Kuukpik, established in 1973, is the village corporation for Nuiqsut, with offices in Nuiqsut and in Anchorage. They will be using approximately ten thousand of the sixty thousand square feet for their offices, leasing out the other fifty thousand square feet of space. Dean Rampy, chief financial officer of Kuukpik, says currently there are no tenants contracted for the building. The building, he says, is capable of accommodating varying needs in office space. Rampy says that as of early March, the foundation and footprint was com-

plete. The foundation walls for the parking area were put in during the following weeks, with steel scheduled to arrive early this month, which means that vertical construction can begin. Pfeffer Development is the development company for the project with contractor Criterion General and architect firm KPB Architects. The building is located on 36th Avenue between the Alaska Communications building and Stewart Title of Alaska. Some of the amenities the building will include are a cultural area on the first floor, a fitness room, and an outdoor plaza area, as well as panoramic views of the Chugach Mountains and the Alaska Range. Rampy says the project is on schedule to be completed in December of this year. “It’s in a great location,” Rampy says. “There’s going to be covered parking, it’s close to bus stops, it has great entrance and egress—we’re hoping it will attract some great tenants.” R Tasha Anderson is an Associate Editor at Alaska Business Monthly.

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CONSTRUCTION

Image courtesy of Matanuska-Susitna Borough School District, Bettisworth North, Perkins+Will

Construction is to begin this year on the Dena’ina Elementary School off Knik-Goose Bay Road near Wasilla.

Alaska’s New Season of Construction Big spending begins on projects statewide By Kirsten Swann

hile researchers forecast a slight decrease in overall construction spending in 2015, Alaska companies are staying busy with projects across the state, from road resurfacing to major hotel renovations and other private commercial projects. There are port and harbor projects, new schools, and public safety facilities and oil and gas-related construction along the North Slope and in Cook Inlet. Some of the most visible projects take place on thoroughfares throughout the state.

Transportation Projects For the Alaska Department of Transportation and Public Facilities (DOT&PF), 2015 construction focuses heavily on roads. The department will spend hundreds of millions of dollars rehabbing and rebuilding thoroughfares from Anchorage to Fairbanks and beyond. “We have a lot of highway safety improvement projects,” says Shannon Mc114

Carthy, a spokeswoman for the state transportation department. A large part of the work involves pavement preservation, McCarthy says: repaving, leveling, and solving minor settlement problems. “You’re extending the life of the roadway and that’s particularly important in areas where there’s no new capacity,” she says. In Anchorage, work will take place on International Airport Road between South Aircraft Drive and Homer Drive. The project will cost an estimated $10 million to $15 million and will advertise for going to construction this summer, McCarthy says. Coordination with Ted Stevens Anchorage International Airport will be a key part of the process because construction will take place during Alaska’s bustling tourist season. The department is also planning pavement preservation projects on the Old Seward Highway between O’Malley Road and Dimond Boulevard, as well as between Rabbit Creek Road and Brandon Road.

A large chunk of pavement preservation work in Anchorage will take place in West Anchorage, McCarthy says, on Raspberry Road between Jewel Lake Road and Minnesota Drive, as well as West Dimond Boulevard between Sand Lake Road and Jodhpur Street. DOT&PF will also spend from $5 million to $10 million for pavement preservation work on Benson Boulevard between Lois Drive and LaTouche Street. “It saves maintenance funds in the long run,” McCarthy says. One of the larger Anchorage projects comes with the construction of a new crosstown connection at West Dowling Road. McCarthy says the $36.9 million project involves building more than a mile of new roads, alignment, bridge, and tunnel; connecting Raspberry Road to Elmore Road; and creating a new thoroughfare between East and West Anchorage. The 2015 construction is the second phase of the project, which DOT&PF hopes will reduce traffic on Tudor Road and help connect lo-

Alaska Business Monthly | April 2015 www.akbizmag.com

cal roadways identified in the Anchorage Long Range Transportation Plan. When finished, the project will include a new intersection at Raspberry Road and 68th Avenue, a new bridge over the railroad at Arctic Boulevard, and an access tunnel connecting traffic to NAPA and Arctic Warehouse. The new road is expected to open to traffic in October, McCarthy says, and some additional work may continue into 2016. “This is a really great project,” she says. “It’s not that well known because it’s a whole new alignment.” Besides extensive pavement preservation projects throughout South and West Anchorage, DOT&PF is preparing for work in East Anchorage, along the Glenn Highway, north to the Parks Highway, and beyond. East Anchorage will see its own big road construction with a Muldoon Road channelization project between 11th Court and Boundary Avenue. McCarthy says crash history along that stretch of road far exceeds the statewide average. There are tens of thousands of vehicles traveling via five lanes of traffic, she says, and “what happens when you start getting high volumes of traffic like that—you have more angled crashes.” McCarthy says construction involves building raised medians to add a level of separation between turning vehicles and oncoming traffic. It would also help provide a small refuge for pedestrians making dangerous—and illegal—midblock crossings. Two people have died that way this year, she says, and the state transportation department hopes the medians could help protect both drivers and pedestrians. Construction on Muldoon Road would also fix “a little bit of a drainage problem,” McCarthy says. The project—part of a DOT&PF Highway Safety Improvement Program—is estimated to cost $1 million to $5 million. The state also plans on spending an estimated $1 million to $5 million completing intersection improvements on Bragaw Street between 16th Avenue and DeBarr Road. Farther north, construction is planned on Eagle River Road from the Old Glenn Highway to mile 5.3, McCarthy says. Miles farther up the Glenn Highway, Northern Powerline is the contractor for an $8 million continuous lighting projwww.akbizmag.com

ect around the Knik River Bridge and the Palmer Hayflats. Major construction on the Parks Highway aims to increase capacity through the Wasilla area, McCarthy says. Other projects extend all the way north to Fairbanks. The transportation department plans on upgrading existing turnouts to create two new rest areas—with restroom facilities, picnic areas, and parking— near mileposts 287 and 314. They’re scheduled for completion in fall 2015, according to DOT&PF. Continuing work begun in 2014, the department is extending the four-lane, divided Parks Highway north, extending it from Church Road to Pittman Road. QAP, Inc. is the contractor for a rehabilitation project between mileposts 123.5 and 146 involving laying new pavement, signing, striping, and improving area guardrails. The company will install a six inch foamed asphalt base underneath four inches of hot mix asphalt, DOT&PF says. The project is also slated to wrap up in fall 2015. Construction on Parks Highway railroad overpasses is set to take place between mileposts 91 and 194, according to DOT&PF. Current highways crossings are set to be replaced with bridges at mileposts 91.6 and 100.7: the Montana and Sunshine crossings. Crews will relocate utilities, build retaining walls and approaches, and complete earthwork and temporary traffic control measures. A project involving a new railroad overpass and bridge over the Chulitna River at Broad Pass is contracted out to QAP, the transportation department says, and work is scheduled to end by September 2016. QAP has also been contracted for reconstruction between mileposts 239 and 252; The project involves adding passing lanes; widening and paving the road; improving culverts, guardrails, and signage in the area; and limited bridge work. Scheduled completion is set for September, according to DOT&PF. Great Northwest, Inc. is working on several projects between mileposts 197 and 235. Construction will involve building three passing lanes between Cantwell and Healy, as well as installing fluorescent yellow curve warning signs, guardrail delineation strips, and chevron signs. Work is scheduled to wrap up in September. At milepost 237, Hamilton Construction is working to replace the Riley Creek Bridge and realign 1.8 miles of April 2015 | Alaska Business Monthly

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road, according to the state transportation department. The project, set to be completed in September 2016, includes building new turn pockets onto Park Road and minor renovations to the nearby bicycle and foot paths. The transportation department will also spend around $1 million to $5 million upgrading crash cushions, McCarthey says. Many of this year’s road improvements focus on a very specific mission. “Their purpose is to reduce fatality and injury crashes—particularly serious injury crashes,” McCarthy says. With that goal in mind, she says, the Central Region High Friction Surface Treatment project aims to complete pavement upgrades throughout Southcentral Alaska. The road surface application helps maintain pavement friction, and McCarthy says it’s used on spots in need of a little extra traction: hills, curves, and intersections. The transportation department will be applying the treatment at thirty-nine sites throughout the area, including seventeen sites in Anchorage. “It’s a cost effective method to reduce crashes in spots that have a safety con-

cern,” McCarthy writes in an email. All told, she says, the department will likely have more than $300 million worth of projects throughout the Central Region: the Mat-Su, Anchorage, Kenai, Alaska Peninsula, the Aleutians, and Southwest Alaska. In early February McCarthy wrote that “while the highway construction season is still shaping up, it looks like a significant year.”

Public Projects Highways aren’t the only big construction projects set to take place in the Mat-Su Valley this year. Bettisworth North, an Anchoragebased architectural and planning firm, is working with the Matanuska-Susitna Borough School District on the Dena’ina Elementary School, which was out to bid in early February. The project came in response to rapid recent growth in the area, says Leah Boltz, Bettisworth North’s director of business development and marketing. She says the school off of Knik-Goose Bay Road is a design collaboration with Perkins + Will, a global architectural

firm founded in Chicago. The building—adjacent to a new Joe Reddington Sr. Junior-Senior High School—will be an estimated forty-four thousand square feet, Boltz says. According to the Matanuska-Susitna Borough, the approved project budget totaled nearly $27 million, with $18.4 million designated for construction. Hundreds of miles north, Bettisworth North and Perkins + Will are teaming up for another school project. Boltz says the firms are working on Ryan Middle School in Fairbanks; a sixty thousandsquare-foot replacement and expansion project scheduled to go to bid in March. “That one is really heavily focused on energy efficiency,” says Boltz. “It’s totally out of necessity.” She says the project involves a “real emphasis on maximizing space,” from flexible furniture to multipurpose gathering spaces. The middle school replacement project has a total budget of more than $37 million, according to the Fairbanks North Star Borough Department of Public Works, and it aims for “substantial completion” by August 2016.

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The proposed plan for the City of Nome harbor Improvementsâ&#x20AC;&#x201D;Middle Dock. Rendering courtesy of PND Engineers, Inc.

Continuing the education theme, Boltz says her firm is also working on the Alaska Vocational Technical Center in Seward: a design build with Watterson Construction. The twenty-seven thousand-square-foot project involves

renovating a pipe-welding shop and adding a heavy equipment and diesel shop. Bettisworth North also worked on a new South Anchorage fire stationâ&#x20AC;&#x201D;a replacement of Station 9 on Huffman Road, Boltz says.

The station is a design collaboration with Washington-based architectural and planning firm TCA, she says, and it aims to meet both updated national standards and Anchorage Fire Department modernization goals.

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The project was scheduled to go to bid in March. It’s a little different than previous stations, she says, because it’s right on the edge of a residential neighborhood. A big part of the design process involved taking cues from the surrounding area and creating a natural buffer between the station and nearby homes. “[Planners] were able to help keep as many trees as they possibly could,” Boltz says. The 11,600-square-foot project will cost an estimated $4.8 million and be complete by spring 2016. The firm is also involved with a $4 million locker room renovation and addition at the YMCA, Boltz says: “Just a fun community project that we’re getting to do.” The state’s healthcare sector will see a few major projects this year—like the sixfloor, 170-room patient housing facility on the Alaska Native Medical Center campus, scheduled to open in spring 2016. The new rooms will triple the medical center’s current capacity, according to the native hospital. The project will be financed by $31 million in Certificates of Participation sold by the State of Alaska in 2014.

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But construction on numerous smaller facilities is also set to take place this year. Boltz says Bettisworth North worked on small clinics in Gambell and Savoonga: The 5,200-square-foot projects cost around $4 million. “We’re all over the state right now, which is fun for us,” Boltz says.

Port of Nome Facelift In Western Alaska, the Port of Nome is also preparing for a major facelift; moving forward with a $10 million expansion project. Joy Baker, project manager for the Port of Nome expansion, says construction has been years in the making. There was extensive fundraising, lobbying, and design. The City of Nome paid for “a good chunk” of the process, Baker says: the initial project study and concept documents. Then came the design phase. Funding for the new dock came via multiple grants, the project manager says. There was $8 million in state grants, $1 million in federal grant money, and $500,000 from the Norton Sound Economic Development Corporation. Construction is finally sched-

uled to begin around June—or whenever ice conditions allow, Baker says. Crews are hoping to complete the bulk of the project this year. The port already has two existing cells in its causeway, Baker says, but they’re both more than twenty-years-old and are not nearly enough to handle current marine traffic. The new cell will be built in between the two existing cells, Baker says, thus the name “Middle Dock.” The project was ultimately awarded to Orion Marine Group, whose bid came in at slightly more than $7 million, Baker says. She says construction will involve removing a portion of the armor stone that lines the causeway, building the dock, then rebuilding the causeway. There will also be some dredging, Baker says, and it’s possible that some of the final dredging will be pushed into 2016. Weather poses one of the largest hurdles to construction. “We’re exposed to the elements, so that’s always a challenge,” Baker says. Another challenge—coordinating construction with the port’s busy summer shipping season.

Alaska Business Monthly | April 2015 www.akbizmag.com

Early stage of the huge remodeling project at the Millennium Hotel.

A Private Project: Millennium Hotel Remodel By Kirsten Swann

ack in Anchorage, a private project is gearing up to transform the landscape of Lake Spenard. The Millennium Alaskan Hotel, owned by Millennium Hotels and Resorts and the Anchorage home of the Iditarod, is undergoing an $8.3 million exterior and interior renovation. The project involves completely overhauling the face of the hotel, its corridors, and 248 guest rooms. Carol Fraser, the hotel’s general manager, says the work is the first major renovation the hotel has ever undergone. “When we get done, it’s really going to look like a lodge,” she says. “We’re trying to change this into an upper-end lodge.”

“We’re going to be pinched for space,” Baker says. “You just have to find the right formula to make it work for everybody.” When complete, the dock expansion project will increase the port’s capacity by 50 percent and add a much-needed, thirty-foot roll on/roll off ramp for ease in unloading vehicles, fuel, and heavy equipment. It will save time and alleviwww.akbizmag.com

Fraser says the hotel partnered with Neeser Construction for the project. The guest rooms and the corridors will be done by mid-May, but the exterior is dependent on the weather and should be done by mid-June, Fraser says. In early February, two of the hotel’s floors were unrecognizable; stripped down to the drywall while builders worked to complete the renovation on schedule. Construction crews will redo the hotel’s worn façade in stone and rustcolored paint, replace interior carpeting, and overhaul everything from the walls to the knobs on the rooms’ bathroom doors. “It’s going to change the whole face of Spenard,” Fraser says. R ate crowding at the two existing docks, Baker says. “Our vessel calls have skyrocketed in the last several years,” she says. “This third cell will make a dent in our backlog of traffic.” R Kirsten Swann is an independent journalist based in Anchorage. April 2015 | Alaska Business Monthly

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CONSTRUCTION

Private Construction Starts Early in Anchorage Photo by Russ Slaten/Alaska Business Monthly

Early groundbreaking for Rilke Schule German School of Arts and Science was in February due to the mild winter in Anchorage.

Contractors at work on more than a dozen commercial projects By Russ Slaten

itterly cold weather struck the Lower 48 in February, while record high temperatures were experienced across Alaska, allowing the construction season to begin early and a bit easier in Anchorage. On February 23, Anchorage set a record high temperature of forty-seven degrees at Ted Stevens Anchorage International Airport, beating a record of forty-three degrees set nearly forty years ago in 1978, according to the National Weather Service. Construction projects in Anchorage are feeling the benefits of an early spring as the Rilke Schule German School of Arts and Science project began in mid-February with dirt work. General contractor Criterion General moved dirt and debris with ease, side-stepping the typical thaw and pull process seen when conducting dirt work in the winter. The kindergarten through eighth grade German immersion charter school is expecting to use the space long-term with a new 39,500-square-foot building located on East 64th Avenue at

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the end of Burlwood Street in Anchorage. RIM Architects designed the school developed by Nanuaq Development LLC, a joint venture of Pfeffer Development and Sitnasuak Native Corporation, the village corporation of Nome. The building is owned by a special purpose entity that includes Sitnasuak Native Corporation and Mark Pfeffer, president of Pfeffer Development. The project is expected to be completed by September and saw forty to fifty workers at peak construction. In Chugiak, Roger Hickel Contracting is working on the new Alaska Laborers Training Facility. The forty-four-thousandsquare-foot building saw twenty Roger Hickel Contracting employees at peak construction. The training facility is owned by Alaska Laborers Construction Industry Training Fund and was designed by Spark Design. Construction began in June 2014 and is expected to be done in April. In Downtown Anchorage, Pfeffer Development is remodeling of the former Covenant House Alaska building located

at 609 F Street. The eleven thousandsquare-foot building, designed by KPB Architects, is being transformed into a multi-faceted location that will offer food, drinks, and event space. The building is owned by a special purpose entity that includes Salamatof Native Association, Inc., the village corporation of Salamatof located on the Kenai Peninsula; Mark Pfeffer, president of Pfeffer Development; and a small group of investors. General contractor Benchmark Construction began this year in mid-January and expects the project to be completed by the end of June. Employment at peak construction was between fifty to sixty workers.

South Anchorage General contractor H. Watt & Scott began construction on the Huffman Center located on the north side of the Carrs/Safeway Huffman store in summer 2014 and expects the twenty-two-thousand-squarefoot building to be completed by this summer. The project is a two-story building in-

Alaska Business Monthly | April 2015 www.akbizmag.com

tended for retail and office space. Huffman Center was designed by ECI/Hyer Architecture and is owned by Carr-Gottstein GP LLC and Labar Properties LP. The project’s peak employment numbers reached about fifteen to twenty workers. Up the way from Huffman Road on Old Seward Highway, Top Shelf Storage, owned by a group of local businessmen, Jerry Mackie, Brent Eaton, Chris Hubble, and Marten Martensen, opened in November 2014, with the finishing touches of the project completed by December 2014. Top Shelf Storage stands at forty-five-thousand-square-feet with 285 storage units and is located at 1711 Old Seward Highway. The structure was built and designed by Wisconsin-based, self-storage system steel manufacturer Trachte Building Systems, with about twenty-five workers at peak construction. Body Renew Alaska completed its new South Anchorage facility located at 10325 Old Seward in March. General contractor PCG LLC began the $5 million project in October 2013. Designed by SAJJ Architecture LLC, the twentyfive-thousand-square-foot building will become Body Renew’s flagship location,

says project interior designer Elke Gustafson of Coordinators Interior Design. “Body Renew is the only Alaskan-owned, multi-facility fitness organization of its kind, and this new facility speaks to that uniqueness. The design concept is articulated by its exaggerated applied design elements of giant chandeliers, chain draperies, and large arabesque patterns that are repeated on the walls and floor in different locations,” Gustafson says. At 100th Avenue, between Old Seward and C Street in South Anchorage, general contractor Criterion General began work in October 2014 on a fifty-thousand-square-foot dock-high warehouse with offices. Developed by Green Properties LLC and designed by 61 North Architects, the $5.8 million project was completed in February. Peak construction saw about fifty-five workers on site. At 320 W. 100th Avenue, in the Target parking lot off C Street, Davis Constructors & Engineers is building a small retail space, with Starbucks as the first announced tenant. The JL Properties retail space is nine thousand square feet with room for two other tenants. The project is designed by RIM Architects and saw

ten to fifteen workers at peak construction. Davis began building October 2014 and is expected to be done by June. Dimond Center will soon open doors to the international Swedish retailer H&M. At the southeast corner of the building, the thirty-eight-thousand-square-foot space was designed by kpb architects. Roger Hickel Contracting began the $3.84 million project in June 2014 and at the time of publication was anticipating a completion date in March. Roger Hickel Contracting says about twenty of its employees were on site at peak construction. A new Class A office building is going up near the intersection of Dimond Boulevard and Old Seward Highway. The threestory, 12,500-square-foot building located at 8301 Old Seward Highway was designed by Ivy & Co. Architects. General contractor Swank Construction saw about twenty workers at peak construction. Construction began August 2014 and is expected to be done in June. Travis Tollefsen of GTK Commercial Real Estate, the leasing and property management company for the project, says, “The way this building was made is unique in that it showcases the architectural detail of the building.”

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The Motorcycle Shop saw the finishing touches to its new location at 944 E. 73rd Avenue in March. General contractor Whalen Construction began the project in July 2014. The three-story, twenty-six-thousand-square-foot building, designed by Petersen Architects, was built after the Motorcycle Shop began to outgrow its Dowling Road store, home of the company for forty years.

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Midtown Anchorage Home2 Suites by Hilton, located at 4700 Union Square Drive, near the intersection of C Street and Tudor Road, is well on its way to open in late summer this year. Utah-based general contractor Richardson Van Leeuwen Construction began working on the project in September 2014. The four-story, 135-suite, sixty-eightthousand-square-foot hotel was designed by TAAG Architects. The Home2 Suites Anchorage/Midtown location is owned by Anchorage HS Holding LLC and will be operated by Horne Management Group. Bosco’s in Midtown Anchorage moved three blocks away from its thirty-year location to a renovated and newly added space on 2301 Spenard Road. At a total of 5,700 square feet, general contractor Dokoozian Construction added 1,500 square feet to the 3,200-square-foot building that originally began as a car wash in 1978. John Weddleton, owner of the cards, comics, and collectibles store, says, “A big part of the budget went towards getting the drainage right and connecting it to the storm drain.” Architect Hildie Cain designed the project, with financing through First National Bank Alaska and the Alaska Industrial Development and Export Authority. At a little less than $1 million, the project began July 2014, and Bosco’s held a grand opening on Valentine’s Day February 14. Weddleton figures about “eightythree people worked on it over the project life. With a team of eight or so on the roof, framers and plumbers down below, there could have been twenty on some days.” U-Med District The Anchorage U-Med District is seeing continued growth with First National Bank Alaska and Imaging Associates opening new locations and the near completion remodel of the Orthopedic Physicians Anchorage building. Pfeffer Development broke ground on 3650 Piper Street in March 2014. The U-

Med branch of First National Bank Alaska was completed in January; and Imaging Associates, a state-of-the-art imaging center, is scheduled to be done in mid-April. First National Bank Alaska owns the unit occupied by the branch, and Imaging Associates is leasing space from a special purpose entity that includes a small group of investors including Mark Pfeffer, who is the manager for the entity. Criterion General was the contractor for the building and the First National Bank Alaska space, and KPB Architects designed it, while Corvus Contractors undertook the design-build for the Imaging Associates space. At peak construction, employment for the project reached about forty workers. Still in the U-Med District, Orthopedic Physicians Anchorage has neared completion of its remodel, including an addition of about twelve thousand square feet of medical office space. The building at 3801 Lake Otis Parkway is owned by a special purpose entity that includes Orthopedic Physicians Anchorage, Mark Pfeffer, and Jerry Neeser, owner of Neeser Construction. General contractor Neeser Construction began the project December 2013 and expects it to be done by July. The remodel and addition saw about fifty workers at peak construction. Alaska Regional Hospital in Anchorage has been undergoing a $60 million facility modernization project. Renovations and aesthetic upgrades throughout the facility include new flooring, removal of wallpaper, and new paint, lighting, and plumbing fixtures. Designed by Earl Swensson Associates, Inc. out of Nashville, Tennessee, the project also includes updated signage, electrical system upgrades, and new emergency generators and transfer equipment. General contractor Layton Construction, based in Sandy, Utah, began renovations to the Family Birth Center in October 2013 and will be done by June. Also, renovations to five other patient care areas began February 2014 and are expected to be finished by December. “During one of the peak months, we had 109 workers on-site related to this project,” says Alaska Regional Hospital spokesperson Kjersten Lastufka. “On an ongoing basis, we have approximately fifty workers onsite daily.” R Russ Slaten is an Associate Editor at Alaska Business Monthly.

Alaska Business Monthly | April 2015 www.akbizmag.com

OIL & GAS

Photo by Sean Hochanadel/ Courtesy of Bowhead Transport

Halliburton gasfield tanks being offloaded from Bowhead Transport’s landing craft Nunaniq at Barrow.

Upstream Downstream Ocean Going Vessels Marine transport for Alaska’s oil and gas industry

By Kirsten Swann

n Alaska—a state with 6,640 miles of general coastline (33,904 miles of tidal shoreline), a sparse road system, and a multibillion-dollar oil and gas sector—one type of business sees consistently high demand. Companies that provide marine transportation within the state’s bustling petroleum industry are important catalysts to the biggest economic driver in the state. Alaska isn’t like most other states: Its communities are remote, subject to extreme weather conditions, and home to small populations and vast natural resources. The businesses that provide 124

shipping services for the oil and gas industry in the Last Frontier face oneof-a-kind challenges and unpredictable opportunities with potentially vast rewards. Overcoming those challenges is often a matter of having the right equipment.

Upstream Bowhead Transport Bowhead Transport Company, a subsidiary of the Ukpeaġvik Iñupiat Corporation (UIC), has the equipment and also knows the value of flexibility. A new 150-foot landing craft, set to launch this season, was designed to

provide “multi-mission capabilities in conjunction with our common carrier barge services and for other maritime services uses during the open water season,” according to Bowhead Operations Manager Sean Hochanadel. Hochanadel says the vessel was built by Nichols Brothers Boat Builders based in Washington state and is primarily designed to work with Bowhead’s common carrier cargo deliveries, but it also has some built-in functionality that could make it attractive for other jobs. “It’s got room for a big crew,” Hochanadel says.

Alaska Business Monthly | April 2015 www.akbizmag.com

Working with Alaska’s oil and gas industry requires more than just flexible equipment; it necessitates operational adaptability, too. Bowhead reached a new level of versatility through a partnership with Crowley Marine Services, Inc. The joint venture, UIC Bowhead-Crowley LLC, was formed in 2013, and Hochanadel says it led to a multi-year contract for cargo transport between Prudhoe Bay and Point Thomson. He says the powerup of the Point Thomson project has been the joint venture’s main focus. During the exploration phase, the marine transport company brought in construction materials needed to build a pad, large-diameter tanks, and other equipment. During the exploration phase, Hochanadel says, barges might carry pipe-laying machinery, support equipment, or “other things that it takes to do a different job.” Different cargo is needed for all the various phases of oil and gas development. For marine transport providers, it means using different resources capable of safely moving a range of different materials. It may be tanks in phase one

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exploration, Hochanadel says, and then loads of pipes for phase two production. “It can take years between the two phases [exploration and production], and by having the right equipment and the right partnership we can have the longevity to see the project through multiple phases,” Hochanadel says. The Bowhead and Crowley partnership brings numerous benefits, he says, including the opportunity to pool marine assets and experience. It combines the flexibility of a charter with the costeffectiveness of a common carrier. “It gives us different opportunities to customize an agreement with a customer based on the specific requirements of the job,” he says. Providing marine transport in Alaska waters comes with a unique set of challenges, many of which are environmental. Hochanadel says changeable weather, ice, and water conditions make scheduling vessels and marine cargo operations difficult. Preparation and up-front logistical planning is required to be successful within the short seasonal window, he says. “An aptitude for flexibility and decades of experience working in the Arctic has

made our company a success since its inception and provides an avenue for us to prepare for the challenges that lie ahead,” Hochanadel writes in an email. He says the future holds plenty of prospects. Exploration along the OCS (Outer Continental Shelf) areas of the Chukchi and Beaufort seas would bring “numerous opportunities” for growth with the state’s marine transport sector. The development of oil and gas leases from Wainwright to Point Thomson could also bring “a dramatic increase in marine activity and cargo shipments to and throughout the region,” Hochanadel says. He says maintaining a skilled workforce is essential to Bowhead’s business. “We expect a need for additional employees, including Alaska Native Corporation shareholders, to receive cargo and provide documentation and logistical support for increased frequency and volumes of cargo shipments to and within the region,” the Bowhead operations manager writes. “We do look forward to increased opportunities for all of our employees and will continue to highlight our respect for the traditional Iñupiat values that are core to our business practices.”

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A commitment to safety is also key, he says, and his company works closely with UIC’s human resources department to develop and train employees with the right experience. The company also recognizes its responsibility to keep in compliance with all laws and industry regulations and prioritizes employee development and shareholder benefit. “We do proactively focus our attention to fulfill our mission of developing the talents of our employees and to continue to enhance the lives of our shareholders,” Hochanadel writes. It’s all about having the expertise— and equipment—to fill the demand and seize the opportunity.

Lynden Lynden companies meet Alaska’s marine transport needs: Alaska Marine Lines, Bering Marine, Lynden Transport, and Alaska West Express, all Lynden companies, play an indirect role in the state’s oil and gas industry through a variety of marine shipping options. Alaska Marine Lines operates a fleet of thirty-seven fleet barges and three landing craft between Seattle and the ports in Southeast Alaska, Valdez, Whittier, Anchorage, Dutch Harbor, Sand Point, and Kodiak; the Western Alaska ports in Bethel, Dillingham, Kotzebue, Naknek, and Nome; and of the villages on the west coast and rivers of Western Alaska and Bristol Bay, bringing construction supplies, heavy equipment, vehicles, groceries, and other necessities. Alaska Marine Lines also moves the rail cars for the Alaska Railroad between Seattle and Whittier. Bering operates an integrated tug and barge between Whittier, Valdez, and Cordova; a landing craft on the North Slope plus two river/ocean tugbarge sets in Western Alaska. Lynden Transport utilizes the marine services of Alaska Marines Lines, TOTE, and Horizon Lines to provide general commodity service to all of Alaska. Alaska West Express, Alaska’s largest bulk commodity carrier, utilizes all the available ship and barge services to Alaska. “It’s all time and money,” says Jeanine St. John, VP of Lynden Logistics. “If you’re looking for cost savings, there are great opportunities for the oil industry to save money.” 126

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St. John notes several prospective projects that would rely heavily on ocean-based business. Having the right equipment to get the job done is one of the central elements to success in the marine transportation business. It’s also something that’s often overlooked, St. John says. The business involves more than just tugs and barges and big ships. It also involves cargo handling and container equipment and other specialized gear necessary for handling the goods through all the stages of transport. “It’s a huge component,” St. John says. She says Lynden is well-equipped for that; working with one of the largest fleets of vessels and handling and container equipment in the industry.

Downstream Vitus Marine At Vitus Marine, success in Alaska waters relies heavily on a specialized fleet of articulated tug and barge (ATB) combinations. Mike Poston, Vitus’s director of sales, says the tugs and barges play an integral role in the company’s work. “It’s kind of the backbone of our system for village deliveries,” he says.

While Vitus itself is a relative newcomer to Alaska, its leaders are veterans within the industry. Poston says they bring the experience necessary to bring marine solutions to Western Alaska’s most challenging locations. “We have a good team where everybody puts their heads together and we feel very confident in our ability to solve any problem that comes up,” he says. In 2009, the company partnered with the Alaska Village Electric Cooperative to build two ATB sets for work in the state’s coastal waters, and the vessels began delivering fuel to coastal communities in 2012. The company—which operates throughout the Aleutian Islands, along Alaska’s west coast, and up and down the Yukon, Kuskokwim, and Bristol Bay river systems—also arranges charters for fuel deliveries from domestic and international sources. Poston says the Alaska Village Electric Cooperative articulated tugs and barges remain Vitus Marine’s primary vessels. Historically, barges are hauled via tow wire. The ATBs operate by driving with the tug positioned in a notch in the stern of the barge, pushing the

cargo and avoiding having to reconnect upon arrival. “That’s the key to efficiency,” Poston says. “They travel faster; they can operate in rougher weather that you commonly see in Western Alaska. We find that the equipment that we use is very effective, and that translates into savings.” The ATBs work well in about 90 percent of coastal locations, he says. The other 10 percent require even shallower crafts, and Vitus is up to the challenge. In October 2014, the company announced the expansion of its shallow draft fleet: renovating a landing craft to work with barges in extremely shallow conditions and acquiring two additional ultra-shallow draft vessels for renovation and work in remote Alaska waters. “It allows us to expand our operating areas,” Poston says. Poston says Vitus fuel barges also have freight capabilities—an important ability in an industry that demands flexibility. R Kirsten Swann is an independent journalist living in Anchorage.

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OIL & GAS

North Slope LNG Update

Flare tower at Flow Station 1 with oil rigs and Deadhorse in the background at the Prudhoe Bay oilfield on the North Slope in Arctic Alaska. ÂŠ Lucas Payne/AlaskaStock.com

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Work continues on state’s future

TOTAL PROJECT SUPPORT

By Mike Bradner

s a North Slope natural gas pipeline any closer to reality? Alaskans have hoped for years that the stranded gas resources of the slope—36 trillion cubic feet known now and it’s believed 100 trillion cubic feet or more eventually— can be brought to market. After many false starts over four decades, a large gas pipeline and liquefied natural gas (LNG) project seems to be moving forward. Finally, the gas producers—the companies that own lease on the slope—and the state appear to be working in tandem on a project. Additionally, the state is aligned with TransCanada Corporation, an experienced pipeline company. Having all the players together on one team is considered vital to the project because it creates an alignment where the risks, and rewards, are shared equitably, the producing companies have maintained. There are bumps in the road, however. Governor Walker announced in February that he would “scale up” an alternative pipeline the state has worked on independently as a “Plan B.” This is the Alaska Stand-Alone Pipeline, or ASAP, a smaller pipeline project intended to get gas to Alaska communities if the big project falters. The governor wants to increase the volume of gas, or “throughput,” to improve its economics. The North Slope producers, the state’s partners in the big project, were unsure at first how to interpret the governor’s announcement. They worried that Walker desires to develop a state-owned competing project. The governor has assured the companies, however, that he still supports the state’s partnership in the large project and that the alternative state-backed ASAP is still just an option, a fallback for the state. However, there are concerns that the scaling up of the state-backed pipeline risks confusion in the Asia market, where the companies and the state hope to sell North Slope gas. The confusion would be over which project the state really supports, the industry-led project in which the state is a 25 percent partner or the state-led ASAP where the state is majority owner. If this project www.akbizmag.com

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moves forward, the governor has said he wants the state to control it, with at least 51 percent ownership.

Progress Continues Meanwhile, work is continuing on the larger project and a great deal has been accomplished. The companies, with the state’s participation, are currently engaged in the “pre-Front End Engineering and Design,” or pre-FEED, stage of preliminary engineering. This is a further step than the conceptual design work that had been done to date, which was

the basis for initial decisions like route selection and a choice of Nikiski, near Kenai, as the pipeline terminus and site of the large LNG plant. The initial cost estimate of $45 billion to $65 billion was also done during the conceptdevelopment stage, and a key goal of the pre-FEED project will be to refine and update the cost estimate. There have been important steps made in regulatory proceedings. In 2014 the companies have filed for an application for an LNG export permit with the US Department of Energy,

which the DOE has said it will expedite the application. This is an important step that will help in the LNG marketing efforts. The companies also made preliminary filings in 2014 with the Federal Energy Regulatory Commission (FERC) for a license for the project and in March filed applications to begin the federal Environmental Impact Statement, which the FERC will lead. Meanwhile, the decision to move to pre-FEED in mid-2014 was a critical milestone because it required the parties to reach an agreement among themselves as to how the $500 million costs of pre-FEED would be shared. The state is paying a 25 percent share, its share of the project, but the three producing companies, BP, ExxonMobil, and ConocoPhillips, had to come to an agreement among themselves as to how to allocate the other 75 percent of the costs. This wasn’t easy but it was accomplished, and the agreement finally struck will serve as a basis for agreements on further stages of the project, or it is hoped, anyway. What made the pre-FEED alignment among the parties possible, however, was the state of Alaska’s agreement to participate. This was accomplished when the Legislature passed Senate Bill 138 during its 2014 session, which gave formal approval for the state’s involvement and laid out the roadmap as to how the project would proceed. So far Walker and the industry partners are following the roadmap, but state legislators are keeping a sharp eye on the process—anxious that the project stay on schedule.

The Project The Alaska LNG Project is an eight hundred-mile, forty-two-inch pipeline with a large gas treatment plant (GTP) at the north end, on the North Slope, and a large LNG plant at the southern end, at Nikiski. Besides these parts of the project—mega-projects in themselves—there is a sixty-mile gas pipeline from the Point Thomson gas field and expanded facilities needed there to produce gas from the field. On the North Slope, the project would include:  Three parallel treatment systems (trains) with a capacity up to 4.3 billion cubic feet per day 130

Alaska Business Monthly | April 2015 www.akbizmag.com

 A one-mile-long, large diameter aboveground pipeline to transport gas from the existing central gas facility to the GTP  A sixty-mile-long, thirty-inchdiameter pipeline to transport gas from the Point Thomson Unit to the GTP  Prudhoe Bay Unit improvements to the West Dock loading and unloading facilities  Water reservoir, pump facilities, and a transfer line to provide water to the GTP The main pipeline facilities include:  About eight hundred miles of forty-two-inch-diameter pipeline from the planned GTP to the planned LNG plant in Nikiski  Eight natural gas driven compressor stations, four custody transfer meter stations, multiple pig launching/receiving stations, heater stations, cathodic protection facilities, and mainline block valves LNG Liquefaction facilities at Nikiski include:  Marine terminal facilities  Three liquefaction trains capable of liquefying up to 20 million tons per year of LNG  Three 160,000 cubic meter storage tanks. FERC Jurisdictional Facilities:  A number of support facility activities would also be undertaken to complete and operate the FERC jurisdictional facilities. These include:  Updates to existing transportation infrastructure  Gravel quarries  Construction camps The planned project would start at the GTP on the North Slope and generally follow the existing Trans Alaska Pipeline System (TAPS) and the Dalton Highway south to Livengood, Alaska. www.akbizmag.com

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From Livengood, the mainline would diverge from TAPS and generally head south-southwest to Trapper Creek in the northern Matanuska-Susitna Borough. Then the project turns south-southeast around Viapan Lake. Finally, it crosses the Cook Inlet in the vicinity of Shorty Creek to Boulder Point on the Kenai Peninsula. The applicants anticipate starting construction in 2018 or early 2019, with construction and startup taking approximately seven years, with operations beginning in 2025 or 2026.

Harmony Needed Building this project will require all of the gas owners, including the state of Alaska, which owns royalty gas, to work together. The framework for this is in the “Heads of Agreement,” or HOA, document signed by all gas owners, which include BP, ConocoPhillips, and ExxonMobil. TransCanada, a pipeline company, is part of the agreement as well although it is not a gas owner. The HOA provides the basic blueprint for the group to work together in advancing the project toward a final investment decision, which is expected in 2018. Having the state involved as an owner is an essential part of the arrangement, the producing companies have said. This is because having the state as a partner, owning a part of the project, and shipping its own royalty gas aligns the interests of the producing parties in a way that best shares the risks. By having the state take its gas in “kind” (or as gas) and shipping and marketing its gas as LNG, the arrangement solves problems in royalty accounting and potential disputes that could occur if the alternative arrangement, taking the royalty (and tax share) in “value,” or cash. Disputes over oil royalty and tax accounting dogged the North Slope oil producers for years after TAPS was completed in 1977, costing the companies (and the state) hundreds of millions of dollars in legal fees before the disputes over royalty and tax values were settled. The producers are adamant that this will be avoided with the gas pipeline, and it will be best accomplished if the state takes its royalty and tax as gas and sell it. “They get what we get,” the companies have said, with no uncertainties that will cause disputes. The commercial structure that is envisioned would have the state as an 132

equity investor. It would have each gas owner, including the state, to own a part of the project equal to the respective party’s gas share (the state would take its royalty and production tax in kind, about 25 percent of the total North Slope gas production). TAPS is organized in a similar manner, except that the state is not a partner, something that many state leaders over the years have regretted. With TAPS, each oil producer owns a percent of TAPS equal to the oil share, so that each producer ships its own oil through its pipeline subsidiary. Alyeska Pipeline Service Co., the pipeline operator, essentially works as a contractor for the pipeline owners, who are mostly the pipeline subsidiaries of the major producers. Each producer signs a contract with its pipeline company to ship the oil, which remains the property of the producing company until it is sold. The pipeline company is the transportation entity and it is a regulated entity under FERC. One way to visualize this arrangement is to think of TAPS as a bundle of pipeline companies operating within one pipe, with Alyeska managing the system.

Financing Considerations The gas pipeline will function in a similar manner with each owner holding a share, equal to its gas, of the gas treatment plant, in the north, and the pipeline and the LNG plant, in the south. This arrangement extends to financing for construction and paying for operations, with each owner paying proportionately for its share of costs. The pipeline company (a subsidiary of a producer or TransCanada for the state’s 25 percent), legally owns the piece of the pipe and plants and will make an equity investment for its part of the project, which is usually 25 percent or 30 percent of the construction cost. The owner/investor then goes to financial markets to finance the rest with debt, 70 percent or 75 percent of the remaining cost. Under the current arrangement with the gas project it is envisioned that the state would finance its 25 percent share of the LNG plant directly through the state AGDC (Alaska Gasline Development Corporation) TransCanada would finance, and own, a 25 percent share of the pipeline and gas treatment plant, enough to process and ship the state’s

gas. It is the financial strength of the parent companies of the pipeline subsidiaries, and of the state for its share, that determines the terms of financing, such as the interest rate. The lenders, meaning the bond buyers, for the 70 percent to 75 percent debt portion of the financing will require a financial commitment from each borrower that the share of the project being funded will actually be used, much like banks wish to see iron-clad long-term leases on an office building being financed. In this case the producing companies must sign “throughput contracts” to ship their gas. These contracts are typically long-term, often twenty-five years (they can be less, or more), and they are “take or pay,” meaning the commitment must be paid even if some event prevents gas from actually flowing through the project. The shipping contracts are the security for the bond buyers.

Shipping Agreement The state, as a gas owner, must similarly sign a contract to ship its gas through its share of the project, but of course working with TransCanada as the owner of 25 percent of the gas treatment plant and pipeline. The state must also sign a contract with itself, through the state-owned AGDC, for the state share of the LNG plant. In TransCanada’s case, the state gas shipping contract will allow the pipeline company to go to the debt market to raise funding for its financing. It is assumed that the pipeline company will also make an equity investment, as will the other owners including the state’s AGDC for its portion of the LNG plant. TransCanada will have no share in the LNG plant. Under the arrangement the state owns the gas all the way through the system. The three producing companies will also retain ownership of their gas. Each owner of the gas, made into LNG at the Nikiski plant, will then be responsible for marketing their respective shares of the LNG. One feature of the arrangement is that the state has the option to buy 40 percent of TransCanada’s share of the pipeline and treatment plant. This would increase the state’s long-term profits but it also would make the state responsible for raising funds for 40 percent of the pipeline and treatment

Alaska Business Monthly | April 2015 www.akbizmag.com

plant. The option must be exercised in 2016 under the agreement. The TransCanada arrangement has prompted a great deal of debate. Many in Alaska have questioned why the state needs to have a partner in the 25 percent of the pipeline and gas treatment plant. If the state owned these parts itself, as it does its 25 percent share of the LNG plant, the profits would be greater, it’s argued. However, in such an arrangement the state would also have to finance more of the project, which will be a challenge given the state’s diminished financial capability. By bringing in TransCanada as a partner the state is not only aligning with a very experienced pipeline company, but would also have TransCanada finance all of the share of the pipe and treatment plant, relieving the state of that burden.

Initial State Investment One of the real unknowns in the venture is whether the state, with its diminished finances, will be able to fund its share of the project. For the construction, the state’s share would be several billion dollars. Much of this would be debt-financed but some, a quarter to a third, would be equity funded by cash. However, it is typical that LNG project developers sell a good portion of their future production in advance, and presumably the state would do this too. Prior to the start of construction, however, the state will also have to fund its share of the FEED cost, which is estimated at $2 billion to $3 billion. This could amount to several hundred million dollars paid out of a depleted state treasury and before it will be known that the project will really proceed (the Final Investment Decision). These payments for the FEED, assuming the project gets to that, would be made in 2016 and 2017. However, the state’s finances are unlikely to have improved by then. This is a big issue that Walker and state legislators will have to wrestle with in those years, but there’s an upside in the long term because the state’s ownership of part of the project could bring in several billion dollars a year of new revenues from LNG sales, an incomestream that could last for decades. R

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Mike Bradner is publisher of the Alaska Legislative Digest. www.akbizmag.com

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HEALTH & MEDICINE

Occupational Safety and Health: United by Best Practices (and Lots of Acronyms)

By Jonathan A. Jacobi

n affinity for acronyms may not be a prerequisite for a career as a safety and health professional— but it helps. Our day-to-day responsibilities require us to know dozens of abbreviations. And though we share the same fundamental mission… Occupational safety and health (OSH) is one of the most widely accepted terms in the vocabulary of occupational safety and health professionals—which makes sense as it echoes the federal act that brought the industry to greater prominence. Some organizations flip the order to OHS. Others add environment to the mix: EHS, HSE, SHE.

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Integrating security into the mix yields a few more variations, like HSS and HSSE. And, as leading-edge companies continue exploring the synergy between quality management and workforce safety and health, we’re also seeing greater use of acronyms like EHSQ. Still, I’d argue that “occupational safety and health” best describes the heart of these programs. It also is appropriate because those two functions are so closely intertwined—or should be. Although they are separate “silos” in many organizations, today’s most successful programs achieve greater efficiency and effectiveness by uniting safety and health management enterprise-wide. Consider the following ar-

eas where safety and health professionals can, and should, work together:

Hearing Conservation All good programs involve health professionals conducting audiograms to monitor the hearing of individuals working in noisy areas. Safety personnel typically provide training, hearing protection and other controls as part of the effort. What’s a noisy area? That’s best answered by safety and industrial hygiene personnel using noise sampling equipment. If it is determined that an employee has experienced a substantial loss in hearing, health and safety professionals work together to document the occur-

Alaska Business Monthly | April 2015 www.akbizmag.com

An Anchorage Fire Department firefighter stands atop the roof of a downtown motel while working to extinguish the blaze. © Carl Johnson/AlaskaStock.com

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Chemical and Biological Exposure Control Reducing or eliminating exposure to hazardous substances is very much a team effort between health and safety professionals. While healthcare personnel are responsible for monitoring and preventing the harmful effects of exposure (e.g., through immunizations, etc.), safety and industrial hygiene personnel typically are the best source of information about the specific substances involved and which employees and job categories are most likely to experience exposure risks. Safety professionals www.akbizmag.com

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also are likely to be responsible for the training required to support employee knowledge of hazards and precautions.

Respiratory Protection Safety and industrial hygiene professionals work to control the potential for harmful exposures through ventilation and other means, but when they can’t eliminate the risk, wearing respirators becomes the best way to protect employees. But before respirators can be worn, healthcare personnel must conduct pulmonary function tests and other physical exams. Recurrent health checks and training then must be provided to ensure each wearer’s continued health and safety. Drug and Alcohol Testing Transportation regulations mandate drug and alcohol testing for commercial drivers, pilots, and other transportation professionals. Drug/alcohol testing also may be performed post-incident, periodically as part of corporate policy or “with cause” related to safety, health, productivity, or human resources concerns. Clearly, drug and alcohol issues have a major impact on workplace safety—and safety professionals may be the first to spot a potential problem. But actual testing or administration of a formal program usually falls under the jurisdiction of healthcare personnel. Return-To-Work and Wellness Programs Return-to-work, wellness, and work hardening programs can have significant bottom-line value, particularly in highrisk industries where workers are susceptible to more injuries and illnesses. These programs also are gaining importance as the workforce ages. Increased absenteeism (or even “presenteeism,” i.e., working while in some way impaired) undermines productivity, quality, morale, and ultimately profitability. Wellness programs and safety training and procedures help minimize risks, but can’t prevent everything that causes employee absences. That makes it equally important to have strong return-towork programs that help employees suffering from injuries and illnesses to get back to work more quickly. Such programs often require health and safety professionals to work closely together. For example, a health professional may www.akbizmag.com

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monitor an employee’s condition—but a safety professional may help evaluate when it is safe for that employee to resume their duties, or what alternate duties might facilitate their return.

many acronyms—increasingly they are united by industry best practices as well. While the benefits of a united approach to occupational safety and health are easy to understand, implementing such an approach has its challenges. Yes, safety and health professionals share common goals, and in most organizations there is at least some overlap in their responsibilities, including the areas I described above. But sometimes these still are very separate departments with separate cultures. Communication and process breakdowns easily can occur, and with so many safety

A United Approach There are many more examples that illustrate the same point: cross-functional collaboration between safety and health professionals can drive improvements in safety, health, efficiency, and profitability. In short, “safety” and “health” are united by more than our industry’s

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and health professionals being asked to “do more with less,” it may be difficult to find the time to even explore opportunities for deeper collaboration. Options, such as software systems, are available to help safety and health professionals overcome these challenges by improving the flow of information, facilitating clear communication and driving workflow efficiencies that will free up more time for cross-functional collaboration. Ideally, such a system would cover the broad range of functions associated with occupational safety and health, with training being at the top of the list. Even if your organization juggles multiple point solutions for safety and health responsibilities, or still handles many tasks manually, moving toward “uniting” management processes is worth the effort. Whatever acronym your organization happens to use, you will achieve better results if your occupational safety and health professionals work as closely together as the acronym suggests. R

Jonathan A. Jacobi, a Senior Environment, Health and Safety Advisor with UL, has more than twenty years of health and safety leadership experience. He is a Certified Safety Professional (CSP) and OSHA Authorized Outreach Trainer who earned graduate and post-graduate degrees in Occupational Health and Safety from Murray State University. Jacobi has played a leadership role in the creation and evolution of the UL Workplace Health and Safety online training library. Jacobi helped establish and currently leads UL’s OSHA Outreach Training Program. His insight and experience managing safety systems is shared with the health and safety community through various forms of consultation and thought leadership such as national seminars, presentations, articles, and white papers.

Alaska Business Monthly | April 2015 www.akbizmag.com

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RIGHT MOVES Alaska Business Monthly

Alaska Business Monthly p r o m o t e d Ta s h a Anderson to Associate Editor. She has been with the company since 2012. In her new role, she will have expanded editorial duties and readers can expect to see more of her great reporting. She will continue as survey Anderson administrator and cross-train other staff in that endeavor. Anderson received her BA in English at the University of Wyoming, where she also earned minors in Latin and Business Writing.

NANA Regional Corporation

NANA Regional Corp oration, Inc. appointed Jens Beck as the new Chief Financial Officer of NANA and its whollyo w n e d s u b s i d i a r y, NANA Development Corporation. Prior to his new position, Beck served as CFO and Senior Vice President at ASRC Beck Energy Services. Throughout his career, he has held a variety of financial leadership positions including Senior Auditor of Public Accounting for KPMG where he obtained his CPA certification for Alaska.

R&M Consultants, Inc.

Josh Zellmer, PE, joined R&M’s Department Group as a Project Engineer in its Anchorage office. He brings six years of experience in structural and civil engineering to the firm and is experienced in creating bid ready specifications, plans, and estimates. Prior to R&M, Zellmer Zellmer worked on disaster-related repair projects for roads, highways, airports, and Alaska DOT&PF facilities within Alaska’s Central Region. He has a BS

Compiled by Russ Slaten in Civil Engineering from Montana State University and is a professional civil engineer licensed in Alaska.

Hope Community Resources, Inc.

Hope Community Resources promoted Roy T. Scheller, PhD to Executive Director. Scheller joined the team at Hope more than thirtysix years ago, bringing with him a background in anthropology and work in the field of intellectual disabilities in both New Scheller York and Massachusetts. He played a key role in developing Hope’s corporate culture and service delivery standards. Scheller has held many positions with Hope, starting in direct support and eventually serving as Hope’s Deputy Executive Director.

Davis Wright Tremaine LLP

Hodes

groups. She is widely recognized for her expertise in government contracting and speaks nationally several times a year on the subject.

GeoNorth, LLC

Jonathan Heinsius has been appointed as the Director of Sales, Federal Programs, for GeoNorth, LLC. Heinsius comes to GeoNorth with more than eighteen years of direct, hands-on experience in the geospatial and remote sensing industry.

Brice Environmental Services

Oakley

McVay

Moody

O’Malley

Williams

Elizabeth Pifke Hodes has been promoted from Associate to Partner at the Davis Wright Tremaine Anchorage office. Hodes is an experienced litigator who focuses largely on labor and employment matters. She counsels employers on how to prevent workplace disputes and comply with laws governing hiring and terminations, leaves of absence, payment of wages and overtime, personnel policies, and a wide array of other employment issues. Christine V. Williams, who most recently served as vice president and general counsel of the Bering Straits Native Corporation, has joined the Davis Wright Tremaine Anchorage office as a Partner. Williams was a partner at Perkins Coie LLP in Anchorage from 2009 to 2014 and an attorney at Patton Boggs LLP from 2005 to 2009. At both firms, Williams practiced with the government contracting and/or construction

A team of p rofes sional s join ed B rice Environmental Services Corporation, a subsidiary of Calista Corporation, in its Fairbanks office. Jamie Oakley, PG, Vice President, has more than nineteen years’ environmental experience with nine years serving 8(a) Alaska Native Corporations (ANCs) as Interim President, Director of Environmental Services, and Senior Program Manager for federal contracts. Jon McVay, PMP, Sr. Program Manager, has twenty-two years of broad-based project experience with federal, state, and local regulatory and construction programs: eighteen years of managing environmental projects including six years of Alaska oil and gas experience. Doug Moody, Construction Manager, brings

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Alaska Business Monthly | April 2015 www.akbizmag.com

RIGHT MOVES twenty-five years’ experience in construction and environmental management, with seven years serving 8(a) ANCs, and serving as a Country Manager for the Department of Energy National Nuclear Security Administration program for DICCE services. Diane O’Malley, Director of Marketing, has more than sixteen years’ experience in government proposal capture management, production, graphic design, and corporate branding and marketing services. She has eight years’ experience in the ANC 8(a) arena.

Compiled by Russ Slaten Ground Operations of its subsidiary NAMS, has transitioned to the new position of Director of Deadhorse Operations for NAMS. Lorrie Rogers joined NAC as Manager of Tech Pubs. Rogers comes to NAC from PenAir where she worked for nine years in their technical publications department and brings comprehensive experience in technical writing, editing, proofreading, and publishing company manuals.

Wells Fargo

Solstice Advertising

Solstice Advertising added Art Director Brad Fleming to its team. With more than twenty-five years of experience, Fleming serves as a well-versed expert in the field of advertising. Fleming’s ability to deliver innovative creative with attention to detail has lead him to produce award Fleming winning creative in all aspects of integrated marketing and communications campaigns.

Northern Air Cargo

Dave Squier was appointed to COO of Anchoragebased Northern Aviation Services, parent company of Northern Air Cargo (NAC). Previously, he was Vice President of Cargo Services for NAC. In his new capacity Squier will have oversight of cargo and ground operations at both NAC and Honolulu, Hawaii-based subsidiary Aloha Air Cargo. Sami Glascott was hired as COO of NAC. Glascott previously served as Director of Sales for NAC and president and CEO of the Anchorage Chamber of Commerce. Glascott holds an MPA from the University of Alaska Anchorage, a Foraker Certificate in Nonprofit Management, and a BS in geology from Colorado College. Brian Heath has assumed the position of General Manager of Northern Air Maintenance Services (NAMS), a subsidiary of NAC. Heath has been a key leader of the NAMS team for the past seven years as Director of Maintenance and is a twenty-year Air Force retiree. Bob Reith, a twenty-three year employee of NAC, most recently serving as Director of

Michael Baker International, LLC

Bill Kontess, AIP, PMP, LEED AP, has joined Michael Baker International as Senior Architect/Project Manager. Kontess has provided project analysis reports, space utilization studies, and facility assessments throughout Alaska and the Pacific, resulting in capital improvement plans, area master plans, and individual facility design projects. Kontess is a retired career Air Force Civil Engineer officer with facility management experience overseeing more than 1,400 facilities in the state. Steve Reidsma is certified as and joins Michael Baker International at the Fairbanks office as a Professional Wetland Scientist. Reidsma has more than twenty years of experience in Alaska and will complement Michael Baker’s hydrology, engineering, NEPA, and permitting services.

RIM Architects

Hile

Penny

Wells Fargo has named Jennifer Hile Senior Treasury Specialist and Justin Penny and Mark Sabata Senior Business Relationship Managers for its Alaska Commercial Banking Group. Hile has worked at Wells Fargo Alaska for eleven years, serving as a Sabata personal banker, investment management associate, private banker, and business relationship manager. Hile holds a BBA in marketing from the University of Alaska Anchorage. She is currently studying to earn the Certified Treasury Professional designation. Penny has been with Wells Fargo for six years. He joined the company as a teller in northern Michigan, and he has served Alaska customers as a mobile personal banker and business relationship manager in Sitka. Penny holds a BBA in management from Northern Michigan University. Sabata has eleven years of financial services experience, including eight years serving Wells Fargo customers. He spent the last four years as a business relationship manager based at Wells Fargo’s Huffman location. Sabata earned a MBA from Alaska Pacific University and BBA in finance from the University of Nebraska.

Laura O’Neill was named Senior Vice President/ Chief Financial Officer fo r R I M A rch i te c t s . O’Neill provides strategic financial information to the firm’s management team an d B o ard of Directors and fosters best practices in corporate financial management. O’Neill O’Neill joined RIM in 2007 as Accounting Manager and head of administration for RIM’s Anchorage location, transitioning to Controller for all four RIM locations and corporate operations prior to accepting the CFO position.

KeyBank

Bryan Powell has been promoted to Middle Market Relationship Manager and Vice President with KeyBank in Alaska. He has been with KeyBank for thirteen years, and has more than twenty-five years of banking industry experience. Powell has Powell held positions in retail, operations, and commercial banking. At KeyBank, he has worked as branch manager and middle market credit underwriter. R

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INSIDE ALASKA BUSINESS

Alaska Air Group

mployees at Alaska Airlines and Horizon Air are receiving annual bonuses of more than 9 percent of their annual pay, or more than five weeks’ pay for most workers. The bonus is in addition to the approximately $1,000 in 2014 monthly bonuses that most employees earned for achieving on-time and customer satisfaction goals. The combined monthly and annual bonuses amounted to nearly $116 million, the highest in Alaska’s history, and are part of the company’s incentivebased pay program. Nearly $51 million in annual bonuses—55 percent of the total—is being paid to nearly 6,000 Alaska and Horizon employees in the Puget Sound area. Another $12 million is being paid to 2,122 employees in the Portland, Oregon, area, while $9 million is going to workers throughout the state of Alaska.

Lynden Training Center

he Alaska West Training Center has a new name and is newly accredited to provide hazardous materials response training that meets national and international criteria. The Alaska West Express Training Center is now the Lynden Training Center and is accredited by the State of Alaska Training and Education Bureau as the first thirdparty provider to offer State of Alaska hazardous materials training, a designation usually reserved for state agencies and fire departments. The accreditation includes ProBoard, IFSAC, and Methods of Instruction designations that bring national and international notoriety.

Compiled by Russ Slaten

For nearly twenty years, the Center in Fairbanks has been providing training to individuals, businesses, and government personnel all over Alaska and the Lower 48. The Center offers hands-on real-world workplace safety training in hazardous materials transportation, emergency response for hazardous materials, specialized rescue, mining and workplace safety, and training on the Incident Command System. Collectively, Lynden Training Center instructors have over 180 years of experience including transportation, military, oil and gas, and emergency response. Course offerings vary from forklift training to hazardous materials transportation and include specific courses for rescue team personnel. One of the training facility’s biggest assets is the ability to simulate real-life emergency situations.

Northern Made Creations

ocal husband and wife team Stephen and Sarah Fuller opened Northern Made Creations Gift Shop & Gallery in January in Huffman Square in South Anchorage. Sarah, a lifelong Alaskan, grew up with her parents while her dad’s work led them to several Southeast Alaska logging camps. Steve, an eighteen-year Anchorage resident and avid gold miner, is showcasing several of his own original gold nugget jewelry pieces. The Gallery features a monthly artist and includes an Aurora Room displaying the photography of Todd Salat, known as the “Aurora Hunter.” The gift shop is stocked with hand-

made treasures from regional Alaskan artists with a large selection of hand crafted silver and gold nugget jewelry.

ConocoPhillips Alaska

onocoPhillips Alaska announced in January its decision to slow the pace of investment on the Greater Mooses Tooth 1 project, or GMT1. ConocoPhillips says the project is challenged by permitting delays and requirements, as well as the current oil price environment. In 2015, ConocoPhillips will continue to shoot seismic over the GMT1 area and progress engineering. In 2015, ConocoPhillips will continue construction of the CD-5 and Drill Site 2S projects, both of which are expected to reach first production at the end of 2015. ConocoPhillips also intends to sanction the first phase of the North East West Sak development, the NEWS 1H project, in 2015. In addition, ConocoPhillips says it will execute its development drilling programs across the Alpine and Kuparuk fields and continue to progress construction of a new rotary rig and new coiled tubing rig to optimize its long-term inventory of development drilling opportunities.

Walmart

almart is adding more wild caught Alaska seafood at select stores in Alaska and Washington. The expanded assortment includes The Alaskan, a new 100 percent Alaska seafood brand created by a family-owned business and launching exclusively at Walmart. The nation’s largest grocer is also adding Alaska cod, salmon, rockfish, sole, and crab to its broad seafood

Your Project, Our Responsibility. 24/7 Service Pacific Pile & Marine has a robust fleet of marine equipment including our recent addition of a 600-Ton 4600 Ringer.

www.pacificpile.com I (907) 276-3878 276-3873 142

From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services. 620B East Whitney Road I Anchorage, AK 99501

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INSIDE ALASKA BUSINESS offering. Each of the new items is harvested in Alaska and processed locally in Alaska or in the Pacific Northwest. From all-natural Alaska coho salmon fillets to Alaska whitefish burgers, fourteen new exclusive items are now on shelves at each Supercenter in Alaska and twenty additional stores in Washington State. Trident Seafoods, a Seattle-based family owned business founded in 1973, supplies The Alaskan brand. Trident operates more than a dozen fish processing facilities in Alaska coastal communities and is fully committed to maintaining abundant, sustainably managed fisheries.

GeoNorth LLC

eoNorth LLC, headquartered in Anchorage, has acquired the exclusive rights to resell the State of Alaska’s Statewide Digital Mapping Initiative’s (SDMI) 2.5m orthoimagery dataset. GeoNorth worked with the Nanook Innovation Corporation, a nonprofit corporation which supports the University of Alaska, to acquire these rights. This marks the very first time Alaska’s SDMI orthoimagery is available to commercial users. GeoNorth recently went fully operational with the first multi-mission Direct Receiving Station capable of downlinking both optical and SAR imagery from Airbus Defense and Space’s SPOT, Pleiades, and TerraSAR satellite constellations. Owned and operated by GeoNorth, the Direct Receiving Station provides the unique ability to control the whole image collection process from satellite tasking, to downlink, processing, and dissemination of im-

Compiled by Russ Slaten

agery. Now, with the addition of the SDMI orthoimagery, GeoNorth will be able to support commercial users with new collection and off-the-shelf imagery options.

Exxon Mobil Corporation

he Alaska Native Science & Engineering Program (ANSEP) announced in February that Exxon Mobil Corporation has made a three-year commitment totaling $600,000 to support an expansion of the ANSEP precollege academies. The academies immerse students in science, technology, engineering and math learning experiences early in their educational careers with the goal of preparing students socially and academically for success at the university. ExxonMobil will contribute $200,000 per year over the next three years to the program. Earlier this year, the company also made a $200,000 contribution pledge to ANSEP for the same pre-college programs.

First Bank

fter many months of remodeling, more than 150 people celebrated First Bank’s grand re-opening of its remodeled historic downtown Ketchikan branch. First Bank’s downtown building was built in 1903 by John Koel, an enterprising businessman who was active in helping establish Ketchikan’s infrastructure in its early days. Koel’s building on the corner of Main and Dock

streets was reportedly the first reinforced concrete, fireproof commercial building in Alaska and its first tenant was the Miners & Merchants Bank. In April 1921 Miners & Merchants built its own building across the street and Koel then went into the banking business himself in his own building in 1924 under the name First National Bank, later changed to First Bank. The remodel and grand re-opening helped First Bank cap its 90th year in business in 2014. With its main offices located in Ketchikan, First Bank is the only commercial bank with headquarters in Southeast Alaska. The bank also has branches in Juneau, Sitka, Wrangell, Petersburg, and Prince of Wales Island.

PenAir

n 2015, PenAir will take delivery of three Saab 2000 aircraft. PenAir has been operating the thirty-seat Saab 340 aircraft for fifteen years in its Alaska markets and since 2012 in its Northeast US markets. The Saab 2000 is a fifty-four-seat aircraft that will be modified for flying in Alaska in a forty-five-seat configuration. The new aircraft will initially be utilized on the twenty-eight weekly flights between Anchorage and Dutch Harbor/Unalaska, which PenAir currently operates on behalf of Alaska Airlines. Under this arrangement, PenAir operates and maintains the aircraft, while Alaska Airlines schedules and sells tickets on the flights. The Saab 340 operates at 250 knots/290 mph, whereas the Saab 2000 will fly faster at 375 knots/430 mph. A typical flight to Dutch Harbor/Unalaska on the Saab 2000 will take nearly

Your Project, Our Responsibility. 24/7 Service

Pacific Pile & Marine has a robust fleet of marine equipment including our recent addition of a 600-Ton 4600 Ringer.

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From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services. 620B East Whitney Road I Anchorage, AK 99501 April 2015 | Alaska Business Monthly

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INSIDE ALASKA BUSINESS forty-five minutes less to complete than the Saab 340. PenAir will take delivery of the first Saab 2000 by mid-summer, with the other two aircraft to follow before the end of the year.

AIDEA

n conjunction with Governor Bill Walker, AIDEA (Alaska Industrial Development and Export Authority) has signed a Letter of Intent to purchase Pentex Alaska Natural Gas Company LLC and its assets, including Fairbanks Natural Gas. AIDEA immediately commenced due diligence on the proposed Pentex purchase at the Letter of Intent price of $52.5 million. The purchase includes the LNG (liquefied natural gas) plant in Mat-Su, the trucking enterprise, and the existing storage and distribution systems.

UAF Geophysical Institute

s NASA’s newest satellite made its first orbit in January, the University of Alaska Fairbanks was ready to track it, receive data from it, and send commands to it. Ground-station support is one of two critical roles the UAF Alaska Satellite Facility is playing in the new mission, which will measure the planet’s soil moisture every three days for three years. The mission is called SMAP, for Soil Moisture Active Passive. The Alaska Satellite Facility’s second role is distributing SMAP data to scientists. They will use it to understand, and

Compiled by Russ Slaten

improve forecasting of, all things related to soil moisture, including floods, drought, weather, water supplies, and the changing climate. Part of the UAF Geophysical Institute, the Alaska Satellite Facility downlinks, processes, archives, and distributes remote-sensing data to scientific users around the world. To support SMAP, the facility will use the newest of its three antennas, an eleven-meter antenna operated by the facility on behalf of NASA, installed in 2013 on the UAF Fairbanks campus.

Myra Roberts Health Clinic

fter ten months of construction efforts, the remote Interior community of Venetie welcomed the opening of the new Myra Roberts Health Clinic. Construction was performed using local carpenters and laborers under the direction of the Alaska Native Tribal Health Consortium Division of Environmental Health and Engineering. The new 2,269-square-foot clinic replaces a much smaller log-constructed building which has served as the clinic for more than twenty years. The new clinic is equipped with fully piped water and sewer services and features two exam rooms, a dental operatory, a behavioral health office, a lab/pharmacy room, and sleeping quarters to house visiting traveling physicians, dentists, and other specialists. The new facility also boasts full access to telemedicine services and electronic health records. Work on the clinic will continue in 2015, and includes the design and con-

struction of an energy-efficient heat recovery system, which is projected to save the community money in operating costs. The village council partnered with Alaska Native Tribal Health Consortium, the Denali Commission, the Alaska Department of Health and Social Services, Indian Health Service, and the Alaska Mental Health Trust Authority to complete the facility.

Harris Corporation

arris Corporation has been awarded a ten-year contract, with an expected value of $98 million, by the Federal Aviation Administration, or FAA, to upgrade and manage the system that provides real-time weather data and flight-planning capabilities for Alaska’s general aviation community. The contract includes three base years and seven one-year options. Under the Operational and Supportability Implementation System (OASIS) II program, Harris will provide integrated flight planning and real-time weather briefing capabilities to FAA Flight Service specialists. OASIS also supports Notice to Airmen messages— which alert pilots to potential hazards and provides up-to-date radar and satellite imagery. OASIS II will be the first consumer of System Wide Information Management in the National Airspace System. As a part of the contract Harris will also provide system test and maintenance support services. Harris was awarded the original OASIS contract in 1997 and it is currently operational at eighteen sites in Alaska and four support sites in the continental United States. R

• General Contracting • Marine Infrastructure • Design Build

Dutch Harbor - Unalaska, Alaska

www.pacificpile.com I (907) 276-3873 144

620B East Whitney Road I Anchorage, AK 99501

Alaska Business Monthly | April 2015 www.akbizmag.com

AGENDA

Compiled By Tasha Anderson April

Visit Anchorage Annual Seymour Awards Banquet

April 10—Dena’ina Convention Center, Anchorage: A celebration of the industry’s successes of the past year. Special award presentations will be made to Visit Anchorage partners whose exceptional efforts have made these achievements possible. anchorage.net

April 20-24—Sheraton Hotel & Spa, Anchorage: Hosted by the Anchorage chapter of the APOA, or Alaska Peace Officers Association. apoaonline.org

AOPA Crime Conference

Alaska Business Week

April 24-25—BP Energy Center, Anchorage: The theme of the Alaska Family Child Care Association’s 2015 conference is “For the Love of Kids.” alaskafcca.org

NEA Alaska Spring Conference

April 24-26—NEA Alaska, an affiliate of the National Education Association, is an organization with over twelve thousand members who work in Alaska’s public schools. neaalaska.org April 29—Hilton Anchorage Hotel: Business & Economic Update Luncheon sponsored by the World Trade Center Anchorage, covering new business and economic trends in Mat-Su. wtcak.org

2015 Alaska Chapter of ASA Annual Conference

AWWMA Annual Conference

May 4-7—Hotel Captain Cook, Anchorage: The Alaska Water Wastewater Management Association is dedicated to the stewardship of the environment and the protection of public health. awwma.org

Alaska Bar Convention

May 12-15—Westmark Fairbanks Hotel, Fairbanks: This conference provides opportunities to complete CLE requirements as well as an opening reception, several luncheons, and an awards reception and Dinner for 25, 50, and 60 year recognition. alaskabar.org

APCOM 2015

May 23-27—Westmark Fairbanks Hotel & Conference Center, Fairbanks: This is the international symposium for the Application of Computers and Operations Research in the Mineral Industry. apcom2015.org

ADS Annual Meeting

May 28-30—Land’s End Resort, Homer: The annual meeting of the Alaska Dental Society, which is “Committed to enhancing the dental profession and the health of all Alaskans.” akdental.org

Chapman Conference on Magnetospheric Dynamics

Alaska Travel Industry Association Convention & Trade Show

International Conference on Solid-State Sensors, Actuators, and Microsystems

June 21-25—Dena’ina Center, Anchorage: The world’s premiere conference in MEMS sensors, actuators and integrated micro and nano systems. transducers2015.org

July Rocky Mountain Mineral Law Institute

July 16-18—Dena’ina Center, Anchorage: The Rocky Mountain Mineral Law Foundation (RMMLF) is a collaborative educational nonprofit organization dedicated to the scholarly and practical study of

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September 28-October 3—Seward: Includes training, workshops, lectures, and a firefighter competition. The 2015 theme is “Passing the Torch.” alaskafireconference.com

October

Southcentral Foundation 2015 Nuka System of Care Conference

June 15-19—Southcentral Foundation Ahklun Mountains Building, Anchorage: The conference describes the entire healthcare system created, managed, and owned by Alaska Natives with workshops, break-out sessions, evening networking, and a cultural reception. southcentralfoundation.com

September 24-25—Hilton Anchorage, Anchorage: Meet more than two hundred human resources professionals, office managers and administrators, directors, and adult educators representing both public and private industry from around the state learning more about responsibilities as HR Professionals. alaska.shrm.org

Alaska Fire Conference

n n

September 20-25—Fairbanks: Scientific objectives of the proposed CCEMD include magnetic storms, auroral and magnetospheric substorms, dayside and tail magnetic reconnections, and new results of the MMS mission. www.gi.alaska.edu/2015ChapmanConference

Alaska State HR Conference

Animal Behavior Society Annual Conference

June 10-14—Anchorage: The Animal Behavior Society was founded in 1964 to promote the study of animal behavior in the broadest sense, including studies using descriptive and experimental methods under natural and controlled conditions. animalbehaviorsociety.org

August 25-27—Alaska Pacific University, Anchorage: The meeting features a workshop on Generalized Additive Models by Dr. Simon Wood (University of Bath, UK). community.amstat.org/alaskachapter

September

June

July 23-26—Anchorage: One of the CU Conferences, which educates the Credit Union Community, this conference provides information such as generating loans across all age groups and what types of loans can increase earnings. cuconferences.com

August

May

July 23—Dena’ina Center, Anchorage: A one-day trade show for the snow and ice management industry brought to Alaska by the Snowfighters Institute with special educational conferences targeting snow contractors, property managers, and municipalities and “Lunch and Learn,” round table discussions. alaskasnowsymposium.com

Annual Strategic Lending Conference

Mat-Su Rising

July 18-25—Alaska Pacific University, Anchorage: Alaska Business Week is a one-week summer program teaching the basic principles of private sector business to Alaskan high school students. alaskachamber.com

Alaska Snow Symposium

AFCCA Annual Child Care Conference

the law and regulations relating to mining, oil and gas, water, public lands, energy, environmental protection, and other related areas. rmmlf.org

October 5-8—Juneau: The 2015 “In Your Wildest Dreams” ATIA convention for Alaska’s tourism industry leaders with delegates from tour operators, wholesalers, Alaska vendors, destination marketing organizations, and elected officials. alaskatia.org

Alaska Business Monthly’s Top 49ers Luncheon

October 7—Dena’ina Center, Anchorage: Come honor the top ranked Alaskan-owned companies ranked by gross revenue at our annual luncheon. Contact: Melinda Schwab, 907-276-4373, accounts@akbizmag.com, akbizmag.com

All-Alaska Medical Conference

October 8-10— Anchorage: A continuing medical education conference put on by the Alaska Academy of Physicians Assistants, providing up to 25 CMEs. akapa.org

Alaska Coalition on Housing and Homelessness Conference

October 12-14—Anchorage: Events include keynote speakers and training sessions. alaskahousing-homeless.org/conference

AAHPA Annual Conference

October 12-16—Anchorage: This is the annual conference of the Alaska Association of Harbormasters & Port Administrators. alaskaharbors.org April 2015 | Alaska Business Monthly

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ALASKA THIS MONTH By Tasha Anderson

DINING

Middle Way Café

Modern Boutique.

CLASSIC CHARM.

Exquisitely restored in the heart of downtown, the Historic Anchorage Hotel offers superior service and luxury accommodations in a boutique setting – at a price you can afford. Its remodeled banquet spaces can accommodate 150.

330 E Street, Anchorage, Alaska 99501 | 907-272-4553 • 800-544-0988

www.HistoricAnchorageHotel.com 146

iddle Way Café is located at 1200 W. Northern Lights Boulevard, Suite G in Anchorage at the Northern Lights Shopping Center, which also includes REI, TitleWave Books, Grassroots, and The Alaska Club. The café, bakery, and coffee house was established in 1994. According to Middle Way’s website, “Our mission has and will always be to contribute to a healthy, balanced, and sustainable life through good food and drink.” To pursue that mission, Middle Way uses as many organic and locally sourced products as available and offers a range of glutenfree and vegan or vegetarian options. One of their vegan options is the Vegan Avacado Melt, served on fresh whole wheat sourdough or on walnut multi-grain bread, which features avocado, roma tomato, red onion, gomasio (a dry condiment made from sesame seeds), vegan mayo, and vegan mozzarella. Their menu also contains other classic sandwiches, modern burgers, salads, and soup and a range of breakfast items, which are served until 1 p.m. on the weekends and 10:45 a.m. during the work week. Middle Way Café also offers smoothies, low-fat yogurt or vegan versions, and fruit and vegetable juices in exciting mixes, such as the Spicy Kale Lemonade, which contains carrot, kale, ginger, lemon, and apple juices. Despite how attractive the food is, it isn’t the only attraction. The café has operated the Middle Way Café art program since 2008, with the goal of providing opportunities to artists in the community to show their work to the public. Shows at the café exhibit for two month cycles, with an opening the second Friday every other month, an event that includes catering and staff provided by Middle Way Café. middlewaycafe.com R

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ALASKA THIS MONTH By Tasha Anderson

TRAVEL

Photo by Carol Rushmore/Courtesy of USFWS

Stikine River Birding Festival

A flock of snow geese on the Stikine River, one of the attractions of the birding festival which runs from April 30 through May 3 in 2015.

he Stikine River Birding Festival is organized by the City and Borough of Wrangell in cooperation with the US Forest Service and community members in Wrangell, says Corree Delabrue, district interpreter for the US Forest Service. “[The festival] has morphed over time from a general spring celebration to focusing what is unique about the Stikine [River] in the spring,” Delabrue says. She says that, in addition to being a celebration of spring, the festival was originally founded as the Garnet Festival in the ‘90s, trying to promote Wrangell in the spring shoulder season. “We changed the name to focus on the many bird species that visit because that’s a spectacular resource. That’s also when it became a partnership between the Forest Service and Wrangell. This year, Delabrue says, she’s excited to reintroduce an event that the festival had in the past and says it is “an introduction to birding so that people in the community who appreciate birds but are not that confident in their bird identification can learn.” The introduction to birding would take place in an evening with an actual bird walk the following day for people to practice their new skills. Additionally, there are public presentations about bird knowledge, informing people about their habits and habitats. Guest speakers are invited into town for the festival and often also present at the local schools. “This year we’re taking more of a habitat and environmental effects approach. We’re having a marine debris presentation and planning some beach clean-up and talking about the effects of marine debris on birds and wildlife,” Delabrue says. She says the timing of the festival has changed over the years. “The type of birds on the river are different depending on the time of year,” she says, with a range from bald eagles in early April to snow geese and cranes at the end of April to shorebirds in early May. A full schedule of events can be found online. wrangell.com/birdingfestival R

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How hard should a car rental company try?

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ALASKA THIS MONTH By Tasha Anderson

ENTERTAINMENT

Wildlife Wednesdays Grizzly bear in the Kodiak National Wildlife Refuge, Alaska. Brown bear is lying on back and looking at the camera with his paws in the air. Credit: U.S. Fish and Wildlife Service, Steve Hillebrand

ommunity partners such as Alaskans for Palmer Hay Flats, the Alaska Wildlife Alliance, the Alaska Department of Fish and Game, the North Gulf Oceanic Society, and a host of others across the state coordinate to produce Wildlife Wednesday Lectures. Department of Fish and Game Education Specialist Brenda Duty says the goal of the lectures is “to highlight the research that’s going on through fish and wildlife agencies and organizations throughout Alaska, as well as bring to the forefront some of the viewing opportunities for wildlife and how people can connect with wildlife across the state.” In April, there are Wildlife Wednesday events in Anchorage and the Mat-Su Valley. On April 8 in Anchorage at the Alaska Zoo Gateway Hall, the topic is Killer Whale Predation on Gray Whales in the Unimak Island Region. The Fish and Games website says, “Most of the Eastern North Pacific gray whale population migrates through Unimak Pass, Alaska. Over one hundred killer whales also arrive to intercept them with effects that ripple through the near-shore and terrestrial ecosystem. Craig Matkin, executive director for the North Gulf Oceanic Society, will discuss this interaction and how it affects the marine ecosystem.” In Palmer at the Mat-Su College FSM Building on April 29, the topic is McNeil River Brown Bears. “In early July through mid-August, chum salmon congregate between a series of rocks and boulders that form McNeil River Falls. Since there are only a few rivers in the area with similar fishing sites, brown bears congregate here in numbers that have brought McNeil River worldwide fame. Drew [Hamilton, wildlife technician with the Alaska Department of Fish and Game] has spent several field seasons at McNeil and will share his impressive photographs and amazing tales,” according to the website. Duty says, “It’s a super opportunity to meet biologists and learn first-hand about their experiences and see images they’ve taken through their research.” The Wildlife Wednesday Lectures take a break during the summer months, and then resume again in the fall, she says. All of the lectures are free, and tend to run about an hour with time afterward for questions and interaction with the lecturer. adfg.alaska.gov R

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EVENTS CALENDAR

Compiled by Tasha Anderson

ANCHORAGE

Alaska Railroad Easter Train

Passengers will have the chance to visit with the Easter Bunny, be amazed by the onboard magician, and enjoy a number of goodies and surprises. There will also be plenty of opportunities to snap photos of the beautiful scenery along Turnagain Arm. Trains depart 10 a.m. and 3 p.m. alaskarailroad.com

Anchorage Rocks for Autism

This will be the fourth annual Anchorage Rocks for Autism Show, this year featuring acoustic artists The Harlequin State, Shifter, Lamplighter, Iliamna, and Tamerlane. Admission is a minimum $5 donation, all of which will go to the Autism Society of Alaska. The evening will also include a silent auction. Anchorage Community Works, 7 p.m. facebook.com/events/1472126079734724

Anchorage Museum Gala

Join the Anchorage Museum on a Northern expedition. Expedition attire, gourmet provisions and a virtual journey to the Pole set the stage for this special evening. More than one hundred prominent Alaskan artists are creating work specifically for the live and silent auctions. Guests can bid on unusual adventure packages. Proceeds from the gala support exhibitions and quality education programs. Dena’ina Civic and Convention Center, 6 p.m. anchoragemuseum.org

16-18

NYO Games

More than five hundred athletes from across Alaska will compete in the 45th Annual NYO Games, which celebrate Alaska’s rich diversity and are open to students of all backgrounds. Additional activities include musical and dance performances, the Pilot Bread Recipe Contest, and the Opportunities Expo featuring businesses to help prepare young athletes for future success. Alaska Airlines Center. citci.org/event-programs/nyo-games

Real Heroes Breakfast

Each year, individuals and organizations from the community make a positive impact on the lives of others, whether through a lifesaving action or tireless work to benefit the community. The American Red Cross of Alaska will honor the 2015 Real Heroes, “everyday heroes” who reflect the mission of the American Red Cross by making the Alaska community a safer and better place to live and work. Hotel Captain Cook, 7 a.m. to 8:45 a.m. redcross.org/ak/anchorage

FAIRBANKS

Souper Soup Off for Stone Soup Café

This event offers guests the opportunity to taste soups from twenty of Fairbanks’s finest dining establishments, wines from K & L Distributors, beers from HooDoo Brewery, and coffee from Diving Duck Coffee. In addition there are live and silent auctions and the opportunity to win two tickets anywhere Alaska Airlines flies, with no black out dates. Westmark Hotel and Conference Center, 6 p.m. explorefairbanks.com

10-12

GIRDWOOD

Alyeska Spring Carnival and Annual Slush Cup

Spring Carnival takes advantage of the long days with extended hours of lift operations, great spring-skiing conditions, and Alyeska’s largest and most popular winter event, Taco Bell Slush Cup, where competitors dressed in zany costumes attempt to skim across a ninety-foot long pool of freezing water. Other activities include the KWHL Costume Party, Idiot Swim, Dummy Downhill, XTRATUF Pull Tug-of-War, live music, and more. Alyeska Resort. alyeskaresort.com

HAINES

River Talk-Along the Chilkat

This is an evening of storytelling sponsored by Lynn Canal Community Players—the lobby is transformed into the “Chilkat Chit-Chat Cafe” where guests can enjoy refreshments and hear great stories or tell a story themselves. Seven people tell stories, each seven minutes long. The cost is $7. Local musicians provide music to make this a very special evening. Chilkat Center Lobby, 7 p.m. haines.ak.us/events www.akbizmag.com

Spring Fling

This is an evening of barbeque, beer, and live music. Harriett Hall, Southeast Alaska State Fair Grounds. haines.ak.us/events

KETCHIKAN

1-30

Alaska Hummingbird Festival

Through the month of April, this festival celebrates the return of migratory birds back to Alaska. The festival includes guided hikes, art shows, activities for children, and many other birding events. alaskacenters.gov/bird-festivals.cfm

NINILCHIK

Kenai Peninsula Fair Celebrity Waiter Fundraiser

This is the 12th Annual Celebrity Waiter fundraiser which supports the Kenai Peninsula Fair. “Celebrities” from across the Peninsula will come and wait on their guests and compete for tips and the coveted title “Head Waiter.” All proceeds benefit the Kenai Peninsula Fair. Event includes dinner, live and silent auctions, raffles, and entertainment by the Kenai Peninsula Orchestra. Kenai Peninsula Fairgrounds, 5:30 p.m. homeralaska.org

PALMER

Patty Griffin

Whistling Swan welcomes Grammy Award-winner Patty Griffin, one of America’s finest singer-songwriters, for her first ever performances in Southcentral Alaska. Glenn Massay Theater, 7:30 p.m. to 9:30 p.m. alaskapublic.org

PETERSBURG

Blessing of the Fleet

The annual blessing of Petersburg’s fishing fleet is sponsored by the Sons of Norway Lodge. Coffee and pastries are served after with visiting and stories about the various boats and old time fishermen and women. Open to the community and broadcast over the radio. Fisherman Memorial Park. petersburg.org

SKAGWAY

17-18

Folk Festival & Spring Art Show

Answering the question “What do you do in the winter,” the Skagway Arts Council presents a wonderful collection of artwork created by Skagway Residents. The show is at the AB Hall on Broadway and 2nd Avenues. It is free to the public but donations are welcome. skagway.com

VALDEZ

3-12

Snowkite Festival at Thompson Pass

Speed-riding and paragliding athletes from around the world demonstrate acrobatic skills and compete for prizes. Snowkite instructional training available and demos for spectators. Thompson Pass. valdezalaska.org

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ALASKA TRENDS

By Amy Miller

Alaska’s Business Travel Market:

Small but Important A

laska’s travel industry is dominated by those fulfilling what is often a lifelong dream to explore the state by cruise ship, rail, or highway—but a less-visible segment of the market returns big rewards for select communities and business types. Business travelers represent approximately 9 percent of the overall summer-travel market in Alaska, according to the 2011 Alaska Visitor Statistics Program. The comprehensive survey of Alaska travelers is commissioned periodically by the Alaska Department of Commerce, Community and Economic Development to provide detailed profiles of Alaska’s various visitor types (2011 is the most recent year for which a profile of business travelers is available). According to the Alaska Visitor Statistics Program, business travelers spend more on a per-person, per-trip basis than Alaska vacationers. Expenditures for business travelers averaged $1,251, while vacationers spent $932. Total Alaska business travel spending is estimated at $179 million annually. Across the state, local convention and visitors bureaus work diligently to attract meetings and events—both from within Alaska and out of state—to help generate sales throughout the year. The three largest have shortened and rebranded their names to Visit Anchorage, Travel Juneau, and Explore Fairbanks.

Travel Juneau has seen steadily increasing numbers of meetings over the last several years; between 2012 and 2014, the organization nearly doubled (from sixteen to thirty-one) the number of meetings it attracted and/or helped facilitate. Fairbanks’ estimated direct attendee spending rose dramatically between 2012 and 2013, when the annual Alaska Federation of Natives conference met in the Interior city. Spending by attendees was estimated at $5.4 million in 2012 and reached nearly $9 million in 2013. However, Explore Fairbanks had another great year in 2014, when it hosted the Arctic Winter Games in March of that year and saw attendee expenditures nearly matched the 2013 level. Visit Anchorage and its members saw a number of records broken in 2014: the agency tracked its highest number of events held in a year, 660, at the Egan and Dena’ina centers downtown, which also resulted in the greatest annual revenue ever for the centers. October 2014 was the busiest month ever for the centers, with eighty-eight events attended by nearly eighteen thousand people. December 6, 2014, marked the greatest single-day revenue at the two centers, with a combined attendance of 3,363 and total food and beverage revenue of $409,000. R Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

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Alaska Business Monthly | April 2015 www.akbizmag.com

ALASKA TRENDS

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By Amy Miller

April 2015 | Alaska Business Monthly

151

ALASKA TRENDS

Indicator

GENERAL Personal Income—Alaska Personal Income—United States Consumer Prices—Anchorage Consumer Prices—United States Bankruptcies Alaska Total Anchorage Total Fairbanks Total EMPLOYMENT Alaska Anchorage & Mat-Su Fairbanks Southeast Gulf Coast Sectorial Distribution—Alaska Total Nonfarm Goods Producing Services Providing Mining and Logging Mining Oil & Gas Construction Manufacturing Seafood Processing Trade/Transportation/Utilities Wholesale Trade Retail Trade Food & Beverage Stores General Merchandise Stores Trans/Warehouse/Utilities Air Transportation Information Telecommunications Financial Activities Professional & Business Svcs Educational & Health Services Health Care Leisure & Hospitality Accommodation Food Svcs & Drinking Places Other Services Government Federal Government State Government State Education Local Government Local Education Tribal Government Labor Force Alaska Anchorage & Mat-Su Fairbanks Southeast Gulf Coast Unemployment Rate Alaska Anchorage & Mat-Su Fairbanks 152

By Amy Miller Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Units

Period

Latest Report Period

US $ US $ 1982-1984 = 100 1982-1984 = 100

3rdQ14 3rdQ14 2ndH14 2ndH14

39,306 14,789,078 216.83 237.09

39,057 14,646,964 214.78 236.38

36,923 14,180,492 213.91 233.55

6.45% 4.29% 1.37% 1.52%

Number Filed Number Filed Number Filed

December December December

28 21 2

26 9 7

28 10 2

0.00% 52.38% 0.00%

Thousands Thousands Thousands Thousands Thousands

December December December December December

338.77 192.79 44.06 34.40 36.19

340.13 191.98 44.06 34.68 36.93

333.10 177.00 39.20 33.85 28.60

1.70% 8.92% 12.40% 1.62% 26.54%

Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands

December December December December December December December December December December December December December December December December December December December December December December December December December December December December December December December December December

323.00 281.60 41.40 18.30 18.10 15.20 15.30 7.80 4.00 63.80 6.20 37.20 6.60 10.60 20.40 6.00 6.10 4.00 12.00 29.40 48.00 33.90 28.60 6.00 18.60 11.40 82.30 14.60 26.10 8.50 41.60 24.10 3.70

324.40 280.30 44.10 18.50 18.10 15.00 15.70 9.90 6.10 63.50 6.30 37.00 6.60 10.60 20.20 6.00 6.10 4.00 11.80 29.60 47.00 33.60 28.30 5.80 18.50 11.60 82.40 14.40 26.40 8.60 41.60 24.10 3.90

317.40 38.90 278.50 18.20 17.60 15.00 15.90 4.80 1.30 61.70 5.60 36.00 6.30 9.50 20.10 5.60 6.10 4.00 13.10 27.10 47.40 33.70 28.20 5.70 18.60 11.40 83.50 14.30 26.20 8.60 43.00 24.20 3.40

1.76% 623.91% -85.13% 0.55% 2.84% 1.33% -3.77% 62.50% 207.69% 3.40% 10.71% 3.33% 4.76% 11.58% 1.49% 7.14% 0.00% 0.00% -8.40% 8.49% 1.27% 0.59% 1.42% 5.26% 0.00% 0.00% -1.44% 2.10% -0.38% -1.16% -3.26% -0.41% 8.82%

Thousands Thousands Thousands Thousands Thousands

December December December December December

361.73 203.38 46.67 37.06 39.17

362.44 202.45 46.64 37.18 39.72

362.58 203.08 46.86 37.47 37.83

-0.23% 0.15% -0.41% -1.09% 3.54%

Percent Percent Percent

December December December

6.3 5.2 5.6

6.2 5.2 5.5

6.5 5.2 5.4

-3.08% 0.00% 3.70%

Alaska Business Monthly | April 2015 www.akbizmag.com

ALASKA TRENDS

By Amy Miller Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Units

Period

Latest Report Period

Percent Percent Percent

December December December

7.2 7.6 5.6

6.7 7.0 5.8

7.2 8.4 6.5

0.00% -9.52% -13.85%

Millions of Barrels Billions of Cubic Ft. $ per Barrel

December December December

16.10 8.88 60.90

15.52 8.21 77.41

16.92 8.12 108.19

-4.85% 9.36% -43.71%

Active Rigs Active Rigs $ Per Troy Oz. $ Per Troy Oz. Per Pound

December December December December December

11 1882 1201.37 16.24 2.27

8 1925 1176.36 15.97 2.26

9 1771 1225.40 19.61 0.95

22.22% 6.27% -1.96% -17.19% 138.95%

Millions of $ Millions of $ Millions of $

37.13 4.52 12.71

43.59 8.63 33.81

41.78 5.35 36.43

-11.13% -15.51% -65.11%

Total Deeds Total Deeds

December December

736 222

671 186

655*GeoNorth 186

12.37% 19.35%

VISITOR INDUSTRY Total Air Passenger Traffic—Anchorage Total Air Passenger Traffic—Fairbanks

Thousands Thousands

December December

389.14 76.53

345.41 66.67

362.93 77.18

7.22% -0.84%

ALASKA PERMANENT FUND Equity Assets Net Income Net Income—Year to Date Marketable Debt Securities Real Estate Investments Preferred and Common Stock

Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $

December December December December December December December

52354.20 52905.50 194.80 696.60 -70.30 -9.70 -469.40

51610.80 52342.20 234.20 442.20 30.80 -13.20 235.60

49241.90 49882.40 357.90 408.80 -57.30 -10.50 276.00

6.32% 6.06% -45.57% 70.40% -22.69% 7.62% -270.07%

BANKING (excludes interstate branches) Total Bank Assets—Alaska Cash & Balances Due Securities Net Loans and Leases Other Real Estate Owned Total Liabilities Total Bank Deposits—Alaska Noninterest-bearing deposits Interest- bearing deposits

Millions of $ 3rdQ14 Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $

5,781.68 299.37 146.66 2,742.89 18.01 5,002.29 4,346.55 1,830.26 2,516.30

5,589.78 309.79 145.27 2,703.46 18.73 4,814.61 4,188.54 1,702.65 2,485.89

5,432.28 478.68 133.97 2,464.96 17.23 4,697.44 4,086.89 1,693.48 2,393.41

6.43% -37.46% 9.47% 11.28% 4.53% 6.49% 6.35% 8.08% 5.13%

FOREIGN TRADE Value of the Dollar In Japanese Yen In Canadian Dollars In British Pounds In European Monetary Unit In Chinese Yuan

Yen Canadian $ Pounds Euro Yuan

119.54 1.15 0.64 0.81 6.14

115.86 1.13 0.63 0.80 6.14

103.47 1.06 0.61 0.73 6.12

15.53% 8.49% 4.92% 10.96% 0.33%

Indicator

Southeast Gulf Coast United States PETROLEUM/MINING Crude Oil Production—Alaska Natural Gas Field Production—Alaska ANS West Coast Average Spot Price Hughes Rig Count Alaska United States Gold Prices Silver Prices Zinc Prices REAL ESTATE Anchorage Building Permit Valuations Total Residential Commercial Deeds of Trust Recorded Anchorage—Recording District Fairbanks—Recording District

December December December December December

Notes: 1. Source of Anchorage Deeds of trust (GeoNorth) is cited in the data field. 2. Banking data has been updated to include Alaska State Banks and Alaska’s sole federally chartered, Alaska-based bank, First National Bank Alaska

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April 2015 | Alaska Business Monthly

153

ADVERTISERS INDEX Advanced Physical Therapy of Alaska.............................................25 AE Solutions Alaska LLC....................133 AHTNA Inc..............................................43 Alaska Air Cargo - Alaska Airlines.....31 Alaska Communications - ACS..........47 Alaska Executive Search - AES..........65 Alaska Logistics...................................125 Alaska Pacific University...............35, 97 Alaska Park............................................. 75 Alaska Roof Coatings.........................122 Alaska Spine Institute.........................135 Alaska Traffic Co..................................115 Alaska USA Federal Credit Union..... 55 Alaska USA Insurance Brokers.......... 57 Alyeska Resort......................................111 American Marine / Penco................ 150 Anchorage Chrysler Dodge................32 Anchorage Messenger Service..........28 Anchorage Opera................................146 Arctic Office Products.........................29 Arctic Spine..........................................138 AT&T........................................................... 9 Avis Rent-A-Car...................................147 BDO...........................................................11 Bering Air Inc.......................................147 Best Western Kodiak Inn..................110 Boyer Towing........................................131

154

Calista Corp............................................63 Carlile Transportation Systems........155 Chris Arend Photography.................154 Ciri Alaska Tourism.............................110 Colville Inc..............................................131 Construction Machinery Industrial....2 Cook Inlet Tug & Barge Inc...............126 Cornerstone Advisors...........................17 Cruz Construction Inc........................ 121 Davis Wright Tremaine LLP...............113 Dianneâ&#x20AC;&#x2122;s Wild Fork Catering.............. 41 Discover Kodiak..................................104 Donlin Gold.............................................85 Explore Fairbanks.............................. 105 Fairweather LLC...................................137 First National Bank Alaska................... 5 Foss Maritime.........................................71 Fountainhead Hotels............................68 GCI........................................... 27, 133, 156 Granite Construction..........................119 Great Originals Inc................................69 HELIMAX Aviation............................... 73 Hilco Real Estate LLC...........................68 Historic Anchorage Hotel.................146 Homer Marine Trades Assoc........... 139 Horizon Lines......................................... 53 Hotel Captain Cook........................... 103 Hotel Group........................................ 100

Island Air Express................................148 Judy Patrick Photography...................36 Junior Achievement.............................. 19 Landâ&#x20AC;&#x2122;s End Resort..............................104 Lounsbury & Associates.......................71 Lynden Inc...............................................45 Magtec Enegy......................................129 Mandanas Dental.................................135 Mat-Su Convention & Visitors Bureau..............................106 Millenium Hotels..................................116 N C Machinery.....................................123 NCB...........................................................69 North Star Behavioral Health.......... 136 Northern Air Cargo.................. 140, 141 Northrim Bank.......................................49 NPC Energy Services......................... 127 Olympic Tug & Barge.........................126 Oxford Assaying & Refining Inc......149 Pacific Alaska Freightways Inc..........83 Pacific Coast Maritime......................126 Pacific Pile & Marine....... 142, 143, 144 Paramount Suppy Company............ 139 Parker Smith & Feek............................. 33 PENAIR.....................................................51 Personnel Plus.....................................148 Ravn Alaska............................................23 Ritchie Brothers Auctioneers............34

REMAX/Dynamic Properties............27 Ryan Air...................................................58 Safway Group Holding LLC................ 75 Seward Convention & Visitors Bureau & Chamber of Commerce........... 107 Span Alaska Transportation Inc........59 Spenard Builders Supply A Probuild Company..................... 118 Stellar Design Inc................................ 139 The Odom Corp..................................... 21 Total Safety............................................137 Truckwell of Alaska.............................129 Tulalip Casino Resort.........................101 Turnagain Marine Construction......126 UAA College of Business and Public Policy........................................... 91, 95 United Way of Alaska...................65, 89 Usibelli Coal Mine.................................63 Valdez Convention & Visitors Bureau..............................109 Vigor Alaska............................................67 Visit Anchorage.....................................99 Washington Crane & Hoist.................13 Waste Management.......................... 130 Watterson Construction....................117 Wealth Strategies of Alaska............... 37 Westmark Hotels - HAP Alaska.... 100 XTO Energy Inc....................................... 3

Alaska Business Monthly | April 2015 www.akbizmag.com

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